SNOWDANCE, INC.
1,000,000 Shares
Common Stock, $.001 par value
"QUALIFIED INDEPENDENT UNDERWRITER" AGREEMENT
New York, New York
_____ __, 1997
The undersigned, Snowdance, Inc. (the "Company"), a Delaware corporation,
hereby agrees with Cruttenden Xxxx Incorporated ("Cruttenden") as follows:
1. Introduction. The Company proposes to issue and sell to the public,
1,000,000 shares of common stock, $.001 par value, of the Company (the "Common
Stock") (the "Offering"). Pursuant to Rule 2720 of the National Association of
Securities Dealers, Inc. (the "NASD") Conduct Rules ("Rule 2720") the Company,
as an affiliate of NASD members, may participate in the Offering only if the
price at which the Shares is to be offered to the public is no higher than the
price recommended by a "Qualified Independent Underwriter" (as such phrase is
defined by Rule 2720) who participates in the preparation of the registration
statement and prospectus relating to the Offering and exercises customary
standards of due diligence with respect thereto.
As hereinafter used, the term "Registration Statement" means the
registration statement on Form SB-2 (No. 333-____) (including the related
preliminary prospectus, financial statements, exhibits and all other documents
to be filed as a part thereof or incorporated therein) for the registration of
the offer and sale of the Shares under the Securities Act of 1933, as amended,
and the rules and regulations thereunder (collectively, the "Act"), filed with
the Securities and Exchange Commission (the "Commission"), and any amendments
thereto, and the term "Prospectus" means the prospectus including any
preliminary or final prospectus (including the form of final prospectus as filed
with the Commission) pursuant to Rule 424(b) under the Act and any amendments or
supplements thereto, to be used in connection with the Offering.
2. Rule 2720 Requirement. Cruttenden hereby confirms its agreement as
set forth in Rule 2720, and agrees to act as the "Qualified Independent
Underwriter" for the Offering. Cruttenden represents that, as appropriate, it
satisfies or will satisfy at the times designated in Rule 2720 the other
requirements set forth therein.
3. Consent. Cruttenden hereby consents to be named in the Registration
Statement and Prospectus as having acted as
the "Qualified Independent Underwriter." Except as permitted by the immediately
preceding sentence or to the extent required by law, all references to
Cruttenden in the Registration Statement or Prospectus or in any other filing,
report, document, release or other communication prepared, issued or transmitted
in connection with the Offering by the Company or any corporation controlling,
controlled by or under common control with the Company, or by any director,
officer, employee, representative or agent of any thereof, shall be subject to
Cruttenden's prior written consent with respect to form and substance.
4. Material Facts. The Company represents and warrants to Cruttenden
that at the time the Registration Statement or any amendment or supplement
thereto becomes effective, the Registration Statement and, at the time the
Prospectus is filed with the Commission (including any preliminary prospectus
and the form of prospectus filed with the Commission pursuant to Rule 424(b))
and at all times subsequent thereto, to and including the date on which payment
for and delivery of the Shares (such date being referred to herein as the
"Closing Date"), the Prospectus (as amended or supplemented if it shall have
been so amended or supplemented) will contain all material statements which are
required to be stated therein in accordance with the Act and will conform to all
other requirements of the federal securities laws, and will not, on such dates,
include any 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. The Company further represents and warrants that any further filing,
report, document, release or communication which in any way refers to Cruttenden
or to the services to be performed by it pursuant to this Agreement will not
contain any untrue or misleading 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.
5. Availability of Information. The Company hereby agrees to provide
Cruttenden, at the Company's expense, all information and documentation with
respect to the Company's business, financial condition and other matters as
Cruttenden may deem relevant, including, without limitation, copies of all
correspondence with the Commission, certificates of its officers, opinions of
its counsel and comfort letters from its auditors. The above mentioned
certificates, opinions of counsel and comfort letters shall be provided to
Cruttenden as it may request on the effective date of the Registration Statement
and on the closing date of the Offering. The Company will make reasonably
available to Cruttenden, its auditors, counsel, and officers and directors to
discuss with Cruttenden any aspect of the Company or its business which
Cruttenden may deem relevant. In addition, the Company, at Cruttenden's request,
will cause to be delivered to Cruttenden, copies of any certificates, opinions,
letters and reports and shall cause the person issuing such certificates,
opinions, letters or reports to authorize Cruttenden to rely
2
thereon to the same extent as if addressed directly to Cruttenden. The Company
represents and warrants to Cruttenden that all such information and
documentation provided pursuant to this paragraph 6 will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading. In addition, the Company will promptly
advise Cruttenden of all telephone conversations with the Commission which
relate to or may affect the Offering.
6. Indemnification.
(a) Subject to the conditions set forth below, the Company hereby
agrees that it will indemnify and hold Cruttenden and each officer, partner,
employee or representative of Cruttenden and each person controlling, controlled
by or under common control with Cruttenden within the meaning of Section 15 of
the Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the rules and regulations thereunder (individually, an
"Indemnified Person") harmless from and against any and all loss, claim, damage,
liability, cost or expense whatsoever (including, but not limited to, any and
all legal fees and other expenses and disbursements incurred in connection with
investigating, preparing to defend or defending any action, suit or proceeding,
including any inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in any
action, suit or proceeding including any inquiry, investigation or pretrial
proceeding such as a deposition) to which such Indemnified Person may become
subject under the Act, the Exchange Act, or other federal or state statutory law
or regulation at common law or otherwise, arising out of, based upon, or in any
way related or attributed to (i) this Agreement, (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or Prospectus or any other filing report, document, release or
communication, whether oral or written referred to in paragraph 5 hereof 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, (iii)
any application or other document executed by the Company or based upon written
information furnished by the Company filed in any jurisdiction in order to
qualify the Shares under the securities or Blue Sky laws thereof, 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, (iv)
the breach of any representation or warranty made by the Company in this
Agreement, or (v) the performance by Cruttenden as the "Qualified Independent
Underwriter" pursuant to this Agreement unless as a direct result of
Cruttenden's gross negligence, bad faith or willful misfeasance. The Company
further agree that upon demand by an Indemnified Person at any time or from time
to time, they will promptly reimburse such Indemnified Person for, any loss,
claim, damage, liability, cost or expense as to which the Company has
indemnified such person pursuant hereto. Notwithstanding the foregoing
provisions of
3
this paragraph 7, any such payment or reimbursement by the Company of fees,
expenses or disbursements incurred by an Indemnified Person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all appeals
or the expiration of time to appeal) is entered against such Indemnified Person
as a direct result of such person's gross negligence, bad faith or willful
misfeasance will be promptly repaid to the Company.
(b) Promptly after receipt by an Indemnified Person under paragraph
(a) above of notice of the commencement of any action, such Indemnified Person
will, if a claim in respect thereof is to be made against the Company under
paragraph (a), notify the Company in writing of the commencement thereof; but
the omission to so notify the Company will not relieve the Company from any
liability which either may have to any Indemnified Person otherwise than under
this paragraph 7. In case any such action is brought against any Indemnified
Person, and such Indemnified Person notifies the Company of the commencement
thereof, the Company will be entitled to participate therein and, to the extent
that they may elect by written notice delivered to the Indemnified Person
promptly after receiving the aforesaid notice from such Indemnified Person, to
assume the defense thereof with counsel reasonably satisfactory to such
Indemnified Person: provided, however, that if the defendants in any such action
include both the Indemnified Person and the Company or any corporation
controlling, controlled by or under common control with the Company, or any
director, officer, employee, representative or agent of any thereof, and the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it which are different from or additional to those
available to such other defendant, the Indemnified Person shall have the right
to select separate counsel to represent it. Upon receipt by the Indemnified
Person of notice from the Company setting forth the Company's irrevocable
election to assume the defense of such action and approval by the Indemnified
Person of such counsel, the Company will not be liable to such Indemnified
Person under this paragraph 7 for any fees of counsel subsequently incurred by
such Indemnified Person in connection with the defense thereof (other than the
reasonable costs of investigation subsequently incurred by such Indemnified
Person) unless (x) the Indemnified Person shall have employed separate counsel
in accordance with the provision of the next preceding sentences, (y) the
Company, within a reasonable time after notice of commencement of the action,
shall not have employed counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person, or (z) the Company shall have
authorized in writing the employment of counsel for the Indemnified Person at
the expense of the Company, and except that, if clause (x) or (z) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (x) or (z).
4
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
paragraph 7 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company to Cruttenden on grounds of policy or
otherwise, the Company and Cruttenden shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigation or defending of same) to which the
Company and Cruttenden may be subject in such proportion so that Cruttenden is
responsible for that portion represented by the percentage that its fee under
this Agreement bears to the aggregate public offering price appearing on the
cover page of the Prospectus and the Company is responsible for the balance,
except as the Company may otherwise agree to reallocate a portion of such
liability with respect to such balance with any other person; provided, however,
that no person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the Act shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (c), any person controlling, controlled by or under common control
with Cruttenden, or any partner, director, officer, employee, representative or
any agent of any thereof, shall have the same rights to contribution as
Cruttenden and each person who controls the Company within the meaning of
Section 15 of the Act or Section 20 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 clause (y) of this paragraph (c). 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 the other party under this paragraph (c),
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this paragraph (c). The indemnity and contribution agreements contained in
this paragraph 7 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Indemnified Person or any
termination of this Agreement.
7. Authorization by Company. The Company represents and warrants to
Cruttenden that this Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the Company.
8. Notice. Whenever notice is required to be given pursuant to this
Agreement, such notice shall be in writing and shall be mailed by first class
mail, postage prepaid, addresses (a) if to Cruttenden, at 00000 Xxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx 00000, Attention: _____________ and (b) if to the Company, at
Xxxxx 00, Xxxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxxxxx.
5
9. Governing Law. This Agreement shall be construed (both as to
validity and performance) and enforced in accordance with and governed by the
laws of the State of New York applicable to agreements made and to be performed
wholly within such jurisdiction.
10. Parties. This Agreement shall inure solely to the benefit of and
shall be binding upon, Cruttenden and the Company and the controlling persons,
directors and officers referred to in paragraph 7 hereof, and their respective
successors, legal representative and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
6
If the foregoing correctly sets forth the understanding between Cruttenden
and the Company, please so indicate in the space provided below for that purpose
whereupon this letter shall constitute a binding agreement between us.
SNOWDANCE, INC. CRUTTENDEN XXXX INCORPORATED
By:_______________________ By: ____________________________________
7
