UNDERWRITING AGREEMENT
,
2005
BROOKSTREET
SECURITIES CORPORATION
0000
Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxxx, President
Gentlemen:
Xxxx’x,
Inc., a Delaware corporation (the “Company”), hereby confirms its agreement with
you (the “Underwriter”) as follows:
SECTION
1
DESCRIPTION
OF SECURITIES
1.1
The
Offering.
The
Company proposes to issue and sell 2,000,000 shares (the “Shares”) of the
Company’s Common Stock (the “Offering”). The Company hereby appoints the
Underwriter as its exclusive (managing) agent to sell the Shares, subject
to the
terms and provisions of this Agreement, on a “best efforts, all or none” basis.
Puruant to the terms of Section 3.2, the Company shall issue and sell to
the
Underwriter and its designees on the termination of the Offering (the “Closing
Date”) the Underwriter’s Warrants (as defined below).
SECTION
2
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
In
order
to induce the Underwriter to enter into this Agreement, the Company hereby
represents and warrants to and agrees with the Underwriter that:
2.1. Registration
Statement and Prospectus.
A
registration statement on Form SB-2 (File
No. 333-120451) has
been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the “Securities Act”), and the rules and regulations of
the Securities and Exchange Commission (the “Commission”) thereunder, and said
registration statement has been filed with the Commission. Copies of such
registration statement and any amendments, and all forms of the related
prospectuses contained therein, have been delivered to the Underwriter. Such
registration statement, including the prospectus, Part II, and financial
schedules and exhibits thereto, as amended at the time when it shall become
effective, is herein referred to as the “Registration Statement,” and the
prospectus included as part of the Registration Statement on file with the
Commission when it shall become effective or, if the procedure in Rule 430A
of
the Rules and Regulations (as defined below) under the Securities Act is
followed, the prospectus that discloses all the information that was omitted
from the prospectus on the effective date pursuant to such Rule, and in either
case, together with any changes contained in any prospectus filed with the
Commission by the Company with your consent after the effective date of the
Registration Statement, is herein referred to as the “Final Prospectus.” If the
procedure in Rule 430A is followed, the prospectus included as part of the
Registration Statement on the date when the Registration Statement became
effective is referred to herein as the “Effective Prospectus.” Any prospectus
included in the Registration Statement and in any amendments thereto prior
to
the effective date of the Registration Statement is referred to herein as
a
“Preliminary Prospectus.” For purposes of this Agreement, “Rules and
Regulations” mean the rules and regulations adopted by the Commission under the
Securities Act.
Included
in the Registration Statement are the Shares; and the shares of Common Stock
reserved against exercise of the Underwriter’s Warrants. As used in this
Agreement, the term “Effective Date” refers to the date the Commission declares
the Registration Statement effective pursuant to Section 8 of the Securities
Act.
2.2. Accuracy
of Registration Statement and Prospectus.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus with respect to the Shares, and each Preliminary
Prospectus has conformed in all material respects with the requirements of
the
Securities Act and the applicable Rules and Regulations and to the best of
the
Company’s knowledge has not included at the time of filing any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; except
that
the foregoing shall not apply to statements in or omissions from any Preliminary
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by the Underwriter, or from any Underwriter through
the
Underwriter, specifically for use in the preparation thereof.
When
the
Registration Statement becomes effective and on the Closing Date (hereinafter
defined), the Registration Statement, the Effective Prospectus (and on the
Closing Date, the Final Prospectus) will contain all statements which are
required to be stated therein in accordance with the Securities Act and the
Rules and Regulations. No such document will contain 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; except that the
foregoing does not apply to information contained in or omitted from the
Registration Statement or the Effective Prospectus or Final Prospectus in
reliance upon written information furnished by the Underwriter, or by any
Underwriter through the Underwriter, specifically for use in the preparation
thereof. The Company will not at any time hereafter file any amendments to
the
Registration Statement or in accordance with Rule 424(b) of the Rules and
Regulations of which the Underwriter shall not have been previously advised
in
advance of filing or to which the Underwriter shall reasonably object in
writing.
2.3. Financial
Statements.Xxxxxxxx
& Company, P.A., whose reports appear in the Effective Prospectus and the
Final Prospectus, are, and during, the periods covered by their reports were,
independent accountants as required by the Securities Act and the applicable
Rules and Regulations. The financial statements and schedules (including
the
related notes) included in the Registration Statement, any Preliminary
Prospectus or the Effective Prospectus or the Final Prospectus, present fairly
the financial position, the results of operations, and changes in financial
position of the entities purported to be shown thereby at the dates and for
the
periods indicated; and such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated.
2
2.4. No
Material Adverse Change.
Except
as may be reflected in or contemplated by the Effective Prospectus or the
Final
Prospectus, subsequent to the dates as of which information is given in the
Effective Prospectus or the Final Prospectus, and prior to the Closing Dates,
(a) there shall not have been any material adverse change in the condition,
financial or otherwise, of the Company or in its business taken as a whole;
(b)
there shall not have been any material transaction entered into by the Company
other than transactions in the ordinary course of business; (c) the Company
shall not have incurred any material liabilities, obligations or claims,
contingent or otherwise, which are not disclosed in the Effective Prospectus
or
the Final Prospectus; (d) except in the ordinary course of business and with
the
consent of the Underwriter, there shall not have been nor will there be any
change in the capital stock or long-term debt (except current payments) of
the
Company; and (e) the Company has not and will not have paid or declared any
dividends or other distributions on its capital stock.
2.5. No
Defaults.
Other
than as disclosed in the Effective Prospectus or the Final Prospectus, the
Company is not in any default (which has not been waived) in the performance
of
any obligation, agreement or condition contained in any debenture, note or
other
evidence of indebtedness or any indenture or loan agreement. The execution
and
delivery of this Agreement and the consummation of the transactions herein
contemplated, and compliance with the terms of this Agreement will not conflict
with or result in a breach of any of the terms, conditions or provisions
of, or
constitute a default under, the articles of incorporation, as amended, or
by-laws of the Company; any note, indenture, mortgage, deed of trust, or
other
material agreement or instrument to which the Company is a party or by which
it
or any of its property is bound, other than for which the Company has received
a
consent or waiver of such conduct, breach or default or except where such
default would not have a material adverse effect on the business of the Company;
or any existing law, order, rule, regulation, writ, injunction, or decree
of any
government, governmental instrumentality, agency or body, arbitration tribunal
or court, domestic or foreign, having jurisdiction over the Company or its
property. The consent, approval, authorization, or order of any court or
governmental instrumentality, agency or body is not required for the
consummation of the transactions herein contemplated except such as may be
required under the Securities Act or under the securities laws of any state
or
jurisdiction.
2.6. Incorporation
and Standing.
Each of
the Company and its Subsidiaries (as defined in Section 12.7 hereof) is,
and at
the Closing Dates (hereinafter defined) will be, duly incorporated and validly
existing in good standing as a corporation under the laws of the jurisdiction
of
its organization, with full power and authority (corporate and other) to
own its
property and conduct its business, present and proposed, as described in
the
Effective Prospectus and the Final Prospectus; the Company has full power
and
authority to enter into this Agreement; is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the character or location
of its properties (owned or leased) or the nature of its business makes such
qualification necessary except where the failure to be so qualified would
not
have a material adverse effect on the Company; and each of the Company and
its
Subsidiaries holds all material licenses, certificates, and permits from
governmental authorities necessary for the conduct of its business as described
in the Effective Prospectus and Final Prospectus.
3
2.7. Capitalization.
The
Company’s authorized and outstanding capitalization on the Effective Date and on
the Closing Date (hereinafter defined) are and will be as set forth under
the
caption “Capitalization” in the Effective Prospectus and the Final Prospectus.
The Company’s securities conform to the description thereof contained under the
captions “Description of Securities” in the Effective Prospectus and the Final
Prospectus. The outstanding shares of Common Stock have been, and the shares
underlying the Underwriter’s Warrants, upon issuance and delivery against
payment therefor in the manner described herein, will be, duly authorized
and
validly issued, fully paid and nonassessable. No sales of securities have
been
made by the Company in violation of the registration or anti-fraud provisions
of
the Securities Act or in violation of any other federal law or laws of any
state
or jurisdiction.
2.8. Legality
of Shares.
The
Shares, and the Common Stock issuable upon the exercise of the Underwriter’s
Warrants have been duly and validly authorized and, when issued and delivered
against payment therefor as provided in this Agreement, will be validly issued,
fully paid and nonassessable. There are no preemptive rights or other rights
to
subscribe for or to purchase, or any restriction upon the voting or transfer
of,
any shares of Common Stock pursuant to the Company’s articles of incorporation,
by-laws or other governing documents or any agreement or other instrument
to
which the Company or any of its Subsidiaries is a party or by which any of
them
may be bound. Neither the filing of the Registration Statement nor the offering
or sale of the Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or relating
to
the registration of any shares of Common Stock. All of the outstanding shares
of
capital stock of each Subsidiary of the Company are owned directly or indirectly
by the Company, free and clear of any claim, lien, and encumbrance or security
interest. The Underwriter’s Warrants, when sold and delivered, will constitute
valid and binding obligations of the Company enforceable in accordance with
the
terms thereof. A sufficient number of shares of Common Stock of the Company
have
been reserved for issuance upon exercise of the Underwriter’s Warrants.
2.9. Prior
Sales.
No
unregistered securities of the Company, of an affiliate or of a predecessor
of
the Company have been sold within three years prior to the date hereof, except
as disclosed in the Registration Statement.
2.10. Litigation.
Except
as set forth in the Effective Prospectus and the Final Prospectus, there
is, and
at the Closing Date there will be, no action, suit or proceeding before any
court, arbitration tribunal or governmental agency pending, or to the knowledge
of the Company, threatened, which might result in judgments against the Company
not adequately covered by insurance or which collectively might result in
any
material adverse change in the condition (financial or otherwise), the business
or the prospects of the Company, or which would materially affect the properties
or assets of the Company.
2.11. Underwriter’s
Warrants.
Upon
issuance of the Underwriter’s Warrants pursuant to Section 3.4 of this
Agreement, the Underwriter and designees of the Underwriter will receive
good
and marketable title thereto, free and clear of all liens, encumbrances,
charges
and claims whatsoever; and the Company will have on the Effective Date and
at
the time of delivery of such Underwriter’s Warrants the requisite power and
authority to sell, transfer and deliver such Underwriter’s Warrants in the
manner provided hereunder.
4
2.12. Finder.
The
Company knows of no outstanding claims against it for compensation for services
in the nature of a finder’s fee, origination fee or financial consulting fee
with respect to the offer and sale of the Shares hereunder except as previously
disclosed in writing to the Underwriter.
2.13 Exhibits;
Contracts; Agreements.
There
are no contracts or other documents which are required to be filed as exhibits
to the Registration Statement by the Securities Act or by the Rules and
Regulations which have not been so filed and each contract to which the Company
is a party and to which reference is made in the Effective Prospectus and
the
Final Prospectus has been duly and validly executed by the Company and, to
the
best of the Company’s knowledge, is in full force and effect in all material
respects in accordance with its terms, and none of such contracts have been
assigned by the Company; and the Company knows of no present situation or
condition or fact which would prevent compliance with the terms of such
contracts, as amended to date. Except for amendments or modifications of
such
contracts in the ordinary course of business, the Company has no intention
of
exercising any right which it may have to cancel any of its obligations under
any of such contracts, and has no knowledge that any other party to any of
such
contracts has any intention not to render full performance under such contracts.
All material terms of each contract, agreement, plan, arrangement or
understanding to which the Company is a party, or to which it may reasonably
be
expected to become a party, have been fully disclosed in the Effective
Prospectus and Final Prospectus.
2.14. Tax
Returns.
The
Company has filed all federal and state tax returns that are required to
be
filed by it and has paid all taxes shown on such returns and on all assessments
received by it to the extent such taxes have become due. All taxes with respect
to which the Company is obligated have been paid or adequate accruals have
been
set up to cover any such unpaid taxes.
2.15. Property.
Except
as otherwise set forth in or contemplated by the Effective Prospectus and
the
Final Prospectus, the Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects, except such as are described in the Effective
Prospectus and the Final Prospectus or such as do not materially effect the
value of such property and do not interfere with the use made or proposed
to be
made of such property by the Company or such Subsidiaries; and any real property
and buildings held under lease by the Company and its Subsidiaries are held
by
them under valid, existing, and enforceable leases with such exceptions as
are
not material and do not interfere with the use made or proposed to be made
of
such property and buildings by the Company and such Subsidiaries.
2.16. Authority.
The
execution and delivery by the Company of this Agreement has been duly authorized
by all necessary corporate action and this Agreement is the valid, binding
and
legally enforceable obligation of the Company, except as rights to indemnity
hereunder may be limited by federal or state securities laws or public policy
and except as enforceability may be limited by bankruptcy, insolvency, or
similar laws affecting creditors rights generally and by general equitable
principles.
5
2.17. Lock-Up.
The
Company has obtained from each of its officers, directors, and 5% or greater
shareholders, his or her written agreement that for a period of 12 months
from
the Effective Date he or she will not, without prior written consent of the
Underwriter, sell or otherwise dispose of any shares of Common Stock of the
Company owned directly or indirectly or benificially by him, other then
intra-family transfers or transfers to a trust for estate planning
purposes.
2.18. Use
of Form SB-2.
The
Company is eligible to use Form SB-2 for the offer and sale of the Shares.
2.19. Governmental
Compliance.
Neither
the Company nor any Subsidiary is in violation of any law, ordinance,
governmental rule or regulation or court decree to which it may be subject
which
violation might reasonably be expected to have a material adverse effect
on the
condition (financial or other), properties, prospective results of operations
or
net worth of the Company and its Subsidiaries.
2.20. Stabilization.
The
Company has not taken and may not take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares.
2.21. CUSIP
Number.
The
Company has obtained aCUSIP number for its Common Stock.
2.22. Subsidiaries.
The
Company has no Subsidiaries and it has no present intention of acquiring
or
forming any subsidiaries, except as disclosed in the Effective Prospectus
and
the Final Prospectus.
2.23. Books
and Accounts.
The
books, records and accounts of the Company and each of its subsidiaries
accurately and fairly reflect, in reasonable detail, the transactions in
and
dispositions of the assets of the Company and each of its subsidiaries. The
systems of internal accounting controls maintained by the Company and each
of
its subsidiaries are sufficient to provide reasonable assurances that (w)
transactions are executed in accordance with management’s general or specific
authorization; (x) transactions are recorded as necessary (A) to permit
preparation of financial statements in conformity with generally accepted
accounting principles and (B) to maintain accountability for assets; and
(z) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
2.24. Employees.
No
labor disturbance by the employees of the Company or any of its Subsidiaries
exists or is imminent; and the Company is not aware of any existing or imminent
labor disturbance by the employees of any principal suppliers, contract
manufacturing organizations, manufacturers, authorized dealers or distributors
that might be expected to result in any material adverse change in the condition
(financial or otherwise), earnings, operations, business or prospects of
the
Company and its Subsidiaries, considered as a whole. No collective-bargaining
agreement exists with any of the Company’s or any of the Company’s Subsidiaries’
employees and, to the best knowledge of the Company, no such agreement is
imminent.
6
2.25. Political
Contributions.
Neither
the Company nor any of its Subsidiaries has, directly or indirectly, at any
time
(x) made any contributions to any candidate for political office, or failed
to
disclose fully any such contribution, in violation of law; (y) made any payment
to any state, federal or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or allowed by all applicable laws; or (z) violated nor is it in
violation of any provision of the Foreign Corrupt Practices Act of 1977,
as
amended.
2.26. Environmental
Liabilities.
Neither
the Company nor any of its Subsidiaries has any liability, known or unknown,
matured or not matured, absolute or contingent, assessed or unassessed, imposed
or based upon any provision of, or has received notice of any potential
liability under, any foreign, federal, state or local law, rule or regulation
or
the common law, or any tort, nuisance or absolute liability theory, or under
any
code, order, decree, judgment or injunction applicable to the Company or
any of
its Subsidiaries relating to public health or safety, worker health or safety
or
pollution, damage to or protection of the environment, including, without
limitation, laws relating to damage to natural resources, emissions, discharges,
releases or threatened releases of hazardous materials into the environment
(including, without limitation, ambient air, surface water, ground water,
land
surface or subsurface strata), or otherwise relating to the manufacture,
processing, use treatment, storage, generation, disposal, transport or handling
of hazardous materials. As used herein, “hazardous material” includes chemical
substances, wastes, pollutants, contaminants, hazardous or toxic substances,
constituents, materials or wastes, whether solid, gaseous or liquid in nature.
2.27. Investment
Company Act.
The
Company is familiar with the Investment Company Act of 1940, as amended (the
“1940 Act”), and the rules and regulations thereunder, and has in the past
conducted, and intends in the future to conduct, its affairs in such a manner
as
to ensure that it will not become an “investment company” within the meaning of
the 1940 Act and such rules and regulations.
2.28. Patents.
Each of
the Company and each of its Subsidiaries owns or possesses adequate rights
to
use all material patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights described or referred
to
in the Final Prospectus as owned by or used by any of them, or which are
necessary for the conduct of their business as described in the Final
Prospectus; and neither the Company nor any of its Subsidiaries has received
any
notice of infringement of or conflict with asserted rights of others with
respect to any patents, patent rights, inventions, trade
secrets,
know-how, trademarks, service marks, trade names or copyrights which, singly
or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
might have a material adverse effect on the business, properties, condition
(financial or otherwise), prospects or results of operations of the Company
and
its Subsidiaries, taken as a whole.
7
SECTION
3
PURCHASE
AND SALE OF THE SECURITIES
3.1. Sale
of Shares.
Subject
to the terms and conditions and upon the basis of the representations and
warranties herein set forth, the Company hereby appoints the Underwriter
its
exclusive (managing) agent for a period of 45 days (which period may be extended
up to 45 days by written agreement between the Underwriter and the Company)
commencing on the Effective Date for the purpose of offering the Shares as
provided in this agreement on a “best efforts” basis. The Underwriter agrees to
use its best efforts to sell the Shares as the Company’s agent. It is understood
and agreed that there is no firm commitment on the Underwriter’s part to
purchase any of the Shares. The Underwriter may, in its discretion, offer
a part
of the Shares for sale by dealers who are members of the National Association
of
Securities Dealers, Inc., selected by the Underwriter, at such price, and
the
Underwriter may form and manage a selling group of such selected dealers.
The
Underwriter may allow such concessions upon sales by selected dealers as
may be
determined from time to time by the Underwriter.
3.2. Public
Offering Price.
After
the Commission notifies the Company that the Registration Statement has become
effective, the Underwriter will offer the Shares hereunder at a price of
$4.00
per Share. The Underwriter will be entitled to a fee of 7% on each Share
sold by
it as such agent (broken
down into an 6% sales commission and 1% lead underwriter’s concession)
plus
a
non-accountable expense allowance of 3% on each Share. Any commissions and
fees
payable to the Underwriter under this paragraph shall be payable on the Closing
Date or as otherwise provided herein.
3.3. Inspection
of Certificates.
For the
purpose of expediting the checking and packaging of the certificates for
the
Shares, if requested by the Underwriter, the Company agrees to make the
certificates available for inspection by the Underwriter at the main office
of
the Underwriter in Irvine, California, at least two full business days prior
to
the proposed delivery date.
3.4. Issuance
of Underwriter’s Warrants.
On the
effective date of the Offering, at a price of $0.001 per warrant, the Company
will issue to the Underwriter and its designees, warrants (the Underwriter’s
Warrants”) substantially in the form filed as an Exhibit to the Registration
Statement with such changes therein, if any, as may be agreed upon by the
Company and the Underwriter, to purchase the number of shares of Common Stock
equal to 10% of at the Shares sold in the Offering for a term of five years
at
an exercise price of per share equal to 165% of the offering price per share
of
Shares sold in the Offering. The shares of Common Stock underlying the
Underwriter’s Warrants shall be registered on the Registration Statement for the
Offering.
The
Underwriter’s Warrants shall also contain anti-dilution provisions for stock
splits, recombinations, and reorganizationsand shall otherwise be in form
and
substance satisfactory to the Underwriter.
3.5. Expenses.
The
Company shall reimburse Underwriter for fees and disbursements of Underwriter’s
counsel incurred in connection with the Offering for up to $50,000 for work
not
covering the qualification of the Offering under blue sky laws, provided
however
that, if at least $2,000,000 gross proceeds is not raised in the Offering,
the
Company's responsibility for fees of counsel for the Underwriter shall be
limited to $25,000. Additionally, the Company shall reimburse Underwriter
for
all fees and disbursements of Underwriter’s counsel that may be in connection
with the qualification of the Offering under blue sky laws.
8
3.6. Representations
of the Parties.
The
parties hereto respectively represent that as of the the Effective Date and
continuing through the Closing Date, the representations herein contained
and
the statements contained in all the certificates theretofore or simultaneously
delivered by any party to another, pursuant to this Agreement, shall in all
material respects be true and correct.
3.7. Post-Closing
Information.
The
Underwriter covenants that reasonably promptly after the Closing Date, it
will
supply the Company with all information required from the Underwriter which
must
be supplied to the Commission, if any, and such additional information as
the
Company may reasonably request to be supplied to the securities authorities
for
such states in which the Shares have been qualified for sale.
3.8. Re-Offers
by Selected Dealers.
The
Underwriter shall require any selected dealer selling the Shares to agree
to
sell the Shares on the terms and conditions of the Offering set forth in
the
Prospectus.
SECTION
4
REGISTRATION
STATEMENT AND PROSPECTUS
4.1. Delivery
of Registration Statements.
The
Company shall deliver to the Underwriter without charge two manually signed
copies of the Registration Statement, including all financial statements
and
exhibits filed therewith and any amendments or supplements thereto, and shall
deliver without charge to the Underwriter ten conformed copies of the
Registration Statement and any amendment or supplement thereto, including
such
financial statements and exhibits. The signed copies of the Registration
Statement so furnished to the Underwriter will include manually signed copies
of
any and all consents and certificates of the independent public accountant
certifying to the financial statements included in the Registration Statement
and signed copies of any and all opinions, consents and certificates of any
other persons whose profession gives authority to statements made by them
and
who are named in the Registration Statement as having prepared, certified,
or
reviewed any part thereof.
4.2. Delivery
of Pre-Effective Prospectus.
The
Company will cause to be delivered to the Underwriters and to other
broker-dealers, without charge, prior to the Effective Date, as many copies
of
each Preliminary Prospectus filed with the Commission bearing in red ink
the
statement required by Item 501(c)(8) of Regulation S-K (Reg. 229.501(c)(8))
as
may be required by the Underwriter. The Company consents to the use of such
documents by the Underwriters and by selected dealers prior to the Effective
Date of the Registration Statement.
4.3. Delivery
of Prospectus.
The
Company will deliver, without charge, copies of the Effective Prospectus
and the
Final Prospectus at such addresses and in such quantities as may be required
by
the Underwriters for the purposes contemplated by this Agreement and shall
deliver said printed copies of the Effective Prospectus and the Final Prospectus
to the Underwriters and to selected dealers within one business day after
the
Effective Date.
9
4.4. Further
Amendments and Supplements.
If
during such period of time as in the opinion of the Underwriter or its counsel
the Final Prospectus is required to be delivered under the Securities Act,
any
event occurs or any event known to the Company relating to or affecting the
Company shall occur as a result of which the Final Prospectus as then amended
or
supplemented would include an untrue statement of a material fact, or omit
to
state any material fact necessary to make the statements therein, in light
of
the circumstances under which they were made, not misleading, or if it is
necessary at any time after the Effective Date to amend or supplement the
Final
Prospectus to comply with the Securities Act, the Company will forthwith
notify
the Underwriter thereof and prepare and file with the Commission such further
amendment to the Registration Statement or supplement the Final Prospectus
(at
the expense of the Company) so as to correct such statement or omission or
effect such compliance. The Company shall furnish and deliver to the Underwriter
and to others whose names and addresses are designated by the Underwriter,
all
at the cost of the Company, a reasonable number of copies of the amended
or
supplemented Prospectus which as so amended or supplemented will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the Prospectus not misleading in the light
of
the circumstances as of the date of such Prospectus, amendment, or supplement,
and which will comply in all respects with the Securities Act. In the event
the
Underwriters are required to deliver a Prospectus beyond completion of their
participation in the Offering, upon request the Company will prepare promptly
such Prospectus or Prospectuses as may be necessary to permit continued
compliance with the requirements of Section 10 of the Securities Act.
4.5. Use
of Prospectus.
The
Company authorizes the Underwriters and all selected dealers to whom any
of the
Shares may be sold to use the Effective Prospectus and the Final Prospectus,
as
from time to time amended or supplemented, in connection with the offer and
sale
of the Shares and in accordance with the applicable provisions of the Securities
Act, the Rules and Regulations and state Blue Sky or securities laws.
SECTION
5
COVENANTS
OF THE COMPANY
The
Company covenants and agrees with the Underwriters that:
5.1. Objection
of Underwriter to Amendments or Supplements.
The
Company will not at any time, whether before or after the Effective Date,
file
any amendment or supplement to the Registration Statement or Prospectus unless
and until a copy of such amendment or supplement has been furnished to the
Underwriter a reasonable period of time prior to the proposed filing thereof;
or
to which the Underwriter or counsel for the Underwriter have reasonably
objected, in writing, on the ground that such amendment or supplement is
not in
compliance with the Securities Act or the Rules and Regulations.
10
5.2. Company’s
Best-Efforts to Cause Registration Statement to Become
Effective.
The
Company will use its best efforts to cause the Registration Statement to
become
effective or, if the procedure in Rule 430A of the Rules and Regulations
is
followed, comply with the provisions of and make all requisite filings with
the
Commission pursuant to such Rule and to notify the Underwriter promptly (in
writing, if requested) of all such filings. The Company shall promptly advise
the Underwriter, and will confirm such advice in writing (a) when the
Registration Statement shall become effective and when any amendment thereto
shall have become effective and when any amendment of or supplement to the
Effective Prospectus or the Final Prospectus shall be filed with the Commission;
(b) when the Commission makes a request or suggestion for any amendment to
the
Registration Statement or the Effective Prospectus or the Final Prospectus
or
for additional information and the nature and substance thereof; and (c)
of the
happening of any event which in the judgment of the Company makes any material
statement in the Registration Statement or Effective Prospectus or the Final
Prospectus untrue or which requires the making of any changes in the
Registration Statement or the Effective Prospectus or Final Prospectus in
order
to make the statements therein not misleading. The Company shall also promptly
notify the Underwriter, and confirm such notice in writing, when the Company
has
knowledge of the issuance by the Commission of an order suspending the
effectiveness of the Registration Statement pursuant to Section 8 of the
Securities Act, suspending or preventing the use of any Preliminary Prospectus
or the Effective Prospectus or Final Prospectus or suspending the qualification
of the Shares for offering or sale in any jurisdiction, or of the institution
of
any proceedings for any such purpose. The Company will use every reasonable
effort to prevent the issuance of any order suspending the effectiveness
of the
Registration Statement or refusing or suspending the qualification of the
Shares, and to obtain as soon as possible a lifting of any such suspension
order, the reversal of any such refusal to qualify, and the termination of
any
such suspension.
5.3 Preparation
and Filing of Amendments and Supplements.
The
Company agrees to prepare and file promptly with the Commission, upon request
of
the Underwriter, such amendments or supplements to the Registration Statement
or
Final Prospectus, in form satisfactory to counsel to the Company, as may
be
necessary, in the opinion of counsel to the Underwriter and of counsel to
the
Company; and it shall use its best efforts to cause the same to become effective
as promptly as possible.
5.4. Blue
Sky Qualification.
The
Company will cooperate with the Underwriter in qualifying or registering
the
Shares and underlying securities for sale under the blue sky laws of such
jurisdictions as the Underwriter designates, and will continue such
qualifications in effect so long as is reasonably required for the distribution
of the Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not currently qualified or where it would be subject
to
taxation as a foreign corporation.
5.5. Financial
Statements.
The
Company at its own expense will prepare and give such financial statements
and
other information to the Commission, or the proper public bodies of the states
in which the Shares and underlying securities may be registered or qualified,
as
may be required by them.
5.6. Reports
and Financial Statements to the Underwriter.
During
the period ending three years from the Closing Date, the Company will deliver
to
the Underwriter copies of each annual report of the Company, and will deliver
to
the Underwriter, within 90 days after the close of each fiscal year of the
Company, a financial report of the Company and its Subsidiaries, if any,
on a
consolidated basis, and a similar financial report of all unconsolidated
Subsidiaries, if any. All such reports will include a balance sheet as of
the
end of the preceding fiscal year, a statement of operations, a statement
of cash
flows and an analysis of shareholders’ equity covering such fiscal year, and all
will be in reasonable detail and certified by independent public accountants
for
the Company. These requirements will be satisfied if the Company provides
to the
Underwriter copies of its Forms 10-K, Forms 10-Q and Forms 8-K (or other
appropriate forms) when they are filed with the Commission.
11
If
the
Company shall fail to furnish the Underwriter with financial statements as
herein provided, within the times specified herein, the Underwriter, after
giving reasonable notice of not less than 30 days (and if the financial
statements are not provided within such 30 day period), shall have the right
to
have such financial statements prepared by independent public accountants
of its
own choosing and the Company agrees to furnish such independent public
accountants such data and assistance and access to such records as they may
reasonably require to enable them to prepare such statements and to pay their
reasonable fees and expenses in preparing the same.
During
the period ending three years from the Closing Date the Company shall also
provide to the Underwriter copies of all other statements, documents, or
other
information which the Company shall mail or otherwise make available to any
class of its security holders, or which it shall file with the Commission;
and,
upon request in writing from the Underwriter, the Company shall furnish to
the
Underwriter such other information as may reasonably be requested and which
may
be properly disclosed to the Underwriter with reference to the property,
business and affairs of the Company and its Subsidiaries, if any; provided
such
written request includes an agreement to keep confidential any information
which
should not be disclosed to the public.
5.7. Expenses
Paid by the Company.
The
Company will pay or cause to be paid, whether or not the transactions
contemplated hereunder are consummated or the Registration Statement is
prevented from becoming effective or this Agreement is terminated, (a) all
fees
and expenses (including, without limitation, fees and expenses of the Company’s
accountants and counsel, but excluding fees and expenses of counsel for the
Underwriters except as set forth in section 3.5 of this Agreement) in connection
with the preparation, printing, filing, delivery and shipping of the
Registration Statement (including financial statements therein and all
amendments and exhibits thereto), each Preliminary Prospectus, the Effective
Prospectus and the Final Prospectus as amended or supplemented, and the
printing, delivery and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda and Selected Dealer Agreements; (b)
the
filing fee of the National Association of Securities Dealers, Inc.; (c) any
applicable listing fees; (d) the cost of printing certificates representing
the
Shares; (e) the cost and charges of any transfer agent or registrar; (f)
the
fees and expenses of qualifying the Shares under the blue sky laws of various
jurisdictions; and (g) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise provided for in this
Section.
5.8. Reports
to Shareholders.
During
the period ending five years from the Closing Date the Company will, as promptly
as possible, but not later than 180 days after the end of its annual fiscal
year, render and distribute reports to its shareholders which will include
audited statements of its operations and cash flows during such period and
its
balance sheet as of the end of such period, as to which statements the Company’s
independent certified public accountants shall have rendered an opinion.
12
5.9. Section
11(a) Financials.
The
Company will make generally available to its security holders and will deliver
to the Underwriter, as soon as practicable, an earnings statement (as to
which
no opinion need be rendered but which will satisfy the provisions of Section
11(a) of the Securities Act) covering a period of at least 12 months beginning
after the Effective Date. Compliance by the Company with Rule 158 promulgated
under the Securities Act shall satisfy the requirements of this Section 5.9.
5.10. Post-Effective
Availability of Prospectus.
The
Company will comply, at its own expense, with all requirements imposed upon
it
by the Securities Act, as now or hereafter amended, by the Rules and
Regulations, as from time to time may be in force, and by any order of the
Commission, so far as necessary to permit the continuance of sales or dealings
in the Shares and the Underwriter’s Warrants and the exercise of the
Underwriter’s Warrants
5.11. Application
of Proceeds.
The
Company will apply the net proceeds from the sale of the Shares substantially
in
the manner specifically set forth in the Final Prospectus. Any deviation
from
such application must be in accordance with the Final Prospectus and may
occur
only after approval by the board of directors of the Company and then only
after
the board of directors has obtained the written opinion as to the propriety
of
any such deviation provided by recognized legal counsel well versed in the
federal and state securities laws.
5.12. Agreements
of Certain Shareholders.
The
Company will deliver to the Underwriter, prior to the execution of this
Agreement, the agreement of each officer, director, and 5% or greater
shareholder, that for a period of 6 months from the Effective Date such persons
shall not sell, contract to sell, pledge, hypothecate, grant any option to
purchase or otherwise dispose of any portion of the shares of Common Stock
owned
directly, indirectly or beneficially by such person prior to the Effective
Date,
without the Underwriter’s prior written consent other than intra-family
transfers or transfers to trusts for estate planning purposes.
5.13. Delivery
of Documents.
At or
prior to the Closing, the Company will deliver to the Underwriter true and
correct copies of the articles of incorporation of the Company and all
amendments thereto; true and correct copies of the by-laws of the Company
and of
the minutes of all meetings of the directors and shareholders of the
Company held prior to the Closing Date which in any way relate to the subject
matter of this Agreement. All such copies shall be certified by the Secretary
of
the Company.
5.14. Cooperation
with Underwriter’s Due Diligence.
At all
times prior to the Closing Date, the Company will cooperate with the Underwriter
in such investigation as the Underwriter may make or cause to be made of
all the
properties, management, business and operations of the Company, and the Company
will make available to the Underwriter in connection therewith such information
in its possession as the Underwriter may reasonably request.
5.15. Appointment
of Transfer Agent.
The
Company has appointed Transfer Online, Inc. as Transfer Agent for the Common
Stock, subject to the closing of the Offering. The Company will not change
or
terminate such appointment for a period of three years from the Effective
Date
without first obtaining the written consent of the Underwriter, which consent
shall not be unreasonably withheld.
13
5.16. Compliance
with Conditions Precedent.
The
Company will use all reasonable efforts to comply or cause to be complied
with
the conditions precedent to the several obligations of the Underwriters in
Section 8 hereof.
5.17. Filing
of Form SR.
If
required under the Securities Act, the Company agrees to file with the
Commission all required reports on Form SR in accordance with the provisions
of
Rule 463 promulgated under the Securities Act and to provide a copy of such
reports to the Underwriter and its counsel.
5.18. National
Exchange.
The
Company will use its best efforts to have the Shares listed for trading on
a
national exchange agreeable to the Company and the Underwriter as soon as
practicable following closure of the Offering.
5.19. Right
of Inspection.
For a
period of three years after the Effective Date, the Underwriter, at the
Underwriter’s expense, will have the right to have a person or persons selected
by the Underwriter review the books and records of the Company upon seven
days’
written notice and at reasonable times. Such person or persons will be required
to execute a confidentiality agreement which will, in part, prohibit disclosure
of information to any party except the Underwriter, which information shall
be
held in confidence unless otherwise specifically agreed to by the Company
in
writing.
5.20. Outside
Directors, Committees, Executive Compensation.
The
Company shall use its best efforts to have at least two members elected to
its
board of directors who are not officers or employees of the Company (“outside
directors”) on the Effective Date of the Registration Statement, and to cause
two such outside directors to be nominated as directors for two additional
one-year terms. The Company will form independent audit and compensation
committees which shall be comprised of at least three of the Company’s
directors, at least a majority of whom shall be outside directors.
5.21. Registration
under the Exchange Act.
The
Company has filed a Registration Statement under Section 12(g) of the Exchange
Act with respect to the Common Stock. The Company has delivered a copy of
such
filing to the Underwriter and to legal counsel for the Underwriter. The Company
shall use its best efforts to cause the registration statement under the
Exchange Act to become effective not later than the Effective Date, or as
soon
thereafter as possible.
5.22.
Financial
Statements and Share Issuances.The
Company has prepared and delivered to the Underwriter its most recent financial
statements and projections constituting its best estimate of revenues, earnings
and cash flow and shall update such estimates on a monthly basis during the
registration period. Except in connection with acquisitions or pursuant to
the
exercise of warrants and options outstanding prior to the completion of the
Offering, and the Company’s right to adopt a stock option plan (the “Plan”)
reserving no more than 15% of the issued and outstanding shares of Common
Stock
of the Company as of the date hereof and the grant of options to its officers
and employees under such Plan at an exercise price equal to the offering
price,
the Company will not, without the Underwriter’s prior written consent, sell any
shares of capital stock of the Company or issue warrants or options to purchase
any shares of capital stock of the Company during the twelve month period
following the Offering if $7,000,000 gross proceeds or more is raised in
the
Offering, or during the six month period following the Closing Date if
$5,000,000 to $6,999,999 in gross proceeds are raised in the Offering. This
provision shall not apply if less than $5,000,000 gross proceeds are raised
in
the Offering.
14
5.23.
Observer
Rights.
The
Underwriter shall have the right for a period of five years commencing on
the
Closing Date to designate an observer to the Board of Directors of the Company,
which observer receives notice of all Board and Board committee meetings
concurrent with the Company’s directors or shall have the right to attend all
Board and Board committee meetings.
5.24
Exclusive
Rights.
From
the Effective Date through the Closing Date (the “Exclusive Period”), the
Underwriter shall be the Company’s exclusive investment banker for any and all
financings of the Company. The Company shall refrain from negotiating with
any
other underwriter or investment banker or other person regarding a possible
private or public offering of any of the Company's securities without the
prior
consent of the Underwriter. If the Company, with the consent of the Underwriter,
secures financing other than the Public Offering during the Exclusive Period,
the Company shall pay to the Underwriter a cash
commission on the gross proceeds of any financing equal to 8% of all amounts
up
to $1,000,000, plus 7% of all amounts from $1,000,001 through $2,000,000,
plus
6% of all amounts over $2,000,000.
SECTION
6
INDEMNIFICATION
AND CONTRIBUTION
6.1. Indemnification
by Company.
The
Company shall indemnify and hold harmless each Underwriter and each
participating dealer against any and all loss, claim, damage or liability,
joint
or several, to which such Underwriter or participating dealer may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, or liability (or action with respect thereto) arises out of or is
based
upon (a) any violation of any registration requirements; (b) any improper
use of
sales literature by the Company; (c) any untrue statement or alleged untrue
statement made by the Company in Section 2 hereof; (d) any untrue statement
or
alleged untrue statement of a material fact contained (i) in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus, or the Final
Prospectus or any amendment or supplement thereto, or (ii) in any application
or
other document, executed by the Company specifically for such application
or
based upon written information furnished by the Company, filed in order to
qualify the Shares under the securities laws of the states where filings
were
made (any such application, document, or information being hereinafter called
“Blue Sky Application”); or (e) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Effective Prospectus,
or
the Final Prospectus or any amendment or supplement thereto or in any Blue
Sky
Application a material fact required to be stated therein or necessary to
make
the statements therein not misleading; and shall reimburse each Underwriter
and
each participating dealer for any legal or other reasonable expenses incurred
by
such Underwriter and participating dealer in connection with investigating
or
defending against or appearing as a third-party witness in connection with
any
such loss, claim, damage, liability or action, notwithstanding the possibility
that payments for such expenses might later be held to be improper, in which
case the person receiving them shall promptly refund them; except that the
Company shall not be liable in any such case to the extent, but only to the
extent, that any such loss, claim, damage, or liability arises out of or
is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company through the Underwriter or participating
dealer by or on behalf of any Underwriter or participating dealer specifically
for use in the preparation of the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus and the Final Prospectus or any amendment
or supplement thereto, or any Blue Sky Application.
15
6.2. Indemnification
by Underwriters.
Each
Underwriter severally, but not jointly, shall indemnify and hold harmless
the
Company against any and all loss, claim, damage or liability, joint or several,
to which the Company may become subject under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability (or action in respect thereto)
arises out of or are based upon (a) any untrue statement or alleged untrue
statement of a material fact contained (i) in the Registration Statement,
any
Preliminary Prospectus, the Effective Prospectus or the Final Prospectus
or any
amendment or supplement thereto or (ii) in any Blue Sky Application; or (b)
the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or the Final Prospectus
or any
amendment or supplement thereto or in any Blue Sky Application a material
fact
required to be stated therein or necessary to make the statements therein
not
misleading; except that such indemnification shall be available in each such
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon information and in conformity with written information furnished to
the
Company through the Underwriter or on behalf of such Underwriter specifically
for use in the preparation thereof; and shall reimburse any legal or other
expenses reasonably incurred by the Company in connection with the investigation
or defending against any such loss, claim, damage, liability, or action.
6.3. Right
to Provide Defense.
Promptly after receipt by an indemnified party under Section 6.1 or 6.2 above
of
written notice of the commencement of any action, the indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party
under
such section, notify the indemnifying party in writing of the claim or the
commencement of that action; the failure to notify the indemnifying party
shall
not relieve it of any liability which it may have to an indemnified party,
except to the extent that the indemnifying party did not otherwise have
knowledge of the commencement of the action and the indemnifying party’s ability
to defend against the action was prejudiced by such failure. Such failure
shall
not relieve the indemnifying party from any other liability which it may
have to
the indemnified party or any person identified in Section 6.4 below. If any
such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any
other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from
the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable
to
the indemnified party under such section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; except that the
Underwriter or participating dealer shall have the right to employ counsel
to
represent the Underwriter or participating dealer and those other Underwriters
or participating dealers who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Underwriters or
participating dealer against the Company under such section if, in the
reasonable judgment of the Underwriter or participating dealer, it is advisable
for the Underwriter or participating dealer and those Underwriters or
participating dealers to be represented by separate counsel, and in that
event
the fees and expenses of such separate counsel shall be paid by the Company.
The
indemnified party may, but shall not be obligated to, participate in the
defense
at its own expense with its own counsel.
16
6.4. Contribution.
If the
indemnification provided for in Sections 6.1 and 6.2 of this Agreement is
unavailable or insufficient to hold harmless an indemnified party, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages, or liabilities
referred to in Sections 6.1 or 6.2 above (a) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one
hand and the Underwriters or participating dealers on the other from the
offering of the Shares; or (b) if the allocation provided by clause (a) above
is
not permitted by applicable law, in such proportion as is appropriate to
reflect
the relative benefits referred to in clause (a) above but also the relative
fault of the Company on the one hand and the Underwriters or participating
dealers on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, or liabilities, as well as any
other
relevant equitable considerations. The relative benefits received by the
Company
and the Underwriters or participating dealers shall be deemed to be in the
same
proportion as the total net proceeds from the Offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and
un-itemized expenses received by the Underwriters or participating dealers,
in
each case as set forth in the table on the cover page of the Final Prospectus.
Relative fault shall be determined by reference to, among other things, whether
the untrue statement of a material fact or the omission to state a material
fact
relates to information supplied by the Company, the Underwriter, or the
participating dealers and the parties’ relative intent, knowledge, access to
information, and opportunity to correct or prevent such untrue statement
or
omission. For purposes of this Section 6.4, the term “damages” shall include any
counsel fees or other expenses reasonably incurred by the Company, the
Underwriters, or participating dealers in connection with investigating or
defending any action or claim which is the subject of the contribution
provisions of this Section 6.4. Notwithstanding the provisions of this Section
6.4, no Underwriter or participatinig dealer shall be required to contribute
any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter or participating
dealer
has otherwise been required to pay by reason of any such untrue statements
or
omissions. No person adjudged guilty of fraudulent misrepresentation (within
the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Under this Section 6.4, each Underwriter’s obligations to
contribute are several in proportion to their respective underwriting
obligations and not joint. Each party entitled to contribution agrees that
upon
the service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it
shall
promptly give written notice of such service to the party or parties from
whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may
be
sought from any obligation it may have hereunder or otherwise (except as
specifically provided in Section 6.4 hereof).
17
6.5. Extension
of Obligations.
The
obligations of the Company under this Section 6 shall be in addition to any
other liability which the Company may otherwise have, and shall extend, upon
the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Securities Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability that
the
respective Underwriters may otherwise have, and shall extend, upon the same
terms and conditions, to each director of the Company (including any person
who,
with his consent, is named in the Registration Statement as about to become
a
director of the Company), to each officer of the Company who has signed the
Registration Statement, and to each person, if any, who controls the Company
within the meaning of the Securities Act.
SECTION
7
EFFECTIVENESS
OF AGREEMENT
This
Agreement shall become effective (a) at 10:00 a.m., Los Angeles time, on
the
first full business day after the Effective Date, or (b) upon release by
the
Underwriter of the Shares for sale after the Effective Date, whichever shall
first occur. The Underwriter shall notify the Company immediately after the
Underwriter shall have taken any action, by release or otherwise, whereby
this
Agreement shall have become effective. For purposes of this Agreement, the
release of the initial public offering of the Shares for sale to the public
shall be deemed to have been made when the Underwriter releases, by telegram
or
otherwise, firm offers of the Shares to securities dealers or release for
publication of a newspaper advertisement relating to the Shares, whichever
occurs first. This Agreement shall, nevertheless, become effective at such
time
earlier than the time specified above, after the Effective Date, as the
Underwriter may determine by notice to the Company.
SECTION
8
CONDITIONS
OF THE UNDERWRITERS’ OBLIGATIONS
The
obligations of the several Underwriters hereunder to sell the Shares on a
“best
efforts” basis shall be subject to the accuracy, of each of the representations
and warranties on the part of the Company herein contained, to the performance
by the Company of all its agreements herein contained, to the fulfillment
of or
compliance by the Company with all covenants and conditions hereof, and to
the
following additional conditions:
8.1. Effectiveness
of Registration Statement. The
Registration Statement and all post-effective amendments thereto filed with
the
Commission prior to the Closing Date shall have become effective and any
and all
filings required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made; no stop order suspending the effectiveness of the Registration
Statement or any amendment or supplement thereto shall have been issued;
no
proceeding for that purpose shall have been initiated or threatened by the
Commission or be pending; any request for additional information on the part
of
the Commission (to be included in the Registration Statement or Final Prospectus
or otherwise) shall have been complied with to the satisfaction of the
Commission; and neither the Registration Statement, the Effective Prospectus
or
Final Prospectus, nor any amendment thereto shall have been filed to which
counsel to the Underwriter shall have reasonably objected in writing or have
not
given their consent.
18
8.2. Accuracy
of Registration Statement. The
Underwriter shall not have advised the Company that the Registration Statement
or the Effective Prospectus or Final Prospectus or any amendment thereof
or
supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel to the Underwriter, is material, or omits to state a fact which,
in
the opinion of such counsel, is material and is required to be stated therein,
or is necessary to make the statements therein not misleading.
8.3. Casualty
and Other Calamity. Since
the Effective Date the Company shall not have sustained any loss on account
of
fire, explosion, flood, accident, calamity or any other cause, of such character
as materially adversely affects its business or property considered as an
entire
entity, whether or not such loss is covered by insurance, and no officer
or
director of the Company shall have suffered any injury, sickness or disability
of a nature which would materially adversely affect his or her ability to
properly function as an officer or director of the Company.
8.4. Litigation
and Other Proceedings. Other
than as disclosed in the Registration Statement or Prospectus, there shall
be no
litigation instituted or threatened against the Company and there shall be
no
proceeding instituted or threatened against the Company before or by any
federal
or state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding would materially adversely affect the business, management, licenses,
operations or financial condition or income of the Company considered as
an
entity.
8.5. Lack
of Material Change. Except
as contemplated herein or as set forth in the Registration Statement and
Final
Prospectus, during the period subsequent to the date of the last audited
balance
sheet included in the Registration Statement, the Company (a) shall have
conducted its business in the usual and ordinary manner as the same was being
conducted on the date of the last audited balance sheet included in the
Registration Statement, and (b) except in the ordinary course of its business,
the Company shall not have incurred any liabilities, claims or obligations
(direct or contingent) or disposed of any of its assets, or entered into
any
material transaction or suffered or experienced any substantially adverse
change
in its condition, financial or otherwise. The capital stock and surplus accounts
of the Company shall be substantially the same as at the date of the last
audited balance sheet included in the Registration Statement, without
considering the proceeds from the sale of the Shares, other than as may be
set
forth in the Final Prospectus, and except as the surplus reflects the result
of
continued profits or losses from operations consistent with prior periods.
8.6. Review
by Underwriter’s Counsel. The
authorization of, the Shares, the Underwriter’s Warrants, and the Common Stock
issuable upon the exercise of the Underwriter’s Warrants, the Registration
Statement, the Effective Prospectus and the Final Prospectus and all corporate
proceedings and other legal matters incident thereto and to this Agreement
shall
be reasonably satisfactory in all respects to counsel to the Underwriter.
19
8.7. Opinion
of Counsel. The
Company shall have furnished to the Underwriter an opinions as of the Effective
Date and the Closing Date, addressed to the Underwriter, from Xxxxxxxx X.
Xxxxxxx, Esq.,
counsel
to the Company, to the effect that based upon a review by them of the
Registration Statement, Effective Prospectus and the Final Prospectus, the
Company’s certificate of incorporation, by-laws, and relevant corporate
proceedings and contracts, and examination of such statutes as he deems
necessary and such other investigation by such counsel as he deems necessary
to
express such opinion, that:
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(a)
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The
Company has been duly incorporated and validly exists as a corporation
in
good standing under the laws of the State of Delaware, and has
the
corporate power and authority to own its properties and to carry
on its
business as described in the Registration Statement and Effective
Prospectus and the Final Prospectus.
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(b)
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The
Company is duly qualified and in good standing as a foreign corporation
authorized to do business in all jurisdictions in which the character
of
the properties owned or held under lease or the nature of the business
conducted requires such qualification except where the failure
to qualify
would not have a material adverse effect on the business of the
Company.
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(c)
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The
authorized and outstanding capital stock of the Company is as set
forth in
the Effective Prospectus and Final Prospectus; the Common Stock,
and the
Underwriter’s Warrants conform to the statements concerning them in the
Effective Prospectus and Final Prospectus; the outstanding Common
Stock of
the Company contains no preemptive rights; the Shares are, and
the
Underwriter’s Warrants have been, and the Common Stock issuable upon
exercise of the Underwriter’s Warrants will be, duly and validly
authorized and, upon issuance thereof and payment therefor in accordance
with this Agreement, validly issued, fully paid and nonassessable,
and
will not be subject to the preemptive rights of any shareholder
of the
Company.
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(d)
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A
sufficient number of shares of Common Stock have been duly reserved
for
issuance upon the exercise of the Underwriter’s Warrants.
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(e)
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To
such counsel’s knowledge, no consents, approvals, authorizations or orders
of agencies, officers or other regulatory authorities are required
for the
valid authorization, issuance or sale of, the Shares, and the
Underwriter’s Warrants contemplated by this Agreement, except for those
consents, approvals, authorizations, and orders which the Company
has
obtained and which are in full force and effect under the Securities
Act,
the Exchange Act, and under applicable state securities laws in
connection with the purchase and distribution of such securities
by the
Underwriters, and the clearance of the underwriting compensation
by the
NASD.
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20
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(f)
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The
issuance and sale of the Shares and the Underwriter’s Warrants, the
consummation of the transactions herein contemplated, and the compliance
with the terms of this Agreement will not conflict with or result
in a
breach of any of the terms, conditions, or provisions of or constitute
a
default under the certificate of incorporation or by-laws of the
Company;
nor, to such counsel’s knowledge, will they conflict with or result in a
breach of any of the terms, conditions, or provisions of any note,
indenture, mortgage, deed of trust, or other agreement or instrument
to
which the Company is a party or by which the Company or any of
its
property is bound, other than for which the Company has received
a consent
or waiver of such conflict, breach or default, or where such conflict
or
breach would not have a material adverse effect on the business
of the
Company; or any existing law (provided this paragraph shall not
relate to
federal or state securities laws), order, rule, regulation, writ,
injunction, or decree known to such counsel of any government,
governmental instrumentality, agency, body, arbitration tribunal, or
court, domestic or foreign, having jurisdiction over the Company
or its
property.
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(g)
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On
the basis of a reasonable inquiry by such counsel, including participation
in conferences with Underwriters of the Company and its accountants
at
which the contents of the Registration Statement and the Effective
Prospectus and the Final Prospectus and related matters were discussed,
and without expressing any opinion as to the financial statements
or other
financial data contained therein: (i) nothing has come to such
counsel’s
attention which leads them to believe that the Registration Statement
and
the Final Prospectus, as amended or supplemented by any amendments
or
supplements thereto made by the Company prior to the Closing Date,
do not
comply as to form in all material respects with the requirements
of the
Securities Act; (ii) nothing has come to their attention which
leads them
to believe that the Registration Statement or the Final Prospectus,
as
amended or supplemented by any such amendments or supplements thereto,
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, in light of the circumstances under which they
were
made, not misleading; (iii) they do not know of any contract or
other
document required to be described in or filed as an exhibit to
the
Registration Statement which is not so described or filed; and
(iv) the
Registration Statement has become effective under the Securities
Act, and,
to the best of their knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings
for that
purpose have been instituted or are pending or contemplated by
the
Commission.
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(h)
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This
Agreement has been duly authorized and executed by the Company
and is a
valid and binding agreement of the Company, except as rights to
indemnity
hereunder may be limited by federal or state securities laws or
public
policy and except as enforceability may be limited by federal or
state
securities laws or public policy and except as enforceability may
be
bankruptcy, insolvency, or similar laws affecting creditors rights
generally and by general equitable
principles.
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21
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(i)
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The
Company is not in default of any of the contracts, licenses, leases
or
agreements to which it is a party, and the offering and sale of
the Shares
and the Underwriter’s Warrants will not cause the Company to become in
default of any of its contracts, licenses, leases or agreements.
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(j)
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To
such counsel’s knowledge the Company is not currently offering any
securities for sale except as described in the Registration Statement.
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(k)
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Counsel
has no knowledge of any promoter, affiliate, parent or subsidiaries
of the
Company except as are described in the Registration Statement and
Final
Prospectus.
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(l)
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To
the knowledge of counsel, all of the leases, subleases and other
agreements under which the Company holds its properties are in
full force
and effect; the Company is not in default under any of the material
terms
or provisions of any of the leases, subleases or other agreements;
and
there are no claims against the Company concerning its rights under
the
leases, subleases and other agreements and concerning its right
to
continued possession of its properties.
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(m)
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To
the knowledge of counsel, the Company has been issued by the appropriate
federal, state and local regulatory authorities the required licenses,
certificates, authorizations or permits necessary to conduct its
business
as described in the Registration Statement and to retain possession
of its
properties. Counsel is unaware of any notice of any proceeding
relating to
the revocation or modification of any of these certificates or
permits.
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(n)
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Company
counsel has participated in conferences with certain officers and
representatives of the Company, its independent public accountants,
the
Underwriters and the Underwriters' counsel at which the contents
of the
Registration Statement and the Prospectus and related matters were
discussed. Company counsel is not passing upon and has not independently
checked or verified, the accuracy, completeness or fairness of
the
information contained in the Registration Statement and the Prospectus.
However, based upon Company counsel’s participation as described in the
preceding two sentences: (i) counsel has no reason to believe that
the
Registration Statement (other than the financial statements, including
the
notes and schedules thereto, and the other financial and statistical
data
included in the Registration Statement, as to which counsel expresses
no
belief or opinion), at the time the Registration Statement became
effective, contained any untrue statement of a material fact or
omitted to
state a material fact required to be stated therein or necessary
to make
the statements therein not misleading; and (ii) counsel has no
reason to
believe that the Prospectus (other than the financial statements,
including the notes and schedules thereto, and the other financial
and
statistical data included in the Prospectus, as to which we express
no
opinion or belief), contains any untrue statement of a material
fact or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not
misleading. In rendering such opinion, counsel may rely upon: (A)
as to
matters involving the application of laws other than the laws of
the
United States, the General Corporation Law of the State of Delaware;
(B)
as to matters of fact, certificates of responsible officers of
the Company
and certificates or other written statements of officers of departments
of
various jurisdictions having custody of documents respecting the
corporate
existence or good standing of the
Company.
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22
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(o)
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As
to all factual matters, including without limitation the issuance
of stock
certificates and receipt of payment therefor, the states in which
the
Company transacts business, and the adoption of resolutions reflected
by
the Company’s minute book, such counsel may rely on the certificate of an
appropriate officer of the Company. Counsel’s opinion as to the validity
and enforceability of any and all contracts and agreements referenced
herein may exclude any opinion as to the validity or enforceability
of any
indemnification or contribution provisions thereof, or as the validity
or
enforceability of any such contract or agreement may be limited
by
bankruptcy or other laws relating to or affecting creditors’ rights
generally and by equitable principles.
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8.8. Accountant’s
Letter. The
Underwriter shall have received letters addressed to it dated the Effective
Date, and the Closing Date, respectively, and a draft of such letter at least
five days prior to the Effective Date, and the Closing Date, from Xxxxxxxx
&
Company, P.A., confirming that they are independent public accountants with
respect to the Company within the meaning of the Act and the published Rules
and
Regulations. In the letter dated the date of this Agreement, they shall state
their conclusions and findings with respect to such financial, accounting,
and
statistical information and other matters contained in the Registration
Statement as have been approved by the Underwriter prior to the execution
of
this Agreement. In the letter dated the the Closing Date, they shall state
as of
such date (or, with respect to matters involving changes or developments
since
the respective dates as of which specified financial information is given
in the
Final Prospectus, as of a date not more than five days prior to the date
of such
letter) their conclusions and findings with respect to the financial information
and other matters covered by their letter dated the date of this Agreement,
the
purpose of the letter to be delivered on the Closing Date being to update
in all
respects the conclusions and findings set forth in the prior letter or letters.
The Underwriter shall be furnished without charge, in addition to the original
signed copies, such number of signed or photostatic or conformed copies of
such
letters as the Underwriter shall reasonably request.
8.9. Officer’s
Certificate. The
Company shall furnish to the Underwriter certificates, each signed by the
President and Chief Financial Officer of the Company, dated as of the Effective
Date and as of each Closing Date, to the effect that:
(a) The
representations and warranties of the Company in this Agreement are true
and
correct at and as of the date of the certificate, and the Company has complied
with all the agreements and has satisfied all the conditions on its part
to be
performed or satisfied at or prior to the date of the certificate.
23
(b) The
Registration Statement has become effective and to the best of the knowledge
of
the respective signers no order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been initiated
or is threatened by the Commission.
(c) The
respective signers have each examined the Registration Statement and the
Final
Prospectus and any amendments and supplements thereto, and to the best of
their
knowledge the Registration Statement and the Final Prospectus and any amendments
and supplements thereto contain all statements required to be stated therein,
do
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 and, since the Effective Date, there has occurred
no
event required to be set forth in an amended or a supplemented Prospectus
which
has not been so set forth.
8.10. Tender
of Delivery of Shares. All
of the Shares being offered by the Company and being sold by the Underwriter,
and the Underwriter’s Warrants being purchased from the Company by the
Underwriter, shall be tendered for delivery in accordance with the terms
and
provisions of this Agreement.
8.11. Blue-Sky
Registration or Qualification. The
Shares shall be registered or qualified in such states as the Underwriter
and
the Company may agree pursuant to Section 5.4, and each such registration
or
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Dates. On the Effective Date and the Closing Date,
the
Underwriter’s counsel shall provide written information which contains the
following:
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(a)
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the
names of the states in which applications to register or qualify
the
Shares have been filed;
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(b)
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the
status of such registrations or qualifications in such states as
of the
date of such letter;
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(c)
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a
list containing the name of each such state in which the Shares
may be
legally offered and sold by a dealer licensed in such state and
the number
of each which may be legally offered and sold in the Offering in
each such
state as of the date of such letter;
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(d)
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with
respect to the written information provided on the Effective Date,
a
representation that such counsel will promptly update such written
information if counsel receives actual notice of any material changes
in
the information provided therein between the Effective Date and
the
Closing Date;
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(e)
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the
names of the states in which the offer and sale of the Shares in
the
Offering is exempt from registration or qualification; and
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(f)
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a
statement that the Underwriters and selected dealers in the Offering
may
rely upon the information contained therein.
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24
8.12. Approval
of Underwriter’s Counsel. All
opinions, letters, certificates and evidence mentioned above or elsewhere
in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance satisfactory to counsel to the
Underwriter, whose approval shall not be unreasonably withheld. The suggested
form of such documents shall be provided to the counsel for the Underwriter
at
least three business days before the dates they are to be provided, that
is, the
Effective Date and the Closing Dates.
8.13. Officers’
Certificate as a Company Representation. Any
certificate signed by an officer of the Company and delivered to the Underwriter
or counsel for the Underwriter shall be deemed a representation and warranty
by
the Company to the Underwriter as to the statements made therein.
SECTION
9
TERMINATION
9.1. Termination
Because of Non-compliance. This
Agreement may be terminated in its entirety by the Underwriter by notice
to the
Company prior to its effectiveness in the event that the Company shall have
failed or been unable to comply with any of the terms, conditions or provisions
of this Agreement which the Company is required by this Agreement to be
performed, complied with or fulfilled (including but not limited to those
specified in Sections 2, 3, 4, 5, and 8 hereof) within the respective times
herein provided for, unless compliance therewith or performance or satisfaction
thereof shall have been expressly waived by the Underwriter in writing.
9.2. Market
out Termination. This
Agreement may be terminated by the Underwriter by notice to the Company at
any
time if, in the sole judgment of the Underwriter, payment for and delivery
of
the Shares is rendered impracticable or inadvisable because of:
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(a)
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Material
adverse changes in the Company’s business, business prospects, management,
earnings, properties or conditions, financial or otherwise;
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(b)
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Any
action, suit, or proceedings, at law or in equity, hereafter threatened
or
filed against the Company by any person or entity, or by any federal,
state or other commission, board or agency wherein any unfavorable
result
or decision could materially adversely affect the business, business
prospects, properties, financial condition or income or earnings
of the
Company;
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(c)
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Additional
material governmental restrictions not in force and effect on the
date
hereof shall have been imposed upon the trading in securities generally,
or new offering or trading restrictions shall have been generally
established by a registered securities exchange, the Commission,
the
National Association of Securities Dealers, Inc. or other applicable
regulatory authority, or trading in securities generally on any
such
exchange, the Nasdaq Stock Market, or otherwise, shall have been
suspended, or a general moratorium shall have been established
by federal
or state authorities;
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25
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(d)
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Substantial
and material changes in the condition of the market beyond normal
fluctuations such that it would be undesirable, impracticable or
inadvisable in the judgment of the Underwriter to proceed with
this
Agreement or with the public offering of the Shares;
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(e)
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Any
outbreak or escalation of major hostilities in which the United
States is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment
of the
Underwriter, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed
with
completion of the sale of and payment for the Shares; or
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(f)
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Any
suspension of trading in the securities of the Company or the interruption
or termination of listing of any security of the Company on any
exchange
or over-the-counter markets.
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9.3. Effect
of Termination Hereunder. Any
termination of this Agreement pursuant to this Section 9 shall be without
liability of any character (including, but not limited to, loss of anticipated
profits or consequential damages) on the part of any party hereto, except
that
the Company shall remain obligated to pay the costs and expenses provided
to be
paid by it specified in Sections 3.5 and 5.7; and the Company and the
Underwriters shall be obligated to pay, respectively, all losses, claims,
damages or liabilities, joint or several, under Sections 6.1 or 6.4 in the
case
of the Company and Sections 6.2 or 6.4 in the case of the Underwriter.
SECTION
10
UNDERWRITER’S
REPRESENTATIONS AND WARRANTIES
The
Underwriter represents and warrants to and agrees with the Company that:
10.1. Registration
as Broker-Dealer and Member of NASD. The
Underwriter is registered as a broker-dealer with the Commission and is
registered as a securities broker-dealer in all states in which it will sell
Shares and is a member in good standing of the National Association of
Securities Dealers, Inc.
10.2. No
Pending Proceedings. There
is not now pending or threatened against the Underwriter any action or
proceeding of which it has been advised, either in any court of competent
jurisdiction, before the Commission or any state securities regulatory authority
concerning activities as a broker or dealer which are foreseen as affecting
the
Underwriter’s capacity to complete the terms of this Agreement.
10.3. Company’s
Right to Terminate. In
the event any action or proceeding of the type referred to in Section 10.2
above
shall be instituted or threatened against the Underwriter at any time prior
to
the Effective Date hereunder, or in the event there shall be filed by or
against
the Underwriter in any court pursuant to any federal, state, local or municipal
statute, a petition in bankruptcy or insolvency or for reorganization or
for the
appointment of a receiver or trustee of its assets or if it makes an assignment
for the benefit of creditors, the Company shall have the right on three days’
written notice to the Underwriter to terminate this Agreement without any
liability to the Underwriter or the Company of any kind except for the payment
of all expenses as provided herein.
26
10.4. Underwriter’s
Covenants. The
Underwriter covenants and agrees with the Company that (a) it will not offer
or
sell the Shares in any state or other jurisdiction where it has not been
advised
in writing by its legal counsel or counsel for the Company that the Shares
are
qualified for the offer and sale therein or exempt from such requirements;
(b)
it will not make any representation to any person in connection with the
offer
and sale of the Shares covered hereby except as set forth in the Registration
Statement or as authorized in writing by the Company and the Underwriter;
(c) it
will comply in good faith with all laws, rules and regulations applicable
to the
distribution of the securities, including the Rules of Fair Practice of NASD
Regulation, Inc.; and (d) the Underwriter has the authority to execute this
Agreement on behalf of all of the Underwriters.
SECTION
11
NOTICE
Except
as
otherwise expressly provided in this Agreement:
11.1 Notice
to the Company. Whenever
notice is required by the provisions of this Underwriting Agreement to be
given
to the Company, such notice shall be in writing addressed to the Company
as
follows:
Reeds,
Inc.
00000
Xxxxx Xxxxxx Xxxxxx
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxxxxxxxx X. Xxxx
with
a
copy to:
Xxxxxxx
& Cron
Four
Venture Plaza, Suite 390
Xxxxxx,
XX 00000
Attn:
Xxxxxxxx X. Xxxxxxx, Esq.
11.2 Notice
to the Underwriter. Whenever
notice is required by the provisions of this Agreement to be given to the
Underwriter, such notice shall be given in writing addressed to the Underwriter
as follows:
Brookstreet
Securities Corporation
0000
Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxxx
27
with
a
copy to:
Xxxxxx
& Xxx
00000
Xxxx Xxxxxx Xxxxxx
Xxxxxx,
XX 00000
Attn:
Xxxxx Xxxxxx, Esq.
11.3 Effective
Date of Notices. Such
notices shall be effective on the date of delivery set forth on the receipt
if
the notice is sent by registered or certified mail or any expedited delivery,
or, if sent regular mail, three days from the day of mailing.
SECTION
12
MISCELLANEOUS
12.1. Benefit. This
Agreement is made solely for the benefit of the Underwriter, other Underwriters,
the Company, their respective officers, directors and controlling persons
referred to in Section 15 of the Securities Act and such other persons as
are
identified in this Agreement, and their respective successors and assigns,
and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term “successor” or the term “successors and assigns” as used in
this Agreement shall not include any purchasers, as such, of any of the Shares.
12.2. Survival. The
respective indemnities, agreements, representations, warranties, and covenants
of the Company or its officers and the Underwriter or the Underwriters as
set
forth in or made pursuant to this Agreement and the indemnity and contribution
agreements contained in Section 6 hereof of the Company and the Underwriter
(as
defined in Section 6) shall survive and remain in full force and effect,
regardless of (a) any investigation made by or on behalf of the Company or
the
Underwriters or any such officer or director thereof or any controlling person
of the Company or of the Underwriters, (b) delivery of or payment for the
Shares, and (c) the Closing Date, and any successor of the Company or the
Underwriter or any controlling person, officer or director thereof, as the
case
may be, shall be entitled to the benefits hereof.
12.3. Governing
Law. The
validity, interpretation and construction of this Agreement and of each part
hereof will be governed by the laws of the State of Colorado.
12.4. Entire
Agreement. This
Agreement contains the entire agreement and understanding between the parties
hereto, and supersedes all agreements and understandings including, but not
limited to, the Letter of Intent dated November 12, 2004.
12.5. Underwriter’s
Information. The
statements with respect to the public offering of the Shares on the inside
and
outside of both the front and back cover pages of the Prospectus and under
the
caption “Underwriting” in the Final Prospectus constitute the written
information furnished by or on behalf of the Underwriter referred to in Section
2.2 hereof, in Section 6.1 hereof and Section 6.2 hereof.
28
12.6. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original and all of which together will constitute one and the
same
instrument.
12.7. Definition
of “Business Day” and “Subsidiary”. For
purposes of this Agreement, (a) “Business Day” means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) “Subsidiary” has the
meaning set forth in Rule 405 of the Rules and Regulations.
Please
confirm that the foregoing correctly sets forth the Agreement between you
and
the Company.
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Very
truly yours,
REEDS,
INC.,
A Delaware corporation |
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By:
Xxxxxxxxxxx X. Xxxx,
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Its:
Chairman, President and Chief Executive
Officer
|
||
The
foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date
first above written.
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BROOKSTREET
SECURITIES CORPORATION,
A
California corporation
|
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| |
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By:
Xxxxxxx X. Xxxxxx
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Its:
President
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29
