VALUERICH, INC. West Palm Beach, Florida 33407 Re: Underwriting Agreement Initial Public Offering Form SB-2 (File No.: 333-135511) Gentlemen:
US
Euro Securities, Inc.
00000
Xxxxxxx Xxx Xxxxx
Xxxxxxx
Xxx, Xxxxxxx 00000
|
Lane
Capital Markets, LLC
000
Xxxxxx Xxxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxxxx 00000
|
________________,
2007
VALUERICH,
INC.
0000
X.
Xxxxx Xxxxxxx, Xxxxx X
Xxxx
Xxxx
Xxxxx, Xxxxxxx 00000
Re: Underwriting
Agreement
Initial
Public
Offering
Form
SB-2 (File
No.: 333-135511)
Gentlemen:
This
Agreement confirms the mutual
understanding and agreement between ValueRich, Inc., a Delaware
corporation (the “Company”), and US Euro Securities, Inc. and
Lane Capital Markets, LLC, as exclusive managing agents (the
“Managing Agents”) in connection with the offering and sale,
on a “best-efforts, minimum/maximum” basis (the “Offering”), through the
Managing Agents and other broker-dealers identified on Schedule
I attached hereto (together with the Managing Agents, the
“Placement Agents”) of a minimum of 1.6 million (1,600,000) (the
“Minimum Offering”) and a maximum of 2.3 million
(2,300,000) shares (the “Maximum Offering”) of common stock,
par value $0.01 per share (the “Common Stock”), of the Company (the
“Securities”) at an initial offering price to the public
of $3.50 per share (the “Offering Price”) pursuant
to a registration statement on Form SB-2, as amended (File No.: 333-135511)
(the
“Registration Statement”), filed with the Securities and Exchange
Commission (the “SEC” or the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”). The Offering
is further described in the Registration Statement.
1. Registration
Statement. The Registration Statement, including the prospectus
included in the Registration Statement, and the exhibits filed therewith,
for
the registration of the Securities under the Securities Act will be prepared
by
the Company and filed with the SEC and the applicable state authorities.
The
Registration Statement, any amendments thereto, and all documents filed by
the
Company with the SEC shall conform in all material respects with the
requirements of the Securities Act and the Rules and Regulations promulgated
thereunder. All financial statements contained in the Registration Statement
and
any amendment thereto shall have been reported on by independent certified
public accountants acceptable to the Managing Agents, it being agreed that
Xxxxxxxx, Bierwolf & Xxxxxx, LLC, the Company’s current independent
auditors, are acceptable to the Managing Agents.
The
Registration Statement, includes the prospectus, Part II, and financial
schedules and exhibits thereto, as amended at the time when it shall become
effective, and the prospectus included as part of the Registration Statement
on
file with the SEC when it shall become effective or, if the procedure in
Rule
430A of the Rules and Regulations (as defined below) under the
Securities
Act
is
followed, the prospectus that discloses all the information that was omitted
from the prospectus pursuant to such Rule on the date the Registration Statement
is declared effective by the SEC (the “Effective Date”), and in either case,
together with any changes contained in any prospectus filed with the SEC
by the
Company with your consent after the Effective Date, is herein referred to
as the
“Final Prospectus.” If the procedure in Rule 430A is followed, the prospectus
included as part of the Registration Statement on the date when the Registration
Statement became effective is referred to herein as the “Effective Prospectus.”
Any prospectus included in the Registration Statement and in any amendments
thereto prior to the Effective Date of the Registration Statement is referred
to
herein as a “Preliminary Prospectus.” For purposes of this Agreement, “Rules and
Regulations” mean the rules and regulations adopted by the SEC under the
Securities Act.
2. Representations,
Warranties and Covenants of the Company. In order to induce the
Managing Agents to enter into this Agreement, the Company hereby represents,
warrants and covenants as follows:
(a) Neither
the Registration Statement nor the other material to be filed with the SEC
will
contain any untrue statements of material facts nor will there be any omissions
of material fact required to be stated therein or that are necessary to make
the
statements therein not misleading, except that, as between the parties, this
covenant will not apply to any statement or omission made in reliance
upon or in conformity with information furnished to the Company by and with
respect to the Placement Agents expressly for use in the Registration Statement
or any amendment or supplement thereto.
(b) The
Registration Statement, as may be amended from time to time, shall be submitted
to the Managing Agents for review at least five (5) business days before
the
date the Company and Managing Agents propose to file the Registration Statement
with the SEC. All amendments and supplements to the Registration Statement
shall
be submitted to the Managing Agents at least five (5) business days prior
to the
date that such amendments are intended to be filed with the SEC, which time
period may be shortened by mutual consent of the parties. The content of
any
verbal comments and copies of all comment letters received from the SEC shall
immediately be supplied to Managing Agents and their counsel. The Company
will
deliver to the Managing Agents as many copies of the manually executed and
conformed Registration Statement and each amendment thereto (including
exhibits), as the Managing Agents shall reasonably request and at the same
time
as such documents are filed with the SEC. The Company will not allow the
Registration Statement to become effective without obtaining the prior written
consent of the Managing Agents.
(c) The
Company has obtained a CUSIP number for the Securities, and the Company will
use
its best efforts to register or qualify (or exempt from
registration/qualification) the Securities for offering in every state,
territory or possession of the United States (including the District of
Columbia, hereinafter referred to as a “State”) in which it plans to
offer the Securities for sale. The materials filed or to be filed
with any State will not contain any untrue statements of material fact nor
are
there or will there be any omissions of material facts required to be stated
therein that are necessary to make the statements therein not
misleading, except that, as between the parties, this covenant will not apply
to
any statement or omission made in reliance upon or in conformity with
information furnished to the Company by and with respect to Placement Agents
expressly for use in the materials filed with the State.
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(d) The
outstanding capital stock of the Company has been duly and validly authorized,
issued and is fully paid and non-assessable and will conform to all statements
made in the Registration Statement, including the Prospectus and relevant
exhibits, with respect thereto. The Securities have been duly and
validly authorized and, when issued and delivered against payment as provided
in
this Agreement, will be validly issued, fully paid and
non-assessable.
(e) The
Securities are validly authorized, and when issued and delivered in accordance
with this Agreement, will be validly issued, fully paid and nonassessable,
without any personal liability attaching to the ownership thereof, and will
not
be issued in violation of any preemptive or similar rights of stockholders
of
the Company, and the holders thereof will receive good title to the Securities
free and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders’ agreements and voting trusts. The Securities conform to
all statements relating thereto in the Registration Statement and
Prospectus.
(f) The
Company has been legally incorporated and is now, and always during the period
of the Offering will be, a validly existing corporation under the laws of
the
State of Delaware, lawfully qualified to conduct the business for which is
was
organized and which it proposes to conduct. The Company will always
during the period of the Offering be qualified to conduct business as a foreign
corporation in each jurisdiction where the nature of its business requires
such
qualification.
(g) The
Company’s certificate of incorporation provides for the authorization of 100
million (100,000,000) shares of Common Stock and ten million (10,000,000)
shares
of preferred stock, par value $0.001 per share. There are no
outstanding options, warrants or other rights to purchase or otherwise receive
securities of the Company except as described in the Registration
Statement.
(h) The
Company has no subsidiaries nor contemplates acquiring subsidiaries or engaging
in mergers with or the acquisition of any companies.
(i) The
financial statements, together with related schedules and notes, to be included
in the Registration Statement will present fairly the financial condition
of the
Company and will be reported upon by independent public accountants according
to
generally accepted accounting principles and as required by the rules and
regulations of the Commission.
(j) Neither
the Securities nor any other Company’s securities are subject to preemptive
rights.
(k) The
Company has the legal right and authority to enter into this Underwriting
Agreement, to effect the proposed sale of the Securities, and to effect all
other transactions contemplated by this Agreement.
(l) The
Company is eligible to use Form SB-2 for the offering of the
Securities.
(m) The
Company possesses adequate certificates and permits issued by the appropriate
federal, state and local regulatory authorities necessary to conduct its
business and to retain possession of its properties. The Company has
not received any notice of any proceeding relating to the revocation or
modification of any of these certificates or permits.
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(n) The
Company has filed all tax returns required to be filed and is not in default
in
the payment of any taxes that have become due pursuant to any law or any
assessment.
(o) All
of the contracts, leases, licenses, permits and agreements under which the
Company operates as will be described in the Registration Statement are in
full
force and effect. The Company is not in default under any of the
material terms or provisions of any such contracts, leases, licenses, permits
or
agreements.
(p) All
original documents and other information relating to the Company’s business are
and will continue to be made available upon request to the Managing Agents
and
their counsel at the offices of the Company, and copies of any such documents
will be promptly furnished upon request to the Managing Agents or their
counsel.
(q) The
Company shall appoint Interwest Transfer Company, Inc., or another firm
reasonably acceptable to the Managing Agents, as the Company’s transfer
agent. The Company will continue to retain a transfer agent
reasonably satisfactory to the Managing Agents for so long as the Company
is
subject to the reporting requirements under Section 12(g) or Section 15(d)
of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Company will make arrangements to have available at
the office of the transfer agent sufficient quantities of the Company’s
appropriate certificates as may be needed for the quick and efficient transfer
of the Securities.
(r) The
Company will use the proceeds from the sale of the Securities as will be
set
forth in the Registration Statement and Prospectus.
(s) There
are no contracts or other documents required to be described in the Registration
Statement or to be filed as exhibits to the Registration Statement that will
not
be described or filed as required.
All
of the above representations and
warranties shall survive the performance or termination of this
Agreement.
3. Representations,
Warranties and Covenants of the Managing Agents. Each of the
Managing Agents represents, warrants and covenants as follows:
(a) It
is registered as a broker-dealer with the Commission, and is registered to
the
extent registration is required with the appropriate governmental agency
in each
State in which it offers or sells the Securities, and is a member of the
National Association of Securities Dealers, Inc. (“NASD”) and will use
its best efforts to maintain such registrations, qualifications and memberships
throughout the term of the Offering.
(b) To
the knowledge of the Managing Agent, no action or proceeding is pending against
the Managing Agent or any of its officers or directors concerning the Managing
Agent’s activities as a broker or dealer that would affect the Company’s
offering of the Securities.
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(c) The
Managing Agent, or the Placement Agents, will offer the Securities only in
those
states and in the quantities that are identified in the Blue Sky Memoranda
from
the Company’s counsel to the Managing Agent that the offering of the Securities
has been registered or qualified (or exempt from registration/qualification)
for
sale under the applicable State statutes and regulations. The
Managing Agent and the Placement Agents, however, may offer the Securities
in
other States if (i) the transaction is exempt from the registration requirements
in that State, (ii) the Company’s counsel has received notice ten days prior to
the proposed sale, and (iii) the Company’s counsel does not object within such
ten-day period.
(d) The
Managing Agent, in connection with the offer and sale of the Securities and
in
the performance of its duties and obligations under this Agreement, agrees
to
use its best efforts to comply with all applicable federal laws; the laws
of the
states or other jurisdictions in which the Securities are offered and sold;
and
the Rules and current written interpretations and policies of the
NASD.
(e) The
Managing Agent is a duly organized entity, validly existing and in good standing
under the laws of the state of its formation with all requisite power and
authority to enter into this Agreement and to carry out its obligations
hereunder.
(f) This
Agreement has been duly authorized, executed and delivered by the Managing
Agent
and is a valid agreement on the part of the Managing Agent.
(g) Neither
the execution of this Agreement nor the consummation of the transactions
contemplated hereby will result in any breach of any of the terms or conditions
of, or constitute a default under, the formation documents or bylaws of the
Managing Agent or any indenture, agreement or other instrument to which the
Managing Agent is a party or violate any order directed to the Managing Agent
of
any court or any federal or State regulatory body or administrative agency
having jurisdiction over the Managing Agent or its affiliates.
(h) No
person acting by, through or under the Managing Agent will be entitled to
receive from the Managing Agent or from the Company finders’ fees or similar
payments, except as set forth in this agreement.
All
of the above representations and
warranties shall survive the performance or termination of this
Agreement.
4. Employment
of the Managing Agents. In reliance upon
the
representations and warranties and subject to the terms and conditions of
this
Agreement:
(a)
The Company employs the Managing
Agents as its exclusive agents to sell for the Company's account the Securities,
on a cash basis only, at a price of $3.50 per share. The Managing Agents
agree
to use their best efforts, as agents for the Company, to sell the Securities
subject to the terms and conditions set forth in this Agreement. It is
understood between the
parties
that there is no firm commitment by the Managing Agents to purchase any or
all
of the Securities.
(b)
The obligation of the Managing
Agents to offer the Securities is subject to receipt by it of written advice
from the SEC that the Registration Statement is effective, is subject to
the
Securities being registered or qualified (or exempt from
registration/qualification) for offering under applicable laws in the States
as
may be reasonably designated, is subject to the absence of any prohibitory
action by any governmental body, agency or official, and is subject to the
terms
and conditions contained in this Agreement and in the Registration
Statement.
5
(c)
The Company and the Managing Agents
agree that unless a minimum of 1.6 million (1,600,000) of the Securities
to be
offered are subscribed on or within 60 days (or such lesser number of days
as
may be required by the American Stock Exchange) after the Effective Date,
(which
period may be extended by the Managing Agents for an additional period or
periods of up to 60 days in the aggregate), the agency between the Company
and
the Managing Agents will terminate. In such an event, the full proceeds that
have been paid for the Securities shall be returned to the purchasers within
five (5) business days. Prior to the sale of all of the Securities to be
offered, all proceeds received from the sale of the Securities will be deposited
into a non-interest bearing escrow account entitled "ValueRich, Inc. Escrow
Account" (the "Escrow Account") with Continental Stock Transfer &
Trust Company (the "Escrow Agent") or the Clearing Firm Account (as
defined below).
(d)
The Managing Agents, the Company
and the Escrow Agent have entered into a fund escrow agreement ("Escrow
Agreement") filed as exhibit to the Registration Statement. The Company
agrees to faithfully perform its obligations under the Escrow Agreement.
The
Managing Agents will promptly deliver the funds designated for deposit to
the
Escrow Account into the Escrow Account in accordance with Rule 15c2-4 of
the
Exchange Act, but in any event not later than noon the next business day
after
receipt of such funds. The Managing Agents will promptly deliver a copy of
each
subscription agreement received to the executive offices of the Company,
to the
attention of the Company's Assistant Treasurer. In accordance with the
requirements of Rules 15c2-4 and 10b-9 of the Exchange Act, in the event
that
the Minimum Offering amount is not met, the funds paid into the Escrow Account
or Clearing Firm Account (as defined below) shall be promptly returned to
each
individual subscriber by the Escrow Agent or Clearing Firm, as the case may
be,
and not returned to the Managing Agents or the Company for delivery to such
subscribers.
(e) Additionally,
a
bank account
(the “Clearing Firm Account”) has been established at US Euro Securities’
Clearing Firm (the “Clearing Firm”) where NASD member firms can use the
Depository Trust Company (DTC) system and their trades can be processed on
an
electronic basis. Upon confirmation that the funds held in the Escrow Account
together with the total shares verified by Effective Notice and All Sold
Agreements by NASD member firms with the Managing Agents meet the Minimum
Offering amount, the process will proceed. The Clearing Firm account name
is the
“Value Rich Syndicate Account.” In order to ensure compliance with SEC
Rule 15c2-4, the Clearing Firm Account will be subject to all requirements
of
the Escrow Account.
(f) Prior
to the Minimum Closing being consummated, the Managing Agents will receive
confirmation of the total amount of funds held both in the Clearing Firm
Account
and the Escrow Account to ensure that the Minimum Offering amount has been
met. Also prior to the Minimum Closing
being
consummated, the Company will confirm in writing to the Managing Agents that
all
subscriptions for all funds constituting the Minimum Offering have been accepted
by the Issuer.
(g)
Subject to the closing of the sale
by the Company of the Minimum Offering, the Company agrees to pay to the
Managing Agents immediately upon the release to the Company in such closing
(the
"Initial Closing") of the investors' funds deposited into the Escrow
Account and Clearing Firm Account, and upon release to the Company of the
investors' funds in each closing thereafter:
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(i)
|
upon
each closing, an underwriting discount equal to nine percent (9%)
of the
aggregate subscription amount for all Securities placed by the
Managing
Agents and the Placement Agents;
|
(ii)
|
a
non-accountable expense allowance to the Managing Agents for legal,
accounting, and other miscellaneous expenses equal to three percent
(3%)
of the aggregate subscription amount for all Securities placed
by the
Managing Agents and the Placement Agents; such allowance to be
paid on
each closing of the Offering with respect to the amount closed
in each
such closing less advances which are to be applied against such
expense
allowance as stated; and
|
(iii)
|
A
bank check or wire transfer of $108,000 pursuant to a three (3)
year
consulting agreement, in the form substantially similar to that
attached
hereto as Annex A, at a fee of $36,000 per year to be
entered into by and between the Company and the Managing Agents,
which
such agreement shall be effective upon the
Closing.
|
(h) At
the Initial Closing, the Company shall also deliver to the Managing Agents,
lock-up agreements, satisfactory to the Managing Agents (the “Lock-Up
Agreements”), from each of the officers, directors and 5% or more
stockholders to the Company, agreeing that for a period of twelve (12) months
from the date the Effective Date, he, she or it will not, without the Company’s
and each Managing Agent’s prior written consent, offer, sell, contract to sell,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock of the Company, including
without limitation, any shares of Common Stock issuable upon the exercise
of any
employee stock options; provided however, that such persons
may offer, sell contract to sell, grant an option for the sale of, or
otherwise dispose of all or any part of his, her or its shares of Common
Stock
or other securities or instruments of the Company during such period only
if
such transaction is private in nature and the transferee of such shares of
Common Stock or other securities or instruments agrees in writing prior to
such
transaction, to be bound by all of the provisions of such Lock-up
Agreement. The Lock-up Agreements shall also provide that each of the
officers, directors and 5% or more stockholders of the Company will agree
that
subsequent to the expiration of this twelve (12) month lock-up period, they
will
only dispose of or otherwise encumber any of their shares when the Securities
price, adjusted for any splits, or any material change in capital structure
via
merger or business combination, trades 60% above the Offering Price for a
twenty
(20) consecutive business day period. Commencing 12 months from the date
of this
prospectus, should the Company’s Common Stock trade sixty percent (60%) above
the Offering Price for a twenty (20) consecutive business day period,
all
contractual
lock-ups will be terminated. The lock-up will expire in all cases eighteen
(18)
months from the Effective Date. .
(i) The
Company shall be responsible for all of its selling expenses incident to
the
offering which are customarily incurred, paid, or borne by or on behalf of
issuers in connection with the sale of securities, even though such expenses
are
paid through the Managing Agents. Such selling expenses include, but are
not
limited to, the following: (1) the cost of preparing, printing, and filing
registration applications, registration statements, prospectuses, offering
circulars, and other documents used in registering securities, including
any
registration fees and other expenses associated therewith; (2) the amount
of any
attorney's fees and expenses incurred or paid in connection with the Offering;
(3) the amount of any accountant's or auditor's fees and expenses incurred
or
paid in connection with the Offering; (4) the amount of the fees and charges
of
any transfer agents, registrars, indenture trustees, escrow agents,
depositories, engineers, appraisers, or other professional or technical experts;
(5) the cost of authorizing, preparing, and printing certificates for securities
and other documents relating thereto, including taxes and stamps; (6) the
amount
of all printing, advertising, traveling expenses, and expenses in connection
with meetings and presentations for informational or promotional purposes
(e.g.,
"road show") incurred or paid by the Company or, at the request of or with
the
prior approval of the Company, which approval shall not be unreasonably
withheld, by the Managing Agents, in registering or selling securities; and
(7)
any other costs (including staffing or other additional administrative costs)
directly or indirectly borne by the Company in respect of the sale of the
securities being offered, that are not selling costs for the offering.
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(j) At
each Closing, the Managing Agents shall have received the favorable opinion
of
Xxxxxx & Xxxxx, LLP, counsel for the Company, having offices at Mission Bay
Office Plaza, 00000 Xxxxx Xxxx 0, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000,
addressed to the Managing Agents, to the satisfaction of the Managing
Agents.
(k) At
each closing, the Managing Agents shall have received a customary “cold comfort”
letter from the Company’s auditors.
5. Further
Agreements of the Company. The Company further agrees with the
Managing Agents as follows:
(a) To
use its best efforts to cause the Registration Statement to become effective
under the Securities Act as promptly as possible and notify the Managing
Agents
immediately, and confirm such notice in writing, (i) when the Registration
Statement and any post-effective amendment thereto become effective under
the
Securities Act, (ii) of the receipt of any comments from the SEC or the “blue
sky” or securities authority of any jurisdiction regarding the Registration
Statement, any post-effective amendment thereto, the Prospectus, or any
amendment or supplement thereto, (iii) of the filing with the SEC of any
supplement to the Prospectus, and (iv) of the receipt of any notification
with
respect to a Stop Order. The Company will use its best efforts to
prevent the issuance of any Stop Order and, if and if any Stop Order is issued,
to obtain the lifting thereof as promptly as possible. If the
Registration Statement has become or becomes effective under the Securities
Act
with a form of prospectus omitting information under Rule 430A of Regulation
C
promulgated under the Securities Act, or filing of the prospectus with the
SEC
is otherwise required under Rule 424(b) of Regulation C, the Company will
file
with the SEC the Prospectus, properly completed, pursuant to such
rule
within
the time period prescribed and will provide evidence satisfactory to the
Managing Agents of such timely filing.
(b) During
the time when a Prospectus relating to the Securities is required to be
delivered hereunder or under the Securities Acts or regulations promulgated
by
the SEC, comply with all the requirements imposed upon it by the Securities
Act,
as now existing and hereafter amended, and by the rules and regulations
promulgated thereunder, as from time to time in force, so far as necessary
to
permit the continuance of the sales of the Securities in accordance with
the
provisions hereof. If, at any time when a Prospectus relating to the
Securities is required to be delivered hereunder or under the rules or the
regulations promulgated by the SEC, any event shall have occurred as a result
of
which, in the reasonable opinion of counsel for the Company or counsel for
the
Managing Agents, the Registration Statement or the prospectus as then amended
or
supplemented contains any untrue statement of a material fact or omits to
state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or if, the in the reasonable opinion of
either of such counsel, it is necessary at any time to amend or supplement
the
Registration Statement or the prospectus to comply with the Securities Act
and
the rules and regulations promulgated thereunder, the Company will immediately
notify the Managing Agents and promptly prepare and file with the SEC an
appropriate amendment or supplement (in form and substance satisfactory to
the
Managing Agents) which will correct such statement or omission of which will
effect such compliance and will use its best efforts to have any such amendment
declared effective under the Securities Act as soon as possible.
8
(c) The
Company will use its best efforts to register or qualify the sale of the
Securities in such States as shall be reasonably requested by the Managing
Agents.
(d) The
Company will deliver to the Managing Agents as many copies of the Preliminary
Prospectus the Managing Agents may reasonably request during the period
following the filing of the Registration Statement and each amendment
thereto. The Company will deliver to the Managing Agents as many
copies of the Final Prospectus and each post-effective amendment of the
Registration Statement, as the Managing Agents may reasonably request during
the
period of the offering and for ninety (90) days after the closing
date,
(e) The
Company will file with the Commission and any appropriate State securities
commissioners any sales and other reports required by the rules and regulations
of such agencies and will promptly supply copies to the Managing
Agents.
(f) The
Company will notify the Managing Agents a reasonable amount of time in advance
of any additional issuance of shares following a successful closing, for
a
period of two years following the Final Closing Date, except upon the issuance
of shares underlying warrants outstanding on the closing date and shares
issued
pursuant to any duly adopted directors or employees stock or stock option
or
equivalent plan, the issuance of which Company will notify the Managing Agents
within five business days following such issuance.
6. Indemnification
and Contribution.
(a) Indemnification
by Company. The Company shall indemnify and hold harmless each
Managing Agent and each participating dealer against any and all loss, claim,
damage or
liability,
joint or several, to which such Managing Agent or participating dealer may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, or liability (or action with respect thereto) arises out of
or is
based upon (a) any violation of any registration requirements; (b) any improper
use of sales literature by the Company; (c) any untrue statement or alleged
untrue statement made by the Company in Section 2 hereof; (d) any untrue
statement or alleged untrue statement of a material fact contained (i) in
the
Registration Statement, any Preliminary Prospectus, Effective Registration
or
the Final Prospectus or any amendment or supplement thereto, or (ii) in any
application or other document, executed by the Company specifically for such
application or based upon written information furnished by the Company, filed
in
order to qualify the Securities under the securities laws of the states where
filings were made (any such application, document, or information being
hereinafter called “Blue Sky Application”); or (e) the omission or alleged
omission to state in the Registration Statement, any Preliminary Prospectus,
the
Effective Prospectus, or the Final Prospectus or any amendment or supplement
thereto or in any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading; and shall
reimburse the Managing Agents and each participating dealer for any legal
or
other reasonable expenses incurred by the Managing Agents and participating
dealer in connection with investigating or defending against or appearing
as a
third-party witness in connection with any such loss, claim, damage, liability
or action, notwithstanding the possibility that payments for such expenses
might
later be held to be improper, in which case the person receiving them shall
promptly refund them; except that the Company shall not be liable in any
such
case to the extent, but only to the extent, that any such loss, claim, damage,
or liability arises out of or is based upon 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 through the
Managing Agents or participating dealer by or on behalf of the Managing Agents
or participating dealer specifically for use in the preparation of the
Registration Statement, any Preliminary Prospectus, the Effective Prospectus
and
the Final Prospectus or any amendment or supplement thereto, or any Blue
Sky
Application.
9
(b) Indemnification
by Managing Agents. The Managing Agents shall indemnify and hold
harmless the Company against any and all loss, claim, damage or liability,
joint
or several, to which the Company may become subject under the Securities
Act or
otherwise, insofar as such loss, claim, damage, liability (or action in respect
thereto) arises out of or is based upon (a) any untrue statement or alleged
untrue statement of a material fact contained (i) in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus or the Final
Prospectus or any amendment or supplement thereto or (ii) in any Blue Sky
Application; or (b) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospective, the Effective Prospectus
or
the Final Prospectus or any amendment or supplement thereto or in any Blue
Sky
Application a material fact required to be stated therein or necessary to
make
the statements therein not misleading; except that such indemnification shall
be
available in each such case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was
made in reliance upon information and in conformity with written information
furnished to the Company through the Managing Agents or on behalf of the
Managing Agents specifically for use in the preparation thereof; and shall
reimburse any legal or other expenses reasonably incurred by the Company
in
connection with the investigation or defending against any such loss, claim,
damage, liability or action.
(c) Right
to Provide Defense. Promptly after receipt by an indemnified party
under Section 6(a) or 6(b) above of written notice of a claim or the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such section,
notify
the indemnifying party in writing of the claim or the commencement of that
action; the failure to notify the indemnifying party shall not relieve it
of any
liability which it may have to an indemnified party, except to the extent
that
the indemnifying party did not otherwise have knowledge of the claim or
the commencement of the action and the indemnifying party’s ability to
defend against the claim or action was prejudiced by such failure. Such
failure shall not relieve the indemnifying party from any other liability
which
it may have to the indemnified party or any person identified in Section
6(d)
below. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its
election to assume the defense of such claim or action, the indemnifying
party
shall not be liable to the indemnified party under such section for any legal
or
other expenses subsequently incurred by the indemnified party in connection
with
the defense thereof other than reasonable costs of investigation; except
that
the indemnified party shall have the right to employ counsel to represent
the
indemnified party who may be subject to liability arising out of any claim
in
respect of which indemnity may be sought by the indemnified party under this
Section 6 if, in the reasonable judgment of the indemnified party, it is
advisable for the indemnified party to be represented by separate counsel,
and
in that event the fees and expenses of such separate counsel shall be by
the
indemnifying party. The indemnified party may, but shall not be obligated
to,
participate in the defense at its own expense with its own counsel.
Notwithstanding anything contained herein, the Company shall promptly reimburse,
or advance if so requested by the Managing Agents, any and all reasonable
and
accountable attorney fees and expenses incurred, or to be incurred, by the
Managing Agents under this Section 6.
10
(d) Contribution.
If the indemnification provided for in Sections 6(a) and 6(b) of this Agreement
is unavailable or insufficient to hold harmless an indemnified party, then
each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages, or liabilities
referred to in Sections 6(a) or 6(b) above (a) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one
hand and the Managing Agents or participating dealers on the other from the
offering of the Securities; or (b) if the allocation provided by clause (a)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect the relative benefits referred to in clause (a) above but also
the
relative fault of the Company on the one hand and the Managing Agents or
participating dealers on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, or liabilities,
as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Managing Agents or participating dealers
shall
be deemed to be in the same proportion as the total net proceeds from the
Offering (before deducting expenses) received by the Company bear to the
total
compensation received by the Managing Agents or participating dealers under
this Agreement. Relative fault shall be determined by reference to, among
other
things, whether the untrue statement of a material fact or the omission to
state
a material fact relates to information supplied
by
the
Company, the Managing Agents, or the participating dealers and the parties’
relative intent, knowledge, access to information, and opportunity to correct
or
prevent such untrue statement or omission. For purposes of this Section 6(d),
the term “damages” shall include reasonable counsel fees or other expenses
reasonably incurred by the Company, the Managing Agents, or participating
dealers in connection with investigating or defending any action or claim
which
is the subject of the contribution provisions of this Section 6(d).
Notwithstanding the provisions of this Section 6(d), no Managing Agent or
participating dealer shall be required to contribute any amount in excess
of the
amount by which the total price at which the Securities underwritten by it
and
distributed to the public were offered to the public exceeds the amount of
any
damages which such Managing Agent or participating dealer has otherwise been
required to pay by reason of any such untrue statements or omissions. No
person
adjudged guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Under this Section
6(d), each Managing Agent’s obligations to contribute are several in proportion
to their respective underwriting obligations and not joint. Each party entitled
to contribution agrees that upon the service of a summons or other initial
legal
process upon it in any action instituted against it in respect of which
contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but
the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought from any obligation
it
may have hereunder or otherwise (except as specifically provided in Section
6(d)
hereof).
11
(e) Extension
of Obligations. The obligations of the Company under this Section 6
shall be in addition to any other liability which the Company may otherwise
have, and shall extend, upon the same terms and conditions, to each person,
if
any, who controls any Managing Agent within the meaning of the Securities
Act;
and the obligations of the Managing Agents under this Section shall be in
addition to any liability that the respective Managing Agent may otherwise
have,
and shall extend, upon the same terms and conditions, to each director of
the
Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to
each
officer of the Company who has signed the Registration Statement, and to
each
person, if any, who controls the Company within the meaning of the Securities
Act.
7. Termination.
(a) This
Agreement shall become effective 9:30 a.m., New York City local time, on
the
first full business day following the date on which the Registration Statement
becomes effective under the Securities Act. Subject to paragraph (c)
of this Section, this Agreement may be terminated by the Managing Agents
by
written notice sent to the Company at the address shown in this Agreement
at any
time prior to the Initial Closing.
(b) An
attempt to assign any rights and obligations under this Agreement shall
constitute automatic termination of this Agreement.
(c) Managing
Agents may terminate this Agreement, by notice to the Company, at any time
prior
to the final closing of this Offering (i) if there has occurred any material
adverse change, outbreak of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make
it, in
the Managing Agents’ judgment impracticable to market the Securities or enforce
contracts for the sale of the Securities, (ii) if trading in the securities
of
the Company has been suspended or materially limited by the SEC, (iii) if
trading generally on any national or foreign stock exchange or over-the-counter
market has been suspended, or minimum or maximum prices for trading have
been
fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or market or by order of the SEC or
any
other governmental authority, (iv) if a banking moratorium has been declared
by
either federal or any state authorities or (v) there shall have occurred
any
change, or any development or event involving a prospective change, in the
condition (financial or otherwise), business, properties or results of
operations of the Company, which, individually or in the aggregate, in the
judgment of the Managing Agents, is material and adverse and makes it
impractical or inadvisable to proceed with the offering, sale or delivery
of the
Securities on the terms and in the manner contemplated in the Prospectus.
12
(d) If
this Agreement is terminated pursuant to this paragraph 7, such termination
shall be without liability of any party to the other parties other than incurred
and payable expenses and fees owing under this Agreement..
8. Notices. All
notices shall be deemed to have been duly given if mailed, or if communicated
by
telegraph, facsimile, electronic mail or telephone and subsequently immediately
confirmed in writing:
To
the Company:
|
ValueRich,
Inc.
0000
X. Xxxxx Xxxxxxx, Xxx. X
Xxxx
Xxxx Xxxxx, XX 00000
Tel:
(000) 000-0000
Attn: Xxxxxx
Xxxxxxxx, CEO
|
With
a copy to:
|
Xxxxxx
& Xxxxx, XX
Mission
Bay Office Plaza
00000
Xxxxx Xxxx 0, Xxx 000
Xxxx
Xxxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn: Xxxx
Xxxxxx, Esq.
|
To
the Managing Agents:
|
US
EURO Securities, Inc.
00000
Xxxxxxx Xxx Xxxxx
Xxxxxxx
Xxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxxxxx Xxx Xxxxxx
Xxxx
Capital Markets, LLC
000
Xxxxxx Xxxxx Xxxx
Xxxxxxxxx,
XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxx X. Xxxx
|
|
With a
copy to:
|
The
Xxxxxxx Law Firm
The
Galleria
0
Xxxxxx Xxxxxx
Xxxxxxxx
0, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxxxxxx X. Xxxxxxx, Esq.
|
13
9. Binding
Effect. This Agreement shall inure to the benefit of and be
binding upon the Company and the Managing Agents and their
successors. Nothing expressed in this Agreement is intended to give
any person other than the persons mentioned in the preceding sentence any
legal
or equitable right, remedy or claim under this Agreement.
10. Arbitration. The
Company and the Managing Agents agree that in the event a dispute arises
between
the Managing Agents and the Company or any their its officers, directors,
employees, agents, attorneys or accountants, arising out of, in connection
with
or as a result of the execution of this Agreement or as a result of any
subscription tendered by any purchaser of the Securities, such dispute shall
be
resolved through arbitration rather than litigation. The parties
agree to submit such disputes for resolution to the NASD within five (5)
days
after receiving a written request from any of the aforesaid parties to do
so. The failure by the Company or Managing Agents to submit any
dispute to arbitration as requested may result in the
commencement
of an arbitration proceeding against such party. The parties further
agree that any hearing scheduled after an arbitration proceeding is initiated
by
any of the aforesaid parties shall take place in Pensacola, Florida. The
parties
acknowledge that the result of the arbitration proceeding shall be final
and
binding on all of the parties to the proceeding, and by agreeing to arbitration
the parties are waiving their respective rights to seek remedies in
Court.
11. Syndicate.
(a) The
Managing Agents agree that they shall use their best efforts to be qualified
to
sell securities to purchasers in all 00 Xxxxxx Xxxxxx, xxx Xxxxxxxx xx Xxxxxxxx
and the Commonwealth of Puerto Rico either through its own brokers or through
qualified and/or licensed by NASD.
(b) The
Managing Agents shall enter into selling agreements with licensed brokers
and/or
dealers it selects who are acceptable to the Company using a form of selling
agreement reasonably acceptable to the Company ("Selling
Agreements"). The Managing Agents may also enter into Selling
Agreements with Placement Agents selected by the Company who are reasonably
acceptable to the Managing Agents, which such Placement Agents upon the
execution of Selling Agreements shall be deemed part of the syndicate of
Placement Agents. Neither the Company nor the Managing Agents shall unreasonably
withhold acceptance of any Placement Agent proposed by the other
party.
12. Miscellaneous
Provisions.
(a) This
Agreement shall be construed in accordance with the laws of the State of
New
York.
14
(b) The
representations and warranties made in this Agreement shall survive the
termination of this Agreement and shall continue in full force and
effect.
(c) This
Agreement is made solely for the benefit of the Company and its officers,
directors and controlling persons within the meaning of Section 15 of the
Securities Act and of the Managing Agents and their officers, directors and
controlling persons within the meaning of Section 15 of the Securities Act,
and
their respective successors, heirs and personal Managing Agents, and no other
person shall acquire or have any right under or by virtue of this
Agreement. The term “successor” as used in this Agreement
shall not include any purchaser, as such, of the Securities.
(d) The
information contained in the Company’s database of potential investors is
strictly confidential and Placement Agent shall use that information as provided
by the Company solely for the purpose of offering the Securities, and satisfying
its fiduciary obligations to all purchasers of the Securities. The
Managing Agents may specifically open accounts for, and discuss other
investments with, any potential investor in the Company's database who already
has a relationship with the Managing Agents, or who specifically requests
that
service and/or related information from the Managing Agents (including requests
through Managing Agents’ website contact form), but the Managing Agents shall
not make any general solicitation to others in the Company's investor database
without the express written consent of the Company. The
Managing
Agents shall use its best efforts to obtain compliance with this paragraph
by
the Placement Agents.
13. Effectiveness. The
effectiveness of this Agreement shall be subject to the approval of the
Company’s board of directors.
15
If
this
letter agreement correctly sets forth our understanding, please indicate
your
acceptance in the space provided below for that
purpose.
Sincerely,
US
EURO SECURITIES,
INC.
By:
_______________________Name: Xxxxxxx Xxx Xxxxxx
Title: Chairman
LANE
CAPITAL MARKETS,
LLC
By:
_______________________Name: Xxxx X. Xxxx
Title: President
Confirmed
and accepted as of ______________, 2007
VALUERICH,
INC.
By:
____________________
Name: Xxxxxx
Xxxxxxxx
Title: Chief
Executive Officer and President
16
SCHEDULE
I
Managing
Agents
|
US
Euro Securities,
Inc.
|
Lane
Capital Markets,
LLC
|
Placement
Agents
|
17