Exhibit 1.1
800,000 SHARES OF COMMON STOCK
AND
800,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS
DISCAS, INC.
AGREEMENT AMONG UNDERWRITERS
New York, New York
________ ___, 1997
Roan Capital Partners L.P.
As Representative of the Several Underwriters
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Underwriting Agreement. We understand that DISCAS, INC., a Delaware
corporation (the "Company"), proposes to enter into an underwriting agreement
in the form attached hereto as Exhibit A (the "Underwriting Agreement") with
the underwriters named in Schedule A to the Underwriting Agreement (the
"Underwriters") acting severally and not jointly with respect to the purchase
of 800,000 shares of common stock, $.0001 par value per share ("Common Stock")
and 800,000 redeemable common stock purchase warrants ("Warrants") of the
Company (the Warrants, collectively with the Common Stock, are referred to
herein as the "Securities"). In addition, the Underwriters (or, at its option,
Roan Capital Partners L.P., the "Representative", individually) have been
granted an option to purchase up to 120,000 additional shares of Common Stock
and up to an additional 120,000 Warrants to cover over-allotments, if any,
referred to in Section 5 of the Underwriting Agreement (the "Additional
Securities").
This is to confirm that we agree to purchase, in accordance with the
terms hereof and of the Underwriting Agreement, the number of Securities set
forth opposite our name in Schedule A to the Underwriting Agreement, plus such
number of Securities, if any,
which we may become obligated to purchase pursuant to Section 4 hereof ("our
Securities"). The ratio which the number of our Securities bears to the total
number of Securities purchased pursuant to the Underwriting Agreement is herein
called "our underwriting proportion".
2. Registration Statement and Prospectus. We have heretofore received
and examined a copy of the registration statement, as amended to the date
hereof, and the related prospectus in respect of the Securities, as filed with
the Securities and Exchange Commission. The registration statement, as amended
at the time it becomes effective, including financial statements and exhibits,
is hereinafter referred to as the "Registration Statement," and the prospectus
in the form first filed with the Securities and Exchange Commission pursuant to
Rule 424(b) after the Registration Statement becomes effective is referred to
as the "Prospectus."
We confirm that the information furnished to you by us for use in the
Registration Statement and in the Prospectus is correct and is not misleading
insofar as it relates to us. We consent to being named as an Underwriter in
such Registration Statement and we are willing to accept our responsibilities
under the Securities Act of 1933, as a result thereof. We confirm that we have
authorized you to advise the Company on our behalf (a) as to the statements to
be included in any Preliminary Prospectus and in the Prospectus under the
heading "Underwriting" insofar as they relate to us and (b) that there is no
other information about us required to be stated in the Registration Statement
or Prospectus. We further confirm that, upon request by you, as Representative,
we have furnished a copy of any amended preliminary prospectus to each person
to whom we have furnished a copy of any previous preliminary prospectus, and we
confirm that we have delivered, and we agree that we will deliver, all
preliminary and final prospectuses required for compliance with the provisions
of Rule 15c2-8 under the Securities Exchange Act of 1934.
3. Authority of the Representative. We authorize you, acting as
Representative, to execute and deliver on our behalf the Underwriting
Agreement, and to agree to any variation of its terms (except as to the
purchase price and the number of our Securities) which, in your judgment, is
not a variation which materially and adversely affects our rights and
obligations. We also authorize you, in your discretion and on our behalf, with
approval of counsel for the Underwriters, to approve the Prospectus and to
approve of, or object to, any further amendments to the Registration Statement,
or amendments or supplements to the Prospectus. We further
authorize you to exercise all the authority and discretion vested in the
Underwriters and in you by the provisions of the Underwriting Agreement and to
take all such action as you, in your discretion, may believe desirable to carry
out the provisions of the Underwriting Agreement and of this Agreement,
including the extension of any date specified in the Underwriting Agreement,
the exercise of any right of cancellation or termination, and to determine all
matters relating to the public advertisement of the Securities; provided,
however, that, except with the consent of Underwriters who shall have agreed to
purchase in the aggregate 50% or more of the Securities, no extension of the
time by which the Registration Statement is to become effective, as provided in
Section 9(a) of the Underwriting Agreement, shall be for a period in excess of
two business days. We authorize you to take such action as in your discretion
may be necessary or desirable to effect the sale and distribution of the
Securities, including, without limiting the generality of the foregoing, the
right to determine the terms of any proposed offering, the concession to
Selected Dealers (as hereinafter defined) and the reallowance, if any, to other
dealers and the right to make the judgments provided for in Section 12 of the
Underwriting Agreement.
4. Authority of Representative as to Defaulting Underwriters. Until
the termination of this Agreement, we authorize you to arrange for the purchase
by other persons, who may include you or any of the other Underwriters, of any
Securities not taken up by any defaulting Underwriter. In the event that such
arrangements are made, the respective amounts of the Securities to be purchased
by the non-defaulting Underwriters and by such other person or persons, if any,
shall be taken as the basis for all rights and obligations hereunder; but this
shall not in any way affect the liability of any defaulting Underwriter to the
other Underwriters for damages resulting from its default, nor shall any such
default relieve any other Underwriter of any of its obligations hereunder or
under the Underwriting Agreement except as herein or therein provided.
In the event of default by one or more Underwriters in respect of
their obligations (a) under the Underwriting Agreement to purchase the
Securities, agreed to be purchased by them thereunder, or (b) under this
Agreement to take up and pay for any Securities purchased, or (c) to deliver
any Securities sold or over-allotted by you for the respective accounts of the
Underwriters pursuant to Section 9 hereof, or to bear their respective share of
expenses or liabilities pursuant to Sections 11, 13 and 14 hereof, and to the
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extent that arrangements shall not have been made by you for any persons to
assume the obligations of such defaulting Underwriter or Underwriters, we agree
to assume our proportionate share of the obligations of each defaulting
Underwriter or Underwriters (subject in the case of clause (a) above to the
limitations contained in Section 12 of the Underwriting Agreement) without
relieving any such defaulting Underwriter or Underwriters of its liability
therefor.
5. Offering of Securities. We understand that you will notify us when
the initial public offering of the Securities is to be made and of the initial
public offering price. We hereby authorize you, in your sole discretion, after
the initial public offering, to change the public offering price, the
concession and the reallowance. The offering price at any time in effect is
hereinafter referred to as the "public offering price". We agree that we will
not offer any of the Securities for sale at a price other than the public
offering price or allow any discount therefrom except as herein otherwise
specifically provided.
We agree that public advertisement of the offering shall be made by
you on behalf of the Underwriters on such date as you shall determine. We have
not advertised the offering and will not do so until after such date. We
understand that any advertisement we may then make will be our own
responsibility and at our own expense.
We authorize you to reserve and offer for sale to institutions and
other retail purchasers and to dealers (the "Selected Dealers") to be selected
by you (such dealers may include any Underwriter) such of our Securities as
you, in your sole discretion, shall determine. Any such offering to Selected
Dealers may be made pursuant to a Selected Dealers Agreement, in the form
attached hereto as Exhibit B, or otherwise, as you may determine. The form of
Selected Dealers Agreement attached hereto as Exhibit B is satisfactory to us.
We authorize you to make purchases and sales of the Securities from or
to any Selected Dealers or Underwriters at the public offering price, less all
or any part of the concession and, with your consent, any Underwriter may make
purchases or sales of the Securities from or to any Selected Dealer or
Underwriter at the public offering price, less all or any part of the
concession.
We understand that you will notify each Underwriter promptly
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upon the release of the Securities for public offering as to the amount of
Securities reserved for sale to Selected Dealers and retail purchasers.
Securities not so reserved may be sold by each Underwriter for its own account,
except that from time to time you may, in your discretion, add to the
Securities reserved for sale to Selected Dealers and retail purchasers any
Securities retained by an Underwriter remaining unsold. We agree to notify you,
from time to time, upon request, of the amount of our Securities retained by us
remaining unsold. If all of the Securities reserved for offering to Selected
Dealers and retail purchasers are not promptly sold by you, any Underwriter
may, from time to time, with your consent, obtain a release of all or any
Securities of such Underwriter then remaining unsold, and Securities so
released shall thereafter be deemed not to have been reserved. Securities of
any Underwriter so reserved which remain unsold, or, if sold, have not been
paid for at any time prior to the termination of this Agreement may, in your
discretion or upon the request of such Underwriter, be delivered to such
Underwriter for carrying purposes only, but such Securities shall remain
subject to redelivery to you upon demand for disposition by you until this
Agreement is terminated.
We agree that in connection with sales and offers to sell the
Securities, if any, made by us outside the United States or its territories or
possessions, (a) we will furnish to each person to whom any such offer or sale
is made such prospectus, advertisement or other offering document containing
information relating to the Securities or the Company, as may be required under
the laws of the jurisdiction in which such offer or sale is made and (b) we
will furnish to each person to whom any such offer is made a copy of the then
current preliminary prospectus, and to each person to whom any such sale is
made, a copy of the Prospectus referred to in the Underwriting Agreement (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto). Any prospectus, advertisement or other offering
document (other than any such preliminary prospectus or Prospectus) furnished
by us to any person in accordance with the preceding sentence and all such
additional offering material, if any, as we may furnish to any person (i) shall
comply in all respects with the laws of the jurisdiction in which it is so
furnished, (ii) shall be prepared and so furnished at our sole risk and
expense, and (iii) shall not contain information relating to the Securities or
the Company which is inconsistent in any respect with information contained in
the then current preliminary prospectus or in the Prospectus (as then amended
or supplemented if the Company shall
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have furnished any amendments or supplements thereto), as the case may be.
We recognize the importance of a broad distribution of the Securities
among bona fide investors and we agree to use our best efforts to obtain such
broad distribution and, to that end, to the extent we deem practicable, to give
priority to small orders.
We agree that we will not sell to any account over which we exercise
discretionary authority any of the Securities which we have agreed to purchase
pursuant to the Underwriting Agreement.
6. Compensation to Representative. We authorize you to charge to our
account, as compensation for your services as Representative in connection with
this offering, including the purchase from the Company of the Securities and
the management of the offering, an amount equal to $. per share of Common Stock
and $.___ per Warrant in respect to each of our Securities.
7. Payment and Delivery. At or before 9:00 a.m., New York City time,
on the Closing Date as defined in the Underwriting Agreement, we agree to
deliver to you at your office a certified or official bank check payable in New
York Clearing House funds to your order, in an amount equal to the initial
public offering price, less the concession to the Selected Dealers in respect
of that portion of our Securities which has been retained by or released to us
for direct sales.
In the event that our funds are not received by you when required, you
are authorized, in your discretion, but shall not be obligated, to make payment
for our account pursuant to the Underwriting Agreement by advancing your own
funds. Any such payment by you shall not relieve us from any of our obligations
hereunder or under the Underwriting Agreement.
We authorize you to hold and deliver against payment any of our
Securities which have been sold or reserved for sale to Selected Dealers or
retail purchasers. Any of our Securities not sold or reserved by you as
aforesaid will be available for delivery to us at your office as soon as
practicable after such Securities have been delivered to you.
Upon the termination of this Agreement, or prior thereto at your
discretion, you will deliver to us any of our Securities reserved by you for
sale to Selected Dealers or retail purchasers,
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but not sold and paid for against payment by us of an amount equal to the
initial public offering price of such Securities, less the concession to the
Selected Dealers in respect thereof.
8. Authority to Borrow. We authorize you to arrange loans for our
account and to execute and deliver any notes or other instruments in connection
therewith, and to pledge as security therefor all or any part of our
Securities, as you may deem necessary or advisable to carry out the purchase,
carrying and distribution of the Securities, and to advance your own funds,
charging current interest rates.
9. Over-allotment; Stabilization. We authorize you, for the account of
each Underwriter, prior to the termination of this Agreement, and for such
longer period as may be necessary to cover any short position incurred for the
accounts of the several Underwriters pursuant to this Agreement, (a) to
over-allot in arranging for sales of Securities to Selected Dealers and others
and, if necessary, to purchase Securities (whether pursuant to exercise of the
option set forth in Section 5 of the Underwriting Agreement or otherwise) at
such prices as you may determine for the purpose of covering such
over-allotments, and (b) for the purpose of stabilizing the market in the
Securities, to make purchases and sales of Securities on the open market or
otherwise, for long or short account, on a when-issued basis or otherwise, at
such prices, in such amounts and in such manner as you may determine; provided,
however, that at no time shall our net commitment, either for long or short
account, under this Section 9 exceed 15% of the amount of our Securities. Such
purchases, sales and over-allotments shall be made for the respective accounts
of the several Underwriters as nearly as practicable to their respective
underwriting proportions. We agree to take up on demand at cost any Securities
so purchased for our account and deliver on demand any Securities so sold or
over-allotted for our account. We authorize you to sell for the account of the
Underwriters any Securities purchased pursuant to this Section 9, upon such
terms as you may deem advisable, and any Underwriter, including yourselves, may
purchase such Securities. You are authorized to charge the respective accounts
of the Underwriters with broker's commissions or dealer's xxxx-up on purchases
and sales effected by you.
If pursuant to the provision of the preceding paragraph and prior to
the termination of this Agreement (or prior to such earlier date as you may
have determined) you purchase or contract to
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purchase for the account of any Underwriter in the open market or otherwise any
Securities which were retained by, or released to, us for direct sale, or any
Securities which may have been issued in exchange for such Securities, we
authorize you either to charge our account with an amount equal to the
concession to Selected Dealers with respect thereto, which amount shall be
credited against the cost of such Securities, or to require us to repurchase
such Securities at a price equal to the total cost of such purchase, including
transfer taxes and broker's commissions or dealer's xxxx-up, if any. In lieu of
such action you may, in your discretion, sell for our account the Securities so
purchased and debit or credit our account for the loss or profit resulting from
such sale.
You will notify us promptly if and when you engage in any
stabilization transaction pursuant to this Section 9 or otherwise and will
notify us of the date of termination of stabilization. We agree to file with
you any reports required of us including "Not as Manager" reports pursuant to
Rule 17a-2 under the Securities Exchange Act of 1934 not later than five
business days following the day upon which such stabilization transaction was
terminated, and we authorize you to file on our behalf with the Securities and
Exchange Commission any reports required by such Rule.
10. Limitation on Transactions by Underwriters. Except as permitted by
you, we will not, during the term of this Agreement, bid for, purchase, sell or
attempt to induce others to purchase or sell, directly or indirectly, any
Securities other than (i) as provided in the Underwriting Agreement and in this
agreement, (ii) purchases from or sales to dealers of the Securities at the
public offering price, less all or any part of the reallowance to dealers, or
(iii) purchases or sales by us of any Securities as broker or unsolicited
orders for the account of others.
We represent that we have not participated in any transaction
prohibited by the preceding paragraph and that we have at all times complied
with the provisions of Regulation M of the Securities and Exchange Commission
applicable to this offering.
We may, with your prior consent, make purchases of the Securities from
and sales to other Underwriters at the public offering price, less all or any
part of the concession to dealers.
11. Allocation and Payment of Expenses. We understand that all
expenses of a general nature incurred by you, as
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Representative, in connection with the purchase, carrying, marketing and sale
of the Securities shall be become by the Underwriters in accordance with their
respective share of the underwriting obligations. We authorize you to charge
our account with our share, based on our underwriting obligation, of the
aforesaid expenses, including all transfer taxes paid on our behalf on sales or
transfers made for our account.
As promptly as possible after the termination of this Agreement, the
accounts arising pursuant hereto shall be settled and paid. Your ascertainment
of all expenses and the apportionment thereof shall be conclusive.
Notwithstanding any settlement or settlements hereunder, we will remain liable
for our share of all expenses and liabilities which may be incurred by or for
the accounts of the Underwriters, including any expenses and liabilities
referred to in Sections 13 and 14(b) hereof, which shall be determined as
provided in this Section 11.
12. Termination. Unless this Agreement or any provision hereof is
earlier terminated by you, and except for provisions herein that contemplate
obligations surviving the termination hereof as noted in the next paragraph,
this Agreement will terminate at the close of business on the 30th day after
the date hereof, but in your discretion, may be extended by you for a further
period not exceeding 30 days with the consent of the Underwriters who have
agreed to purchase in the aggregate 50% or more of the Securities. No
termination or suspension pursuant to this Section shall affect your authority
under Section 9 to cover any short position under this Agreement.
Upon termination of this Agreement, all authorizations, rights and
obligations hereunder shall cease, except (i) the mutual obligations to settle
accounts under Section 11, (ii) our obligation to pay any transfer taxes which
may be assessed and paid on account of any sales hereunder for our account,
(iii) our obligation with respect to purchases which may be made by you from
time to time thereafter to cover any short position incurred under this
Agreement, (iv) the provisions of Sections 13 and 14, and (v) the obligations
of any defaulting Underwriter, all of which shall continue until fully
discharged.
13. Liability of Representative and Underwriters. Neither as
Representative nor individually shall you be under any liability whatsoever to
any other Underwriter, nor shall you be under any liability in respect of any
matters connected herewith or action
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taken by you pursuant hereto, except for the obligations expressly assumed by
you in this Agreement. You shall be under no liability for or in respect of the
value of the Securities or the validity of the form thereof, the Registration
Statement, the Prospectus, or agreements or other instruments executed by the
Company or others; or for or in respect of the delivery of the Securities; or
for the performance by the Company or others of any agreement on its or their
part.
Nothing herein contained shall constitute the several Underwriters an
association, or partners with us or with each other, or, except as herein
expressly provided, render any Underwriter liable for the obligation of any
other Underwriter. The rights, obligations and liabilities of each of the
Underwriters are several, in accordance with their respective obligations, and
not joint. Notwithstanding any settlement of accounts under this Agreement, we
agree to pay our underwriting proportion of the amount of any claim, demand or
liability which may be asserted against and discharged by the Underwriters or
any of them, based on the claim that the Underwriters constitute an
association, unincorporated business or other entity, and also to pay our
underwriting proportion of expenses approved by you incurred by the
Underwriters, or any of them, in contesting any such claims, demands or
liabilities. If the Underwriters shall be deemed to constitute a partnership
for income tax purposes, it is the intent of each Underwriter to be excluded
from the application of Sub-chapter K, Chapter 1, Subtitle A of the Internal
Revenue Code of 1954, as amended. Each Underwriter elects to be so excluded and
agrees not to take any position inconsistent with such election. Each
Underwriter authorizes you, in your discretion, to execute and file on behalf
of the Underwriters such evidence of election as may be required by the
Internal Revenue Service.
14. Indemnification and Future Claims.
(a) We agree to indemnify and hold harmless you and each other
Underwriter, and each person, if any, who controls you and such other
Underwriter within the meaning of Section 15 of the Securities Act of 1933, and
to reimburse their expenses, to the extent and upon the terms that we agree to
indemnify and hold harmless the Company and to reimburse expenses as set forth
in the Underwriting Agreement. Our indemnity agreement set forth in this
Section 14 shall remain in full force and effect regardless of any
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investigation made by or on behalf of such other Underwriter or controlling
person and shall survive the delivery of and payment for the Units and the
termination of this Agreement.
(b) In the event that any time any claim or claims shall be
asserted against you, as Representative, or otherwise involving the
Underwriters generally, relating to the Registration Statement or any
preliminary prospectus or the Prospectus, as such may be from time to time
amended or supplemented, the public offering of the Units or any of the
transactions contemplated by this Agreement, we authorize you to take such
other action as you shall deem necessary or desirable under the circumstances,
including settlement of any such claim or claims if such course of action shall
be recommended by counsel retained by you. We agree to pay to you on request,
our underwriting proportion of all expenses incurred by you (including, but not
limited to, disbursements and fees of counsel so retained) in investigating and
defending against such claim or claims and our underwriting proportion of any
liability incurred by you in respect of such claim or claims, whether such
liability shall be the result of a judgment or as a result of any such
settlement.
15. Title to Securities. The Securities purchased by, or on behalf of,
the respective Underwriters shall remain the property of such Underwriters
until sold, and title to any such Securities shall not in any event pass to the
Representative by virtue of any of the provisions of this Agreement.
16. Blue Sky Matters. It is understood that you assume no
responsibility with respect to the right of any Underwriter or other person to
offer or to sell Securities in any jurisdiction, notwithstanding any
information which you may furnish as to the jurisdictions under the securities
laws of which it is believed the Securities may be sold.
17. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
18. Capital Requirements. We confirm that the incurrence by us of our
obligation under this Agreement and under the Underwriting Agreement will not
place us in violation of the net capital requirements of Rule 15c3-1 under the
Securities Exchange Act of 1934 or of any applicable rules relating to capital
requirements of any securities exchange to which we are subject.
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19. Miscellaneous. Any notice from you to us shall be deemed to have
been duly given if mailed, telephoned or telegraphed to us at the address set
forth in the Underwriters Questionnaire furnished by us to you. Any notice from
us to you shall be deemed to have been duly given if mailed, telephoned or
telegraphed to you at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
We understand that you are a member in good standing of the NASD. We
hereby confirm that we are actually engaged in the investment banking or
securities business and are either (i) a member in good standing of the NASD or
(ii) a dealer with its principal place of business located outside the United
States, its territories and its possessions, and not registered as a broker or
dealer under the 1934 Act? who agrees not to make any sales within the United
States, its territories or its possessions, or to persons who are nationals
thereof or residents therein (except that we may participate in sales to
Selected Dealers and others under Section 5 of this Agreement). We hereby agree
to comply with the provisions of Section 24 of Article III of the Rules of Fair
Practice of the NASD, and if we are a foreign dealer and not a member of the
NASD, we also hereby agree to comply with the NASD's interpretation with
respect to free-riding and withholding and to comply, as though it were a
member of the NASD, with the provisions of Sections 8 and 36 of Article III of
such Rules of Fair Practice, and to comply with Section 25 of Article III
thereof as that Section applies to a non-member foreign dealer. In connection
with sales and offers to sell Units made by us outside the United States, its
territories and possessions (i) we will either furnish to each person to whom
any such sale or offer is made a copy of the then current Preliminary
Prospectus or the Prospectus, as the case may be, or inform such person that
such Preliminary Prospectus or Prospectus will be available upon request, and
(ii) we will furnish to each person to whom any such sale or offer is made such
prospectus, advertisement or other offering document containing information
relating to the Units or the Company as may be required under the law of the
jurisdiction in which such sale or offer is made. Any prospectus, advertisement
or other offering document furnished by us to any person in accordance with the
preceding sentence and any such additional offering material as we may furnish
to any person (x) shall comply in all respects with the law of the jurisdiction
in which it is so furnished, (y) shall be prepared and so furnished at our sole
risk and expense and (z) shall not contain information relating to the Units or
the Company which is inconsistent in any respect with the information contained
in the then current Preliminary Prospectus or in the Prospectus, as
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the case may be.
We understand that, in consideration of your services in connection
with the public offering of the Securities, the Company has agreed with you
individually and not as Representative of the Underwriters (a) to sell to you
the Representative's Warrant referred to in Section 1(b) of the Underwriting
Agreement for the sum of $10, (b) to pay to you a non-accountable expense
allowance referred to in Section 8(b) of the Underwriting Agreement, (c) to
enter into the Consulting Agreement described in Section 3(v) of the
Underwriting Agreement and (d) to grant you a right of first refusal to act as
underwriter or agent of the Company for future public or private offerings of
the securities of the Company as described in Section 3(aa) of the Underwriting
Agreement. In addition, you may, at your sole discretion, elect to exercise the
over-allotment option described in Section 5, individually. We confirm to you
that we shall make no claim to the Representative's Warrant, any rights related
thereto, the Company's securities underlying the Representative's Warrants, the
non-accountable expense allowance, or, to the over-allotment option, to the
extent you elect to exercise such option individually. You confirm to us that
we shall have no obligations or liabilities with respect to the purchase of the
Representative's Warrant, the exercise thereof, the Company's securities
underlying the Representative's Warrant, or the non-accountable expense
allowance, or, to the over-allotment option, to the extent you elect to
exercise such option individually.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
-----------------------------------
By:
--------------------------------
(Attorney-in-fact for each of
the several Underwriters named
in Schedule A to the attached
Underwriting Agreement.)
Confirmed as of the date
first above written:
ROAN CAPITAL PARTNERS L.P.
as Representative
By:
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