AMPLIDYNE, INC.
1,400,000 SHARES OF COMMON
STOCK, PAR VALUE $.0001 PER SHARE
AND
1,400,000 REDEEMABLE WARRANTS
AGREEMENT AMONG UNDERWRITERS
________________, 1996
Dear Sirs:
We wish to confirm our agreement among you the undersigned and the
other underwriters set forth on Schedule A attached hereto (collectively, the
"Underwriters") with respect to the purchase by the Underwriters severally, on
a firm commitment basis, from Amplidyne, Inc., a Delaware corporation (the
"Company"), of up to 1,400,000 shares of Common Stock, par value $.0001 per
share and 1,400,000 Redeemable Warrants (the "Securities").
The Company has filed a registration statement with respect to the
Securities with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), which is more particularly
described in the Underwriting Agreement hereinafter referred to. As used
herein, the "Registration Statement" means such registration statement, as
amended and supplemented from time to time in accordance with the Act, and the
"Prospectus" means the prospectus constituting a part of the Registration
Statement, as amended and supplemented from time to time in connection with the
offering of the Securities. One or more amendments or supplements to the
Registration Statement or the Prospectus have been or may be filed in which,
with our consent hereby given, we have been or will be named as one of the
underwriters of the Securities, but no such amendment or supplement shall
release us from or otherwise affect our obligations hereunder or under the
Underwriting Agreement.
1. Underwriting Agreement. Annexed hereto is a copy of a proposed
agreement (the "Underwriting Agreement") with the Company providing for the
purchase of the Securities from the Company by each Underwriter, severally and
not jointly, of the respective amount of the Securities set forth opposite its
name in Schedule A hereto. We authorize you to execute the Underwriting
Agreement on our behalf in substantially the form annexed hereto. It is
understood that the number of Securities to be purchased by us (hereinafter
referred to as "our Securities") as set forth herein will not be changed
without our consent except as provided herein or in the
Underwriting Agreement. The term "Underwriting Commitment", with respect to any
Underwriter, shall refer to the number of Securities which such Underwriter is
obligated to purchase pursuant to the provisions of the Underwriting Agreement.
2. Authority of Representative. We authorize you, as Representative of
the several Underwriters, (i) to act as our representative in all matters
concerning the Underwriting Agreement, this Agreement, and the purchase,
carrying, sale and distribution of the Securities thereunder, (ii) to exercise
all authority vested in the Underwriters or the Representative by the
Underwriting Agreement, and (iii) to take such action as you may deem necessary
or advisable in respect of all matters pertaining thereto, including the
determination of the time of the public offering and the furnishing to the
Company of the information to be included in the Prospectus with respect to the
terms of the offering. We understand that you will advise us when the
Securities are released for sale to the public. You will furnish to us as soon
as possible copies of the Prospectus to be used in connection with the offering
of the Securities. We authorize you on our behalf, in your discretion, to
approve or object to any amendments or supplements to the Registration
Statement or the Prospectus.
We authorize you to reserve for sale and to sell for our account (a) to
institutions and other retail purchasers and (b) to dealers selected by you
("Selected Dealers"), including Underwriters, such amounts of our Securities as
you determine, and we authorize you to fix the concessions and reallowances in
connection with any such sales to Selected Dealers. Such concessions and
reallowances may be allowed only as consideration for services rendered in
distribution to Selected Dealers who are actually engaged in the investment
banking or securities business, and who are either (i) members in good standing
of the National Association of Securities Dealers, Inc., ("NASD") and who agree
in writing to comply with Section 24 of the NASD's Rules of Fair Practice (the
"Rules") or (ii) foreign dealers who are not eligible for membership in the
NASD and (a) who agree that (x) in making sales of Securities outside the
United States they will comply with the NASD's Interpretation with Respect to
Free-Riding and Withholding and (y) they will not offer or sell any Securities
in the United States and (b) who agree in writing that in making sales of the
Securities outside the United States they will comply with the provisions of
Sections 8, 24 and 36 of Article III of such Rules and with Section 25 of such
Rules as that Section applies to a non-member broker or dealer in a foreign
county. Except for sales for the accounts of Underwriters designated by a
purchaser, aggregate sales of Securities to institutions and for the accounts
of Underwriters designated by a purchaser, aggregate sales of Securities to
institutions and other retail purchasers will be made for the accounts of the
several Underwriters as nearly as practicable in proportion to their respective
Underwriting Commitments. Sales of Securities to Selected Dealers will be made
for the accounts of the several Underwriters in such proportions as you
determine.
We authorize you in your discretion, after the Securities are released
for sale to the public, to change the public offering price of the Securities,
the concessions and reallowances in connection with sales to Selected Dealers
and other terms of sale hereunder and under the agreements with Selected
Dealers.
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Sales of the Securities between Underwriters may be made with your
prior consent, or as you deem advisable for Blue Sky purposes.
At or prior to the time when the Securities are released for sale, you
will advise us of the amounts so sold or reserved for sale for our account. We
will retain for direct sale any Securities purchased by us and not sold or
reserved for sale for our account. With your consent, we may obtain release
from you for direct sale of Securities reserved for sale to Selected Dealers
but not sold and paid for, in which event the amount reserved for our account
for sale to Selected Dealers will be correspondingly reduced.
After advice from you that the Securities are released for sale to the
public, we will offer for sale to the public in conformity with the terms of
offering set forth in the Prospectus such of our Securities as you advise us
are not sold or reserved for sale for our account.
We will advise you from time to time, at your request, of the number of
Securities retained by us remaining unsold. You may at any time (a) reserve any
of such Securities for sale by you for our account or (b) purchase any of such
Securities which, in your opinion, is needed to enable you to make deliveries
for the accounts of the several Underwriters pursuant to this Agreement. Such
purchases will be made at the public offering price or, at your option, at such
price less any part of the Selected Dealers' concession.
In respect of any Securities sold directly by us and thereafter
purchased by you at or below the public offering price prior to the termination
of this Agreement (or such longer period as may be necessary to cover any short
position with respect to the offering), you may charge our account with an
amount equal to the Selected Dealers' concession with respect thereto and
credit such amount against the cost thereof, or you may require us to purchase
such Securities at a price equal to the total cost thereof, including any
commissions and transfer taxes on redelivery.
3. Stabilization and Trading in Securities. We authorize you, at any
time prior to Termination (as defined in Section 5 hereof), in your discretion
to make purchase and sales of Securities in the open market or otherwise,
either for long or short accounts, and on such terms and at such prices as you
may determine; provided, however, that in no time will the aggregate of our net
commitments resulting from such purchases and sales whether for long or short
account, exceed 15% of our Underwriting Commitment. All such purchases and
sales will be made for the respective accounts of several Underwriters as
nearly as practicable in proportion to their respective Underwriting
Commitments. We agree to take up at cost on demand any of the Securities so
purchased for our account and to deliver on demand any of the Securities so
sold for our account. Without limiting the generality of the foregoing, you may
buy or take over for the accounts of the several Underwriters, all in the
proportion and within the limits set forth above, at the price at which
reserved, any Securities of any Underwriter reserved for sale by you, but not
purchased and paid for.
3
Except as permitted by you, we will not bid for, purchase, attempt to
induce others to purchase, or sell, directly or indirectly, any Securities
otherwise than by (a) the purchase and sale of Securities as provided in the
Underwriting Agreement, this Agreement or the agreements with Selected Dealers,
(b) the purchase from or sale to other Underwriters or Selected Dealers of
Securities at the public offering price or at such price less any part of the
Selected Dealers' concession and (c) as brokers pursuant to unsolicited orders.
We confirm that we have at all times complied and agree that we will at all
times comply with the provisions of Rule 10b-6 of the Commission under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), applicable to
this offering.
We understand that, in the event that you effect stabilization pursuant
to this Section, you will notify us promptly of the date and time at which the
first stabilizing purchase is effected and the date and time when stabilizing
is terminated. We agree (and such agreement will survive Termination) to comply
with all requirements of the 1934 Act and the rules and regulations thereunder
applicable to us with respect to notifications and keeping of records of
stabilizing transactions.
4. Delivery and Payment. At your request, we will furnish you with
funds in an amount equal to the public offering price, less the Selected
Dealers' concession, of either our Securities or our unreserved Securities, as
you may direct, and we authorize you to make payment therewith pursuant to the
provisions of the Underwriting Agreement. Such payment will be credited to our
account. You may in your discretion make such payment on our behalf with your
own funds, in which event we will reimburse you on request.
You will promptly deliver to us any Securities purchased by us and not
sold or reserved for sale by you. You may in your discretion deliver such
Securities to us through the facilities of The Depository Trust Company if
transactions in the Securities may be settled through its facilities and if we
are a member or, if we are not a member, through our ordinary correspondent who
is a member, unless we promptly give you written instructions otherwise. All
other Securities which you then hold for our account will be delivered to us
upon Termination, or prior thereto in your discretion, and may at any time be
delivered to us for carrying purposes only, subject to redelivery upon demand.
If, upon Termination, the amount of Securities reserved by you which remains
unsold does not exceed ten percent of the aggregate Underwriting Commitments of
all of the Underwriters, you may, in your discretion, sell such Securities at
such prices as you may determine.
We authorize you, in connection with the purchase, distribution and
resale of the Securities, to advance your own funds for our account (in which
event we will reimburse you on request), charging current interest rates, or to
arrange loans for our account and execute on our behalf any note in connection
therewith, and to hold or pledge all or any part of our Securities as security
therefor. Any lender is hereby authorized to accept your instructions with
respect thereto.
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You will promptly remit to us or credit to our account (a) the proceeds
of any loan made on our behalf and (b) upon payment to you for any unreserved
Securities sold for our account, an amount equal to the sale price of such
Securities received by you, less transfer taxes, if any, and expenses, and (c)
upon payment to you for any reserved Securities sold for our account, the
purchase price (if any) paid by us for such Securities, and you will debit or
credit, as appropriate, our account with the difference between the sale price
and the purchase price of reserved Securities sold for our account.
5. Termination and Settlement. Termination of this Agreement
("Termination") will occur (a) at the close of business on the forty fifth 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 you 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, all authorizations, rights and obligations hereunder
will cease, except (a) the mutual obligation to settle account hereunder, (b)
our obligation to pay any claims referred to in the last paragraph of this
Section, (c) our obligation with respect to purchases which may be made by you
from time to time thereafter to cover any short position with respect to the
offering and (d) the obligations with respect to indemnity and contribution set
forth in Section 7 hereof, all of which will continue until fully discharged,
and except your authority with respect to matters to be determined by you, or
by you and the Company pursuant to the terms of the Underwriting Agreement,
which will survive Termination.
The accounts arising pursuant to this Agreement will be settled and
paid as soon as practicable after Termination. The determination by you of the
amounts to be paid to or by us will be final and conclusive.
We authorize you to charge our account with (a) any transfer taxes on
sales made for our account, (b) our proportionate share (based upon our
Underwriting Commitment) of all expenses (other than transfer taxes) incurred
by you, as Representative of the several Underwriters, in connection with the
negotiations for, purchase of and distribution of the Securities and (c) the
compensation to the Representative referred to in Section 6.
Notwithstanding any settlement upon Termination, we will pay our
proportionate share of an 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 Securities for our
account.
6. Indemnity and Contribution. Each Underwriter, including yourselves,
agrees to indemnity, hold harmless and reimburse each other Underwriter, each
person who controls any
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other Underwriter within the meaning of Section 15 of the Act, and any
successor of any other Underwriter, all if and to the extent that each
Underwriter will be obligated in the Underwriting Agreement to indemnify, hold
harmless and reimburse the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Act.
Each Underwriter (including yourselves) will pay upon request, as
contribution, its proportionate share, based upon its Underwriting Commitment,
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 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
Securities, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order 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 paragraph, appropriate adjustment may be
made by you to reflect any amounts received by any one or more Underwriters in
respect of such claim from the Company, pursuant to the Underwriting Agreement
or otherwise. There will be credited against any amount paid or payable by us
pursuant to this paragraph 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 paragraph, appropriate provision will 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,
including fees and disbursements for a successful defense, will be included in
the amounts payable pursuant to this paragraph. In determining amounts payable
pursuant to this paragraph, any loss, claim, damage, liability or expense
incurred by any person controlling any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the 1934 Act which has been incurred by
reason of such control relationship will 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 paragraph would be applicable, you will give
prompt notice thereof to each Underwriter. You will also 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 obligations to make any
payments under this paragraph, each non-defaulting Underwriter will be
obligated to pay its proportionate
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share of all defaulted payments, based upon such Underwriter's Underwriting
Commitment as related to the Underwriting Commitments of all non-defaulting
Underwriters.
7. Position of Representative. In taking any action under this
Agreement, you will act only as agent to the Underwriters and will be under no
liability to us except for lack of good faith, for obligations expressly
assumed by you in this Agreement and for any liability imposed by the Act.
8. Miscellaneous. If the Underwriting Agreement provides that the
obligations of the Underwriters thereunder are subject to the condition that
the Registration Statement, as defined therein, shall have become effective not
later than a specified time on a specified date following the date of the of
the of Underwriting Agreement, you are hereby authorized, in your discretion,
to extend such date to not later than the same specified time on the second
full business day following such specified date, and, with the consent of
Underwriters, including yourselves, who have agreed to purchase in the
aggregate at least a majority of the Firm Securities, to extend such date to
any subsequent date and to execute on our behalf any supplementary agreement
that may be necessary for such purpose.
With respect to the Underwriting Agreement, you are authorized in your
discretion (a) to postpone the Closing Date, or any other date specified
therein and (b) to exercise any right of cancellation or termination.
Default by any of the other Underwriters with respect to the
Underwriting Agreement will release us from any of our obligations thereunder
and hereunder only if the Underwriting Agreement is thereupon terminated in
accordance with its terms. If one or more Underwriters default under the
Underwriting Agreement, you may arrange for the purchase by others, including
non-defaulting Underwriters, of Securities not taken up by the defaulting
Underwriter or Underwriters.
Nothing herein contained will constitute the Underwriters a
partnership, association or separate entity, and the obligations of ourselves
and of each of the other Underwriters are several and not joint. If for Federal
income tax purposes the several 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.
We authorize you to file with any governmental agency any reports
required to be field by you in connection with the transactions contemplated by
this Agreement or the Underwriting Agreement, and we will furnish any
information in our possession needed for such reports. You do not assume any
responsibility or obligation as to our right to sell the Stock in any
jurisdiction, notwithstanding any information you may furnish in that
connection.
7
We will not advertise over our name until after the first public
advertisement made by you and then only at our own expense and risk. We
authorize you to exercise complete discretion with regard to the first public
advertisement.
You will not be under any duty to account for any interest on our funds
at any time in your hands.
We hereby confirm that we are willing to accept the responsibilities
under the Act of an Underwriter named in the Registration Statement. We agree
that we will deliver all preliminary and final prospectuses required for
compliance with the provisions of Rule 15c2-8 under the 1934 Act. We agree to
purchase our Securities, set forth on Schedule A, on a "firm committment basis"
and that we will meet all net capital requirements to do so.
Any notice from you to us will be deemed to have been duly given if
mailed, telexed or sent by facsimile or other written communication to us at
the address set forth on the signature page hereof. Any notice to you will be
deemed to have been duly given if mailed, telexed or sent by facsimile or other
written communication to you at Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 Attention: Xx. Xxxxx Xxxxxxx, President, or at such other address as you
shall specify.
You represent that you are a member in good standing of the NASD and we
represent that we are actually engaged in the investment banking or securities
business and are a member in good standing of the NASD or a foreign dealer not
eligible for membership in the NASD and we agree that, if the former, we will
comply with the provisions of Section 24 of the Rules, and, if the latter, that
(i) in making sales of the Securities outside the United States, we will comply
with the provisions of Sections 8, 24 and 36 of such rules, with Section 25 of
such Rules as that Section applies to a non-member broker or dealer in a
foreign country and with the requirements of the NASD's Interpretation with
Respect to Free-Riding and Withholding, and (ii) we will not offer or sell any
of the Securities in the United States except through you.
The Agreement will be governed by and construed in accordance with the
laws of the State of New York, without regard to the principles of conflict of
law.
8
The Agreement is being executed by us and delivered to you in
duplicate. Please indicate your receipt of identical agreements from each of
the other Underwriters by signing and returning to us one counterpart of this
Agreement whereupon it will constitute a binding contract between us.
Very truly yours,
[Name of Underwriter]
By __________________________
Name:
Title:
Address:
Confirmed as of the day and year first above written
XXXXXXXXX XXXXXX, INC.
Representative of the Underwriters
By: ______________________
Name:
Title:
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Schedule A
Name Common Stock Warrants
---- ------------ --------
Xxxxxxxxx Xxxxxx, Inc. 1,400,000 1,400,000
--------------- ----------
Total 1,400,000 1,400,000
10
