1
EXHIBIT 1
5,000,000 Shares
I.T. TECHNOLOGY, INC.
Common Stock
UNDERWRITING AGREEMENT
August 4, 2000
Kensington Capital Corp.
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Silver
Dear Sirs:
The undersigned, I.T. Technology, Inc., a Delaware corporation
(the "Company"), and the undersigned stockholder of the Company, Instanz
Nominees Pty. Ltd., a corporation incorporated under the laws of the State of
Victoria, Australia (referred to herein as the "Selling Stockholder") hereby
confirm their agreement with you (the "Representative") and each of the other
underwriters, if any, named in Schedule A attached hereto (the "Underwriters"),
as follows:
1. The Offering.
(a) The Underwriters agree to sell a minimum of 1,000,000
shares (the "Minimum Subscription") and a maximum of 5,000,000 shares
(the "Maximum Subscription") of the Company's common stock, $.001 par
value per share ("Common Stock") to the public as exclusive agents for
the Company and with respect to 500,000 shares of Common Stock, the
Selling Stockholder, on a "best efforts" only basis during the offering
period commencing as of the effective date of the Company's Registration
Statement on Form SB-2, filed with the Securities and Exchange
Commission (the "Commission") on February 14, 2000 (Commission File No.
333-30364) (the "Initial Registration Statement"), and terminating on
the first to occur of (i) the sale of the maximum subscription or (ii)
one hundred and twenty (120) days from the commencement date and an
additional thirty (30) days thereafter if extended by agreement between
the Underwriters and the Company (the "Offering Period"), plus an
additional three days to permit funds collected during the Offering
Period to clear (the "Offering").
(b) The Underwriters also agree to sell a maximum of
500,000 shares of Common Stock at $5.00 per share to the public as
exclusive agent for the Selling Stockholder on a "best efforts" only
basis during the Offering Period.
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(c) The sale of the Common Stock shall be allocated as
follows: (i) the first 1,000,000 shares of Common Stock sold shall be
allocated entirely to the Company; (ii) the next 500,000 shares of
Common Stock sold shall be allocated entirely to the Selling
Stockholder; and (iii) the remaining 3,500,000 shares shall be allocated
entirely to the Company.
(d) Pending the sale of at least the Minimum Subscription
on behalf of the Company, all funds received from investors shall be
deposited in an interest-bearing escrow account at Comerica Bank -
California, Los Angeles, California (the "Escrow Account"). All checks
for the purchase of Common Stock shall be made payable to Comerica Bank
- California, as Escrow Agent for the Company. If the Underwriter
receives such checks directly from investors, the Underwriter will
forward such checks directly to the Escrow Account by 12:00 p.m.,
Pacific Standard Time, of the next business day after receipt of
such checks. If subscriptions for the Minimum Subscription are not
received within the Offering Period, all funds received prior to the
expiration of the Offering Period from investors will be promptly
returned to them with simple interest at Comerica's then prevailing
money-market rate, less the costs of the Escrow Account. Upon the sale
of at least the Minimum Subscription on behalf of the Company, all funds
in the Escrow Account, plus interest thereon, less the costs of the
Escrow Account will be released to the Company at 10:00 a.m. Pacific
Standard Time on the third business day after the date on which the
Escrow Agent notifies the Company or its counsel that it has received
funds equal to the Minimum Subscription at the public offering price
stated in paragraph (e) of this Section 1 (the "Closing Date"). If at
least the Minimum Subscription is sold on behalf of the Company during
the Offering Period, the Underwriters may use the balance of such period
to sell the remaining shares on a best efforts basis, and none of the
funds received from investors in payment for any part of the balance of
the shares nor interest thereon will be returned to the investors.
(e) The public offering price of the Common Stock shall be
$5.00 per share. The Representative may from time to time increase, but
not decrease the public offering price with the consent of the Company,
by reason of changes in general market conditions or otherwise.
(f) Subject to the sale of at least the Minimum
Subscription, the Company shall pay you as Representative of the
Underwriters a sales commission as set forth in Exhibit "A" attached
hereto and made a part hereof all proceeds received from investors with
respect to the Offering.
(g) The Company has authorized the issuance of up to
750,000 shares of Common Stock in connection with the exercise of
non-transferable warrants, up to 250,000 of which the Company does grant
hereby to the Underwriters in connection with the Offering (the
"Underwriters' Warrants"), and 500,000 of which may be issued, at the
sole discretion of the Company, to certain other selected dealers in
connection with the Offering (the "Selected Dealers' Warrants")
(collectively, the "Warrants"). The Warrants will have a term of three
years and shall be exercisable at $6.00 per share during the first year,
$7.00 per share during the second year, and $8.00 per share during the
third year. In addition, the shares of Common Stock of the Company
underlying such Underwriters' Warrants shall be granted unlimited
"piggyback" registration rights, pursuant to the provisions of a
registration rights agreement substantially in the form of Exhibit B
hereto, which "piggyback" registration rights shall at all times remain
subject to the reasonable discretion by the underwriter of any
subsequent public
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offering of equity securities by the Company to reduce by any number of
shares underlying the Underwriters' Warrants the aggregate number of
shares being registered in such offering, for reasons relating to the
ability of the marketplace to absorb all of the shares of the Company's
Common Stock sought to be registered at such time. The "piggyback"
registration rights shall continue to apply to the Underwriters'
Warrants until the first to occur of:(i) the Underwriters no longer
holding any Underwriters' Warrants or shares of Common Stock of the
Company underlying such Underwriters' Warrants, (ii) all of the shares
of Common Stock of the Company underlying such Underwriters' Warrants
having been registered in a subsequent public offering of the Company's
equity securities; (iii) all of the shares held by the Underwriters upon
the exercise of the Warrants being eligible for sale pursuant to Rule
144; and (iv) five years passing from the date that the Offering has
been consummated.
2. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants to, and agrees
with the Underwriters that:
(i) The Company has filed Amendment No. 1 to the Initial
Registration Statement on February 15, 2000, and will deliver to
you any further amendment(s) to the Registration Statement filed
with the Commission (the Initial Registration Statement and all
amendments thereto hereinafter collectively referred to as the
"Registration Statement"). The prospectus, in the form filed with
the Commission pursuant to Rule 424(b) of the General Rules and
Regulations (the "Regulations") of the Commission under the
Securities Act of 1933, as amended (the "Act") is herein referred
to as the "Prospectus."
(ii) When the Registration Statement becomes effective,
and at all times subsequent thereto and including the Closing
Date (as defined in Section 1(d) and during such longer period as
the Prospectus may be required to be delivered in connection with
sales by the Underwriter or a dealer, and during such longer
period until any post-effective amendment thereto shall become
effective, the Registration Statement (and any post-effective
amendment thereto) and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission
any amendment or supplement to the Registration Statement or the
Prospectus) will contain all statements which are required to be
stated therein in accordance with the Act and the Regulations,
will comply with the Act and the Regulations, and will not
contain any untrue statement of material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading, and no event will
have occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus which
has not been set forth in such an amendment or supplement; except
that no representation or warranty is made in this Section
2(a)(ii) with respect to statements or omissions made in reliance
upon and in conformity with written information furnished to the
Company with respect to the Underwriter by or on behalf of the
Underwriter expressly for
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inclusion in any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement
thereto.
(iii) Neither the Commission nor the "blue sky" or
securities authority of any jurisdiction have issued an order
("Stop Order") suspending the effectiveness of the Registration
Statement, preventing or suspending the use of any Preliminary
Prospectus, the Prospectus, the Registration Statement refusing
to permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of the Common Stock,
nor has any of such authorities instituted or threatened to
institute any proceedings with respect to a Stop Order.
(iv) The only subsidiaries (as defined in the Regulations)
of the Company are I.T. Technology Pty. Ltd., an Australian
corporation, Bickhams, Inc., a Delaware corporation and
Xxxxxxxxxx.Xxx, Inc., a Delaware corporation (the
"Subsidiaries"). The Company and the Subsidiaries are
corporations duly organized, validly existing, and in good
standing under the laws of their respective jurisdictions of
incorporation. The Company and the Subsidiaries are each duly
qualified to do business and are in good standing in every
jurisdiction in which their ownership, leasing, licensing, or use
of property and assets or the conduct of their business makes
such qualification necessary.
(v) The authorized capital stock of the Company consists
of 25,000,000 shares of $.001 par value Preferred Stock of which
no shares have been issued or are outstanding and 100,000,000
shares of Common Stock, of which 16,500,000 shares are
outstanding. Each outstanding share of Common Stock and to the
knowledge of the Company each outstanding share of capital stock
of the Subsidiaries is validly authorized, validly issued, fully
paid, and nonassessable, has not been issued and is not owned or
held in violation of any preemptive rights of stockholders, and
to the knowledge of the Company in the case of the Subsidiaries
are owned of record and beneficially by the Company or the other
shareholders as scheduled in the Prospectus free and clear of all
liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts, except as otherwise
disclosed in the Prospectus. There is currently no outstanding
option, warrant, or other right calling for the issuance of, any
share of capital stock of the Company or to the knowledge of the
Company of the Subsidiaries or any security or other instrument
which by its terms is convertible into, exercisable for, or
exchangeable for capital stock of the Company, except as may be
described in the Prospectus. There is outstanding no security or
other instrument, which by its terms is convertible into or
exchangeable for capital stock of the Company.
(vi) The consolidated financial statements of the Company
as of and for the period ended December 31, 1999 are included in
the Registration Statement and the Prospectus fairly present with
respect to the Company and the Subsidiaries the consolidated
financial position, the consolidated results of operations, and
the other information purported to be shown therein at the
respective dates and for the respective periods to which they
apply. Such financial statements have been prepared in accordance
with generally accepted accounting principles consistently
applied
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throughout the periods involved, are correct and complete,
and are in accordance with the books and records of the Company
and the Subsidiaries. The accountants whose report on the audited
financial statements is filed with the Commission as a part of
the Registration Statement are, and during the periods covered by
their report(s) included in the Registration Statement and the
Prospectus, independent certified public accountants with
respect to the Company and the Subsidiaries within the meaning of
the Act and the Regulations. Except for the consolidated
financial statements of the Company no other financial statements
are required by Form SB-2 or otherwise to be included in the
Registration Statement or the Prospectus.
(vii) There is no litigation, arbitration or other
governmental proceeding (formal or informal), or investigation
pending, threatened in writing, with respect to the Company, the
Subsidiaries, or any of their respective operations, businesses,
properties, or assets except as may be properly described in the
Prospectus or which to the knowledge of the Company do not or
will not have a material adverse effect upon the operations,
business, properties, or assets of the Company and the
Subsidiaries taken as a whole. Neither the Company nor the
Subsidiaries is in violation of, or in default with respect to,
any law, rule, regulation, order, judgment, or decree except as
may be properly described in the Prospectus or such as in the
aggregate do not now have and to the knowledge of the Company and
the Subsidiaries will not in the future have a material adverse
effect upon the operations, business, properties, or assets of
the Company and the Subsidiaries taken as a whole; nor is the
Company or the Subsidiaries required to take any action in order
to avoid any such violation or default.
(viii) Neither the Company nor the Subsidiaries has
received any notice that the Company, the Subsidiaries or any
other party is in violation or breach of, or in default with
respect to, complying with any material provision of any
contract, agreement, instrument, lease, license, arrangement, or
understanding which is material to the Company and the
Subsidiaries taken as a whole, and each such contract, agreement,
instrument, lease, license, arrangement, and understanding is in
full force and is the legal, valid, and binding obligation of the
parties thereto and is enforceable as to them in accordance with
its terms. Neither the Company nor the Subsidiaries is in
violation or breach of, or in default with respect to, any
material term of its certificate of incorporation (or other
charter document) or by-laws.
(ix) Except as set forth in the Prospectus, all patents,
patent applications, trademarks, trademark applications, trade
names, service marks, copyrights, franchises, and other
intangible properties and assets (all of the foregoing herein
referred to as "Intangibles") that the Company or the
Subsidiaries owns or has pending, or under which it is licensed,
are in good standing and to the knowledge of the Company
uncontested. Neither the Company nor the Subsidiaries is aware
that they have infringed, are infringing, or have received notice
of infringement with respect to asserted Intangibles of others.
To the knowledge of the Company or the Subsidiaries there is no
infringement by others of Intangibles of the Company or of the
Subsidiaries.
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(x) The Company has all requisite power and authority to
execute, deliver, and perform this underwriting agreement (the
"Agreement"). All necessary corporate proceedings of the Company
have been duly taken to authorize the execution, delivery, and
performance of this Agreement by the Company. This Agreement has
been duly authorized, executed, and delivered by the Company, is
the legal, valid, and binding obligation of the Company, and is
enforceable as to the Company in accordance with its terms. No
consent, authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or
other tribunal is required by the Company for the execution,
delivery, or performance of this Agreement by the Company (except
filings under the Act which have been or will be made before the
Closing Date and such consents consisting only of consents under
"blue sky" or securities laws which have been obtained at or
prior to the date of this Agreement). Except where the failure
would not have a material adverse effect on the Company taken as
a whole: (a) no consent of any party to any contract, agreement,
instrument, lease, license, arrangement to which the Company is a
party, or to which any of its properties or assets are subject,
is required for the execution, delivery, or performance of this
Agreement and (b) the execution, delivery, and performance of
this Agreement will not violate, result in a breach of, conflict
with any material provision of or (with or without the giving of
notice or the passage of time or both), entitle any party to
terminate or call a default under any contract, agreement,
instrument, lease, license, arrangement, or understanding, or
violate or result in a breach of any term of the certificate of
incorporation (or other charter document) or by-laws of the
Company or violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on the
Company or to which any of their respective operations,
businesses, properties, or assets are subject.
(xi) The Common Stock is validly authorized and, when
issued and delivered in accordance with this Agreement, will be
validly issued, fully paid, and nonassessable and will not be
issued in violation of any preemptive rights of stockholders. The
Common Stock conforms to all statements relating thereto
contained in the Registration Statement or the Prospectus.
(xii) Neither the Company nor any of its officers,
directors, or affiliates (as defined in the Regulations), has
taken or will take, directly or indirectly, any action designed
to stabilize or manipulate the price of any security of the
Company, or which has caused or resulted in, or which might in
the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company, to facilitate the sale or resale of the Common Stock.
(xiii) The Company has obtained from each of its
directors, officers and stockholders a written agreement that for
a period terminating ninety (90) days after the termination of
the offering period, without your prior written consent, offer,
pledge, sell, contract to sell, grant any option for the sale of,
or otherwise dispose of, directly or indirectly, any shares of
Common Stock or any security or other instrument which by its
terms is convertible into, exercisable for, or exchangeable for
shares of Common Stock, except (a) as set forth in the Prospectus
or (b) the sale of Common
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Stock in the Offering by the Selling Stockholder or (c) in a
private placement or other transaction with a non U.S. national
or resident, outside the U.S. or its territories.
(xiv) On the Effective Date the Company shall have
complied with the requirements of the NASD with respect to the
Offering.
(b) The Selling Stockholder represents and warrants to,
and agrees with, the Underwriters that:
(i) Such Selling Stockholder has (A) caused a certificate
or certificates for the number of shares of Common Stock to be
sold by such Selling Stockholder hereunder to be delivered to
Comerica Bank - California, Los Angeles, California (the "Custody
Agent"), duly endorsed in blank or together with blank stock
powers duly executed, with such Selling Stockholder's signature
appropriately guaranteed, such certificate or certificates to be
held in escrow by the Custody Agent pursuant to an escrow
agreement for delivery, pursuant to the provisions hereof, on the
Closing Date, and (B) granted an irrevocable power of attorney to
the Custody Agent to purchase all requisite stock transfer tax
stamps, to sign this Agreement (including agreeing on the price
at which the Common Stock is to be sold to the public) and
thereafter to modify and amend this Agreement, to settle any
dispute relating to the terms of this Agreement, to waive any
condition to the obligations of such Selling Stockholder, and to
execute all other instruments and documents and to perform all
other acts necessary to carry out the provisions of this
Agreement on behalf of such Selling Stockholder (such custody
agreement, together with such irrevocable powers of attorney, are
collectively referred to herein as the "Custody Agreement").
(ii) Such Selling Stockholder has all requisite power and
authority to execute, deliver, and perform this Agreement and the
Custody Agreement. All necessary corporate proceedings of each
corporate Selling Stockholder have been duly taken to authorize
the execution, delivery, and performance of this Agreement and
the Custody Agreement by such Selling Stockholder. This Agreement
and the Custody Agreement have been duly authorized by such
Selling Stockholder and delivered by such Selling Stockholder,
are the legal, valid, and binding obligations of such Selling
Stockholder, and are enforceable as to such Selling Stockholder
in accordance with their respective terms. No consent,
authorization, approval, order, license, certificate, or permit
of or from, or declaration or filing with, any federal, state,
local, or other governmental authority or any court or other
tribunal is required by such Selling Stockholder for the
execution, delivery, or performance of this Agreement (except
filings under the Act which have been or will be made before the
Closing Date and such consents consisting only of consents under
"blue sky" or securities laws which have been obtained at or
prior to the date of this Agreement) or the Custody Agreement by
such Selling Stockholder. No consent of any party to any
contract, agreement, instrument, lease, license, arrangement, or
understanding, to which such Selling Stockholder is a party, is
required for the execution, delivery, or performance of this
Agreement or the Custody Agreement.
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(iii) Such Selling Stockholder has good title to the
shares of Stock to be sold by such Selling Stockholder pursuant
to this Agreement, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts (except those created by this
Agreement and the Custody Agreement), and when delivered in
accordance with this Agreement, each new investor will receive
good title to the shares of Common Stock purchased by them from
such Selling Stockholder, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts.
(iv) Neither such Selling Stockholder nor any of such
Selling Stockholder's affiliates (as defined in the Regulations)
has taken or will take, directly or indirectly, any action
designed to stabilize or manipulate the price of any security of
the Company, or which has caused or resulted in, or which might
in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company, to facilitate the sale or resale of any of the Common
Stock.
(v) All information furnished or to be furnished to the
Company by or on behalf of such Selling Stockholder for use in
connection with the preparation of the Registration Statement and
the Prospectus does not and will not include any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(vi) Except as may be set forth in the Prospectus, such
Selling Stockholder has not incurred any liability for a fee,
commission, or other compensation on account of the employment of
a broker or finder in connection with the transactions
contemplated by this Agreement.
(vii) Such Selling Stockholder has received a copy of and
read the Registration Statement and the Prospectus and to the
best of such Selling Stockholders knowledge and belief the
Registration Statement and the Prospectus do not contain any
untrue statements of material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
3. Covenants of the Company and the Selling Stockholders.
(a) The Company covenants that it will:
(i) Use its best efforts to cause the Registration
Statement to become effective as promptly as possible and notify
you immediately, and confirm such notice in writing, (A) when the
Registration Statement and any post-effective amendment thereto
become effective, (B) of the receipt of any comments from the
Commission 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, and (C) of the receipt of any
notification with respect to a Stop Order or the initiation or
threatening of any proceeding with respect to a Stop Order. The
Company will use its best efforts to prevent the issuance of any
Stop Order and, if any Stop Order is issued, to obtain the
lifting thereof as promptly as possible.
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(ii) During the time when a prospectus relating to the
Common Stock is required to be delivered hereunder or under the
Act or the Regulations, the Company shall comply so far as it is
able with all requirements imposed upon it by the Act, as now
existing and as hereafter amended, and by the Regulations, as
from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Common Stock in
accordance with the provisions hereof and the Prospectus. If, at
any time when a prospectus relating to the Common Stock is
required to be delivered hereunder or under the Act or the
Regulations, any event shall have occurred as a result of which,
in the reasonable opinion of counsel for the Company, 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,
in the opinion of such counsel, it is necessary at any time to
amend or supplement the Registration Statement or the Prospectus
to comply with the Act or the Regulations, the Company will
immediately notify the Representative and promptly prepare and
file with the Commission an appropriate amendment or supplement
(in form and substance satisfactory to the Representative) which
will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any such
amendment declared effective as soon as possible.
(iii) Deliver without charge to the Representative such
number of copies of each Preliminary Prospectus as may reasonably
be requested by the Representative and, as soon as the
Registration Statement, or any amendment thereto, becomes
effective or a supplement is filed, deliver without charge to the
Representative two copies of the executed Registration Statement,
including exhibits, and any amendment thereto, as the case may
be, and two copies of any supplement thereto, and deliver without
charge to the Representative such number of copies of the
Prospectus, the Registration Statement, and amendments and
supplements thereto, if any, without exhibits as the Underwriter
may request for the purposes contemplated by the Act.
(iv) Endeavor in good faith, in cooperation with the
Representative, at or prior to the time the Registration
Statement becomes effective, to qualify the Common Stock for
offering and sale under the "blue sky" or securities laws of such
jurisdictions as you may designate subject to the Company's prior
approval; provided, however, that no such qualification shall be
required in any jurisdiction where, as a result thereof, the
Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such
jurisdiction to which it is not then subject. In each
jurisdiction where such qualification shall be effected, the
Company will, unless you agree in writing that such action is not
at the time necessary or advisable, file and make such statements
or reports at such times as are or may be required by the laws of
such jurisdiction.
(v) For a period terminating ninety (90) days after the
termination of the offering period, not, without the prior
written consent of the Representative, offer, issue, sell,
contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any shares of Common Stock
(or any security or other
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instrument which by its terms is convertible into, exercisable
for, or exchangeable for shares of Common Stock), except as
provided in Section 1.
(vi) File no amendment or supplement to the Registration
Statement or Prospectus at any time, whether before or after the
effective date of the Registration Statement, unless such filing
shall comply with the Act and the Regulations and unless the
Underwriter shall previously have been advised of such filing and
furnished with a copy thereof, and the Underwriter and its
counsel shall have approved such filing.
(vii) Comply with all registration, filing, and reporting
requirements of the Exchange Act, which may from time to time be
applicable to the Company.
(viii) Comply with all provisions of all undertakings
contained in the Registration Statement.
(ix) File timely and accurate reports on Form SR with the
commission in accordance with Rule 463 of the Regulations or any
successor provision.
(x) If the principal stockholders, officers, or directors
of the Company are required by the "blue sky" or securities
authority of any jurisdiction selected by the Underwriter
pursuant to Section 3(a)(iv) to escrow or agree to restrict the
sale of any security of the Company owned by them for the Company
to qualify or register the Common Stock for sale under the "blue
sky" or securities laws of any such jurisdiction, cause each such
person to escrow or restrict the sale of such security on the
terms and conditions and in the form specified by the securities
administrator of such jurisdiction.
(xi) Use its best efforts to cause the application for
quotation of the Common Stock on NASDAQ SmallCap Market to be
approved as soon as possible.
(b) The Selling Stockholder covenants and agrees that for
a period terminating ninety (90) days after the termination of the
offering period, such Selling Stockholder will not, without the prior
written consent of the Representative, offer, pledge, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any security or
other instrument which by its terms is convertible into, exercisable
for, or exchangeable for shares of Common Stock, except as provided in
the Prospectus or Section 1 hereof.
4. Payment of Expenses. The Company agrees to pay all expenses in
connection with (a) the preparation, printing, filing, distribution, and mailing
of the Registration Statement and the Prospectus and the printing, filing,
distribution, and mailing of this Agreement and related documents, including the
cost of all copies thereof and of the Preliminary Prospectuses and of the
Prospectus and any amendments or supplements thereto supplied to the Underwriter
in quantities as hereinabove stated, (b) the issuance, sale, transfer, and
delivery of the Common Stock, including any transfer or other taxes payable
thereon, (c) subject to the Company's prior approval, the qualification of the
Common Stock under state or foreign "blue sky" or securities laws, including the
costs of printing and mailing the preliminary and final "Blue Sky Survey" and
the fees of counsel for the Underwriter and the disbursements in connection
therewith, (d) the filing fees payable to the
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Commission, the National Association of Securities Dealers, Inc. (the "NASD"),
and the jurisdictions in which such qualification is sought, (e) the
disbursements in connection therewith relating to all filings with the NASD and
(f) the reasonable expenses and fees of counsel acceptable to the Company.
5. Conditions of the Underwriters' Obligations. The obligation of
the Underwriters to offer and sell the Common Stock as exclusive agents for the
Company and the Selling Stockholder on a best efforts basis, as provided herein,
shall be subject, in their discretion, to the continuing accuracy of the
representations and warranties of the Company and any Selling Stockholder
contained herein and in each certificate and document contemplated under this
Agreement to be delivered to the Representative, as of the date hereof and as of
the Closing Date, to the performance by the Company and the Selling Stockholders
of their respective obligations hereunder, and to the following conditions:
(a) The Registration Statement shall have become effective
not later than 6:00 P.M., New York City Time, on the date of this
Agreement or such later date and time as shall be consented to in
writing by the Underwriter.
(b) At the time this Agreement is executed and at the
Closing Date, you shall have received the favorable opinion of Messrs.
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, LLP, counsel for the Company, dated the
date of delivery, addressed to the Representative, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware. The Company is duly qualified to do business and are in
good standing in every jurisdiction in which its ownership,
leasing, licensing, or use of property and assets or the conduct
of its business makes such qualification necessary;
(ii) The authorized capital stock of the Company consists
of 25,000,000 shares of Preferred Stock of which none are issued
or outstanding and 100,000,000 shares of Common Stock, of which
16,500,000 shares are issued and outstanding. Each outstanding
share of Common Stock is validly authorized, validly issued,
fully paid, and nonassessable, free and clear of all liens,
security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts, except as set forth in the
Prospectus. Except as disclosed in the Prospectus, to the
knowledge of such counsel, there is no commitment, plan, or
arrangement to issue, and no outstanding option, warrant, or
other right calling for the issuance of, any share of capital
stock of the Company or any security or other instrument which by
its terms is convertible into, exercisable for, or exchangeable
for capital stock of the Company, except as may be properly
described in the Prospectus;
(iii) To the knowledge of counsel, the Company is not in
violation or breach of, or in default with respect to, any
material provision of its certificates of incorporation (or other
charter document) or by-laws;
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(iv) The Company has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary
corporate proceedings of the Company have been taken to authorize
the execution, delivery, and performance of this Agreement by the
Company. This Agreement has been duly authorized, executed, and
delivered by the Company, is the legal, valid, and binding
obligation of the Company, and (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of
creditors' rights generally) is enforceable as to the Company in
accordance with its terms;
(v) The Common Stock sold by the Company in this Offering
will be validly authorized and, when issued and delivered in
accordance with this Agreement, will be validly issued, fully
paid, and nonassessable and will not be issued in violation of
any preemptive rights of stockholders; and
(vi) The Registration Statement has become effective under
the Act. To the knowledge of such counsel, no Stop Order has been
issued and no proceedings for that purpose have been instituted
or threatened in writing.
(c) At the time this Agreement is executed and at the
Closing Date, you shall have received the favorable opinion of Xxxxx
Xxxxxxx, Esq., counsel for the Selling Stockholder, dated the date of
delivery, addressed to the Representative, to the effect that:
(i) The Selling Stockholder is a corporation duly
organized, validly existing, and in good standing under the laws
of Victoria, Australia. The Selling Stockholder is a company is
duly qualified to do business and are in good standing in every
jurisdiction in which its ownership, leasing, licensing, or use
of property and assets or the conduct of its business makes such
qualification necessary;
(ii) The Common Stock sold by the Selling Stockholder in
this Offering will be validly authorized and, when issued and
delivered in accordance with this Agreement, will be validly
issued, fully paid, and nonassessable and will not be issued in
violation of any preemptive rights of stockholders; nor will such
Common Stock be subject to any liens, charges, commitments or
encumbrances of any kind,
(iii) The Selling Stockholder has full power and authority
to execute, deliver, and perform this Agreement and the Custody
Agreement. This Agreement and the Custody Agreement have been
duly executed and delivered by the Selling Stockholder, are the
legal, valid, and binding obligations of the Selling Stockholder,
and (subject to applicable bankruptcy, insolvency, and other laws
affecting the enforceability of creditors' rights generally) are
enforceable as to them in accordance with their respective terms.
No consent, authorization, approval, order, license, certificate,
or permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or
other tribunal is required by the Selling Stockholder for the
execution, delivery, or performance of this Agreement (except
filings under the Act and such consents consisting only of
consents under "blue sky" or securities laws) or the Custody
Agreement by the Selling Stockholder. No consent of any party to
any contract, agreement, instrument, lease, license,
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arrangement, or understanding known to such counsel to which the
Selling Stockholder is a party, or to which such Selling
Stockholder's properties or assets are subject, is required for
the execution, delivery, or performance of this Agreement or the
Custody Agreement; and the execution, delivery, and performance
of this Agreement and the Custody Agreement will not violate,
result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract,
agreement, instrument, lease, license, arrangement, or
understanding, or violate, result in a breach of, or conflict
with any law, rule, regulation, order, judgment, or decree
binding on the Selling Stockholder or to which such Selling
Stockholder's operations, business, properties, or assets are
subject.
Such opinions may contain such qualifications, exceptions,
and assumptions and may rely upon such matters or other opinions as may
be agreed upon by the Underwriters and the counsel rendering the
opinion.
(d) At the Closing Date, you shall have received a
certificate of the Chief Executive Officer and of the Chief Financial
Officer of the Company and Stampville, dated the Closing Date, to the
effect that as of the date of this Agreement and as of the Closing Date,
the representations and warranties of the Company and Stampville
contained herein were and are accurate, and that as of the Closing Date
the obligations to be performed by the Company hereunder on or prior
thereto have been fully performed. At the Closing Date, you shall have
received a certificate of the Selling Stockholder, dated the Closing
Date, to the effect that as of the date of this Agreement and as of the
Closing Date, the representations and warranties of such Selling
Stockholder contained herein were and are accurate, and that as of the
Closing Date, the obligations to be performed by such Selling
Stockholder hereunder on or prior thereto have been fully performed.
(e) All proceedings taken in connection with the issuance,
sale, transfer and delivery of the Common Stock shall be satisfactory in
form and substance to the Underwriter.
(f) The NASD, upon review of the terms of the public
offering of the Common Stock, shall not have objected to the
Underwriter's participation in such offering.
Any certificate or other document signed by any officer of
the Company and delivered to the Underwriter or its counsel shall be
deemed a representation and warranty by the Company hereunder to the
Underwriter as to the statements made therein. Any certificate or other
document signed by or on behalf of the Selling Stockholder and delivered
to the Representative or its counsel shall be deemed a representation
and warranty by such Selling Stockholder hereunder to the Representative
as to the statements made therein. If any condition to the Underwriters'
obligations hereunder to be fulfilled prior to or at the Closing Date is
not so fulfilled, the Representative may terminate this Agreement or, if
the Representative so elects, in writing waive any such conditions which
have not been fulfilled or extend the time for their fulfillment.
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6. Indemnification and Contribution.
(a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the Underwriters and their
respective officers, directors, partners, employee's, agents, and
counsel, and each person, if any, who controls the Underwriters within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against any and all loss, liability, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 6, but
not be limited to reasonable attorneys' fees and any and all reasonable
expense incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever and any and
all amounts paid in settlement of any claim or litigation) as and when
incurred arising out of, based upon, or in connection with (i) any
untrue statement or alleged untrue statement of a material fact
contained (A) in the Registration Statement or the Prospectus (as
amended and supplemented from time to time), or any amendment or
supplement thereto or (B) in any application or other document or
communication (in this Section 6 collectively referred to as an
"application") executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Common Stock under the "blue
sky" or securities laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was
made in reliance upon and in conformity with written information
furnished to the Company as stated in Section 6(b) with respect to you
expressly for inclusion in any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto, or
in any application, as the case may be, or (ii) any breach of any
material representation, warranty, covenant, or agreement of the Company
contained in this Agreement. The foregoing agreement to indemnify shall
be in addition to any liability the Company may otherwise have,
including liabilities arising under this Agreement.
(b) The Underwriters agree to severally, but not jointly,
indemnify and hold harmless the Company, the Selling Stockholder, each
director of the Company or the Selling Stockholder, each officer of the
Company or the Selling Stockholder who shall have signed the
Registration Statement, and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Underwriters in Section 6(a), but only with respect to
statements or omissions, if any, made in the Registration Statement, or
the Prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, or in any application in reliance upon
and in conformity with written information furnished to the Company as
stated in this Section 6(b) with respect to the Underwriters expressly
for inclusion in any Preliminary Prospectus, the Registration Statement,
or the Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be; provided, however, that the obligation
of the Underwriters to provide indemnity under the provisions of this
Section 6(b) shall be limited to the amount which represents the product
of the number of shares of Common Stock sold by the Underwriters as
agent for the Company hereunder and the public offering price per share
set forth on the cover page of the Prospectus. For all purposes of this
Agreement, the amounts of the selling concession and re-allowance and
the information set forth under "Underwriting" and "Over-Attornment
Option" set forth in the Prospectus constitute the only information
furnished in
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writing by or on behalf of the Underwriters expressly for inclusion in
any Preliminary Prospectus, the Registration Statement, or the
Prospectus (as from time to time amended or supplemented), or any
amendment or supplement thereto, or in any application, as the case may
be.
(c) The Selling Stockholder agrees to indemnify and hold
harmless the Company, each director of the Company, each officer of the
Company who shall have signed the Registration Statement, the
Representative, the Underwriter, and each officer, director, partner,
employee, agent, and counsel of the Representative and the Underwriter,
and each other person, if any, who controls the Company, the
Representative or the Underwriters within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Representative and the
Underwriters in Section 6(a), but only with respect to (i) statements or
omissions, if any, made in any Preliminary Prospectus, the Registration
Statement, or the Prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any
application in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Selling Stockholder
expressly for inclusion in any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto, or
in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant, or agreement of such Selling
Stockholder contained in this Agreement.
(d) If any action is brought against any Representative,
the Underwriter, the Company or the Selling Stockholder or any of their
officers, directors, partners, employees, agents, counsel, or
controlling persons (an "indemnified party") in respect of which
indemnity may be sought against any other party hereto pursuant to the
foregoing paragraphs, such indemnified party or parties shall promptly
notify all the parties (the "indemnifying parties") against whom
indemnification is to be sought in writing of the institution of such
action (but the failure so to notify shall not relieve the indemnifying
parties from any liability they may have other than pursuant to this
Section 6(d)) and the indemnifying parties shall promptly assume the
defense of such action, including the employment of counsel
(satisfactory to such indemnified party or parties) and payment of
expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party or parties unless the employment of such counsel shall have been
authorized in writing by the indemnifying parties in connection with the
defense of such action or the indemnifying parties shall not have
promptly employed counsel satisfactory to such indemnified party or
parties to have charge of the defense of such action or such indemnified
party or parties shall have reasonably concluded that there may be one
or more legal defenses available to it or them or to other indemnified
parties which are different from or additional to those available to one
or more of the indemnifying parties, in any of which events such fees
and expenses shall be borne by the indemnifying parties and the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties. Anything in
this paragraph to the contrary notwithstanding, no indemnifying party
shall be liable for any settlement of any such claim or action effected
without its written consent. In addition, the Company and the Selling
Stockholder agree promptly to notify the Underwriter of the commencement
of any litigation or proceedings
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against the Company or any of its officers or directors in connection
with the sale of the Common Stock, any Preliminary Prospectus, the
Registration Statement, or the Prospectus, or any amendment or
supplement thereto, or any application.
(e) To provide for just and equitable contribution, if (i)
an indemnified party makes a claim for indemnification pursuant to
Section 6(a), 6(b), or 6(c) (subject to the limitations thereof) but it
is found in a final judicial determination, not subject to further
appeal, that such indemnification may not be enforced in such case, even
though this Agreement expressly provides for indemnification in such
case or (ii) any indemnified or indemnifying party seeks contribution
under the Act, the Exchange Act, or otherwise, then the Company
(including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed the
Registration Statement, any controlling person of the Company as one
entity and the Underwriter, in the aggregate (including for this purpose
any contribution by or on behalf of an indemnified party) as a second
entity, shall contribute to the losses, liabilities, claims, damages,
and expenses whatsoever to which any of them may be subject, so that the
Underwriter is responsible for the proportion thereof equal to the
percentage which the underwriting discount per share set forth on the
cover page of the Prospectus represents of the public offering price per
share set forth on the cover page of the Prospectus and the Company is
responsible for the remaining portion based upon the proceeds received
or which may have been received by such parties as a result of this
Offering; provided, however, that if applicable law does not permit such
allocation, then other relevant equitable considerations such as the
relative fault of the Company and you in the aggregate in connection
with the facts which resulted in such losses, liabilities, claims,
damages, and expenses shall also be considered. The relative fault, in
the case of an untrue statement, alleged untrue statement, omission, or
alleged omission, shall be determined by, among other things, whether
such statement, alleged statement, omission, or alleged omission relates
to information supplied by the Company including the Selling
Stockholder, or by you, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such
statement, alleged statement, omission, or alleged omission. The Company
including the Selling Stockholder, and you agree that it would be unjust
and inequitable if the respective obligations of the Company and you for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages, and expenses (even if
you and the other indemnified parties were treated as one entity for
such purpose) or by any other method of allocation that does not reflect
the equitable considerations referred to in this Section 6(e). No person
guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
is not guilty of such fraudulent misrepresentation. For purposes of this
Section 6(e), each person, if any, who controls you within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent, and your counsel shall have
the same rights to contribution as you, each person, if any, who
controls a Selling Shareholder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Selling Shareholder, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall
have signed the Registration Statement, and each director of the Company
shall have the same rights to contribution as the company, subject in
each case to the provisions of this Section 6(e). Anything in this
Section 6(e) to the contrary notwithstanding, no party shall
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be liable for contribution with respect to the settlement of any claim
or action effected without its written consent. This Section 6(e) is
intended to supersede any right to contribution under the Act, the
Exchange Act, or otherwise.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date, and such representations, warranties. covenants,
and agreements of the Underwriter, the Company, and the Selling Stockholder,
including the indemnity and contribution agreements contained in Section 6,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriter or any indemnified person,
or by or on behalf of the Company, the Selling Stockholders, or any person or
entity which is entitled to be indemnified under Section 6(b), and shall survive
termination of this Agreement or the delivery of the Common Stock to the new
investors.
8. Effective Date of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at 10:00 A.M.,
New York City Time, on the first full business day following the day on
which the Registration Statement becomes effective. The Representative
or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except as noted below
in this Section 8, by giving the notice indicated in Section 8(d) before
the time this Agreement becomes effective.
(b) If the public offering price of the Common Stock has
not been determined as provided for in Section 1 prior to 4:30 P.M., New
York City Time, on the third full business day after the effective date
of the Registration Statement, this Agreement may be terminated at any
time thereafter either by you or by the Company by giving notice to the
other unless before such termination the purchase price for the Common
Stock has been so determined.
(c) The Representative shall have the right to terminate
this Agreement at any time prior to the Closing Date by giving notice to
the Company if any domestic or international event, act, or occurrence
has materially in disrupted, or in the opinion of the Representative
will in the immediate future materially disrupt, the securities markets;
or if there shall have been a general suspension of, or a general
limitation on prices for, trading in securities on NASDAQ; or if there
shall have been an outbreak of major hostilities or other national or
international calamity; or if a banking moratorium has been declared by
a state or federal authority; or if a moratorium in foreign exchange
trading by major international banks or persons has been declared; or if
there shall have been a material interruption in the mail service or
other means of communication within the United States; or if the Company
or Stampville shall have sustained a material or substantial loss by
fire, flood, accident, hurricane, earthquake, theft, sabotage, or other
calamity or malicious act which, whether or not such loss shall have
been insured, will, in the opinion of the Representative, make it
inadvisable to proceed with the public offering; or if there shall have
been such change in the market for the Company's securities or
securities in general or in political, financial, or economic conditions
as in the judgment of the Representative makes it inadvisable to proceed
with the public offering on the terms contemplated by the Prospectus.
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(d) If the Representative elects to prevent this Agreement
from becoming effective, as provided in this Section 8, or to terminate
this Agreement, the Underwriter shall notify the Company promptly by
telephone, telex, or telegram, confirmed by letter. If, as so provided,
the Company elects to prevent this Agreement from becoming effective or
to terminate this Agreement, the Company shall notify the Representative
promptly by telephone, telex, or telegram, confirmed by letter.
9. Notices.
All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to you shall be
mailed, certified mail, return receipt requested, delivered personally or by
messenger, or via facsimile with fax confirmation of receipt or if by letter, to
Kensington Capital Corp., 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx Silver; with a copy to Xxxxxx, Xxxxxxxx & Xxxx, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxxxx, Esq., Facsimile
No.: (000) 000-0000; or if sent to the Company at 00-00 Xxxx Xxxx, Xxxxxxx,
Xxxxxxxx 0000, Xxxxxxxxx, Xxxxxxxxx, Attention: Secretary, and to the Selling
Stockholder at Level 9 South, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 0000,
Xxxxxxxxx, with a copy to Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP, 2121 Avenue of
the Stars, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attn: Xxxxx X. Xxxxxx,
Esq.; or if sent to the Selling Stockholder at: Instanz Nominees Pty. Ltd.,
Level 9 South, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 0000, Xxxxxxxxx, Attn.:
Xxxxx Xxxxxx, Facsimile 011-613-9650-3550, with a copy to Xxxxx Xxxxxxx, Esq.,
Xxxxx 00, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 0000, Xxxxxxxxx, Facsimile:
011-613-9606-0136. All notices hereunder shall be effective upon receipt by the
party to which it is addressed.
10. Construction. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to conflict of
laws. Time is of the essence in this Agreement.
11. Acknowledgments. The parties hereto acknowledge, understand
and accept that Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, Los Angeles, California, have
acted as counsel to the Company in connection with all legal matters relating to
the Offering described in Section 1 of this Agreement.
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If the foregoing correctly sets forth the understanding among
you, the Company, and the Selling Stockholder, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
The "Company"
I.T. Technology, Inc.
By
---------------------------------------
Xxxx Xxxxxxx, Chief Executive Officer
"Selling Stockholder"
Instanz Nominees Pty. Ltd.
By
-------------------------------------
Xxxxx Xxxxxx,
--------------------
Accepted as of the date first above written.
, New York
------------
----------------------------
By:
-----------------------------------
,
-------------------- -------------
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EXHIBIT "A"
Proceeds from the Offering Underwriters Commission*
-------------------------- ------------------------
At least $5,000,000 but less than $6,000,000 7.99%
At least $6,000,000 but less than $7,000,000 7.9%
At least $7,000,000 but less than $8,000,000 7.8%
At least $8,000,000 but less than $9,000,000 7.7%
At least $9,000,000 but less than $10,000,000 7.6%
At least $10,000,000 but less than $11,000,000 7.5%
At least $11,000,000 but less than $12,000,000 7.4%
At least $12,000,000 but less than $13,000,000 7.3%
At least $13,000,000 but less than $14,000,000 7.2%
At least $14,000,000 but less than $15,000,000 7.1%
At least $15,000,000 but less than $16,000,000 7.0%
At least $16,000,000 but less than $17,000,000 6.8%
At least $17,000,000 but less than $18,000,000 6.6%
At least $18,000,000 but less than $19,000,000 6.4%
At least $19,000,000 but less than $20,000,000 6.2%
At least $20,000,000 but less than $21,000,000 6.0%
At least $21,000,000 but less than $22,000,000 5.8%
At least $22,000,000 but less than $23,000,000 5.6%
At least $23,000,000 but less than $24,000,000 5.4%
At least $24,000,000 but less than $25,000,000 5.2%
$25,000,000 or more 5.0%
-------------------
* The percentage of the proceeds raised designated as the Underwriters
commission set forth opposite the various amounts of proceeds set forth below
shall be payable on the entire amount of proceeds raised in the Offering. So
that if $20,000,000 is raised the Underwriters commission shall be $1,200,000
and if $25,000,000 is raised the Underwriters commission shall be $1,250,000.
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