EXHIBIT 1
Success Development International, Inc.
500,000 Shares of Common Stock
(Par Value .001 Per Share)
February 4, 1998
XXXXXXXXX, XXXXXX & XXXXX
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
Success Development International, Inc., a Florida corporation (the "Company"),
hereby confirms its agreement with XXXXXXXXX XXXXXX & XXXXX (the "Agent"), as
follows:
1. GENERAL. The Company proposes to offer, through the Agent on a "best
efforts basis", up to 500,000 shares (the "Maximum Offering") of the
common stock, $.001 par value, of the Company (the "Shares") at a price of
$5.50 per Share in an offering to the public (the "Offering").
The Company has filed a Registration Statement on Form SB-2A (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") pursuant to which the Company will register the Shares for sale to
the public.
On terms and conditions specified in this (the "Agreement"), the Agent,
for the compensation specified below, will provide the services specified
in this Agreement to assist the Company in the Offering.
2. THE OFFERING.
1 SERVICES TO BE RENDERED. Subject to the terms and conditions hereof
and upon the basis of the representations, warranties and agreements
herein set forth, the Company hereby appoints the Agent as its agent
to sell the Shares on a best efforts basis. The Agent xxxxxx accepts
such appointment and agrees to use its best efforts to find
purchasers for the Shares. The Company and the Agent agree that the
Shares shall be offered to the investing public in Georgia, Florida,
and any other state or states where the Company deems it appropriate
to offer the Shares, all in compliance with the Securities Act of
1933 (the "Securities Act"), the Securities Exchange Act of 1934
(the "Exchange Act"), and the securities or "blue sky" laws of any
applicable jurisdiction.
2 EXCLUSIVE ENGAGEMENT. The Company shall not engage any other person
other than the Agent to solicit offers or sales of Shares during the
Offering Period (as such term is herein defined).
3 COMPENSATION. The Company agrees to pay to the Agent for the Agent's
services in connection with the Offering a commission on all Shares
sold in the Offering as follows: the sum of $.55 per Share together
with an option (an "Option") to purchase one Share for each ten
Shares sold in the Offering. Such Options shall have a term of five
years from the Effective Date, and shall have an exercise price of
$5.50 per Share.
4 PAYMENT OF EXPENSES. The Company will pay all expenses in connection
with the Offering including, but not limited to, the Company's
attorneys' fees, expenses for auditing and accounting services,
advertising fees, all securities registration and NASD filing fees,
postage, and document reproduction expenses, and the engraving,
issuance, transfer and delivery of certificates for the Stock. The
Company shall pay the Agent an expense retainer in the amount of
$5,000 upon execution of this Agreement. In the event that the Agent
incurs additional out-of-pocket expenses, the Company shall
immediately reimburse the Agent upon receipt of the Agent's invoice.
The aggregate out-of-pocket expenses to be reimbursed to the Agent
hereunder shall not exceed $15,000.
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5 BLUE SKY. The Company contemplates that the Offering will be made in
those states listed in Exhibit A attached hereto. The Company shall,
at its sole expense, take or cause to be taken all necessary action
and shall furnish to whomever the Agent may direct such information
as may be required to qualify the Shares for sale under the laws of
such jurisdictions and any other jurisdictions where the Company may
hereafter elect that Shares shall be offered and shall continue such
qualifications in effect for as long as may be necessary for the
distribution of the Shares. At the request of the Agent the Company
shall cause its counsel to prepare and furnish to the Agent "Blue
Sky" memoranda concerning the requirements for qualification of the
Shares for sale under the law of such jurisdictions, and the Agent
shall be entitled to rely on such memoranda in carrying out its
obligations under this Agreement.
6 OFFERING PERIOD. The Shares will be offered for sale during the
period (the "Offering Period") commencing with the date that the
Registration Statement is declared effective by the SEC (the
"Effective Date" of the Offering) until the earlier to occur of (a)
the date the Maximum Offering is achieved, or (b) 120 days from and
after the Effective Date, or (C) the termination of the Offering by
the Company. The Company may, upon written notice to the Agent,
elect to extend the Offering Period, and as used herein, the term
"Offering Period" shall include any such extension.
7 ESCROW AGREEMENT. During the period of the Offering, the proceeds
from the sale of Shares shall, upon receipt by the Agent, be
promptly placed in a special account with First Union National Bank
(the "Escrow Agent"), subject to an escrow agreement substantially
in the form of the Impound Agreement which is attached hereto as
Exhibit B and incorporated herein by this reference (the "Escrow
Agreement"). Each of the parties hereto agrees that this Agreement
shall be automatically terminated and the entire proceeds received
from subscriptions for the Shares shall be returned to the
subscribers for such Shares, without interest, upon the failure of
the Minimum Offering to be achieved on or before the date which is
90 days from and after the Effective Date, unless the Offering is
extended by the Company.
8 DELIVERY OF AND PAYMENT FOR THE SHARES. Provided that the Escrow
Agent is authorized and empowered in accordance with the terms of
the Escrow Agreement to release the proceeds of the Offering from
escrow as described in the Escrow Agreement, and provided further
that this Agreement shall not have been terminated pursuant to the
terms hereof, payment for the Shares shall be made at a closing (the
"Closing") to be held at the offices of the Agent's counsel (or such
other place as the parties hereto may agree), as provided herein.
The date of a Closing hereunder is sometimes referred to as the
"Closing Date". Payment for the Shares sold on behalf of the Company
by the Agent shall be made to the Company or to the order of the
Company by the Escrow Agent acting upon instructions from the
Company and the Agent pursuant to the terms and conditions of the
Escrow Agreement, and payment shall be delivered to the Company by
the Escrow Agent by one or more certified or official bank checks in
next-day funds. Such payment shall be made upon delivery by the
Company of the certificates for the Shares to the Agent, for the
respective accounts of the several purchasers of the Shares against
receipt therefor signed by the Agent. The certificates for the
Shares to be delivered at any Closing will be registered in such
name or names, and shall be in such denominations, as the Agent may
request; PROVIDED, HOWEVER, that such request shall be made no later
than three (3) business days prior to the Closing Date. The
certificates representing the Shares will be made available to the
Agent for inspection, checking and packaging at the office of the
Company's transfer agent and registrar (the "Transfer Agent"), not
less than one (1) business day prior to the Closing Date.
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9 CLOSINGS.
(a) As soon as practicable after the Agent has determined that
100,000 Shares (the "Minimum Offering") have been subscribed
for, the Agent shall so notify the Company in writing. The
Agent's notice to the Company hereunder shall set forth the
number of shares of Common Stock to be delivered to the Agent
by the Company against payment therefor by the Escrow Agent.
The initial Closing hereunder (the "Initial Closing") shall
take place at 10:00 a.m., Atlanta time on the fifth (5th)
business day after the date on which the Agent notifies the
Company as provided herein or on such other date and time as
agreed to in writing by the parties hereto; PROVIDED, HOWEVER,
that the Initial Closing must occur no later than the tenth
(10th) business day after such notice is given by the Agent.
(b) By notice given in writing at each Closing hereunder, the
Company may elect to continue this Agreement until such time
as the maximum number of Shares as provided herein has been
sold, or until January 30, 1999, whichever is earlier;
PROVIDED, HOWEVER, that such Shares may be sold only in
compliance with the terms and conditions of this Agreement and
the Registration Statement.
(c) Closing with respect to Shares sold pursuant to a continuation
of this Agreement pursuant to Section 2.9(b) hereof will occur
on such date(s) and time(s) as the parties may agree in
writing from time to time.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
hereby represents and warrants to, and agrees with, the Agent that:
(a) The prospectus, including any amendments or supplements thereto (the
"Prospectus") when made available to prospective purchasers
throughout the Offering Period, will comply in all material respects
with federal statutes, regulations and policy statements applicable
thereto, including, without limitation, the applicable rules,
regulations and policy statements of the SEC. At all times during
the Offering Period, the Prospectus will contain all information
including financial statements that are required to be included
therein in accordance with applicable regulations (including
interpretations thereof), and policy statements of the SEC and the
Prospectus will not include any untrue statement of material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided,
however, that no representations or warranties are made to the Agent
with respect to statements or omissions made in reliance upon, or in
conformity with, written information furnished to the Company with
respect to the Agent, by the Agent, or on its behalf expressly for
use in the Prospectus.
(b) The Company is, and at all times during the Offering Period will be,
a corporation duly incorporated and organized and is, and will be,
validly existing and in good standing under the laws of the State of
Florida. The Company has, and at all times during the Offering
Period will have, full power and authority to own or lease all of
its properties and conduct all of its business as described in the
Prospectus.
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(c) The Company is, and at all times during the Offering Period will be,
duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction where the ownership or leasing of
its properties or the conduct of its business required such
qualification.
(d) The financial statements contained in the Prospectus present fairly
and accurately the financial position of the Company as the
respective dates thereof and the results of operations of the
Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on
a consistent basis throughout the entire periods involved.
(e) At all times during the Offering Period except as set forth in or
contemplated by the Prospectus: (I) the Company will not have
incurred and will not incur any material liabilities or obligations,
direct or contingent, except for liabilities or obligations entered
into in the ordinary course of business, and will not have entered
into and will not enter into any material transactions; and (ii)
there will have been no, and there will be no, material adverse
change, or any development relating to the Company which the Company
has cause to believe would involve a prospective material adverse
change in or affecting the business, business prospects, general
affairs, management, financial position, net worth, results of
operations, or properties of the Company, or the value of the assets
of the Company.
(f) Except as set forth in or contemplated by the Prospectus, to the
best of its knowledge, the Company does not have and will not have
during the Offering Period any material contingent liabilities or
obligations.
(g) There are no actions, suits or proceedings pending or, to the best
of its knowledge, threatened against or affecting the Company or its
business, business prospects, financial condition, results of
operations or properties, or against or affecting any of its
principal officers, before or by any federal or state court,
commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable
ruling or decision or finding would materially and adversely affect
the business, business prospects, financial condition, results of
operations, or properties of the Company.
(h) At all times during the offering Period, the Company will have title
to all properties and assets described in the Prospectus as being
owned by the Company, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Prospectus or which are not material to the business of the Company.
At all times during the Offering Period, the Company will have
valid, existing and enforceable leases to the properties and
equipment described in the Prospectus as being leased by the
Company, with such exceptions as are not material and do not
materially interfere with the uses made, and proposed to be made, of
such properties by the Company.
(i) The Company has filed all federal and state income tax returns which
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. To the best of its knowledge, all taxes with
respect to which the Company is obligated have been paid or adequate
accruals have been established to cover any such unpaid taxes.
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(j) The Company is not, and at all times during the Offering Period will
not be, in violation of its articles of incorporation or bylaws or
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness or in any contract,
indenture, mortgage, loan agreement or other agreement or instrument
to which the Company is a party or by which it or any of its
properties is bound, and the Company is not, and at all times during
the Offering Period will not be, in violation of any law, order,
rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, of which
it has knowledge. Neither the Company, nor any employee or agent
thereof, has made any payment of funds of the Company or received or
retained any funds in violation of any law, rule or regulation which
payment, receipt or retention of funds is not fully disclosed in the
Prospectus.
(k) At all times during the Offering Period, there will be no document
or contract of the character required to be described in the
Prospectus which is not described as required, and the descriptions
in the Prospectus are accurate and complete and fairly present the
information required to be shown.
(l) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Agent was or will
be, when made, inaccurate, untrue or incorrect in any material
respect.
(m) The Company has full right, power and authority to enter into this
Agreement and this Agreement has been duly authorized, executed and
delivered by the Company and will be, upon acceptance by the Agent,
a valid and binding agreement of the Company enforceable in
accordance with its terms. The performance of this Agreement and the
consummation of the transactions contemplated herein will not result
in a breach or violation of any of the terms or provision of, or
constitute a default under the articles of incorporation or the
bylaws of the Company, any obligation, agreement, covenant or
condition contained in any bond, debenture, note or other evidence
or indebtedness or in any contract, indenture, mortgage, loan
agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties is bound, or
any law, order, rule, regulation, writ, injunction or decree of any
government, governmental instrumentality or court, domestic or
foreign, and will not result in the creation or imposition of any
lien, charge claim or encumbrance upon any property or asset of the
Company. No consent, approval, authorization or order of any
government, governmental instrumentality or court is required in
connection with the execution of this Agreement or the consummation
of the transactions contemplated by this Agreement except such as
may be required by the NASD or by state regulatory authorities under
state securities or blue sky laws in connection with the
distribution of the Shares or in connection with the Agent's
services hereunder.
(n) For purposes of the Agent's obligation to file certain documents and
make certain representations to the NASD in connection with the
Offering: (I) except as described in the Registration Statement, the
Company has not placed any securities within the last eighteen
months; (ii) there have been no material dealings within the last
twelve months between the Company and any NASD member or any person
related to or associated with any such member; (iii) except as
contemplated by this Agreement, no financial or management
consulting contracts are outstanding with any other person; (iv)
there has been no intermediary between the Agent and the Company in
connection with the Offering and no person is being compensated in
any manner for providing such service.
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4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE AGENT. The Agent
represents and warrants to, and agrees with the Company that:
(a) Any and all information furnished to the Company by the Agent in
writing expressly for use in the Prospectus will not contain any
untrue statement of material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Agent is registered with the Securities and Exchange Commission
as a broker-dealer and is a member in good standing with the
National Association of Securities Dealers, Inc. (the "NASD"), and
the Agent and all its agents and representatives have or will have
required licenses and registrations to perform its obligations under
this Agreement; and such registrations, membership and licenses will
remain in effect during the term of this Agreement. The Agent agrees
that, in performing its obligations under this Agreement, the Agent
will comply with all applicable statutes and the rules and
regulations of the NASD and any other federal or state governmental
agency which are applicable to it. This Agreement has been duly and
validly authorized, executed and delivered by the agent and is its
valid and binding agreement and obligation.
(c) All checks and funds received by the Agent with respect to the
subscription price from prospective purchasers in the Offering shall
be made payable to the escrow agent and transmitted directly to the
escrow agent by noon of the next business day after receipt by the
Agent. If the Offering is terminated prior to the end of the
Offering Period by the Company, then subscription funds received
after any such termination shall be promptly returned to the
subscribers for the Shares, with interest.
(d) The Agent will deliver to the Company the original copies of all
subscription documents of prospective purchasers received by the
Agent in the Offering, and the Agent will promptly inform the
Company of any facts which come to the Agent's attention which would
cause a reasonable person to believe that such subscription
documents contain any material misstatement or omission.
5. COVENANTS OF THE COMPANY. The Company further agrees with and covenants
to the Agent as follows:
(a) To comply with the "Blue Sky" and other securities laws and
regulations of each state in which subscriptions are solicited in
the Offering pursuant to the mutual agreement of the Agent and the
Company and to assist the Agent in any necessary registration or
filings that may be required of the Agent with respect to the
Offering, in the states mutually agreed upon by the Agent and the
Company. The Company will advise the Agent promptly of the issuance
by any state regulatory authority of any stop order or other order
suspending the registrations or exemptions therefrom of the
Prospectus or of the institution of any proceedings for that
purpose, will use its best efforts to prevent the issuance of any
stop order or other such order, and should a stop order or other
such order be issued, to obtain as soon as possible the lifting
thereof.
(b) To furnish the Agent with such numbers of printed copies of the
Prospectus, with all amendments, supplements and exhibits thereto,
together with subscription materials, as the Agent may reasonable
request, and similarly, to furnish the Agent and others designated
by the Agent with as many copies of additional sales literature or
other materials approved by the Company for use in connection with
the Offering as the Agent may reasonably request.
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(c) Promptly to furnish such information and execute and file such
documents as may be necessary for the Company to offer and sell the
Shares in full compliance with applicable state and federal
statutes, regulations and policy statements.
(d) To advise the Agent promptly if any event known to the Company shall
have occurred as a result of which the Prospectus in its then
current form (including any amendments or supplements thereto) would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(e) To utilize or furnish no sales literature in connection with the
Offering, other than the Prospectus, unless such other sales
literature has been approved by the SEC and the NASD, if necessary,
and furnished to the Agent at least ten (10) days prior to its first
use and the Agent has failed to object to the contents of, or the
proposed use of, such other sales literature.
6. CONDITIONS OF THE AGENT'S OBLIGATIONS. The Agent's obligation to effect
the transactions contemplated by this Agreement shall be subject to the
continuing accuracy throughout the Offering Period of the representations,
warranties and agreements of the Company, the performance by the Company
of all of its obligations under this Agreement, and the following further
terms and conditions:
(a) The Agent shall have received on any Closing Date hereunder the
opinion of Xxxx Xxxxx, counsel for the Company, dated as of such
Closing Date. Such opinion may be given subject to the January 1,
1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the
Legal Opinion Committee of the Corporate and Banking Law Section of
the State Bar of Georgia (the "Interpretive Standards"), and shall
be substantially to the effect that:
(i) the Company is a corporation duly organized, validly existing
and in good standing, under the laws of the State of Florida.
(ii) the Shares to be sold by the Company have been duly authorized
and will be, upon issuance and delivery against payment
therefor in accordance with the terms of this Agreement,
validly issued, fully paid and non-assessable and will not be
subject to any preemptive or other rights to subscribe for or
purchase Shares pursuant to the organizational documents of
the Company or, to the best of such counsel's knowledge,
otherwise.
(iii) the Company's authorized shares consist of 25,000,000 shares
of common stock, $.001 par value, of which 10,798,699 shares
are outstanding. The outstanding shares of the Company's stock
have been duly authorized and validly issued, were not issued
in violation of any statutory preemptive rights of
shareholders, and are fully paid and nonassessable. Except as
described in the Registration Statement, there are no options,
subscriptions, warrants, calls, rights or commitments
obligating the Company to issue equity securities or acquire
its equity securities.
(iv) the amounts, terms and designations of the capital stock of
the Company conform as to legal matters in all material
respects to the description thereof contained in the
Registration Statement under the caption "Description of
Capital Stock".
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(v) this Agreement has been duly authorized, executed and
delivered by the Company and, when so executed and delivered,
constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company.
(vi) the execution and delivery by Company of this Agreement do
not, and if Company were now to perform its obligation under
this Agreement such performance would not, result in any: (1)
violation of Company's articles or incorporation or bylaws;
(2) violation of any existing federal or state constitution,
statute, regulation, rule, order, or law to which Company or
its assets are subject; (3) breach of or default under any
Material Agreements; (4) creation or imposition of a
contractual lien or security interest in, on or against its
assets under any Material Agreements; or (5) violation of any
judicial or administrative decree, writ, judgment or order to
which, to our knowledge, Company or its assets are subject.
(vii) to the knowledge of such counsel, the Company has all
necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and
other governmental authorities, all self-regulatory
organizations, all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its
business in the manner described in the Registration
Statement, except to the extent that the failure to obtain or
file would not have a material adverse effect on the Company.
(viii) to the knowledge of such counsel, no authorization, consent,
approval of or qualification with any federal or state
governmental authority is required for the execution, delivery
or performance by the Company of this Agreement, except such
as have been previously made or obtained, in connection with
the distribution of the Shares by the Agent, and except those
which, if not made or obtained, will not, individually or in
the aggregate, have a material adverse effect on the Company.
(ix) nothing has come to the attention of such counsel to cause
such counsel to believe that (except for financial statements,
projections, schedules and other financial and statistical
information included or incorporated by reference in the
Registration Statement as to which such counsel need not
express any opinion) the Registration Statement 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, in light of the circumstances
under which they were made, not misleading, or that the
Registration Statement as of the Closing Date, contained any
untrue statement of a material fact or omitted 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.
(x) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the
Company is a party or to which any of the properties of the
Company is subject that are not fairly summarized in all
material respects in the Registration Statement.
(xi) to such counsel's knowledge, after due inquiry, all contracts,
indentures, mortgages, loan agreements, leases or other
documents to which the Company is a party or to which its
business or properties are subject are fairly summarized in
all material respects in the Registration Statement; and
35
(xii) after due inquiry, such counsel does not know of any pending
or threatened proceeding relating to the revocation or
modification of any consent, authorization, approval, order,
certificate or permit necessary to the conduct of the business
of the Company.
As to questions of fact material to such opinion, counsel may rely
on (without independent verification of the accuracy or completeness
thereof), the representations and warranties of the Company
contained in this Agreement as well as the Material Agreements. The
term "Material Agreement", for purposes of such opinion, shall mean
each of the agreements which has been filed with the Securities and
Exchange Commission as an exhibit (including any document which in
lieu of being filed as an exhibit, is incorporate by reference or
which the Company agrees or has agreed to provide to the Securities
and Exchange Commission upon request) to the Company's most
recently-filed Annual Report on Form 10-KSB or any subsequently
filed report on Form 10-QSB of Form 8-K, pursuant to the
requirements of Item 601(b)(10) of SEC Regulation S-B, 17 CFR
228.601(b)(10), as amended.
(b) On the Closing Date of any Closing hereunder, the Agent shall have
received from the President of the Company a letter dated as of such
Closing Date, in form and substance satisfactory to the Agent in all
respects, concerning the accuracy, to his best knowledge and belief,
of the financial information included in the Prospectus.
(c) At the Closing Date of any Closing hereunder, there shall be
furnished to the Agent a certificate, dated as of such Closing Date,
signed by the President and Secretary of the Company (collectively
the "Officers") in form and substance satisfactory to the Agent (the
"Certificate") to the effect that, to their best knowledge and
belief:
(i) The Officers of the Company have carefully examined the
Prospectus, and as of the date of such Certificate, the
statements in the Prospectus are true and correct, and the
Prospectus does not misstate or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not untrue or misleading.
(ii) The Company has complied with all conditions precedent to the
performance of the Agent's obligations under this Agreement.
(iii) Each of the representations and warranties of the Company
contained in this Agreement was when originally made and is as
of the date of such Certificate true and correct.
(iv) No order from any regulatory body has been issued and no
proceedings have been instituted, or to the knowledge of such
Officers contemplated, to prevent the consummation of the
Offering.
7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Agent, its
officers, directors, counsel, representatives and persons who
control the Agent within the meaning of the Exchange Act, from and
against all losses, claims, damages and liabilities, joint and
several, to which any of the aforesaid parties, including the Agent
(collectively, the "Agent Parties"), may become subject, under
federal or state securities laws or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon: (I) any untrue statement or
alleged untrue statement of a material fact contained in the
Prospectus, or in any Blue Sky application or other document
executed by the Company or on its behalf for the purpose of
qualifying any or all of the Stock for sale under the securities
laws of any jurisdiction, or based upon written information
furnished by the Company under the securities laws thereof (any such
application, document, or information being hereinafter referred to
as a "Blue Sky Application") or (ii) the omission to state in the
Prospectus, or in any Blue Sky Application, a material fact
36
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The Company will further reimburse the Agent
Parties, and each and every one of them, for any legal or other
expenses reasonably incurred by any one or more of the Agent Parties
in connection with investigating and defending such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any case to the extent that the subject 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 nonconformity with written
information furnished to the Company by the Agent specifically for
use in the preparation of the subject Prospectus, Blue Sky
Application, or any amendment or supplement thereto. The indemnity
provided for in this Section 7(a) will be in addition to any
liability which the Company may otherwise have.
(b) The Agent will indemnify and hold harmless the Company, its
officers, directors, counsel, representatives and persons who
control the Company which the meaning of the Securities Exchange Act
of 1934, from and against all losses, claims, damages and
liabilities, joint and several, to which any of the aforesaid
parties, including the Company (collectively, the "Company
Parties"), may become subject, under federal or state securities
laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon: (I) any untrue statement of material fact contained in
the Prospects, any Blue Sky Application, or any amendment or
supplement thereto; (ii) the omission to state in the Prospectus,
any Blue Sky Application, or any amendment or supplement to any of
the foregoing, a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
in the case of Sections (7)(b)(I) and (7)(b)(ii) to the extent, but
only to the extent, that such untrue statement or omission was made
in reliance upon or in conformity with written information furnished
to the Company by the Agent specifically for use with reference to
the Agent in preparation of the Prospectus, any Blue Sky
Application, or any supplement or amendment thereto; or (iii)
arising out of any misrepresentation by the Agent in this Agreement
or any breach of warranty by the Agent with respect to this
Agreement. The Agent will further reimburse the Company Parties for
legal or other expenses reasonably incurred by the Company Parties
in connection with investigating or defending any loss, claim,
damage, liability or action under this Section (7)(b). The
indemnification provided for in this Section 7(b) shall be in
addition to any liability which the Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under Section (7)(a)
or (7)(b) above of notice of the commencement of any action, such
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 commencement of the action; but
the omission so to notify the indemnified part shall not relieve it
from any liability which it may have to an indemnified party
otherwise and under such Section. In any case any such action shall
be brought against any indemnified person, then it shall notify the
indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein, and, to the extent
it shall wish, jointly with any other indemnifying party similarly
notified, the indemnifying party may assume the defense thereof,
with counsel satisfactory to such indemnified party (who may also be
counsel to the indemnifying party only if the representation of both
parties does not constitute a conflict) and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such Section for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
37
8. SURVIVAL CLAUSE. The respective indemnities, agreements (including,
without limitation, the agreement set forth in Section 7 hereof),
representations, warranties and other statements of the Company and the
Agent as set forth in this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the
results thereof) made by or behalf of the Agent, any officer or director
of the Agent, or counsel therefor, or the Company or any officer or
director of the Company, or counsel therefor, and shall survive any
termination of this Agreement and the receipt of any payment for the
Shares.
9. NOTICES. All notices under this Agreement shall be in writing and if sent
to the Agent shall be mailed, delivered or telecopied to the Agent at the
address first provided above, and if sent to the Company shall be mailed
or delivered to the Company at its present headquarters address, 0000 Xxx
Xx. Xxxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: President or
to such other address as may be delivered to the Agent from time to time.
Any notice shall be deemed to have given when it is received by the party
to whom it is addressed.
10. GOVERNING LAW. Except to the extent governed by preemptive federal law,
this Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Georgia.
11. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
SUCCESS DEVELOPMENT INTERNATIONAL, INC.
By: __________________________________
Xxxxx X. Xxxxx
President and CEO
ACCEPTED AND AGREED TO this 4th day of February, 1998.
XXXXXXXXX XXXXXX & XXXXX
By: __________________________________
Title:
38
