FORM OF UNDERWRITING AGREEMENT
PROFLIGHT MEDICAL RESPONSE, INC.
1,550,000 Shares of Common Stock
and
1,550,000 Redeemable Common Stock Purchase Warrants
UNDERWRITING AGREEMENT
_________ __, 1998
First Liberty Investment Group, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Dear Sirs:
Proflight Medical Response, Inc., a Colorado corporation (the
"Company"), hereby confirms its agreement with you (the "Underwriter") as
follows:
1. Description of the Securities.
The Company proposes to issue and sell to the Underwriter an aggregate
of 1,550,000 shares of common stock, $.001 par value per share (the "Common
Stock"), and 1,550,000 redeemable common stock purchase warrants of the Company
(the "Warrants," and collectively with the Common Stock, the "Securities"). Each
Warrant shall entitle the holder to purchase one share of Common Stock for
$6.00, subject to adjustment. The Company proposes to grant to the Underwriter
an option to purchase up to 232,500 additional shares of Common Stock and up to
an additional 232,500 Warrants (the "Additional Securities"). The offering of
Securities and Additional Securities contemplated hereby may sometimes be
referred to as the "Offering."
(a) The Warrants.
The Warrants are exercisable at any time from the effective date of the
Registration Statement, as defined in Paragraph 2(a) (the "Effective Date"), and
expire three (3) years after the Effective Date, subject to prior redemption by
the Company. The shares of Common Stock issuable upon the exercise of the
Warrants are hereinafter referred to as the "Warrant Shares."
The Warrants will be redeemable at a price of $.10 per Warrant,
commencing two (2) years after the Effective Date (or one (1) year after the
Effective Date with the prior written consent of the Underwriter) upon at least
30 days prior written notice provided that the average of the closing bid prices
of the Common Stock (or closing sales price if listed on an exchange or on a
reporting system that provides last sales prices) for 20
consecutive trading days ending immediately prior to the date on which notice of
redemption is given shall exceed $8.50 per share (subject to adjustment),
subject to the right of the holder to exercise his purchase rights thereunder
until redemption.
(b) Underwriter's Warrants.
The Company will sell to the Underwriter, for $10, a warrant to
purchase one share of Common Stock and one Warrant for each ten shares of Common
Stock and ten Warrants sold in this Offering excluding the Additional Securities
(a maximum of 155,000 shares of Common Stock and 155,000 Warrants) at a price
equal to $4.80 per share of Common Stock and $.12 per Warrant (the
"Underwriter's Warrants," and collectively with the Securities underlying the
Underwriter's Warrants, the "Underwriter's Securities"). The Warrants underlying
the Underwriter's Warrants shall be exercisable at a price of $6.00 per Warrant.
The Underwriter's Securities shall be non-exercisable and non-transferable
(other than to (i) officers of the Underwriter, and (ii) members of the selling
group and their officers or partners) for a period of 12 months following the
Effective Date. The Underwriter's Securities shall be registered for sale to the
public and shall be included in the Registration Statement filed in connection
with the Offering.
2. Representations and Warranties of the Company.
The Company represents and warrants to the Underwriter that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission"), a registration statement on Form SB-2 (File No.
333-27197), including any related preliminary prospectus ("Preliminary
Prospectus"), for the registration of the Securities under the Securities Act of
1933 (the "Act"). The Company will file further amendments to said registration
statement in the form to be delivered to you and will not, before the
registration statement becomes effective, file any other amendment thereto to
which you shall have objected in writing after having been furnished with a copy
thereof. Except as the context may otherwise require, such registration
statement, as amended, on file with the Commission at the time the registration
statement becomes effective (including the prospectus, financial statements,
exhibits and all other documents filed as a part thereof or incorporated
therein), is hereinafter called the "Registration Statement", and the
prospectus, in the form filed with the Commission pursuant to Rule 424(b) of the
General Rules and Regulations of the Commission under the Act (the
"Regulations") or, if no such filing is made, the definitive prospectus used in
the Offering, is hereinafter called the "Prospectus". The Company has delivered
to you copies of each Preliminary Prospectus as filed with the Commission and
has consented to the use of such copies for purposes permitted
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by the Act.
(b) The Commission has not issued any orders preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects with the requirements of the
Act and has not included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein, not misleading, subject to the provisions set forth below
and except as such untrue statement or omission has been cured in the a
subsequent preliminary prospectus or in the final prospectus.
(c) When the Registration Statement becomes effective under
the Act and at all times subsequent thereto including the Closing Date
(hereinafter defined) and the Option Closing Date (hereinafter defined) and for
such longer periods as in the opinion of counsel for the Underwriter, a
Prospectus is required to be delivered in connection with the sale of the
Securities by the Underwriters, the Registration Statement and Prospectus, and
any amendment thereof or supplement thereto, will contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations, and will in all material respects conform to the
requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, 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; provided, however, that this representation and warranty does
not apply to statements or omissions made in reliance upon and in conformity
with written information furnished to the Company by you, for use in connection
with the preparation of the Registration Statement or Prospectus, or in any
amendment thereof or supplement thereto. It is understood that the statements
set forth under the heading "Underwriting" in the Prospectus with respect to (i)
the amounts of the selling concession and reallowance; (ii) the identity of
counsel to the Underwriter under the heading "Legal Matters;" (iii) the
information concerning the NASD affiliation of the Underwriter; and (iv) the
Risk Factor entitled "Lack of Underwriting History" constitute for purposes of
this Paragraph the only information furnished in writing by or on behalf of the
Underwriter for inclusion in the Registration Statement and Prospectus, as the
case may be.
(d) The Company and each of its subsidiaries (each a
"Subsidiary") are, and at the Closing Date and the Option Closing Date will be,
corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction of their incorporation. The Company and each of its
Subsidiaries are duly qualified or licensed and in good standing as foreign
corporations in each jurisdiction in which their ownership or leasing of any
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properties or the character of their operations requires such qualification or
licensing, except those jurisdictions in which the failure to so qualify would
not have a material adverse effect. The Company and each of its Subsidiaries
have all requisite corporate powers and authority, and, except as set forth in
the Registration Statement, the Company and each of its Subsidiaries and their
employees' have all material and necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies to own or lease their properties and conduct their
businesses as described in the Prospectus, and the Company and each of its
Subsidiaries are doing business and have been doing business during the period
described in the Registration Statement in compliance with all such material
authorizations, approvals, orders, licenses, certificates and permits and all
material federal, state and local laws, rules and regulations concerning the
businesses in which the Company or its Subsidiaries are engaged. The disclosures
in the Registration Statement concerning the effects of federal, state and local
regulation on the Company's or its Subsidiaries' businesses as currently
conducted and as contemplated are correct in all material respects and do not
omit to state a material fact. The Company has all corporate power and authority
to enter into this Agreement and carry out the provisions and conditions hereof,
and all consents, authorizations, approvals and orders required in connection
therewith have been obtained or will have been obtained prior to the Closing
Date.
(e) This Agreement has been duly and validly authorized and
executed by the Company. The Securities (including the Common Stock and the
Warrants), the Warrant Shares, the Underwriter's Warrants to be issued and sold
by the Company pursuant to this Agreement, the Securities issuable upon exercise
of the Underwriter's Warrants and payment therefor, and the Common Stock and
Warrant Shares underlying such Underwriter's Warrants, have been duly authorized
(and, in the case of the Common Stock and the Warrant Shares, have been duly
reserved for issuance) and, when issued and paid for in accordance with this
Agreement (and, in the case of the Warrant Shares, upon exercise of the Warrants
and payment to the Company of the exercise price therefor), the Common Stock and
Warrant Shares will be validly issued, fully paid and non-assessable; the Common
Stock, Warrants, Warrant Shares, Underwriter's Warrants, Additional Securities
and Underwriter's Warrant Shares are not and will not be subject to the
preemptive rights of any stockholder of the Company and conform and at all times
up to and including their issuance will conform in all material respects to all
statements with regard thereto contained in the Registration Statement and
Prospectus; and all corporate action required to be taken for the authorization,
issuance and sale of the Common Stock, Warrants, Warrant Shares and
Underwriter's Warrants has been taken, and this Agreement
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constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms, to issue and sell, upon exercise in accordance with
the terms thereof, the number and kind of securities called for thereby.
(f) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will not result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
the Articles of Incorporation, as amended, or Bylaws of the Company or any of
its Subsidiaries or of any evidence of material indebtedness, lease, contract 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
material properties is bound, or under any applicable law, rule, regulation,
judgment, order or decree of any government, professional advisory body,
administrative agency or court, domestic or foreign, having jurisdiction over
the Company or any of its Subsidiaries or their properties which are material to
the Company or its business, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the properties or assets of the Company
or any of its Subsidiaries; and no consent, approval, authorization or order of
any court or governmental or other regulatory agency or body is required for the
consummation by the Company or any of its Subsidiaries of the transactions on
their part herein contemplated, except such as may be required under the Act or
under state securities or blue sky laws, except where a breach, violation or
failure to obtain such consent would not have a material adverse effect upon the
business or operation of the Company or its Subsidiaries.
(g) Subsequent to the date hereof, and prior to the Closing
Date and the Option Closing Date, the Company will not issue or acquire any
equity securities other than securities of a wholly-owned subsidiary, except
that the Company may make short-term investments as contemplated in the "Use of
Proceeds" section of the Prospectus. Except as described in the Registration
Statement, the Company does not have, and at the Closing Date and at the Option
Closing Date will not have, outstanding any options to purchase or rights or
warrants to subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell shares of its Preferred Stock,
Common Stock or any such options, warrants, convertible securities or
obligations.
(h) The financial statements and notes thereto included in the
Registration Statement and the Prospectus fairly present the financial position
and the results of operations of the Company at the respective dates and for the
respective periods to which they apply; and such financial statements have been
prepared in conformity with generally accepted accounting principles,
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consistently applied throughout the periods involved.
(i) Except as set forth in the Registration Statement, the
Company and each Subsidiary are not, and at the Closing Date and at the Option
Closing Date will not be, in violation or breach of, or default in, the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other
agreement or instrument to which the Company or any of its Subsidiaries are a
party or by which the Company or any of its Subsidiaries may be bound or to
which any of the property or assets of the Company or any of its Subsidiaries
are subject, which violations, breaches, default or defaults, singularly or in
the aggregate, would have a material adverse effect on the Company or any of its
Subsidiaries. The Company and each of its Subsidiaries have not and will not
have taken any action in material violation of the provisions of the Articles of
Incorporation, as amended, or the Bylaws of the Company or its Subsidiaries or
any statute or any order, rule or regulation of any court or regulatory
authority or governmental body having jurisdiction over or application to the
Company or its Subsidiaries, their businesses or properties.
(j) The Company and each of its Subsidiaries have, and at the
Closing Date and at the Option Closing Date will have, good and marketable title
to all properties and assets described in the Prospectus as owned by them, free
and clear of all liens, charges, encumbrances, claims, security interests,
restrictions and defects of any material nature whatsoever, except such as are
described or referred to in the Prospectus and liens for taxes not yet due and
payable. All of the material leases and subleases under which the Company or any
of its Subsidiaries are the lessor or sublessor of properties or assets or under
which the Company or any of its Subsidiaries hold properties or assets as lessee
as described in the Prospectus are, and will on the Closing Date and the Option
Closing Date be, in full force and effect, and except as described in the
Prospectus, the Company and its Subsidiaries are not and will not be in default
in respect to any of the terms or provisions of any of such leases or subleases
(which would have a material adverse effect on the business, business prospects
or operations of the Company or any of its Subsidiaries taken as a whole), and
no claim has been asserted by anyone adverse to rights of the Company or any of
its Subsidiaries as lessor, sublessor, lessee or sublessee under any of the
leases or subleases mentioned above, or affecting or questioning the right of
the Company or any of its Subsidiaries to continue possession of the leased or
subleased premises or assets under any such lease or sublease except as
described or referred to in the Prospectus, and the Company and each of its
Subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted and, except as otherwise stated in the Prospectus,
as proposed to be conducted set
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forth in the Prospectus (which would have a material adverse effect on the
business, business prospects or operations of the Company or any of its
Subsidiaries taken as a whole).
(k) The authorized, issued and outstanding capital stock of
the Company as of September 30, 1997 and as of the date of the Prospectus is as
set forth in the Prospectus under "Capitalization"; the shares of issued and
outstanding capital stock of the Company set forth thereunder have been duly
authorized, validly issued and are fully paid and non-assessable; except as set
forth in the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or agreements or other rights to
convert any obligation into, any shares of capital stock of the Company have
been granted or entered into by the Company; and the Common Stock, the Warrants
and all such options and warrants conform in all material respects, to all
statements relating thereto contained in the Registration Statement and
Prospectus.
(l) Except as described in the Prospectus, the Company does
not own or control any capital stock or securities of, or have any proprietary
interest in, or otherwise participate in any other corporation, partnership,
joint venture, firm, association or business organization; provided, however,
that this provision shall not be applicable to the investment, if any, of the
net proceeds from the sale of the Securities sold by the Company in certificates
of deposits, savings deposits, short-term obligations of the United States
Government, money market instruments or other short-term investments.
(m) To the knowledge of the Company, Xxxxx Xxxxxxxx LLP and
Staff Maikels & Ciampino who have given their reports on certain financial
statements filed and to be filed with the Commission as a part of the
Registration Statement, which are incorporated in the Prospectus, are with
respect to the Company, independent public accountants as required by the Act
and the Rules and Regulations.
(n) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as may
otherwise be indicated or contemplated herein or therein, the Company has not
(i) issued any securities or incurred any material liability or obligation,
direct or contingent, for borrowed money; or (ii) entered into any material
transaction other than in the ordinary course of business; or (iii) declared or
paid any dividend or made any other distribution on or in respect to its capital
stock.
(o) There is no litigation or governmental proceeding pending
or to the knowledge of the Company or any Subsidiary
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threatened against, or involving the properties or business of the Company or
any Subsidiary which might materially adversely affect the value, assets or the
operation of the properties or the business of the Company or any Subsidiary,
except as referred to in the Prospectus. Further, except as referred to in the
Prospectus, there are no pending actions, suits or proceedings related to
environmental matters or related to discrimination on the basis of age, sex,
religion or race, nor is the Company or any Subsidiary charged with or, to its
knowledge, under investigation with respect to any violation of any statutes or
regulations of any regulatory authority having jurisdiction over its business or
operations, and no labor disturbances by the employees of the Company or any
Subsidiary exist or, to the knowledge of the Company or any Subsidiary, have
been threatened.
(p) The Company has, and at the Closing Date and at the Option
Closing Date will have, filed all necessary federal, state and foreign income
and franchise tax returns or has requested extensions thereof (except in any
case where the failure to so file would not have a material adverse effect on
the Company), and has paid all taxes which it believes in good faith were
required to be paid by it except for any such tax that currently is being
contested in good faith or as described in the Prospectus.
(q) The Company has not at any time (i) made any contribution
to any candidate for political office, or failed to disclose fully any such
contribution, in violation of law, or (ii) made any payment to any state,
federal, foreign governmental or professional regulatory agency, officer or
official or other person charged with similar public, quasi-public or
professional regulatory duties, other than payments or contributions required or
allowed by applicable law.
(r) Except as set forth in the Registration Statement, to the
knowledge of the Company, neither the Company nor any of officer, director,
employee or agent of the Company has made any payment or transfer of any funds
or assets of the Company or conferred any personal benefit by use of the
Company's assets or received any funds, assets or personal benefit in violation
of any law, rule or regulation, which is required to be stated in the
Registration Statement or necessary to make the statements therein not
misleading.
(s) On the Closing Date and on the Option Closing Date, all
transfer or other taxes, if any (other than income tax) which are required to be
paid, and are due and payable, in connection with the sale and transfer of the
Securities by the Company to the Underwriters will have been fully paid or
provided for by the Company as the case may be, and all laws imposing such taxes
will have been fully complied with in all material respects.
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(t) There are no contracts or other documents of the Company
which are of a character required to be described in the Registration Statement
or Prospectus or filed as exhibits to the Registration Statement which have not
been so described or filed.
(u) The Company will apply the net proceeds from the sale of
the Securities sold by it for the purposes and in the manner set forth in the
Registration Statement and Prospectus under the heading "Use of Proceeds."
(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with management's general or specified authorizations;
(2) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (3) access to assets is permitted only in
accordance with management's general or specific authorizations; and (4) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(w) Except as set forth in the Prospectus, no holder of any
securities of the Company has the right to require registration of any
securities because of the filing or effectiveness of the Registration Statement.
(x) The Company has not taken and at the Closing Date will not
have taken, 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 Common Stock or the
Warrants to facilitate the sale or resale of such securities.
(y) To the Company's knowledge, there are no claims for
services in the nature of a finder's origination fee with respect to the sale of
the Securities hereunder, except as set forth in the Prospectus.
(z) No right of first refusal exists with respect to any sale
of securities by the Company.
(aa) 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 Underwriters was, when made, or as of the
Closing Date or as of the Option Closing Date will be materially inaccurate,
untrue or incorrect.
(bb) The Company and each of its Subsidiaries have generally
enjoyed satisfactory employer/employee relationships with
9
their respective employees and are in compliance with all federal, state and
local laws and regulations respecting the employment of their respective
employees and employment practices, terms and conditions of employment and wages
and hours relating thereto. To the knowledge of the Company, there are no
pending or threatened investigations involving the Company or any of its
Subsidiaries by the U.S. Department of Labor or any other federal, state or
local agency responsible for the enforcement of such laws and regulations. To
the knowledge of the Company, there are no unfair labor practice charges or
complaints against the Company or any Subsidiary pending before the National
Labor Relations Board or any strikes, picketing, boycotts, disputes, slowdowns
or stoppage pending or threatened against or involving the Company or any
Subsidiary, or any predecessor entity, and none has occurred. No collective
bargaining agreements or modifications thereof are currently in effect or being
negotiated by the Company or any Subsidiary and their respective employees. No
grievance or arbitration proceeding is pending under any expired or existing
collective bargaining agreements of the Company and any Subsidiary.
(cc) The Company has not maintained or contributed to any
deferred compensation, profit sharing, savings, retirement, pension or other
benefit plan or arrangements with or for the benefit of any person resulting
from a relationship with the Company, except as may be disclosed in the
Prospectus.
(dd) The Company is in compliance with all federal and state
laws, rules and regulations relating to consumer protection, occupational safety
and health and to the storage, handling or transportation of hazardous or toxic
materials and the Company has received all permits, licenses or other approvals
required of the Company under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct its business and
the Company is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals which would not, singly or
in the aggregate, result in a material adverse change in the condition
(financial or otherwise), business, net worth or results of operations of the
Company, except as may be described in or contemplated by the Prospectus.
3. Covenants of the Company.
The Company covenants and agrees that:
(a) It will deliver to the Underwriter, without charge, two
conformed copies of each Registration Statement and of each amendment or
supplement thereto, including all financial statements and exhibits.
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(b) The Company has delivered to the Underwriter, and each of
the Selected Dealers (as hereinafter defined) without charge, as many copies as
have been requested of each Preliminary Prospectus heretofore filed with the
Commission in accordance with and pursuant to the Commission's Rule 430 under
the Act and will deliver to the Underwriter and to others whose names and
addresses are furnished by the Underwriter or a Selected Dealer, without charge,
on the Effective Date of the Registration Statement, and thereafter from time to
time during such reasonable period as you may request if, in the opinion of
counsel for the Underwriter, the Prospectus is required by law to be delivered
in connection with sales by the Underwriter or a dealer, as many copies of the
Prospectus (and, in the event of any amendment of or supplement to the
Prospectus, of such amended or supplemented Prospectus) as the Underwriter may
reasonably request for the purposes contemplated by the Act. The Company will
take all necessary actions to furnish to whomever directed by the Underwriter,
when and as requested by the Underwriter, all necessary documents, exhibits,
information, applications, instruments and papers as may be reasonably required
or, in the written opinion of counsel to the Underwriters desirable, in order to
permit or facilitate the sale of the Securities.
(c) The Company has authorized the Underwriter to use, and
make available for use by prospective dealers, the Preliminary Prospectus, and
authorizes the Underwriter, all dealers selected by you in connection with the
distribution of the Securities (the "Selected Dealers") to be purchased by the
Underwriter and all dealers to whom any of such Securities may be sold by the
Underwriter or by any Selected Dealer, to use the Prospectus, as from time to
time amended or supplemented, in connection with the sale of the Securities in
accordance with the applicable provisions of the Act, the applicable Regulations
and applicable state law, until completion of the distribution of the Securities
and for such longer period as you may request if the Prospectus is required
under the Act, the applicable Regulations or applicable state law to be
delivered in connection with sales of the Securities by the Underwriters or the
Selected Dealers.
(d) The Company will use its best efforts to cause the
Registration Statement to become effective and will notify the Underwriter
immediately, and confirm the notice in writing: (i) when the Registration
Statement or any post-effective amendment thereto becomes effective; (ii) of the
issuance by the Commission of any stop order or of the initiation, or to the
best of the Company's knowledge, the threatening, of any proceedings for that
purpose; (iii) the suspension of the qualification of the Securities and the
Underwriter's Warrants, or underlying securities, for offering or sale in any
jurisdiction or of the initiating, or to the best of the Company's knowledge the
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threatening, of any proceeding for that purpose; and (iv) of the receipt of any
comments from the Commission. If the Commission shall enter a stop order at any
time, the Company will make every reasonable effort to obtain the lifting of
such order at the earliest possible moment.
(e) During the time when a prospectus is required to be
delivered under the Act, the Company will comply with all requirements imposed
upon it by the Act and the Securities Exchange Act of 1934 (the "Exchange Act"),
as now and hereafter amended and by the Regulations, as from time to time in
force, as necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and the Prospectus. If at
any time when a prospectus relating to the Securities is required to be
delivered under the Act, any event shall have occurred as a result of which, in
the opinion of counsel for the Company or counsel for the Underwriter, the
Prospectus as then amended or supplemented includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement in accordance with Section 10 of the Act and
will furnish to you copies thereof.
(f) The Company will endeavor in good faith, in cooperation
with you, at or prior to the time the Registration Statement becomes effective,
to qualify the Securities for offering and sale under the securities laws or
blue sky laws of such jurisdictions as you may reasonably designate. In each
jurisdiction where such qualification shall be effected, the Company will,
unless you agree that such action is not at the time necessary or advisable,
file and make such statements or reports at such times as are or may reasonably
be required by the laws of such jurisdiction.
(g) The Company will make generally available to its security
holders, as soon as practicable, but in no event later than the first day of the
fifteenth full calendar month following the Effective Date of the Registration
Statement, an earnings statement of the Company, which will be in reasonable
detail but which need not be audited, covering a period of at least twelve
months beginning after the Effective Date of the Registration Statement, which
earnings statements shall satisfy the requirements of Section 11(a) of the Act
and the Regulations as then in effect. The Company may discharge this obligation
in accordance with Rule 158 of the Regulations.
(h) During the period of five years commencing on the
Effective Date of the Registration Statement, the Company will make
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available to its stockholders an annual report (including financial statements
audited by its independent public accountants), in reasonable detail, and, at
its expense, furnish the Underwriter (i) within 90 days after the end of each
fiscal year of the Company, a consolidated balance sheet of the Company and its
consolidated subsidiaries and a separate balance sheet of each subsidiary of the
Company the accounts of which are not included in such consolidated balance
sheet as of the end of such fiscal year, and consolidated statements of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries and separate statements of operations, stockholders'
equity and cash flows of each of the subsidiaries of the Company the accounts of
which are not included in such consolidated statements, for the fiscal year then
ended all in reasonable detail and all certified by independent accountants
(within the meaning of the Act and the Regulations), (ii) within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, similar
balance sheets as of the end of such fiscal quarter and similar statements of
operations, stockholders' equity and cash flows for the fiscal quarter then
ended, all in reasonable detail, and subject to year end adjustment, all
certified by the Company's principal financial officer or the Company's
principal accounting officer as having been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, (iii) as
soon as available, each report furnished to or filed with the Commission or any
securities exchange and each report and financial statement furnished to the
Company's shareholders generally and (iv) as soon as available, such other
material as the Underwriter may from time to time reasonably request regarding
the financial condition and operations of the Company.
(i) For a period of eighteen months from the Closing Date, the
Company, at its expense, shall cause its regularly engaged independent certified
public accountants to review (but not audit), the Company's financial statements
for each of the first three quarters prior to the announcement of quarterly
financial information, the filing of the Company's 10-Q quarterly report and the
mailing of quarterly financial information to stockholders.
(j) Prior to the Closing Date or the Option Closing Date, the
Company will not issue, directly or indirectly, without your prior written
consent and that of counsel for the Underwriter, any press release or other
public announcement or hold any press conference with respect to the Company or
its activities with respect to this Offering.
(k) The Company will deliver to you prior to filing, any
amendment or supplement to the Registration Statement or Prospectus proposed to
be filed after the Effective Date of the Registration Statement and will not
file any such amendment or supplement to
13
which you shall reasonably object after being furnished such copy.
(l) During the period of 120 days commencing on the date
hereof, the Company will not at any time take, directly or indirectly, any
action designed to, or which will constitute or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of any of the Securities.
(m) The Company will apply the net proceeds from the Offering
received by it in the manner set forth under "Use of Proceeds" in the
Prospectus.
(n) Counsel for the Company, the Company's accountants, and
the officers and directors of the Company will, respectively, furnish the
opinions, the letters and the certificates referred to in subsections of
Paragraph 9 hereof, and, in the event that the Company shall file any amendment
to the Registration Statement relating to the offering of the Securities or any
amendment or supplement to the Prospectus relating to the offering of the
Securities subsequent to the Effective Date of the Registration Statement, such
counsel, such accountants, such officers and directors, respectively, will, at
the time of such filing or at such subsequent time as you shall specify, so long
as securities being registered by such amendment or supplement are being
underwritten by the Underwriter, furnish to you such opinions, letters and
certificates, each dated the date of its delivery, of the same nature as the
opinions, the letters and the certificates referred to in said Paragraph 9, as
you may reasonably request, or, if any such opinion or letter or certificate
cannot be furnished by reason of the fact that such counsel or such accountants
or any such officer or director believes that the same would be inaccurate, such
counsel or such accountants or such officer or director will furnish an accurate
opinion or letter or certificate with respect to the same subject matter.
(o) The Company will comply with all of the provisions of any
undertakings contained in the Registration Statement in all material respects.
(p) The Company will reserve and keep available for issuance
that maximum number of its authorized but unissued shares of Common Stock which
are issuable upon exercise of the Warrants and issuable upon exercise of the
Underwriter's Warrants (including the underlying securities) outstanding from
time to time.
(q) Following the Effective Date and from time to time
thereafter, so long as the Warrants are outstanding, the Company will timely
prepare and file at its sole cost and expense one or more post-effective
amendments to the Registration Statement or a
14
new registration statement as required by law as will permit Warrant holders to
be furnished with a current prospectus in the event Warrants are exercised, and
to use its best efforts and due diligence to have same be declared effective.
The Company will deliver a draft of each such post-effective amendment or new
registration statement to the Underwriter at least ten days prior to the filing
of such post-effective amendment or registration statement.
(r) Following the Effective Date and from time to time
thereafter so long as any of the Warrants remain outstanding, the Company will
timely deliver and supply to its Warrant Agent sufficient copies of the
Company's current Prospectus, as will enable such Warrant Agent to deliver a
copy of such Prospectus to any Warrant or other holder where such Prospectus
delivery is by law required to be made.
(s) So long as any of the Warrants remain outstanding, the
Company shall continue to employ the services of a firm of independent certified
public accountants reasonably acceptable to the Underwriter in connection with
the preparation of the financial statements to be included in any registration
statement to be filed by the Company hereunder, or any amendment or supplement
thereto (it being understood that Xxxxx Xxxxxxxx LLP is acceptable to the
Underwriter). During the same period, the Company shall employ the services of a
law firm(s) suitably experienced in corporate and securities laws in connection
with all legal work of the Company, including the preparation of a registration
statement to be filed by the Company hereunder, or any amendment or supplement
thereto.
(t) So long as any of the Warrants remain outstanding, the
Company shall continue to appoint a Warrant Agent for the Warrants, who shall be
reasonably acceptable to the Underwriter.
(u) The Company agrees that it will, upon the Closing Date,
for a period of no less than three (3) years, engage a designee of the
Underwriter as an advisor (the "Advisor") to its Board of Directors where such
Advisor shall attend meetings of the Board, receive all notices and other
correspondence and communications sent by the Company to members of its Board of
Directors and shall be entitled to receive compensation therefor equal to the
entitlement of all non-employee directors. Such Advisor shall also be entitled
to receive reimbursement for all reasonable costs incurred in attending such
meetings including, but not limited to, food, lodging, and transportation. The
Company further agrees that during said three (3) year period, it shall schedule
no less than four (4) formal and "in person" meetings of its Board of Directors
in each such year and fifteen (15) days advance notice of such meetings shall be
given to the Advisor. Further, during such three (3) year period, the Company
shall give
15
notice to the Underwriter with respect to any proposed acquisitions, mergers,
reorganizations or other similar transactions. In lieu of the Underwriter's
right to designate an Advisor, the Underwriter shall have the right during such
three-year period, in its sole discretion, to designate one person for election
as a Director of the Company and the Company will utilize its best efforts to
obtain the election of such person who shall be entitled to receive the same
compensation, expense reimbursements and other benefits set forth above.
The Company agrees to indemnify and hold the Underwriter and
such Advisor or Director harmless against any and all claims, actions, damages,
costs and expenses, and judgments arising solely out of the attendance and
participation of your designee at any such meeting described herein. In the
event the Company maintains a liability insurance policy affording coverage for
the acts of its of officers and directors, it agrees, if possible, to include
the Underwriter's designee as an insured under such policy.
(v) Upon the Closing Date, the Company shall have entered into
a two year agreement with the Underwriter in form reasonably satisfactory to the
Underwriter (the "Consulting Agreement"), pursuant to which the Underwriter will
be retained as a management and financial consultant and will be paid an
aggregate fee of $120,000 all of which shall be paid upon the Closing Date.
(w) The Company's Common Stock and Warrants shall be listed on
the Nasdaq SmallCap Market ("Nasdaq"), not later than the Effective Date. Prior
to the Effective Date, the Company will make all filings required, including
registration under the Exchange Act, to obtain the listing of the Common Stock
and Warrants on Nasdaq, and will effect and use its best efforts to maintain
such listing (unless the Company is acquired) for at least five years from the
date of this Agreement.
(x) The Company will apply for listing in Standard and Poors
Corporation Reports or Moodys OTC Guide and shall use its best efforts to have
the Company included in such publications, as soon as is practicable following
the Closing Date and for at least five years from the Closing Date.
(y) For a period of twenty-four (24) months from the Effective
Date, no officer, director or holder of any securities of the Company prior to
the Offering (twelve (12) months with respect to the shares held by Srotnac
Group LLC) will, directly or indirectly, offer, sell (including any short sale),
grant any option for the sale of, acquire any option to dispose of, or otherwise
dispose of any shares of Common Stock into public markets, including shares of
Common Stock issuable upon exercise of options, warrants or any convertible
securities of the Company,
16
without the prior written consent of the Underwriter, other than as set forth in
the Registration Statement. In the case of Srotnac Group LLC, after such twelve
(12) month period, the shares which they hold may be sold with the Underwriter's
prior written consent, which consent may not be unreasonably withheld; such
consent may be based on, but not limited to, the financial performance of the
Company and market conditions, including the price and trade volume of the
Company's Common Stock. In order to enforce this covenant, the Company shall
impose stop-transfer instructions with respect to the securities owned by every
stockholder prior to the Offering until the end of such period (subject to any
exceptions to such limitation on transferability set forth in the Registration
Statement). Notwithstanding the foregoing, the Company's current stockholders
shall be permitted to make transfers for estate planning purposes or in private
sales, so long as the transferee agrees in writing to be bound by the foregoing
provisions. If necessary to comply with any applicable Blue-sky Law, the shares
held by such stockholders will be escrowed with counsel for the Company or
otherwise as required.
(z) Except for the issuance of shares of capital stock by the
Company in connection with a dividend, recapitalization, reorganization,
acquisition of a business or similar transactions or as result of the exercise
of warrants or options disclosed in or issued or granted pursuant to plans
disclosed in the Registration Statement, the Company shall not, for a period of
twenty-four (24) months following the Closing Date, directly or indirectly,
offer, sell, issue or transfer any shares of its capital stock, or any security
exchangeable or exercisable for, or convertible into, shares of the capital
stock or register any of its capital stock (under any form of registration
statement, including Form S-8), without the prior written consent of the
Underwriter. Options granted pursuant to plans must be exercisable at the fair
market value on the date of grant.
(aa) For so long as any of the Warrants remain outstanding,
the Company shall maintain key person life insurance payable to the Company on
the life of Xxxxx X. Xxxxxxxxx, its Chief Executive Officer, in the amount of
$1,000,000, unless his employment with the Company is earlier terminated. In
such event, the Company will obtain a comparable policy on the life of his
successor for the balance of such period.
(bb) The Company will use its best efforts to obtain, as soon
after the Closing Date as is reasonably possible, liability insurance covering
its officers and directors.
(cc) The Company agrees that any conflict of interest arising
between a member of the Company's Board of Directors and the Company in
connection with such Director's dealing with, or
17
obligations to, the Company, shall be resolved by a vote of the majority of the
independent members of the Board of Directors.
(dd) The Company agrees that it will employ the services of a
financial public relations firm reasonably acceptable to the Underwriters for a
period of at least twelve months following the Effective Date.
(ee) For a period of two (2) years from the Effective Date, at
the request of the Underwriter, the Company shall provide promptly, at its
expense, copies of the Company's monthly transfer sheets furnished to it by its
transfer agent and copies of the securities positions provided to it by the
Depository Trust Company.
4. Sale, Purchase and Delivery of Securities: Closing Date.
(a) The Company agrees to sell to the Underwriter, and the
Underwriter, on the basis of the warranties, representations and agreements of
the Company herein, and subject to the terms and conditions herein, agrees to
purchase the Securities from the Company at a price of $4.00 per share of Common
Stock and $.10 per Warrant, less an underwriting discount of ten percent (10%)
of the offering price for each security. The Underwriter may allow a concession
not exceeding $.__ per share of Common Stock and $.___ per Warrant to Selected
Dealers who are members of the National Association of Securities Dealers, Inc
("NASD"), and to certain foreign dealers.
(b) Delivery of the Securities and payment therefor shall be
made at 10:00 A.M., New York time on the Closing Date, as hereinafter defined,
at the offices of the Underwriter or such other location as may be agreed upon
by you and the Company. Delivery of certificates for the Common Stock and
Warrants (in definitive form and registered in such names and in such
denominations as you shall request by written notice to the Company delivered at
least two business days' prior to the Closing Date), shall be made to you
against payment of the purchase price therefor by certified or bank check or
wire transfer payable in New York Clearing House funds to the order of the
Company. The Company will make such certificates available for inspection at
least two business days prior to the Closing Date at such place as you shall
designate.
(c) The "Closing Date" shall be ______ __, 1998, or such other
date not later than the sixth business day following the effective date of the
Registration Statement as you shall determine and advise the Company by at least
three full business days' notice, confirmed in writing.
18
(d) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Securities by the Company to
the Underwriters shall be borne by the Company. The Company will pay and hold
the Underwriters, and any subsequent holder of the Securities, harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying federal and state stamp taxes, if any, which may be payable or determined
to be payable in connection with the original issuance or sale to the
Underwriters of the Securities or any portions thereof.
5. Sale Purchase and Delivery of Additional Securities: Option Closing
Date.
(a) The Company agrees to sell to the Underwriter, and upon
the basis of the representations, warranties and agreements of the Company
herein contained, subject to the satisfaction of all the terms and conditions of
this Agreement, the Underwriter shall have the option (the "Option") to purchase
the Additional Securities from the Company, at the same price per Security as
set forth in Paragraph 4(a) above. Additional Securities may be purchased solely
for the purpose of covering over-allotments made in connection with the
distribution and sale of the Securities.
(b) The Option to purchase all or part of the Additional
Securities covered thereby is exercisable by you at any time and from time to
time before the expiration of a period of 45 calendar days from the date of the
Effective Date of the Registration Statement (the "Option Period") by written
notice to the Company setting forth the number of Additional Securities for
which the Option is being exercised, the name or names in which the certificates
for such Additional Securities are to be registered and the denominations of
such certificates. Upon each exercise of the Option, the Company shall sell to
the Underwriters the aggregate number of Additional Securities specified in the
notice exercising such Option.
(c) Delivery of the Additional Securities with respect to
which Options shall have been exercised and payment therefor shall be made at
10:00 A.M., New York time on the Option Closing Date, as hereinafter defined, at
the offices of the Underwriter or at such other locations as may be agreed upon
by you and the Company. Delivery of certificates for Additional Securities shall
be made to you against payment of the purchase price therefor by certified or
bank check or wire transfer in New York Clearing House Funds to the order of the
Company. The Company will make certificates for Additional Securities to be
purchased at the Option Closing Date available for inspection at least two
business days prior to such Option Closing Date at such place as you shall
designate.
19
(d) The "Option Closing Date" shall be the date not later than
five business days after the end of the Option Period as you shall determine and
advise the Company by at least three full business days' notice, unless some
other time is agreed upon between you and the Company.
(e) The obligations of the Underwriter to purchase and pay for
Additional Securities at such Option Closing Date shall be subject to compliance
as of such date with all the conditions specified in Paragraph 2 herein and the
delivery to you of opinions, certificates and letters, each dated such Option
Closing Date, substantially similar in scope to those specified in Paragraph 9
herein.
(f) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Additional Securities by the
Company to the Underwriter shall be borne by the Company. The Company will pay
and hold the Underwriter, and any subsequent holder of Additional Securities,
harmless from any and all liabilities with respect to or resulting from any
failure or delay in paying federal and state stamp taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to the Underwriter of the Additional Securities or any portion thereof.
6. Warrant Solicitation Fee.
The Company agrees to pay the Underwriter a fee of seven percent (7%)
of the aggregate exercise price of the Warrants if: (i) the market price of the
Common Stock is greater than the exercise price of the Warrants on the date of
exercise; (ii) the exercise of the Warrants are solicited by a member of the
NASD and the customer states in writing that the transaction was solicited and
designates in writing the broker-dealer to receive compensation for the
exercise; (iii) the Warrants are not held in a discretionary account; (iv) the
disclosure of compensation arrangements was made both at the time of the
Offering and at the time of the exercise of the Warrant; and (v) the
solicitation of the Warrant is not in violation of Regulation M promulgated
under the Exchange Act. The Company agrees not to solicit the exercise of any
Warrants other than through the Underwriter and will not authorize any other
dealer to engage in such solicitation without the prior written consent of the
Underwriter which will not be unreasonably withheld. The Warrant solicitation
fee will not be paid in a non-solicited transaction. No Warrant solicitation by
the Underwriter will occur prior to one year from the Effective Date.
20
7. Representations and Warranties of the Underwriter.
The Underwriter represents and warrants to the Company that:
(a) The Underwriter is a member in good standing of the
National Association of Securities Dealers, Inc., and has complied with all NASD
requirements concerning net capital and compensation to be received in
connection with the Offering.
(b) To the Underwriter's knowledge, there are no claims for
services in the nature of a finder's origination fee with respect to the sale of
the Securities hereunder to which the Company is, or may become, obligated to
pay.
(c) Neither the Underwriter nor its registered representatives
have provided purchasers of the Securities with any information concerning the
Company other than the Preliminary Prospectus and the Prospectus.
8. Payment of Expenses.
(a) The Company will pay and bear all costs, fees, taxes and
expenses incident to and in connection with: (i) the issuance, offer, sale and
delivery of the Securities, including all expenses and fees incident to the
preparation, printing, filing and mailing (including the payment of postage with
respect to such mailing) of the Registration Statement (including all exhibits
thereto), each Preliminary Prospectus, the Prospectus, and amendments and
post-effective amendments thereof and supplements thereto, and this Agreement
and related documents, Preliminary and Final Blue Sky Memoranda, including the
cost of preparing and copying all copies thereof in quantities deemed necessary
by the Underwriters; (ii) the costs of preparing and printing all "Tombstone"
and other appropriate advertisements; (iii) the printing, engraving, issuance
and delivery of the Common Stock, Warrants, Warrant Shares, Additional
Securities, Underwriter's Warrants and the securities underlying the
Underwriter's Warrants, including any transfer or other taxes payable thereon in
connection with the original issuance thereof; (iv) the qualification of the
Common Stock and Warrants under the state or foreign securities or "Blue Sky"
laws selected by the Underwriter and the Company, and disbursements and
reasonable fees of counsel for the Underwriter in connection therewith (not to
exceed $40,000) plus the filing fees for such states; (v) a fee of $15,000 to be
paid to counsel to the Underwriter for the preparation of a secondary trading
memorandum; (vi) fees and disbursements of counsel and accountants for the
Company; (vii) other expenses and disbursements reasonably incurred on behalf of
the Company; (viii) the filing fees payable to the Commission and the National
Association of Securities Dealers, Inc. ("NASD"); and (ix) any listing of the
Common Stock and Warrants on
21
a securities exchange or on NASDAQ.
(b) In addition to the expenses to be paid and borne by the
Company referred to in Paragraph 8(a) above, the Company shall reimburse you at
closing for expenses incurred by you in connection with the Offering (for which
you need not make any accounting), in the amount of 3% of the price to the
public of the Securities and Additional Securities sold in the Offering. This 3%
non-accountable expense allowance shall cover the fees of your legal counsel,
but shall not include any expenses for which the Company is responsible under
Paragraph 8(a) above, including the reasonable fees and disbursements of your
legal counsel with respect to Blue Sky matters. As of the date hereof, $______
has been advanced by the Company to the Underwriter with respect to such
non-accountable expense allowance.
(c) In the event that the Company does not or cannot, for any
reason whatsoever other than a default by the Underwriter, proceed with the
Offering, or if any of the representations, warranties or covenants contained in
this Agreement are not materially correct or cannot be complied with by the
Company, or business prospects or obligations of the Company are adversely
affected and the Company does not commence or continue with the Offering at any
time or terminates the proposed transaction prior to the Closing Date, the
Company shall reimburse the Underwriter on an accountable basis for all
out-of-pocket expenses actually incurred in connection with the Underwriting,
this Agreement and all of the transactions hereby contemplated (including,
without limitation, your legal fees and expenses).
9. Conditions of Underwriter's Obligations.
The obligations of the Underwriter to consummate the transactions
contemplated by this Agreement shall be subject to the continuing accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of the Closing Date, the accuracy of the statements of the
Company and its officers and directors made pursuant to the provisions hereof,
and to the performance by the Company of its covenants and agreements hereunder
and under each certificate, opinion and document contemplated hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., New York time, on the date following the date of this
Agreement, or such later date and time as shall be consented to in writing by
you and, on or prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Securities under the securities laws of any jurisdiction shall have been
issued and no proceedings for that purpose shall have been
22
instituted or shall be pending or to your knowledge or the knowledge of the
Company, shall be contemplated by the Commission or any such authorities of any
jurisdiction and any request on the part of the Commission or any such
authorities for additional information shall have been complied with to the
reasonable satisfaction of the Commission or such authorities and counsel to the
Underwriter and after the date hereof no amendment or supplement shall have been
filed to the Registration Statement or Prospectus without your prior consent.
(b) The Registration Statement or the Prospectus or any
amendment thereof or supplement thereto shall not contain an untrue statement of
a fact which is material, or omit to state a fact which is material and is
required to be stated therein or is necessary to make the statements therein,
not misleading.
(c) Between the time of the execution and delivery of this
Agreement and the Closing Date, there shall be no litigation instituted against
the Company or any of its officers or directors and between such dates there
shall be no proceeding instituted or, to the Company's knowledge, threatened
against the Company or any of its officers or directors before or by any
federal, state or county commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would have a material adverse effect
on the Company or its business, business prospects or properties, or have a
material adverse effect on the financial condition or results of operation of
the Company.
(d) Each of the representations and warranties of the Company
contained herein and each certificate and document contemplated under this
Agreement to be delivered to you shall be true and correct at the Closing Date
as if made at the Closing Date, and all covenants and agreements contained
herein and in each such certificate and document to be performed on the part of
the Company, and all conditions contained herein and in each such certificate
and document to be fulfilled or complied with by the Company at or prior to the
Closing Date shall be fulfilled or complied with.
(e) At the Closing Date, you shall have received the opinion
of Xxxxx & Xxxxxxx LLP, counsel to the Company, dated as of such Closing Date,
addressed to the Underwriter and in form and substance satisfactory to counsel
to the Underwriter, to the effect that:
(i) The Company and each of its Subsidiaries are
corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction of their incorporation with full corporate power and
authority, and all licenses, permits,
23
certifications, registrations, approvals, consents and franchises to own or
lease and operate their properties and to conduct their businesses as described
in the Registration Statement. The Company and each of its Subsidiaries are duly
qualified to do business as foreign corporations and are in good standing in all
jurisdictions wherein such qualification is necessary and failure so to qualify
could have a material adverse effect on the financial condition, results of
operations, business or properties of the Company and each of its Subsidiaries;
(ii) The Company has full corporate power and
authority to execute, deliver and perform the Underwriting Agreement, the
Consulting Agreement, the Warrant Agreement and the Underwriter's Warrants and
to consummate the transactions contemplated thereby. The execution, delivery and
performance of the Underwriting Agreement, the Consulting Agreement, the Warrant
Agreement and the Underwriter's Warrants by the Company, the consummation by the
Company of the transactions therein contemplated and the compliance by the
Company with the terms of the Underwriting Agreement, the Consulting Agreement,
the Warrant Agreement and the Underwriter's Warrants have been duly authorized
by all necessary corporate action, and each of the Underwriting Agreement, the
Consulting Agreement, the Warrant Agreement and the Underwriter's Warrants have
been duly executed and delivered by the Company. Each of the Underwriting
Agreement, the Consulting Agreement, the Warrant Agreement and the Underwriter's
Warrants is a valid and binding obligation of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement of remedies,
to applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of courts in
granting equitable remedies and except that enforceability of the
indemnification provisions and the contribution provisions set forth in the
Underwriting Agreement may be limited by the federal securities laws or public
policy underlying such laws;
(iii) The execution, delivery and performance of the
Underwriting Agreement, the Consulting Agreement, the Warrant Agreement and the
Underwriter's Warrants by the Company, the consummation by the Company of the
transactions therein contemplated and the compliance by the Company with the
terms of the Underwriting Agreement, the Consulting Agreement, the Warrant
Agreement and the Underwriter's Warrants do not, and will not, with or without
the giving of notice or the lapse of time, or both, (A) result in a violation of
the Articles of Incorporation, as the same may be amended, or Bylaws of the
Company or any of its Subsidiaries, (B) to the best of our knowledge, result in
a breach of, or conflict with, any terms or provisions of or constitute a
default under, or result in the modification or termination of, or result in the
creation or imposition of any lien, security
24
interest, charge or encumbrance upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, any indenture, mortgage, note,
contract, commitment or other material agreement or instrument to which the
Company or any of its Subsidiaries are a party or by which the Company or any of
its Subsidiaries or any of their properties or assets are or may be bound or
affected, except where any of the foregoing would not result in a material
adverse effect upon the Company's or any Subsidiaries business or operations;
(C) to the best of our knowledge, violate any existing applicable law, rule or
regulation or judgment, order or decree known to us of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any of
its Subsidiaries or any of their properties or businesses; or (D) to the best of
our knowledge, have any effect on any permit, certification, registration,
approval, consent, license or franchise necessary for the Company or any of its
Subsidiaries to own or lease and operate their properties and to conduct their
business or the ability of the Company or any of its Subsidiaries to make use
thereof;
(iv) To the best of our knowledge, no authorization,
approval, consent, order, registration, license or permit of any court or
governmental agency or body (other than under the Act, the Regulations and
applicable state securities or Blue Sky laws) is required for the valid
authorization, issuance, sale and delivery of the Securities, the Additional
Securities, the Common Stock, the Warrants, the Warrant Shares, or the
Underwriter's Warrants, and the consummation by the Company of the transactions
contemplated by the Underwriting Agreement, the Consulting Agreement, the
Warrant Agreement or the Underwriter's Warrants;
(v) The Registration Statement was declared effective
under the Act on ______ __, 1998; to the best our 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, threatened
or contemplated under the Act or applicable state securities laws;
(vi) The Registration Statement and the Prospectus,
as of the Effective Date (except for the financial statements and other
financial data included therein or omitted therefrom, as to which we express no
opinion), comply as to form in all material respects with the requirements of
the Act and Regulations and the conditions for use of a registration statement
on Form SB-2 have been satisfied by the Company;
(vii) The description in the Registration Statement
and the Prospectus of statutes, regulations, contracts and other documents have
been reviewed by us, and, based upon such review,
25
are accurate in all material respects and present fairly the information
required to be disclosed, and to the best of our knowledge, there are no
material statutes or regulations, or, to the best of our knowledge, material
contracts or documents, of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement, which are not so described or filed as required.
To the best of our knowledge, none of the material
provisions of the contracts or instruments described above violates any existing
applicable law, rule or regulation or judgment, order or decree known to us of
any United States governmental agency or court having jurisdiction over the
Company or any of its assets or businesses;
(viii) The outstanding Common Stock and Warrants have
been duly authorized and validly issued. The outstanding Common stock is fully
paid an nonassessable. To the best of our knowledge, none of the outstanding
Common Stock has been issued in violation of the preemptive rights of any
stockholder of the Company. None of the holders of the outstanding Common Stock
is subject to personal liability solely by reason of being such a holder. The
authorized Common Stock conforms to the description thereof contained in the
Registration Statement and Prospectus. To the best of our knowledge, except as
set forth in the Prospectus, no holders of any of the Company's securities has
any rights, "demand," "piggyback" or otherwise, to have such securities
registered under the Act;
(ix) The issuance and sale of the Securities, the
Additional Securities, the Common Stock, the Warrants, the Warrant Shares and
the Underwriter's Warrants have been duly authorized and when issued and paid
for in accordance with the Underwriting Agreement or the respective Warrants
will be validly issued, fully paid and nonassessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. Neither the Securities, the Additional Securities, nor the Common Stock
are subject to preemptive rights of any stockholder of the Company. The
certificates representing the Securities are in proper legal form;
(x) The issuance and sale of the Warrant Shares and
the Underwriter's Warrants have been duly authorized and, when paid for, issued
and delivered pursuant to the terms of the Warrant Agreement or the
Underwriter's Warrants, as the case may be, the Warrants and the Underwriter's
Warrants will constitute the valid and binding obligations of the Company,
enforceable in accordance with their terms, to issue and sell the Warrants, the
Warrant Shares and/or Underwriter's Warrants. All corporate action required to
be taken for the authorization, issuance and sale of the
26
securities has been duly, validly and sufficiently taken. The Common Stock and
the Warrants have been duly authorized by the Company to be offered in the form
of the Securities. The Warrants, the Warrant Shares and the Underwriter's
Warrants conform to the descriptions thereof contained in the Registration
Statement and Prospectus;
(xi) The Underwriter has acquired good title to the
Securities, free and clear of all liens, encumbrances, equities, security
interests and claims, provided that the Underwriter is a bona fide purchaser as
defined in 'SS'8-302 of the Uniform Commercial Code;
(xii) Assuming that the Underwriter exercises the
over-allotment option to purchase the Additional Securities and make payments
therefor in accordance with the terms of the Underwriting Agreement, upon
delivery of the Additional Securities to the Underwriter thereunder, the
Underwriter will acquire good title to the Additional Securities, free and clear
of any liens, encumbrances, equities, security interests and claims, provided
that the Underwriter is a bona fide purchaser as defined in 'SS'8-302 of the
Uniform Commercial Code;
(xiii) To the best of our knowledge, there are no
claims, actions, suits, proceedings, arbitrations, investigations or inquiries
before any governmental agency, court or tribunal, foreign or domestic, or
before any private arbitration tribunal, pending or threatened against the
Company or any of its Subsidiaries or involving their properties or businesses,
other than as described in the Prospectus, such description being accurate, and
other than litigation incident to the kind of business conducted by the Company
or any of its Subsidiaries which, individually and in the aggregate, is not
material, and, except as otherwise disclosed in the Prospectus and the
Registration Statement, the Company and its Subsidiaries have complied with all
federal and state laws, statutes and regulations concerning its business;
(xiv) All sales of the Company's securities have been
made in compliance with or under an exemption from the registration requirements
of the Act, and no purchaser of such securities in any such sale has a right of
action against the Company for failure to comply with the registration or filing
requirements of any state; and
(xv) We have participated in reviews and discussions
in connection with the preparation of the Registration Statement and the
Prospectus. Although we are not passing upon and do not assume responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement,
27
no facts came to our attention which lead us to believe that (A) the
Registration Statement (except as to the financial statements and other
financial data contained therein, as to which we express no opinion), on the
Effective Date, contained any untrue statement of 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 (B) the
Prospectus (except as to the financial statements and other financial data
contained therein, as to which we express no opinion) contains any untrue
statement or a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(f) At the Closing Date, you shall have received the opinion
of _____________________, government regulatory counsel to the Company, dated as
of such Closing Date, addressed to the Underwriter and in form and substance
satisfactory to counsel to the Underwriter, to the effect that they have
carefully read and analyzed the material set forth under "Risk Factors -
Government Regulation" and "Business - Government Regulation," and in their
opinion such disclosure accurately reflects the present status of all regulatory
matters which relate to the Company's business, and that the Company is in
compliance with all regulatory requirements applicable to its business,
including regulations promulgated by the Federal Aviation Administration and the
Occupational Safety and Health Administration.
(g) On or prior to the Closing Date, counsel for the
Underwriter shall have been furnished such documents, certificates and opinions
as they may reasonably require for the purpose of enabling them to review the
matters referred to in subparagraph (e) and (f) of this Paragraph 9, or in order
to evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
(h) Prior to the Closing Date:
(i) There shall have been no material adverse change
in the condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such condition is
set forth in the Registration Statement and Prospectus;
(ii) There shall have been no transaction, outside
the ordinary course of business, entered into by the Company from the latest
date as of which the financial condition of the Company is set forth in the
Registration Statement and Prospectus which is material to the Company, which is
either (x) required to be disclosed in the Prospectus or Registration Statement
and is not so
28
disclosed, or (y) likely to have a material adverse effect on the Company's
business or financial condition;
(iii) The Company shall not be in default under any
material provision of any instrument relating to any outstanding indebtedness,
except as described in the Prospectus;
(iv) No material amount of the assets of the Company
shall have been pledged, mortgaged or otherwise encumbered, except as set forth
in the Registration Statement and Prospectus;
(v) No action, suit or proceeding, at law or in
equity, shall have been pending or to its knowledge threatened against the
Company or affecting any of its properties or businesses before or by any court
or federal or state commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business, operations, prospects or financial condition or income of the
Company, taken as a whole, except as set forth in the Registration Statement and
Prospectus;
(vi) No stop order shall have been issued under the
Act and no proceedings therefor shall have been initiated or, to the Company's
knowledge, threatened by the Commission; and
(vii) Each of the representations and warranties of
the Company contained in this Agreement and in each certificate and document
contemplated under this Agreement to be delivered to you was, when originally
made and is at the time such certificate is dated, true and correct.
(i) Concurrently with the execution and delivery of this
Agreement and at the Closing Date, you shall have received a certificate of the
Company signed by the Chief Executive Officer of the Company and the principal
financial officer of the Company, dated as of the Closing Date, to the effect
that the conditions set forth in subparagraph (h) above have been satisfied and
that, as of the Closing Date, the representations and warranties of the Company
set forth in Paragraph 2 herein and the statements in the Registration Statement
and Prospectus were and are true and correct in all material respects. Any
certificate signed by any officer of the Company and delivered to you or for
counsel for the Underwriter shall be deemed a representation and warranty by the
Company to the Underwriter as to the statements made therein.
(j) At the time this Agreement is executed, and at the Closing
Date, you shall have received a "cold comfort" letter, addressed to the
Underwriter and in form and substance satisfactory in all respects to you and
counsel for the Underwriter, from Xxxxx Xxxxxxxx LLP and Staff, Maikels &
Ciampino, P.C., dated as of the
29
date of this Agreement and as of the Closing Date.
(k) All proceedings taken in connection with the
authorization, issuance or sale of the Common Stock, Warrants, Warrant Shares,
Additional Securities, the Underwriter's Warrants and the Underwriter's Warrant
Shares as herein contemplated shall be satisfactory in form and substance to you
and to counsel to the Underwriter, and the Underwriter shall have received from
such counsel an opinion, dated as the Closing Date with respect to such of these
proceedings as you may reasonably require.
(l) The Company shall have furnished to you such certificates,
additional to those specifically mentioned herein, as you may have reasonably
requested in a timely manner as to the accuracy and completeness, at the Closing
Date, of any statement in the Registration Statement or the Prospectus, as to
the accuracy, at the Closing Date, of the representations and warranties of the
Company herein and in each certificate and document contemplated under this
Agreement to be delivered to you, as to the performance by the Company of its
obligations hereunder and under each such certificate and document or as to the
fulfillment of the conditions concurrent and precedent to your obligations
hereunder.
(m) The obligation of the Underwriter to purchase Additional
Securities hereunder is subject to the accuracy of the representations and
warranties of the Company contained herein on and as of the Option Closing Date
and to the satisfaction on and as of the Option Closing Date of the conditions
set forth herein.
(n) On the Closing Date there shall have been duly tendered to
you for your account the appropriate number of shares of Common Stock and
Warrants constituting the Securities.
(o) No action shall have been taken by the Commission or the
NASD the effect of which would make it improper, at any time prior to the
Closing Date, for members of the NASD to execute transactions (as principal or
agent) in the Securities and no proceedings for the taking of such action shall
have been instituted or shall be pending, or, to the knowledge of the
Underwriter or the Company, shall be contemplated by the Commission or the NASD.
The Company and the Underwriter represent that at the date hereof each has no
knowledge that any such action is in fact contemplated against it by the
Commission or the NASD.
(p) Prior to the Effective Date, the Company will make all
filings required, including registration under the Exchange Act, to obtain the
listing of the Common Stock and Warrants on the Nasdaq SmallCap market.
30
(q) If any of the conditions herein provided for in this
Paragraph shall not have been fulfilled in all material respects as of the date
indicated, this Agreement and all obligations of the Underwriter under this
Agreement may be canceled at, or at any time prior to, each Closing Date by the
Underwriter notifying the Company of such cancellation in writing or by telegram
at or prior to the applicable Closing Date. Any such cancellation shall be
without liability of the Underwriter to the Company.
10. Indemnification and Contribution.
(a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the Underwriter and each person, if any,
who controls the Underwriters ("controlling person") within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, against any and
all losses, liabilities, claims, damages, actions and expenses or liability,
joint or several, whatsoever (including but not limited to any and all expense
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever), joint or
several, to which it or such controlling persons may become subject under the
Act, the Exchange Act or under any other statute or at common law or otherwise
or under the laws of foreign countries, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any Preliminary Prospectus or the Prospectus (as from
time to time amended and supplemented); in any post-effective amendment or
amendments or any new registration statement and prospectus in which is included
the Warrant Shares of the Company issued or issuable upon exercise of the
Warrants, or Underwriter's Warrants Shares upon exercise of the Underwriter's
Warrants; or in any application or other document or written communication (in
this Paragraph 10 collectively called "application") executed by the Company or
based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Common Stock, Warrants, Warrant Shares,
Additional Securities, Underwriter's Warrants and Underwriter's Warrant Shares
(including the Shares issuable upon exercise of the Warrants underlying the
Underwriter's Warrants) under the securities laws thereof or filed with the
Commission or any securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the Prospectus, in the
light of the circumstances under which they were made), unless such statement or
omission was made in reliance upon or in conformity with written information
furnished to the Company with respect to the Underwriter by or on behalf of the
Underwriter expressly for use in any Preliminary Prospectus, the Registration
Statement or Prospectus, or any amendment or supplement thereof, or in
application, as the case may
31
be. Notwithstanding the foregoing, the Company shall have no liability under
this Paragraph 10(a) if any such untrue statement or omission made in a
Preliminary Prospectus, is cured in the Prospectus and the Underwriter failed to
deliver to the person or persons alleging the liability upon which
indemnification is being sought, at or prior to the written confirmation of such
sale, a copy of the Prospectus. This indemnity will be in addition to any
liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the
Company and each of the officers and directors of the Company who have signed
the Registration Statement and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Underwriter in Paragraph 10(a), but only with respect to any untrue
statement or alleged untrue statement of any material fact contained in or any
omission or alleged omission to state a material fact required to be stated in
any Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereof or necessary to make the statements therein not
misleading or in any application made solely in reliance upon, and in conformity
with, written information furnished to the Company by you specifically expressly
for use in the preparation of such Preliminary Prospectus, the Registration
Statement or Prospectus directly relating to the transactions effected by the
Underwriters in connection with this Offering. This indemnity agreement will be
in addition to any liability which the Underwriter may otherwise have.
Notwithstanding the foregoing, the Underwriter shall have no liability under
this Paragraph 10(b) if any such untrue statement or omission made in a
Preliminary Prospectus is cured in the Prospectus, and the Prospectus is
delivered to the person or persons alleging the liability upon which
indemnification is being sought.
(c) If any action is brought against any indemnified party
(the "Indemnitee") in respect of which indemnity may be sought against another
party pursuant to the foregoing (the "Indemnitor"), the Indemnitor shall assume
the defense of the action, including the employment and fees of counsel
(reasonably satisfactory to the Indemnitee) and payment of expenses. Any
Indemnitee shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
Indemnitee unless the employment of such counsel shall have been authorized in
writing by the Indemnitor in connection with the defense of such action. If the
Indemnitor shall have employed counsel to have charge of the defense or shall
previously have assumed the defense of any such action or claim, the Indemnitor
shall not thereafter be liable to any Indemnitee in investigating, preparing or
defending any such action or claim.
32
Each Indemnitee shall promptly notify the Indemnitor of the commencement of any
litigation or proceedings against the Indemnitee in connection with the issue
and sale of the Common Stock, Warrants, Warrants Shares, Additional Securities,
Underwriter's Securities or in connection with the Registration Statement or
Prospectus.
(d) In order to provide for just and equitable contribution
under the Act in any case in which: (i) the Underwriter makes a claim for
indemnification pursuant to Paragraph 10 hereof, but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the time to appeal has expired or the last right of appeal has been denied)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Paragraph 10 provides for indemnification of such case; or (ii)
contribution under the Act may be required on the part of the Underwriter in
circumstances for which indemnification is provided under this Paragraph 10,
then, and in each such case, the Company and the Underwriter shall contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after any contribution from others) in such proportion so that the
Underwriter is responsible for the portion represented by dividing the total
compensation received by the Underwriter herein by the total purchase price of
all Securities sold in the public offering and the Company is responsible for
the remaining portion; provided, that in any such case, no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11 (f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The foregoing contribution agreement shall in no way affect
the contribution liabilities of any persons having liability under Section 11 of
the Act other than the Company and the Underwriter. As used in this Paragraph
10, the term "Underwriter" includes any officer, director, or other person who
controls the Underwriter within the meaning of Section 15 of the Act, and the
word "Company" includes any of officer, director or person who controls the
Company within the meaning of Section 15 of the Act. If the full amount of the
contribution specified in this paragraph is not permitted by law, then the
Underwriter and each person who controls the Underwriter shall be entitled to
contribution from the Company to the full extent permitted by law. No
contribution shall be requested with regard to the settlement of any matter from
any party who did not consent to the settlement.
(e) Within fifteen (15) days after receipt by any party to
this Agreement (or its representative) of notice of the commencement of any
action, suit or proceeding, such party will, if a claim for contribution in
respect thereof is made against another
33
party (the "contributing party"), notify the contributing party of the
commencement thereof, but the omission so to notify the contributing party will
not relieve it from any liability it may have to any other party other than for
contribution hereunder.
In case any such action, suit or proceeding is brought against
any party, and such party notifies a contributing party or his or its
representative of the commencement thereof within the aforesaid fifteen (15)
days, the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified. Any such
contributing party shall not be liable to any party seeking contribution on
account of any settlement of any claim, action or proceeding effected by such
party seeking contribution without the written consent of such contributing
party. The indemnification provisions contained in this Paragraph 10 are in
addition to any other rights or remedies which either party hereto may have with
respect to the other or hereunder.
11. Representations, Warranties, Agreements to Survive Delivery.
The respective indemnity and contribution agreements by the Underwriter
and the Company contained in Paragraph 10 hereof, and the covenants,
representations and warranties of the Company and the Underwriter set forth in
this Agreement, shall remain operative and in full force and effect regardless
of (i) any investigation made by the Underwriter or on its behalf or by or on
behalf of any person who controls the Underwriter, or by the Company or any
controlling person of the Company or any director or any of officer of the
Company, (ii) acceptance of any of the Securities and payment therefor, or (iii)
any termination of this Agreement, and shall survive the delivery of the
Securities and any successor of the Underwriter or the Company, or of any person
who controls you or the Company or any other indemnified party, as the case may
be, shall be entitled to the benefit of such respective indemnity and
contribution agreements. The respective indemnity and contribution agreements by
the Underwriter and the Company contained in this Paragraph 11 shall be in
addition to any liability which the Underwriter and the Company may otherwise
have.
12. Effective Date of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at 10:00 A.M., New
York time, on the first full business day following the day on which you and the
Company receive notification that the Registration Statement became effective.
(b) This Agreement may be terminated by the Underwriter by
notifying the Company at any time on or before the Closing Date,
34
if any domestic or international event or act or occurrence has materially
disrupted, or in your opinion will in the immediate future materially disrupt,
securities markets; or if trading on the New York Stock Exchange, the American
Stock Exchange, or in the over-the-counter market shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required on the over-the-counter
market by the NASD or NASDAQ or by order of the Commission or any other
governmental authority having jurisdiction; or if a moratorium in foreign
exchange trading by major international banks or persons has been declared; or
if the Company shall have sustained a loss material or substantial to the
Company taken as a whole by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act which, whether or not such loss
shall have been insured, will, in your opinion, make it inadvisable to proceed
with the delivery of the Securities; or if there shall have been a material
adverse change in the conditions of the securities market in general, as in your
reasonable judgment would make it inadvisable to proceed with the offering, sale
and delivery of the Securities; or if there shall have been a material adverse
change in the financial or securities markets, particularly in the
over-the-counter market, in the United States having occurred since the date of
this Agreement; or your clearing agent has refused to grant you credit in
connection with the purchase of the Common Stock and Warrants; or the NASDAQ
Stock Market, Inc. has refused to release the Common Stock and Warrants for
trading on the Nasdaq SmallCap market.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Paragraph 12, the
Company shall be notified promptly by you by telephone or facsimile, confirmed
by letter.
(d) If this Agreement shall not become effective or if this
Agreement shall not be carried out within the time specified herein by reason of
any failure on the part of the Company to perform any undertaking, or to
materially satisfy any condition of this Agreement by it to be performed or
satisfied, the sole liability of the Company to the Underwriter, in addition to
the obligations assumed by the Company pursuant to Paragraph 8 herein, will be
to reimburse the Underwriter for the following: (i) Blue Sky counsel fees and
expenses to the extent set forth in Paragraph 8(a)(iv); (ii) Blue Sky filing
fees; and (iii) such reasonable out-of-pocket expenses of the Underwriter
(including the fees and disbursements of their counsel), to the extent set forth
in Paragraph 8(c), in connection with this Agreement and the proposed offering
of the Securities.
Notwithstanding any contrary provision contained in this
Agreement, any election hereunder or any termination of this
35
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Paragraph 8 and 10 hereof shall not be in any way affected by such
election or termination or failure to carry out the terms of this Agreement or
any part hereof.
13. Notices.
All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and, if sent to the Underwriter, shall be mailed,
delivered or telegraphed and confirmed to the Underwriter at First Liberty
Investment Group, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: President, with a copy thereof to Xxxxxxxx X. Xxxxxxx, Esq., Gusrae
Xxxxxx & Bruno, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed to the Company
at 0000 X. Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxxxx, President, with a copy thereof to Xxxxx & Schloss LLP, 0 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx, Esq.
14. Parties.
This Agreement shall inure solely to the benefit of and shall be
binding upon, the Underwriter, the Company and the controlling persons,
directors and officers referred to in Paragraph 10 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
15. Construction.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York and shall supersede any
agreement or understanding, oral or in writing, express or implied, between the
Company and you relating to the sale of any of the Securities.
16. Jurisdiction and Venue.
The Company agrees that the courts of the State of New York shall have
jurisdiction over any litigation arising from this Agreement, and venue shall be
proper in the Southern District of New York.
17. Counterparts.
This agreement may be executed in counterparts.
36
If the foregoing correctly sets forth the understanding
between the Underwriter and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement between us.
Very truly yours,
PROFLIGHT MEDICAL RESPONSE, INC.
By:_____________________________
Xxxxx X. Xxxxxxxxx, President
Accepted as of the date first above written:
FIRST LIBERTY INVESTMENT GROUP, INC.
By:_________________________________
