EXHIBT 1.04
AGREEMENT AMONG UNDERWRITERS
Agreement dated as of __________ __, 2001 between Xxxxxxx Xxxxxxxx
Securities Corp. ("KDSC" or the "Managing Underwriter"), and the several
underwriters listed on Schedule 1hereto which are herein collectively referred
to as the "Underwriters."
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, ProtoSource Corporation (the "Company") has filed with the
Securities and Exchange Commission ("Commission"), a registration statement on
Form SB-2 (Registration No. 333-45778) and one or more amendments thereto
(collectively, the "Registration Statement") for the public sale ("Offering")
through the Underwriters, severally and not jointly, of 1,000,000 Units (the
"Units"). Schedule 1 hereto reflects the number of Units each of the
Underwriters is underwriting. The Managing Underwriter also has an option,
exercisable for a period of 45 days from the effective date of the Registration
Statement, to purchase up to an additional, 150,000 Units to cover
over-allotments, if any (the "Over-allotment Option"); and
WHEREAS, the Company and the Underwriters are, on the date hereof, entering
into an underwriting agreement (the "Underwriting Agreement") which provides
that the Underwriters will (a) purchase the Units (sometimes referred to herein
as the "Securities"), severally and not jointly, at a price that reflects a 10%
discount, (b) receive an expense allowance equal to 3% of the gross proceeds of
the offering the ("Expense Allowance"), and (c) be sold, for nominal
consideration, five-year warrants to purchase up to an aggregate of 100,000
Units at 165% of the public offering price (the "Underwriters' Warrants").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Underwriting Fees and Expenses. Of the 10% underwriting discount per
share of Common Stock, each Underwriter shall receive ___% with respect to
underwritten Securities and an additional ___% with respect to Securities
actually sold. The Managing Underwriter, KDSC, will retain a ___% management fee
and the 3% non-accountable expense allowance. Each Underwriter shall bear its
own expenses in connection with the transactions contemplated herein, provided
that the following expenses shall be deducted from the Expense Allowance prior
to distribution: fees and disbursements of Snow Xxxxxx Xxxxxx P.C. counsel to
the Underwriters in connection with the transaction, shall be paid by KDSC from
the 3% non-accountable expense allowance. It is understood among the
Underwriters that Snow Xxxxxx Xxxxxx P.C. is acting as legal counsel for all the
Underwriters.
2. Purchase of Common Stock and Over-Allotment Option. Each Underwriter
shall underwrite, severally and not jointly, the Units set forth in on Schedule
1 hereto. The Managing Underwriter shall have the mutual right to exercise the
Over-allotment Option on a pro-rata basis.
3. Underwriters' Warrants. The Managing Underwriter, KDSC, shall be
entitled to all of the Underwriters' Warrants and shall negotiate separately
with the several underwriters as to the distribution.
4. Intentionally deleted.
5. Indemnity and Contribution.
5.1. Each Underwriter agrees to indemnify and hold harmless the other
Underwriters, its officers, directors, partners, employees, agents, and counsel
and each person, if any, who controls any such Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act ("Control Persons"),
with respect to written information provided to the Company by such Underwriter
as stated in Section 2(c) of the Underwriting Agreement, to the extent and upon
the terms which the Underwriters agree to indemnify and hold harmless the
Company as set forth in the Underwriting Agreement.
5.2. Each Underwriter will pay as contribution, its ratable share (based
upon the number of Units underwritten by each) of any losses, liabilities,
claims, or damages, joint or several, paid or incurred by any Underwriter to any
person other than an Underwriter, arising out of, based upon, or in connection
with any untrue statement or alleged untrue statement of any material fact
contained in any preliminary prospectus, the Registration Statement, the
Prospectus (as from time to time amended or supplemented), any amendment or
supplement thereto, or in any application or other document or communication
executed by or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Units under the "blue sky" or securities laws thereof or filed with
the Commission or any securities exchange, or 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 (other than a statement or omission
made in reliance upon and in conformity with written information furnished to
the Company as stated in Section 2(c) of the Underwriting Agreement with respect
to any Underwriter by or on behalf of such Underwriter expressly for inclusion
therein); and will pay its pro rata portion of all attorney's fees and any and
all expenses whatsoever reasonably incurred in investigating, preparing, or
defending against any such loss, liability, claim, or damage, or any action in
respect thereof and any amounts paid in settlement of any claim or litigation.
In determining the amount of each of the Underwriters' obligation under this
Section 5, appropriate adjustment will be made to reflect any amounts received
by any Underwriter in respect of such untrue statement, alleged untrue
statement, omission, or alleged omission from the Company pursuant to Section 10
of the Underwriting Agreement or otherwise. There shall be credited against any
amount paid or payable by the Underwriters pursuant to this Section 5.2 any
loss, liability, claim, damage, or expense which is reasonably incurred as a
result of any such claim asserted against the Underwriters (other than fees and
disbursements of an Underwriter's separate counsel if such counsel is not
jointly approved by the Underwriters as provided in the next sentence), and if
such loss, liability, claim, damage, or expense is incurred by the Underwriters
subsequent to any payment by the Underwriters pursuant to this Section 5.2,
appropriate provision shall made to effect such credit, by refund or otherwise.
If any such claim is asserted or any action in connection therewith as we
jointly deem necessary or desirable, including retaining counsel for the
Underwriters, and in the Underwriters' joint discretion separate counsel for any
particular Underwriter and the fees and disbursements of any counsel so retained
shall be included in the amounts payable pursuant to this Section 5.2.
5.3. The indemnity and contribution contained in this Section 5 shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of such other Underwriter or its officers, directors,
partners, employees, agents, counsel, or Control Persons (if any) and shall
survive the delivery of the Units to the Underwriters and the termination of
this Agreement. In determining amounts payable pursuant to Section 5.2 hereof,
any loss, liability, claim, damage or expense incurred by any person who
controls any Underwriter within the meaning of Section 15 of the Act or any
Underwriter which has been incurred by reason of such control or other
relationship shall be deemed to have been incurred by such Underwriter. Any
Underwriter shall have the right to employ its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Underwriter. No
Underwriter may settle any such claim or action without the prior written
consent of the other. Whenever an Underwriter receives notice of the assertion
of any claim or the commencement of any action to which the provisions of
Section 5.2 hereof would be applicable, such Underwriter will give prompt notice
thereof to the other Underwriter.
6. Intentionally deleted.
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7. Miscellaneous. This Agreement is made solely for the benefit of the
Underwriters and their respective officers, partners, agents, counsel and
Control Persons and their respective successors and assigns, and not other
person shall acquire or have any rights by virtue of this Agreement. The
validity, interpretation and construction of this Agreement and of each part
hereof will be governed by, and construed in accordance with, the laws of the
State of New York without giving effect to conflicts of laws. This Agreement
constitutes the parties' full agreement and may not be modified by anything
other than a writing signed by the parties. This Agreement may be executed in
any number of counterparts, each of which may be deemed an original and all of
which together will constitute one and the same instrument.
All notices, requests, demands and other communications which are required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given upon the delivery or mailing thereof, as the case
may be, if delivered personally or sent by registered or certified mail, return
receipt requested, postage prepaid:
(a) If to KDSC, to: Xxxxxxx Xxxxxxxx Securities Corp.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxxxx, CEO
If to any other underwriter at the address provided to the managing
underwriter.
(b) With a copy of all notices to:
Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
or to such other addresses as any party shall have specified by notice in
writing to the others.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
XXXXXXX XXXXXXXX SECURITIES CORP.
By: __________________________________
Print name of Participating Underwriter
below
By:___________________________________
Signature of authorized representative
of participating underwriter
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SCHEDULE 1
NAME OF PARTICIPATING UNDERWRITER Number of Units Underwritten
--------------------------------- ----------------------------
Xxxxxxx Davidson Securities Corp [---------]
[-----------------------------] [---------]
[-----------------------------] [---------]
[-----------------------------] [---------]
[-----------------------------] [---------]
[-----------------------------] [---------]
[-----------------------------] [---------]
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