Exhibit 1.1
NOUVEAU INTERNATIONAL, INC.
1,500,000 SHARES OF SERIES B 8% CUMULATIVE
CONVERTIBLE REDEEMABLE PREFERRED STOCK
UNDERWRITING AGREEMENT
November , 1996
Americorp Securities, Inc.
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Gentlemen:
Nouveau International, Inc., a Delaware corporation (the "Company") has
authorized 3,000,000 shares of Preferred Stock, $.001 par value ("Preferred
Stock") and 25,000,000 shares of Common Stock, $.001 par value ("Common Stock")
and has the number of shares of Series A Preferred Stock and Common Stock as set
forth under the heading "Capitalization" in the Prospectus, as hereinafter
defined, adjusted only for any subsequent exercises of outstanding stock options
and warrants. The Company proposes to issue and sell to the underwriters listed
on Schedule I hereto (the "Underwriters"), severally and not jointly, 1,500,000
of its authorized and unissued shares (the "Firm Shares") of Series B 8%
Cumulative Convertible Redeemable Preferred Stock (the "Series B Stock")
containing such terms and conditions including provisions regarding dividends,
conversion and redemption as are contained in the form of Series B stock
certificate which is filed as an exhibit to the registration statement
hereinafter mentioned.
In addition, the Company proposes to grant to you the right to purchase up
to 225,000 additional shares of Series B Stock (the "Optional Shares"), for the
sole purpose of covering over-allotments in the sale of the Firm Shares. Unless
the context otherwise indicates, the Firm Shares and the Optional Shares are
sometimes referred to herein collectively as the "Series B Shares." The Series B
Shares are more fully described in the registration statement, which the Company
has furnished to you, acting as representative (the "Representative") of the
several Underwriters. This is to confirm our agreement with respect to the
purchase of the Series B Shares.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with each Underwriter that:
(a) A registration statement on Form SB-2 (File No. 333- ), for the
registration of the Series B Shares has been prepared by the Company in
conformity with the applicable provisions of the Securities Act of 1933, as
amended (the "Act"), and the applicable rules,
regulations, releases and instructions (the "Rules under the Act") of the
Securities and Exchange Commission (the "Commission"), and has been filed with
the Commission; and one or more amendments to said registration statement,
copies of which have heretofore been delivered to the Representative, has or
have been filed by the Company; and the Company may file on or prior to the
effective date an additional amendment to the registration statement. Included
in the registration statement are 150,000 underwriters' warrants ("Underwriters'
Warrants") and an underlying 150,000 shares of Series B Stock (the
"Underwriters' Series B Shares") to be sold by the Company. As used in this
Agreement, the term "Registration Statement" refers to and means the
registration statement, and all amendments thereto, including the prospectus,
documents incorporated by reference therein, exhibits and financial statements,
at the time it becomes effective; and the term "Prospectus" refers to and means
the prospectus included in the Registration Statement at the time it becomes
effective (including documents incorporated by reference therein), except that,
if the prospectus first filed by the Company pursuant to Rule 424(b) of the
Rules under the Act shall differ from the prospectus included in the
Registration Statement, the term Prospectus shall mean the prospectus filed
pursuant to Rule 424(b) (including documents incorporated by reference therein).
The Company will not file at any time any amendment or supplement to the
Registration Statement or the Prospectus without previous advice to the
Representative, nor if the same shall be reasonably objectionable in form or
substance to the Representative or its counsel.
(b) The Commission has not issued any order preventing or suspending the
use of any preliminary prospectus (the "Preliminary Prospectus") with respect to
the Series B Shares and each Preliminary Prospectus conformed in all material
respects with the requirements of the Act and the Rules under the Act and has
not included any untrue statement therein of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing shall not apply to
statements in, or omissions from, any written information furnished to the
Company by the Representative specifically for use in the preparation thereof.
(c) When the Registration Statement shall become effective and at all times
subsequent thereto, up to and including the Closing Date or the Option Closing
Date, as hereinafter defined, and when any post-effective amendment thereof
shall become effective, the Registration Statement and the Prospectus (and any
post-effective amendment thereof or the Registration Statement as supplemented)
will comply in all material respects with the applicable provisions of the Act
and the Rules under the Act with respect thereto and the Registration Statement
and the Prospectus and any further amendments or supplements thereto will
contain all statements which are required to be stated therein in accordance
with the Act and the Rules under the Act and neither the Registration Statement
nor the Prospectus will contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading in light of the circumstances in
which made; and when the Prospectus is filed with the Commission pursuant to
Rule 424(b) of the Rules under the Act and at all times subsequent thereto, up
to and including the Closing Date and the Option Closing Date, the Prospectus
(and the Prospectus as amended or supplemented, if the Company shall have filed
with the Commission any amendment thereof or supplement thereto) will comply
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in all material respects with the provisions of the Act and the Rules under the
Act and will not contain any untrue statement of a material fact and will not
omit to state any material fact required to be stated therein or necessary in
order to made the statements therein not misleading in light of the
circumstances in which made; provided, however, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information furnished
in writing to the Company by the Representative and the only such information is
the last paragraph of the cover page of the Prospectus and the information in
the Prospectus under the caption "Underwriting."
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company has no significant subsidiary or subsidiaries and does not control,
directly or indirectly, any significant corporation, partnership, joint venture,
association or other business organization, except for Nouveau Foods
International, Inc., Nouveau Vend International, Inc., Nouveau Equities, Inc.
and Nouveau International (PA), Inc. The foregoing companies are referred to
herein singly as a "Subsidiary" and collectively as the "Subsidiaries" except
where the context otherwise requires. Each Subsidiary has been organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation or formation. Each of the Company and each of its
Subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its or any of their
properties (owned, leased or licensed) or the nature of its or any of their
businesses makes such qualification necessary except where the failure to be so
qualified would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole. The Company owns all of the outstanding shares
of capital stock of each of its Subsidiaries free and clear of all liens,
claims, security interests, restrictions, stockholders' agreements, voting
trusts, and any other encumbrances; and all such shares of capital stock have
been duly authorized and are duly and validly issued, fully paid and
nonassessable. Each of the Company and each of the Subsidiaries has full power
and authority (corporate and other) to own or lease its properties and conduct
its business, present and proposed, as described in the Registration Statement
and Prospectus. Each of the Company and each of the Subsidiaries holds all
material licenses, certificates and permits from governmental authorities (both
domestic and foreign) necessary for the conduct of its or their businesses as
described in the Prospectus and owns, or possesses adequate rights to use all
material rights necessary for the conduct of its or their businesses and has not
received any written notice of conflict with the asserted rights of others in
respect thereof and does not know of any material proceeding pending or
threatened seeking to cancel, terminate, or limit such licenses, certificates or
permits.
(e) The financial statements and schedules (including the related notes)
included in the Registration Statement and the Prospectus present fairly the
financial position, results of operations, stockholders' equity and changes in
financial position of the Company and the Subsidiaries as of the respective
dates and for the respective periods indicated, all in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved.
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(f) The accountants who have examined and reported on the audited
financial statements filed with the Commission as parts of the Registration
Statement and the Prospectus are independent public accountants as required by
the Act and the Rules under the Act.
(g) Except as may be reflected in or contemplated by the Registration
Statement or the Prospectus and except for changes resulting from the normal
operation of the Company's and its Subsidiaries' businesses, subsequent to the
dates as of which information is given in the Registration Statement and the
Prospectus (i) there has not been any material adverse change in the financial
condition, in the results of operations or the general affairs of the Company
and its Subsidiaries taken as a whole; (ii) there has not been any material
transaction entered into by the Company or any of the Subsidiaries, other than
transactions in the ordinary course of business; (iii) neither the Company nor
any Subsidiary has incurred any material obligations, contingent or otherwise;
(iv) there has not been any change in the capital stock or long or short term
debt (except current payments) of the Company or the Subsidiaries; (v) there has
not been any issuance of options, warrants, convertible securities or other
rights to purchase the capital stock of the Company or any Subsidiary, and (vi)
there has not been any material adverse change or any development involving a
prospective material adverse change in the condition (financial or other),
business, key personnel, properties, prospective results of operations or net
worth of the Company and the Subsidiaries taken as a whole.
(h) Neither the Company nor any of its Subsidiaries is in violation of its
articles of incorporation or by-laws nor, except as disclosed in the
Registration Statement or Prospectus, in violation of any franchise, license,
permit, judgment, decree, order, statute, rule or regulation, which violation is
material to the Company and the Subsidiaries, taken as a whole, or in material
default in the performance or observance of any obligation, agreement or
condition contained in any note or other evidence of indebtedness or in any
mortgage, indenture or loan agreement or any other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or any of
their properties may be bound or affected in any respect which, in any such
case, is material to the Company and the Subsidiaries taken as a whole. The
Company has full right, power and authority to enter into and perform this
Agreement and to issue, sell and deliver the Series B Shares and the
Underwriters' Warrants to be issued and sold by it as provided in this
Agreement. The execution and delivery of this Agreement, the fulfillment of the
terms set forth herein and the consummation of the transactions contemplated
herein will not conflict with or constitute a breach of, or a default under, the
articles of incorporation or by-laws of the Company or any of its Subsidiaries
or any material agreement, or any material indenture or other material
instrument by which the Company or any of its Subsidiaries or any of their
properties may be bound, or any applicable material franchise, license, permit,
judgment, decree, orders, statute, rule or regulation. Except as required by
the Act, the Securities Exchange Act of 1934, as amended, (the "Exchange Act")
and applicable state securities laws, no consent, approval, authorization or
order of any governmental agency or governmental authority (domestic or foreign)
is required in connection with the consummation of the transactions contemplated
by this Agreement on the part of the Company or any Subsidiary where the failure
to obtain such consent, approval or authorization would have a material adverse
effect on the Company and its Subsidiaries taken as a whole.
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(i) Each contract to which the Company or any Subsidiary is a party and to
which reference is made in the Registration Statement and Prospectus has been
duly and validly executed by the Company or such Subsidiary, is in full force
and effect in accordance with its terms and none of such contracts has been
assigned by the Company or such Subsidiary, and the Company knows of no present
situation or condition or fact which would prevent compliance with the terms of
such contracts, as amended to date. Neither the Company nor any Subsidiary has
any intention of exercising any right which it may have to cancel any of its
rights or obligations under any of such contracts and has no knowledge that any
other party to any of such contracts has any intention not to render full
performance under such contracts except as contemplated by the Registration
Statement.
(j) Each of the Company and each of its Subsidiaries has filed all
Federal, state and foreign tax returns which are required to be filed by it or
validly filed extensions thereof, and has paid all taxes shown due on such
returns and all assessments received by it to the extent such taxes have become
due. All taxes with respect to which the Company and each of its Subsidiaries
is obligated have been paid or adequate accruals have been set up to cover any
such unpaid taxes which are not yet due. Nether the Company nor any Subsidiary
received any notice or claim indicating any deficiency in the payment of or
failure to pay any taxes.
(k) Each of the Company and each of its Subsidiaries has good and
marketable title, free and clear of all liens, encumbrances and defects, except
liens for current taxes not due and payable, to all of its properties and assets
which are stated to be owned by it in the Registration Statement and the
Prospectus, subject only to such liens and exceptions as are not material and
liens and encumbrances disclosed in the Prospectus. The properties, including
any equipment, stated to be leased by the Company or any Subsidiary in the
Registration Statement and the Prospectus are held under valid, subsisting and
enforceable leases with only such exceptions which collectively are not material
and do not have a material adverse effect on the present or prospective business
of, or the use of such property by the Company or any Subsidiary.
(l) The Company has an authorized outstanding capitalization as set forth
or contemplated in the Prospectus and based on sale of the Firm Shares will
have, on the Closing Date, the adjusted capitalization as set forth or
contemplated in such Prospectus under the caption "Capitalization"; all of the
outstanding shares of Preferred Stock and Common Stock of the Company have been
validly authorized and issued and are fully paid and non-assessable and none of
such outstanding shares of Preferred Stock or Common Stock or outstanding
warrants or options to purchase shares of Common Stock were issued in violation
of the pre-emptive rights of any stockholder of the Company; the Series B Shares
and the Underwriters' Warrants have been duly authorized and, when issued and
paid for pursuant hereto, the shares of Common Stock (the "Underlying Common
Shares") when issued upon conversion of the Series B Shares in accordance with
their terms, the Underlying Underwriters' Series B Shares when issued and paid
for upon exercise of the Underwriters' Warrants in accordance with their terms,
and the shares of Common Stock (the "Underlying Underwriters' Common Shares")
when issued upon conversion of the Underwriters' Series B Shares, will be
validly issued, fully paid and non-assessable, will pass valid title to the
holders thereof, free and clear of any lien, encumbrance or
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claim and all corporate action required to be taken for the authorization,
issuance and sale of the Series B Shares and the Underwriters' Warrants has been
validly and sufficiently taken; the holders of the outstanding shares of Common
Stock and Preferred Stock and the holders of the Series B Shares, the
Underwriters' Series B Shares and the Underlying Common Shares and the
Underlying Underwriters' Common Shares (collectively at times, the "Underlying
Securities") are not and will not be subject to any liability as shareholders.
Except as set forth in the Registration Statement or in the Prospectus, on the
effective date of the Registration Statement, the Closing Date and the Option
Closing Date there will be no pre-emptive or other rights to subscribe for or
purchase any of the shares of Preferred Stock, Common Stock, Series B Shares,
Underwriters' Warrants, Underwriters' Series B Shares or Underlying Securities,
or any options, warrants, agreements or similar rights calling for the issuance
by the Company of any of its securities.
(m) The Preferred Stock, Common Stock, Series B Stock, Underwriters'
Warrants, Underwriters' Series B Shares and the Underlying Securities conform to
the description thereof in the Prospectus and such description conforms with the
rights set forth in the instruments defining the same.
(n) Except as described in the Prospectus, there is no action, suit or
proceeding before any court or governmental agency, authority or body (domestic
or foreign) pending, or, to the knowledge of the Company, threatened, which
might result in judgments against the Company or any Subsidiary not adequately
covered by insurance and which collectively might result in any material adverse
change in the condition (financial or otherwise), business or prospects of the
Company and the Subsidiaries taken as a whole or materially affect their
properties or assets.
(o) The delivery upon payment for the Underwriters' Warrants to be sold by
the Company as set forth in Paragraph 11 of this Agreement will pass good and
marketable title thereto free and clear of any and all liens, encumbrances,
charges and claims whatsoever to the Underwriters, and their designees; and the
Company will have, on the effective date of the Registration Statement and at
the time of delivery of the Underwriters' Warrants, full legal right and power
and all authorization and approval required by law to sell, transfer and deliver
the Underwriters' Warrants in the manner provided hereunder.
(p) The Company does not know of any outstanding claim for services in the
nature of a finder's fee or origination fee with respect to the sale of the
Series B Shares hereunder resulting from its acts for which any Underwriter or
the Company may be responsible.
(q) There are no contracts or other documents which are required by the
Act to be filed as exhibits to the Registration Statement which have not been so
filed; and the exhibits which have been filed are complete and correct copies of
the documents of which they purport to be copies, and all agreements referred to
in the Registration Statement or filed as exhibits to the Registration Statement
to which the Company or any Subsidiary is a party or by which it is or may be
bound or to which any of its assets, properties or businesses is or may be
subject have been duly and validly authorized, executed and delivered by the
Company and constitute the legal, valid and binding agreements of the Company in
accordance with their respective terms
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and no default by the Company or to the knowledge of the Company of any other
party to said agreements or, any event which with the giving of notice or
passage of time would constitute a default, has occurred under any such
agreement.
(r) Each of the Company and each of the Subsidiaries makes and keeps
accurate books and records reflecting its assets and maintains internal
accounting controls which provide reasonable assurance that (i) transactions are
executed in accordance with management's authorization, (ii) transactions are
recorded as necessary to permit preparation of the Company's and the
Subsidiary's financial statements and to maintain accountability for the assets
of the Company and each Subsidiary, (iii) access to the assets of the Company
and each Subsidiary is permitted only in accordance with management's
authorization, and (iv) the recorded accountability of the assets of the Company
and each Subsidiary is compared with existing assets at reasonable intervals.
(s) The Company has the full right, power and authority to enter into this
Agreement and this Agreement has been duly and validly authorized, executed and
delivered by the Company and is a validly binding agreement enforceable in
accordance with its terms.
(t) Neither the Company, nor any Subsidiary, nor any Company predecessor
entity has at any time during the past five years; (i) made any unlawful
contributions to any candidate for political office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any state,
Federal or foreign government officer or official, or other person charged with
similar public or quasi-public duties (other than payments required or permitted
by applicable law).
(u) Except as set forth in the Prospectus, neither the Company nor any
Subsidiary maintains any "employee benefit plan" as defined in Section 3(3) of
the Employment Retirement Income Security Act of 1974, as amended, ("ERISA") and
to the best of the Company's knowledge and belief, after diligent investigation
and inquiry (A) there is no material liability of the Company or any Subsidiary
as a result thereof and (B) no "accumulated funding deficiency" (as defined in
Section 302 of ERISA) whether or not waived, exists with respect to any such
plan.
(v) The Company and its Subsidiaries have their properties adequately
insured.
(w) Except as set forth in the Prospectus, there are no actions, suits or
proceedings pending before or by any court or governmental agency, authority or
body, or any arbitrator, which is reasonably likely to result in any material
adverse change in the condition (financial or other), business prospects, net
worth or results of operations of the Company and the Subsidiaries, taken as a
whole and, to the best of the Company's knowledge, no such action, suit or
proceeding is contemplated or threatened.
(x) The Company has not taken and will not take, directly or indirectly,
any action designed to cause or result in, or which has constituted, the
stabilization or manipulation of the
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price of the Common Stock, the Series B Stock or any other outstanding security
to facilitate the sale or resale of the Series B Stock, the Underwriters'
Warrants or any underlying security, provided; however, that nothing herein
shall be construed as extending to any action of the Underwriters or Selected
Dealers.
(y) Except as set forth in the Prospectus, the Company and each Subsidiary
has all government approvals, grants or licenses (domestic and foreign)
necessary for the conduct of its business as described in the Prospectus and is
in compliance with all regulations relating to the same.
2. PURCHASE AND SALE OF THE SERIES B SHARES. (a) The Company agrees to
issue and sell to the several Underwriters listed on Schedule I hereto, and
subject to the terms and conditions set forth herein and, in reliance upon the
representations and warranties herein set forth, the several Underwriters agree
to purchase from the Company, the Firm Shares at a purchase price of $_.__ per
Firm Share.
(b) The Company further agrees that on the Closing Date, as hereinafter
defined, it will sell to the Representative and to such other persons designated
by it, the Underwriters' Warrants more particularly described in Paragraph 12 of
this Agreement.
3. DELIVERY AND PAYMENT. Delivery and payment for the Firm Shares shall
be made at the offices of Americorp Securities, Inc. or at the offices of its
Clearing Agent, in New York, New York on such date and at such time (such date
and time being herein sometimes referred to as the "Closing Date"), as the
Representative may specify in writing, but such date shall not be later than
seven (7) business days after the date on which the Registration Statement
becomes effective; provided, however, that if counsel for the Company or for the
Representative deems it necessary that either a further amendment to the
Registration Statement or supplement to the Prospectus be filed prior to the
Closing Date, the Closing Date shall be on a date to be thereafter fixed by the
Representatives on notice to the Company, such date to be not earlier than the
third business day, nor later than the tenth business day, after the effective
date of such amendment or the date of filing with respect to such supplemented
Prospectus. The Closing Date and the place of delivery may be changed by
written agreement between the Company and the Representative. Delivery of the
Firm Shares shall be made to the Representative against payment by the several
Underwriters of the purchase price for the Firm Shares to or upon the order of
the Company by certified or official bank check or checks payable in New York
Clearing House funds or by wire transfer of funds to the Company's designated
account.
The certificates for the Firm Shares to be delivered by the Company will be
in definitive, fully registered form, will bear no restrictive legends and will
be in such denominations and registered in such names as the Representative
shall request not less than two full business days prior to the Closing Date
(or, if no such request is made, in the names of the respective Underwriters in
the amount set forth opposite their respective names on Schedule I hereto), and
the certificates for the Firm Shares purchased hereunder will be made available
to the
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8Representatives or its clearing agents for inspection, checking and packaging
not later than one full business day prior to the Closing Date.
4. OPTION TO PURCHASE OPTIONAL SHARES. (a) For the purposes of covering
any over-allotments in connection with the distribution and sale of the Firm
Shares as contemplated by the Prospectus, you are hereby granted an option to
purchase all or any part of the Optional Shares from the Company. The purchase
price to be paid for the Optional Shares shall be the same price per Optional
Share as the price per Firm Share set forth in Paragraph 2 hereof. The option
granted hereby may be exercised as to all or any part of the Optional Shares at
any time, and from time to time, within 45 days after the date of the
Prospectus. You shall be under no obligation to purchase any or all of the
Optional Shares unless and to the extent such option is exercised.
(b) The option granted hereby may be exercised by you by giving
telegraphic notice to the Company setting forth the number of Optional Shares to
be purchased and the date and time for delivery of any payment for the Optional
Shares and stating that the Optional Shares referred to therein are to be used
for the purpose of covering over-allotments in connection with the distribution
and sale of the Firm Shares. If such notice is given prior to the Closing Date,
the date set forth therein for such delivery and payment may, at your option be
either the Closing Date or two full business days after such notice, whichever
occurs later. If such notice is given on or after the Closing Date, the date
set forth therein for such delivery and payment shall not be earlier than five
business days after the date of such notice. In either event, the date so set
forth shall not be more than ten full business days after the date of such
notice. The date and time set forth in such notice is herein sometimes referred
to as the "Option Closing Date." Upon exercise of the option, the Company shall
become obligated to deliver to you, and subject to the terms and conditions set
forth in Paragraph 4 (d) hereof, you shall become obligated to purchase the
respective number of Optional Shares set forth in the notice of exercise.
Payment for the Optional Shares shall be made to the Company by certified
or official bank check or checks payable in New York Clearing House funds, at
your offices, or at the offices of your clearing agent in New York City as set
forth in a notice delivered to the Company, or by wire transfer to an account
designated by the Company, against delivery of the Optional Shares to you. The
certificates representing the Optional Shares to be delivered will be in such
denominations and registered in such names as you shall request not less than
two full business days prior to the Option Closing Date, and will be made
available to you or your clearing agent for inspection, checking and packaging
at your aforesaid office, or at the offices of your clearing agent in New York
City not less than one full business day prior to the Option Closing Date.
(d) Your obligation to purchase and pay for any of the Optional Shares is
subject to the accuracy in all material respects of (as of the date hereof and
the applicable Option Closing Date) and compliance by the Company with the
representations and warranties herein, to the accuracy of the statements of the
officers of the Company made pursuant to the provisions hereof, to the
performance in all material respects by the Company of its obligations
hereunder, to the
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satisfaction by the Company of the conditions as of the Closing Date and of the
Option Closing Date set forth in Paragraph 7 hereof, and to the delivery to you
of opinions, certificates and letters dated the Option Closing Date
substantially the same in scope and substance to those specified in
subparagraphs (e), (f) and (g) of Paragraph 7 hereof, but with each reference to
"Firm Shares," "Series B Stock," and "Closing Date" to be, respectively, to the
Optional Shares and the Series B Stock included therein being sold and the
Option Closing Date.
5. OFFERING BY UNDERWRITERS. (a) After the Registration Statement
becomes effective the several Underwriters will offer the Series B Shares for
sale to the public upon the terms set forth in the Prospectus.
(b) The Representative is authorized to change the public offering price
and concessions and discounts to dealers, provided that no such change requiring
an amendment to the Prospectus will be made unless the Prospectus shall first
have been amended and such amendment declared effective.
6. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
Underwriter that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective and will advise the
Representative immediately and, if requested by the Representative, will confirm
such advice in writing (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective, or when any
supplement to the Prospectus or any amended Prospectus has been filed, (ii) of
any request by the Commission for any amendments or supplements to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the institution or threat of
any proceedings for that purpose, (iv) of the happening of any event which in
the judgment of the Company makes any material statement in the Registration
Statement or the Prospectus untrue or which requires any changes to be made in
the Registration Statement or the Prospectus in order to make any material
statements therein not misleading, and (v) of the suspension of the
qualification of the Firm Shares for offering or sale in any jurisdiction, or
the institution or threatening of any proceeding for that purpose. The Company
will use its best efforts (i) to prevent the issuance of any such stop order or
of any order preventing or suspending the use of the Registration Statement or
Prospectus and (ii) if issued, to obtain the lifting or removal of such order as
soon as possible.
(b) The Company will not at any time, whether before, on, or after the
effective date of the Registration Statement, file any amendment to the
Registration Statement or supplement to a Preliminary Prospectus or to the
Prospectus of which the Representative shall not previously have been advised
and furnished with copies, or to which the Representative shall have reasonably
objected in writing or which is not in compliance with the Act and the Rules
under the Act.
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(c) The Company will deliver to the Representative, without charge, a
reasonable number of copies of the Registration Statement, including all
financial statements and exhibits (four of which shall be signed) and include
all exhibits filed therewith and any amendments or supplements thereto. Two
conformed copies of the Registration Statement, including all financial
statements and exhibits filed therewith shall also be delivered to each
Underwriter.
(d) Prior to the effective date of the Registration Statement, the Company
will have delivered to each Underwriter, without charge, in such quantities as
the Representative may have requested, copies of each form of Preliminary
Prospectus. The Company consents to the use of each form of Preliminary
Prospectus by the Underwriters, and by dealers prior to the effective date of
the Registration Statement in conformity with the Act and State Blue Sky Laws.
(e) The Company will deliver to each Underwriter and each Selected Dealer,
without charge, immediately after the effective date of the Registration
Statement and thereafter from time to time as many copies as they may reasonably
request of the Prospectus and of any amended or supplemented Prospectus.
(f) If during such period of time as in the opinion of the Representative
or its counsel a prospectus relating to this financing is required to be
delivered under the Act, due to the occurrence of any event as a result of which
the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or if it shall be necessary during any time after the
effective date of the Registration Statement to amend or supplement the
Prospectus to comply with the Act or the Rules under the Act, the Company will
forthwith notify the Representatives and their counsel thereof and prepare and
file with the Commission and furnish and deliver to each Underwriter and to
others whose names and addresses are designated by the Representative, all at
the cost of the Company, reasonable quantities of the amended or supplemented
Prospectus which as so amended or supplemented will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the Prospectus as amended or supplemented not misleading in the
light of the circumstances when it is delivered to a purchaser or prospective
purchaser, and which will comply in all respects with the Act and the Rules
under the Act, and cause any amendment of the Registration Statement containing
an amended Prospectus to be made effective as soon as possible.
(g) For a period of five years from the effective date of the Registration
Statement, the Company will deliver to the Representative (i) after each fiscal
year, the Company's Form 10-K with respect to such year at the time such Form
10-K is filed with the Commission and, if no Form 10-K is required to be filed,
such financial data with respect to such year as would be required to be filed
by the Company with the Commission pursuant to the instructions to Form 10-K
under the Exchange Act, prepared in accordance with generally accepted
accounting principles and practices as at the end of such fiscal year and for
the twelve months then ended, and covered by a report of independent certified
public accountants; (ii) after each of the first three fiscal quarters of the
Company, the Company's Form 10-Q with respect to such quarter at
11
the time such form 10-Q is filed with the Commission and, if no Form 10-Q is
required to be filed, such financial data with respect to such quarter as would
be required to be filed by the Company with the Commission pursuant to the
instructions to Form 10-Q under the Exchange Act, all in reasonable detail and
certified by the Company's principal financial or accounting officer; (iii)
copies of its annual report and any other reports or communications (financial
or other) of the Company at the time it is mailed to its stockholders or filed
with the Commission; (iv) two copies of every press release and every material
news item and article in respect of the Company and its affairs at the time it
is released by the Company; (v) copies of transfer reports from its transfer
agent; and (vi) such additional documents and information with respect to the
Company and its affairs as the Representative may from time to time reasonably
request.
(h) The Company will make generally available to its stockholders, in the
manner specified in Rule 158(b) under the Act, and deliver to the Representative
as soon as practicable, but in no event later than 45 days after the end of its
first fiscal quarter ending 12 months after the effective date of the
Registration Statement, a consolidated earnings statement (which need not be
audited) meeting the requirements of said Rule 158(b) covering a period of at
least twelve months beginning not earlier than the effective date of the
Registration Statement.
(i) The Company will use the net proceeds to be received by it from the
sale of the Firm Shares in the manner and for the purposes set forth in the
Prospectus.
(j) The Company will deliver to the Representative true and correct copies
of the Company's articles of incorporation and all amendments thereto, such
copies to be certified by the secretary of the Company; true and correct copies
of the By-Laws of the Company and of the minutes of all meetings of the
directors and stockholders of the Company held prior to the Closing Date; and
true and correct copies of all material contracts to which the Company is a
party.
(k) Prior to the public offering of the Firm Shares the Company will
cooperate with the Representative and its counsel in connection with the
registration or qualification of the Firm Shares, Optional Shares, the
Underwriters' Warrants, the Underwriters' Series B Shares, and the Underlying
Securities for offering and sale by the Underwriters and dealers under the
securities or Blue Sky laws of such states as the Representative may designate
and will file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification. The Company
shall bear the expenses incurred in filing for qualification and in qualifying
the Firm Shares, Optional Shares, the Underwriters' Warrants, the Underwriters'
Series B Shares and the Underlying Securities under the securities or Blue Sky
laws of such states, including the fees and charges of the various states, the
cost of printed preliminary, supplementary and final memoranda or surveys with
respect thereto, and the reasonable fees and expenses of the Underwriters'
counsel incurred in connection therewith. The Company shall not be required
however, to qualify as a foreign corporation or sign a general consent to
service of process in any jurisdiction where it is not now subject. In each
jurisdiction where any of its securities shall have been qualified, the Company
will file such reports and statements with respect thereto as may be required by
the applicable governmental or administrative body.
12
(l) During the period from the Closing Date to the Date the exercise
rights represented by the Underwriters' Warrants or the conversion rights of the
underlying Underwriters' Series B Shares either have been fully exercised or
have lapsed, the Company will at all times have authorized and reserved a
sufficient number of shares of its Series B Stock and underlying Common Stock to
provide for the exercise of the Underwriters' Warrants and the conversion of the
Underwriters' Series B Shares.
(m) The Company will pay and bear, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective, or is terminated, all costs and expenses incident to the
performance of its obligations under this Agreement, including all expenses
incident to the authorization of the Series B Shares and their issuance and
delivery to the Underwriters, the authorization of the Underwriters' Warrants
and their sale to the Representative, any original issue taxes in connection
therewith, all transfer taxes, if any, incident to the initial sale of the
Series B Shares to the several Underwriters and to the initial sale of the
Series B Shares by the Underwriters to the public and to Selected Dealers, the
fees and expenses of the Company's counsel and accountants (but excluding fees
and expenses of Counsel to the Underwriters, except where such Counsel shall
have acted as "blue sky" Counsel to the Company), the costs and expenses
incident to the issuance, sale and delivery of the Series B Shares, the
Underwriters' Warrants and the underlying shares, the costs and expenses
incident to the preparation, printing and filing under the Act of the
Registration Statement (including financial statements), any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto; the
printing and distribution of this Agreement, the Agreement Among Underwriters,
the Selected Dealer Agreement, the Blue Sky survey, the Underwriters' Warrant
Agreement, the certificates for the Series B Shares and the Underwriters'
Warrants, the filing fees of the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc. and any state regulatory
agencies, the cost of preparing and filing all exhibits to the Registration
Statement and the cost of furnishing to the Underwriters copies of the
Registration Statement and Prospectus.
(n) The Company will pay to the Representative a non-accountable expense
allowance equal to $_.__ per share for each Series B Share (Firm Share and
Optional Share) sold to the Underwriters pursuant to this Agreement. The
expense allowance is to be paid out of the proceeds of the sale of the Series B
Shares and may be deducted by the Representative on the Closing Date, and the
Optional Closing Date from the amount due to the Company.
(o) Prior to the Closing Date, the Company will cooperate with the
Representative in such investigation as the Representative may make or cause to
be made of the properties, business and operations of the Company in connection
with the purchase and public offering of the Series B Shares and will make
available to the Representative in connection therewith such information as the
Representative may request in connection with the business or properties of the
Company.
(p) The Company has appointed Continental Stock Transfer and Trust Company
as Transfer Agent for the Series B Stock. Such appointment may be changed only
if the proposed new appointee is reasonably acceptable to the Representative.
13
(q) Except as set forth in the Prospectus, during a period of 180 days
from the effective date of the Registration Statement, the Company will not
issue, sell or otherwise dispose of, directly or indirectly, any Common Stock,
Preferred Stock, Series B Stock (or any securities convertible into or
exercisable to purchase Common Stock, Preferred Stock and/or Series B Stock)
other than the Series B Stock and Underwriters' Warrants and underlying shares
being sold by the Company hereunder or securities issued pursuant to outstanding
options or warrants, without the Representative's prior written consent.
(r) The Company will deliver to the Representative on the Closing Date,
the agreement of the persons set forth on Schedule II to this agreement not to
sell securities of the Company for the period set forth on Schedule II hereto.
(s) The Company will comply with the Act, Rules under the Act and the
Exchange Act and the rules and regulations of the Commission promulgated under
the Exchange Act so as to permit the continuance of sales of, and dealings in,
the Series B Stock, Underwriters' Warrants and Underlying Securities under the
Act and under the Exchange Act.
(t) The Company will use its best efforts to cause the Series B Stock and
the Common Stock to be admitted for separate listing on NASDAQ upon or prior to
the effective date of the Registration Statement, and to maintain the listings
on NASDAQ during the period the respective securities are outstanding or for a
period of five years, whichever first occurs.
(u) The Company will deliver to the Representative and its counsel named
on the cover page of the Registration Statement bound volumes of copies of all
documents and appropriate correspondence filed or received from the Commission
and all closing documents.
(v) The Company agrees, that for a period of three years following the
Closing it will engage a single designee selected by the Representative as an
advisor to its Board of Directors and such advisor shall be entitled to the same
notice as members of the Board of Directors or any committee of the Board of
Directors of the Company of any meetings thereof, and to attend all meetings of
such Board of Directors and/or committees and shall be reimbursed for all
reasonable costs in attending such meetings including, but not limited to, food,
lodging and transportation. Such advisor shall also be entitled to receive all
memoranda, reports and other documents distributed to members of the Board or
such committees subject to the execution by the advisor of reasonable non-
disclosure agreements, and to be indemnified to the same extent as the Company's
directors.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of each
Underwriter to purchase and pay for the Series B Stock set forth opposite its
name on Schedule I hereto is subject to the continuing accuracy of and
compliance with the representations and warranties on the part of the Company
contained herein as of the date hereof and as of the Closing Date, to the
performance by the Company of its obligations and covenants hereunder, to the
absence from any certificates, opinions, written statements or letters furnished
to the Representative or to its counsel
14
of any misstatement or omission that is material to the purchase of the Series B
Stock by the several Underwriters and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
9:30 P.M., New York time, on the day after the date of this Agreement, or such
later date or time as shall have been consented to by the Representative; no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
shall be pending, threatened or contemplated by the Commission; and any request
for additional information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with, and no amendments or supplements to the Registration Statement or
Prospectus shall have been filed to which the Representative and its counsel
have not given their consent.
(b) All corporate action taken and all legal opinions and proceedings
relating to the Series B Shares, the Underwriters' Warrants, the Underwriters'
Series B Shares and the Underlying Securities, the Registration Statement and
the Prospectus and all other matters incident thereto and to the transactions to
which this Agreement relate shall be reasonably satisfactory to Underwriters'
counsel and they shall have been furnished with such certificates, documents and
information as they may request in this connection.
(c) The Company shall have performed each of the agreements herein
contained and required to be performed by it at or prior to the Closing Date and
the Option Closing Date.
(d) On the Closing Date and Option Closing Date (i) the Registration
Statement and the Prospectus and any amendments or supplements thereto shall
contain all statements which are required to be stated therein in accordance
with the Act and the Rules under the Act and shall in all material respects
conform to the requirements of the Act and the Rules under the Act and neither
the Registration Statement nor the Prospectus nor any amendment or supplement
thereto shall 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, (ii) since the respective dates as of which
information is given in the Registration Statement and the Prospectus there
shall have been no material adverse changes in the business, property or
financial condition of the Company and its Subsidiaries from that set forth in
the Registration Statement and the Prospectus other than changes occurring in
the ordinary course of business, and there shall have been no material
transaction, contract or agreement entered into by the Company or any Subsidiary
which is not referred to in the Registration Statement and the Prospectus, (iii)
no action, suit or proceeding at law or in equity shall be pending or, to the
knowledge of the Company, threatened against the Company or any Subsidiary which
would be required to be set forth in the Registration Statement and the
Prospectus other than as set forth therein, and no proceedings shall be pending
or, to the knowledge of the Company, threatened against the Company or any
Subsidiary before or by any Federal, state or other (including foreign)
commission, board or administrative agency wherein an unfavorable decision,
ruling or finding would have a material adverse effect upon the business,
property, financial condition or income of the Company and the Subsidiaries
taken as a whole except as disclosed in the Prospectus and
15
(iv) neither the Company nor any Subsidiary shall have declared or made any
payments of dividends or made any acquisitions of capital stock or made any
other distribution on outstanding shares of capital stock other than as set
forth in the Registration Statement (except for distributions made to the
Company by a Subsidiary).
(e) The Representative shall receive on, and as of the Closing Date and
the Option Closing Date, the favorable opinion of Brock, Fensterstock,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLC, counsel for the Company, to the
Representative in form and substance satisfactory to counsel to the
Underwriters, to the effect that:
(i) the Company is a corporation in good standing, duly organized and
validly existing under the laws of the state of its incorporation, and is
authorized by its Certificate of incorporation and by-laws to own its
properties and to conduct its business, as set forth in the Prospectus;
(ii) to the best of such counsel's knowledge, the sole subsidiaries of
the Company are Nouveau Foods International, Inc., Nouveau Vend
International, Inc., Nouveau Equities, Inc. and Nouveau International (PA),
Inc., all of the outstanding capital stock of which are wholly owned by the
Company, and each such Subsidiary is a corporation in good standing, duly
organized and validly existing under the laws of the state of its
incorporation, and is authorized by its Certificate of Incorporation and
by-laws to own its properties and to conduct its business as set forth in
the Prospectus;
(iii) to the best of such counsel's knowledge, the Company and each of
its Subsidiaries is duly qualified to transact the business in which it is
engaged and is in good standing in each jurisdiction in which its ownership
or lease of property requires such qualification or registration, except in
those jurisdictions where the failure to be so qualified would not, taken
in the aggregate, have a material adverse effect on the business, financial
condition or results of the Company and the Subsidiaries taken as a whole;
(iv) the Company has an authorized capitalization as set forth in the
Registration Statement; all of the outstanding shares of Preferred Stock
and Common Stock of the Company have been duly and validly authorized and
issued and all of the outstanding shares of Preferred Stock and Common
Stock are fully paid and non-assessable. The outstanding shares of
Preferred Stock and Common Stock are not, and the Series B Shares and
Underwriters' Warrants (including the underlying securities) to be sold by
the Company hereunder are not subject to the preemptive right of any
shareholder of the Company. The Series B Shares to be sold by the Company
have been validly authorized and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set forth
herein, will be fully paid and non-assessable; the Underwriters' Warrants
to be sold by the Company have been validly authorized and issued and
represent the valid and binding obligations of the Company enforceable in
accordance with their terms, subject as to enforcement of remedies to the
discretion of a court with respect to the granting of equitable relief and
to applicable bankruptcy,
16
insolvency, moratorium and other laws now or hereafter in effect affecting
the rights of creditors generally; and the Underwriters' Series B Shares
underlying the Underwriters' Warrants and the shares of Common Stock
issuable upon conversion of the Series B Shares and the Underwriters'
Series B Shares have been validly authorized and reserved for issuance and
when issued upon exercise of the Underwriters' Warrants or upon conversion
of the Series B Shares or the Underwriters' Series B Shares, as the case
may be, will be validly issued and will be fully paid and non-assessable;
(v) the Preferred Stock, Series B Shares, Common Stock and Warrants
(including Underwriters' Warrants) of the Company conform as to legal
matters to the description thereof contained in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same, and the certificates for the Series B Shares and Underwriters'
Warrants delivered at the Closing are in due and proper form;
(vi) this Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company enforceable in accordance with its terms, subject as to enforcement
of remedies, to the discretion of a court with respect to the application
of equitable principles and to applicable bankruptcy, insolvency,
moratorium and other laws now or hereafter in effect affecting the rights
of creditors generally and except that such counsel need not express an
opinion with respect to the indemnification and contribution provisions set
forth in Paragraphs 8 and 9 of this Agreement; the Company has the legal
power to sell and deliver the Series B Shares and Underwriters' Warrants
pursuant to the provisions of this Agreement; the execution, performance
and delivery of this Agreement and the consummation of the transactions
contemplated in this Agreement to be performed by the Company do not
conflict with, result in a breach of, or constitute a default under the
Company's certificate of incorporation, by-laws, or to the best of such
counsel's knowledge a breach or default under any material indenture,
mortgage, deed of trust, voting trust agreement, note agreement or other
agreement or instrument to which the Company or any Subsidiary is a party
or, to the best of such counsel's knowledge, any statute, order, rule or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company other than "blue
sky" or state securities laws as to which counsel need not express an
opinion;
(vii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the performance by the Company
of the transactions contemplated in this Agreement to be performed by it
except for such consents, approvals, authorizations or orders as need be
obtained under the Act and such as may be required under the securities
laws of any jurisdiction in connection with the purchase and distribution
of the Series B Shares by the Underwriters;
(viii) the Registration Statement has become effective under the Act,
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been
17
instituted or are pending or threatened; and to the best of such counsel's
knowledge, the Registration Statement, the Prospectus and each amendment
thereof or supplement thereto (except for the financial statements and
notes thereto and other financial and statistical information included
therein as to which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and the Rules
under the Act;
(ix) (A) such statutes, contracts and documents as are summarized in
the Registration Statement fairly present the information required to be
shown with respect thereto (other than in the financial statements and
notes thereto and other financial and statistical information included
therein as to which such counsel need express no opinion); and (B) such
counsel does not know of (x) any contracts or documents required to be
summarized or disclosed in the Registration Statement (with the same
exception as in subclause (A)); or required to be filed as exhibits to the
Registration Statement which have not been so summarized, disclosed or
filed, or (y) any legal or governmental proceedings pending or, to the best
of such counsel's knowledge, threatened against or involving the properties
or the business of the Company or the Subsidiaries of a character required
to be disclosed in the Registration Statement and the Prospectus which have
not been so disclosed.
Such opinion shall also include a statement of such counsel that nothing
has come to their attention to cause them to believe that (except for (i) the
financial statements, and (ii) matters set forth under the caption
"Underwriting" as to which such counsel need not express any belief) the
Registration Statement and the Prospectus included therein at the time the
Registration Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented, if applicable, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
In rendering the foregoing opinion, such counsel may rely, as to any
matters of fact upon which such opinion is predicated, on certificates and
written statements of state officials and certificates and written statements of
officers and representatives of the Company and other responsible persons, in
each case to the extent deemed appropriate by such counsel. Copies of all such
certificates shall be furnished to counsel for the Underwriters on the Closing
Date. Such counsel may also rely, as to matters involving the laws of any
jurisdictions other than the States of Delaware or New York or the United States
of America, upon opinions of local counsel whom they believe to be reliable and
who are satisfactory to Underwriters' Counsel. The opinion of such counsel for
the Company shall state that the opinion of any such other counsel (whose
opinion shall be annexed to Company counsel's opinion) is in form satisfactory
to such counsel and, in their opinion, the Underwriters are justified in relying
thereon.
(f) At the time this Agreement is executed and at the Closing Date and the
Option Closing Date, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company, LLP shall have furnished to
the Underwriters
18
letters dated respectively as of the date of this Agreement and as of the
Closing Date and Option Closing Date in form and substance satisfactory to the
Representative, confirming that they are independent public accountants within
the meaning of the Act and the Rules under the Act, and stating in effect that:
(i) in their opinion, the audited consolidated financial statements
and related financial statement schedules examined by them included or
incorporated by reference in the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the Rules under the Act;
(ii) on the basis of a reading of and a review of as set forth above
of the latest available interim consolidated financial statements of the
Company subsequent to the date of their audit, inspection of the minute
books of the Company since the date of audit and consultations with and
inquiries of officers or other persons responsible for financial and
accounting matters of the Company as to transactions and events since
September 30, 1996 nothing has come to their attention which would cause
them to believe that during the period from September 30, 1996 to a
specified date not more than three business days prior to the date of this
Agreement and each of the Closing Date and Option Closing Date,
respectively, there has been any change in the capital stock or
consolidated long term debt of the Company, or decreases in consolidated
net current assets or net assets compared with the amounts shown in the
September 30, 1996 audited consolidated balance sheet included in the
Registration Statement, except in all instances as set forth in or
contemplated by the Registration Statement; and
(iii) in addition to their examinations referred to in their report
included in the Prospectus and the procedures, consultations and inquiries
referred to above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain dollar amounts, numbers of
shares and percentages, which are derived from the accounting records of
the Company and are subject to the internal controls of the Company's
accounting system, and which appear in the Prospectus under the captions
"Prospectus Summary," "Summary Financial Information," "Ratio of Earnings
to Fixed Charges and Preferred Stock Dividends," "Risk Factors," "Use of
Proceeds," "Dilution," "Capitalization," "Selected Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business," "Management - Executive Compensation," "Principal
and Selling Stockholders," "Certain Transactions" and "Concurrent Sales by
Selling Stockholders," and they have compared such dollar amounts, number
of shares, and percentages with such accounting records, and have found
them to be in agreement therewith;
(g) The Representative shall have received on the Closing Date and Option
Closing Date certificates, dated as of the Closing Date and the Option Closing
Date signed by the Chairman of the Board and the President of the Company
certifying that:
19
(i) No stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose are pending or
are, to their knowledge, threatened by the Commission;
(ii) They do not know of any litigation instituted or threatened
against the Company or any Subsidiary of a character required to be
disclosed in the Registration Statement which is not disclosed therein;
they do not know of any contracts which are required to be summarized in
the Prospectus which are not so summarized; and they do not know of any
material contracts required to be filed as exhibits to the Registration
Statement which are not so filed;
(iii) Neither the Registration Statement nor the Prospectus as amended
or supplemented, if amended or supplemented, contains an untrue statement
of any material fact required to be stated therein or necessary to make the
statements therein not misleading; and, since the effective date of the
Registration Statement, to the best of their knowledge, there has occurred
no event required to be set forth in an amended or supplemented Prospectus
which has not been so set forth;
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
material adverse change in the condition of the Company or any Subsidiary,
financial or otherwise, or in the results of its operations, except as
reflected in or contemplated by the Registration Statement and the
Prospectus, and except as so reflected or contemplated since such date
there has not been any material transaction entered into by the Company or
any Subsidiary;
(v) Neither the Company nor any Subsidiary is delinquent in the filing
of any federal, state and municipal or other jurisdiction (domestic or
foreign) tax return or in the payment of any federal, state or municipal or
other jurisdiction (domestic or foreign) taxes; they know of no proposed
redetermination or re-assessment of taxes, adverse to the Company and its
Subsidiaries; and the Company and each of its Subsidiaries has paid or
provided by adequate reserves for all known tax liabilities;
(vi) They know of no material obligation or liability of the Company
or any of its Subsidiaries, contingent or otherwise, not disclosed in the
Registration Statement and Prospectus;
(vii) This Agreement, the consummation of the transactions herein
contemplated, and the fulfillment of the terms hereof, will not result in a
material breach by the Company or any Subsidiary of any terms of, or
constitute a material default under, the Company's Certificate of
Incorporation or By-Laws, or any material indenture, mortgage, lease, deed
of trust, bank loan or credit agreement or any other agreement or
undertaking of the Company or any Subsidiary;
20
(viii) The financial statements and schedules filed with and as part
of the Registration Statement present fairly the financial position of the
Company and its Subsidiaries as of the dates thereof, all in conformity
with generally accepted principles of accounting applied on a consistent
basis throughout the periods involved;
(ix) Except as otherwise set forth in the Registration Statement and
the Prospectus, all material licenses, approvals or permits from Federal,
state, local and/or foreign governmental agencies having jurisdiction over
the Company and its Subsidiaries required for the conduct or any material
aspect of the business or operations of the Company and its Subsidiaries
have been obtained and are outstanding and there are no proceedings pending
or to their knowledge, threatened, to seek to compel, terminate or limit
such licenses, approvals or permits;
(x) Neither the Company nor any Subsidiary has sustained an insured or
uninsured loss on account of fire, flood, accident or other calamity;
(xi) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, except as may otherwise
be referred to therein, neither the Company nor any Subsidiary has prior to
the Closing Date, either (i) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money, (ii)
entered into any material transaction other than in the ordinary course of
business, or (iii) declared, paid or made any dividend or distribution of
any kind on its capital stock;
(xii) All representations and warranties set forth in this Agreement
are true and correct as of the date hereof and the Company has complied
with all of its agreements herein contained to be performed on its part on
or before the Closing Date; and
(xiii) No order suspending the sale of the Series B Shares prior to
the Closing Date in any jurisdiction designated to the Company pursuant to
Paragraph 6(k) hereof has been issued on or prior to the Closing Date and
no proceedings for that purpose have been instituted or, to the knowledge
of such officers, shall have been or shall be threatened.
(h) The Company shall have performed each of the agreements herein
contained and required to be performed by it at or prior to the Closing Date.
The Company shall have furnished to the Representative such other and
further certificates, documents, and opinions as the Representative may
reasonably request (including certificates of officers) as to the accuracy, at
and as of the Closing Date and the Option Closing Date, of the representations
and warranties of the Company herein, as to the performance by the Company of
its obligations hereunder, and as to other conditions concurrent and precedent
to the Underwriters' obligations hereunder.
21
Any certificate signed by an officer of the Company and delivered to the
Representative or its counsel will also be deemed a representation and warranty
by the Company to each of the several Underwriters as to the statements made
therein.
If any of the conditions specified in this Paragraph 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to the Representatives or to
their counsel pursuant to this Paragraph 7 shall not be in all material respects
reasonably satisfactory in form, and substance to the Representative and to its
counsel, this Agreement and all obligations of the Underwriters hereunder may be
cancelled at, or at any time prior to, the consummation of the Closing by the
Representative. Notice of such cancellation shall be given to the Company in
writing, or by telegraph confirmed in writing.
8. INDEMNIFICATION. (a) The Company agrees to indemnify and hold harmless
each Underwriter, its officers, directors, employees and agents and each person,
if any who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act (the "Exchange Act"), against any all loss,
liability, claim, damage and expense whatsoever (including but not limited to
attorneys' fees and any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) caused by any untrue or alleged untrue
statement of a material fact contained (i) in any Preliminary Prospectus, the
Registration Statement or the Prospectus (as from time to time amended or
supplemented) or (ii) in any application or other document or communication (in
this Paragraph 8 collectively called "application") executed by or on behalf of
the Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Series B Shares or the
Underwriters' Warrants or the component or underlying securities thereof 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, unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus, or any amendment or supplement thereof or
in any communication to the Commission, any jurisdiction or any securities
exchange, as the case may be.
If any action is commenced against any Underwriter or any of its officers,
directors, employees, agents or controlling persons (an indemnified party) in
respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such indemnified party or parties shall promptly notify the
indemnifying party in writing of the commencement of such action and the
indemnifying party shall assume the defense of such action, including the
employment of counsel (satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case but the fees and expenses of
such counsel shall be borne by such indemnified party or parties unless the
employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such action or the
22
indemnifying party shall not have employed counsel to take charge of the defense
of such indemnified party or parties or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the indemnifying
party. Anything in this paragraph to the contrary notwithstanding, the Company
shall not be liable for any settlement of any such claim or action effected
without its written consent. The Company agrees promptly to notify the
Underwriters of the commencement of any litigation or proceeding against the
Company or any of its officers or directors in connection with the sale of the
Series B Shares or in connection with such Registration Statement or Prospectus.
With respect to any untrue statement or alleged untrue statement made in, or
omission or alleged omission from, any Preliminary Prospectus, the indemnity
agreement contained in this Paragraph 8 (a) with respect to such Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting the claim with respect to which such indemnification is sought
hereunder purchased Series B Shares if the Prospectus (or the Prospectus as
amended or supplemented if the Company shall have made any amendments thereof or
supplements thereto which shall have been furnished to such underwriter prior to
the time of the confirmation of such sale) does not contain such statement,
alleged statement, omission or alleged omission and a copy of such Prospectus
shall not have been sent or given to such person at or prior to the written
confirmation of such sale to such person.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers of the
Company who shall have signed the Registration Statement and each other person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to the several Underwriters, but only with respect to
statements or omissions if any, made, in any preliminary prospectus, the
Registration Statement or Prospectus or any amendment or supplement thereof or
in any application in reliance upon and in conformity with, written information
furnished to the Company with respect to any Underwriter by or on behalf of such
Underwriter expressly for use in any preliminary prospectus, the Registration
Statement or Prospectus or any amendment or supplement thereof or in any
application, as the case may be. The statements set forth in the last paragraph
of the cover page and under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters expressly for use in any preliminary prospectus, the
Registration Statement or the Prospectus, as the case may be. In case any action
shall be brought against the Company, or any other person so indemnified based
on any preliminary prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereof or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Company, and the Company, and each other person
so indemnified shall have the rights and duties given to the several
Underwriters by the provisions of subsection (a) above.
23
9. CONTRIBUTION. (a) In order to provide for just and equitable
contribution under the Act in any case in which (i) a party to this Agreement,
its officers, directors, employees and agents and each person who controls the
party within the meaning of the Act or the Exchange Act makes claim for
indemnification pursuant to Paragraph 8 hereof but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not -be enforced in such case notwithstanding the
fact that Paragraph 8 provides for indemnification in such case or (ii)
contribution under the Act may be required on the part of such Underwriter or
any such controlling person in circumstances for which indemnification is
provided under Paragraph 8, then, 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 contribution from others) in
such proportion so that the Underwriter is responsible for an aggregate of _%
(being the percentage of the initial public offering price of the Series B
Shares represented by such Underwriter's commission and discount) and the
Company is responsible for the remaining portion; provided, however, 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.
(b) Promptly after receipt by any party to this Agreement of notice of the
commencement of any action, suit or proceeding, such party will, if a claim for
contribution in respect thereof is to be made against another party
("contributing party"), notify the contributing party of the commencement
thereof; but the omission to so notify the contributing party will not relieve
it from any liability which it may have to any other party other than for
contribution under the Act. In case any such action, suit or proceeding is
brought against any party, and such party notifies a contributing party of the
commencement thereof, the contributing party will be entitled to participate in
the defense thereof with the notifying party and any other contributing party
similarly notified.
10. DEFAULT BY AN UNDERWRITER. If any one or more underwriters shall fail
to purchase and pay for all of the Series B Shares agreed to be purchased by
such Underwriter or Underwriters at the Closing Date and such failure shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the number of Series B Shares
to be purchased from the Company set forth opposite the names of the remaining
Underwriters in Schedule I hereto bear to the aggregate number of such Series B
Shares set opposite the names of the remaining Underwriters) the Series B Shares
set forth in Schedule I opposite the names of the defaulting Underwriter or
Underwriters; provided, however, that in the event that the aggregate number of
Series B Shares which the defaulting Underwriter or Underwriters agreed but then
failed to purchase shall exceed 10% of the aggregate number of the Series B
Shares to be purchased at the Closing Date, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of such Series B Shares, and if such non-defaulting Underwriters
do not purchase all such Series B Shares, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company except as
provided in Paragraphs 8 and 9 hereof. In the event of a default by any
24
Underwriter as set forth in this Paragraph 10, the Closing Date shall be
postponed for such period, not exceeding seven business days as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing herein contained shall relieve any
defaulting Underwriter of its liabilities, if any, to the Company and to any
non-defaulting Underwriter for damages occasioned by its default hereunder.
11. TERMINATION. (a) This Agreement shall become effective at 9:30 A.M.,
New York time, on the first full business day following the day on which the
Registration statement becomes effective or at the time of the initial public
offering by the several Underwriters of, the Series B Shares, whichever is
earlier. The time of the initial public offering, for the purpose of this
Paragraph 11, shall mean the time, after the Registration Statement becomes
effective, or the release by the Representative for publication of the first
newspaper advertisement which is subsequently, published relating to the Series
B Shares or the time, after the Registration Statement becomes effective, when
the Series B Shares are first released by the Representative for offering by the
Underwriters or Selected Dealers by letter or telegram, whichever shall first
occur. The Representative, or the Company may prevent this Agreement from
becoming effective by giving the notice indicated below in this Paragraph 11
before the time this Agreement becomes effective.
(b) In addition to the provisions of Paragraph 7, 10 and 11 hereof, this
Agreement shall be subject to termination in the absolute discretion of the
Representative, by notice given to the Company prior to the Closing Date and the
Option Closing rate, if prior to such time, (i) the Company or any Subsidiary
sustains a material loss, whether or not insured, by reason of fire, flood,
accident or other calamity, which, in the opinion of the Representative,
substantially affects the value of the property of, or materially interferes
with the operation of the business of the Company and the Subsidiaries, taken as
a whole, (ii)trading in securities on the New York Stock Exchange, Inc. or the
American Stock Exchange, Inc. has been suspended or limited or minimum prices
have been established on either such exchange other than normal limitations,
(iii) a banking moratorium shall have been declared, either by Federal or state
authorities, (iv) any new enactment, publication decree, other promulgation, or
other restriction of or imposed by any federal, state, regulatory or self
regulatory body or order of any court or any other governmental authority
whether United States or foreign which in the judgment of the Representative
materially adversely affects the business or operations of the Company and the
Subsidiaries taken as a whole, or materially adversely affects the distribution
of the Series B Shares shall have become effective, (v) trading in any
securities of the Company shall have been suspended or halted by any national
securities exchange or the Commission, (vi) the market value of securities in
general or political financial or economic conditions shall have so materially
changed as, in the judgment of the Representative, shall render it impracticable
to offer for sale or to enforce contracts made by the Underwriters for the
resale of the Series B Shares agreed to be purchased hereunder, (vii) in the
reasonable opinion of the Representative, there exists materially adverse market
conditions in the over-the-counter market as in the judgment of the
Representative, makes it unadvisable to proceed with the delivery of the Series
B Shares or (viii) in the sole discretion of the Representative, any material
adverse change has occurred since the dates as of which information
25
is given in the Registration Statement or Prospectus, in the earnings, business,
condition of the Company or any Subsidiary (financial or otherwise) net worth,
results of operations, key personnel or assets of the Company or any Subsidiary,
whether or not arising in the ordinary course of business; provided, however,
that the provisions of Paragraphs 6(m), 8 and 9 hereof shall survive such
termination. However, in the event that the offering is terminated hereunder,
for any reason in the willful control of the Company, the Company shall be
responsible for the payment to the Representative, of $___,___ in lieu of the
non-accountable expense allowance in Section 6(n) hereof.
(c) If the Representative elects to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Paragraph 11, the
Company shall be notified promptly by the Representative by telephone or
telegram, confirmed by letter. If the Company elects to prevent this Agreement
from becoming effective the Representative shall be notified promptly by the
Company by telephone or telegram, confirmed by letter.
12. UNDERWRITERS' WARRANTS. The Company agrees to sell to the
Representative, its officers and/or any underwriter or its officers, and
partners which participate in the public distribution of the Series B Shares at
the Closing Date, an aggregate of 150,000 Underwriters' Warrants at a price of
$.0001 per Underwriters' Warrant. Each Underwriters' Warrant shall represent
the right to purchase one Underwriters' Series B Share during the four year
period commencing one year from the effective date of the Registration Statement
and ending five years after the effective date, at $_.__ per Underwriters'
Series B Share.
The Underwriters' Warrants shall be evidenced by certificates in the form
and contain the terms and conditions as set forth in the exhibit to the
Registration Statement. The Underwriters' Warrant certificates shall be
delivered in such denominations and in such names as may be requested by the
Representative or in the absence of such request, then in denominations of
25,000 Series B Share certificates, registered in the name of the
Representative. In addition, the Company agrees to reserve against the exercise
of the Underwriters' Warrants the number of shares of its authorized but
unissued shares of Series B Stock equal to the number of shares purchasable upon
the exercise of the Underwriters' Warrants as well as the number of shares of
its authorized but unissued shares of Common Stock issuable upon conversion of
such Series B Stock. The certificates representing the Underwriters' Warrants
shall contain typical anti-dilution provisions. The Underwriters' Warrants will
not be redeemable by the Company.
13. FINDERS. (a) The Company knows of no claims for services in the nature
of a finder's fee or origination fee with respect to this financing resulting
from the respective acts of its officers, directors or employees, or any other
party acting in its behalf, for which any Underwriter may be responsible, and
the Company, agrees to indemnify and hold each Underwriter free and harmless
from any claims for any services of such nature arising from any act of the
Company or its officers, directors, employees, or any such other person acting
in its behalf, and will reimburse any Underwriter for any counsel fees, legal or
other expenses reasonably incurred by an Underwriter in investigating or
defending against any such claim.
26
(b) The Underwriters know of no claims for services in the nature of a
finder's fee or origination fee with respect to this financing resulting from
the respective acts of their officers, directors, or employees, or any other
party acting in their behalf for which the Company may be responsible, and each
Underwriter agrees to indemnify and hold the Company free and harmless from any
claims for any services of such nature arising from any act of such Underwriter
or its officers, directors or employees, or any such other person acting in its
behalf and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in investigating or defending against any such claim.
14. REPRESENTATIONS, ETC. TO SURVIVE DELIVERY. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers, and the several
Underwriters, respectively, set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of the Underwriters, and will survive delivery of and payment for the
Series B Shares. A successor to any Underwriter shall be entitled to the
indemnity, contribution and reimbursement agreements contained in this
Agreement.
15. BENEFIT. This Agreement has been and is made solely for the benefit
of and shall be binding upon the Representative, the several Underwriters, the
Company and, to the extent expressed, any person controlling the Company, the
Representative, the several Underwriters and the officers and directors of the
Company, and their respective legal representative successors and assigns, all
as and to the extent provided herein, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "legal
representatives, successors and assigns" shall not include any purchaser of any
of the Series B Shares from the Underwriters merely because of such purchase,
and except further that in the event that any of the persons who shall have
purchased any of the Underwriters' Warrants hereof which are registered in the
Registration Statement shall be alleged to be or held to be, an Underwriter, as
that term is defined in the Act, with respect to any part of any of the
securities registered in the Registration Statement; then and in such event the
warranties, indemnities and agreement of the Company contained in this Agreement
shall also be for the benefit of any person or persons, if any, who control such
persons within the meaning of Section 15 of the Act. All of the obligations of
the Underwriters hereunder are several and not joint.
16. NEW YORK LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
17. NOTICES. All communications hereunder shall be in writing and, if to
the Representative, will be mailed, delivered, telegraphed or telexed to
Americorp Securities, Inc., ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, President; or if sent to the Company will be mailed,
delivered, telegraphed or telexed to Nouveau International, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President.
Copies of such notice should also be sent to counsel to such parties named in
the Prospectus.
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement, among the
Company and the several Underwriters.
Very truly yours,
NOUVEAU INTERNATIONAL, INC.
By_____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written by
AMERICORP SECURITIES, INC.
for itself and the several Underwriters
named on Schedule I hereto
AMERICORP SECURITIES, INC.
By:_________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
28
SCHEDULE I
Number of
UNDERWRITER SERIES B SHARES PURCHASED
____________
TOTAL
29
SCHEDULE II
NAME DATE "LOCK-UP" EXPIRES
30
