EXHIBIT 1.1
EONNET MEDIA, INC.
1,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
, 2002
ViewTrade Securities, Inc.
0000 Xxxx Xxxxxxxx Xxxx Xx., Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Gentlemen:
EONNET Media, Inc., a corporation organized under the laws of the State
of Florida (the "Company"), hereby confirms its agreement with ViewTrade
Securities Inc., ("Viewtrade"), as managing underwriter of the group of
underwriters set forth on Schedule I hereto, as the Underwriters of its
securities (collectively the "Underwriters"), as set forth below.
The Company proposes to issue and sell to the Underwriters 1,000,000
shares of the Company's common stock, $.001 par value per share (the "Common
Stock"). The shares of Common Stock being sold by the Company are referred to as
the "Firm Shares." In addition, the Company proposes to issue to ViewTrade at no
cost up to 200,000 shares of Common Stock (the "Free Shares") to distribute at
no cost to doctors affiliated with the Company as described in the Prospectus
(as hereinafter defined).
In addition, for the sole purpose of covering over-allotments from the
sale of the Firm Shares the Company proposes to grant to the Underwriters an
option to purchase an additional 150,000 shares of Common Stock, (the "Firm
Option Shares" or the "Option Shares"), all as provided in Section 2(c) of this
agreement (the "Agreement") and to issue to you the Underwriters' Warrant (as
defined in Section 2 hereof) to purchase certain further additional shares of
Common Stock. The Firm Shares and the Option Shares are collectively referred to
herein as either the "Shares" or the "Securities."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) A registration statement on Form SB-2 (File No.
333-80475), with respect to the Securities and the Underwriters' Warrant Shares
(as hereinafter defined), and the Free Shares including a prospectus subject to
completion, has been filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act "), and one or more amendments to that registration statement may have been
so filed. Copies of such registration statement and of each amendment heretofore
filed by the Company with the Commission have been delivered to the
Underwriters. After the execution of this Agreement, the Company will file with
the Commission either (i) if the registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act, a
prospectus in the form most recently included in that registration statement
(or, if an amendment thereto shall have been filed, in such amendment), with
such changes or insertions as are required by Rule 430A under the Act or
permitted by Rule 424(b) under the Act and as have been provided to and approved
by the Underwriters prior to the execution of this Agreement, or (ii) if that
registration statement, as it may have been amended, has not been declared by
the Commission to be effective under the Act, an amendment to that registration
statement, including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Underwriters prior to the execution of this
Agreement. The Company also may file a related registration statement with the
Commission pursuant to Rule 462(b) under the Act for purposes of registering
certain additional Securities, which registration statement shall become
effective upon filing with the Commission (the "Rule 462(b) Registration
Statement"). As used in this Agreement, the term "Registration Statement" means
that registration statement, as amended at the time it was or is declared
effective, and any amendment thereto that was or is thereafter declared
effective, including all financial schedules and exhibits thereto and any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined), together with any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with the Registration Statement (including the
prospectus subject to completion, if any, included in the Registration Statement
at the time it was or is declared effective); and the term "Prospectus" means
the prospectus first filed with the Commission pursuant to Rule 424(b) under the
Act or, if no prospectus is so filed pursuant to Rule 424(b), the prospectus
included in the Registration Statement. The Company has caused to be delivered
to the Underwriters copies of each Preliminary Prospectus and has consented to
the use of those copies for the purposes permitted by the Act. If the Company
has elected to rely on Rule 462(b) and the Rule 462(b) Registration Statement
has not been declared effective, then (i) the Company has filed a Rule 462(b)
Registration Statement in compliance with and that is effective upon filing
pursuant to Rule 462(b) and has received confirmation of its receipt and (ii)
the Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under the Act or
the Commission has received payment of such filing fee.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When each Preliminary
Prospectus and each amendment and each supplement thereto was filed with the
Commission it (i) contained all statements required to be stated therein, in
accordance with, and complied with the requirements of, the Act and the rules
and regulations of the Commission thereunder and (ii) did not include any untrue
statement of a material
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fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When the Registration Statement was or is declared
effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus and each amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required so to be filed,
when the Registration Statement containing such Prospectus or amendment or
supplement thereto was or is declared effective) and on the Firm Closing Date
and any Option Closing Date (as each such term is hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing provisions of this
paragraph (b) do not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by the Underwriters specifically for use therein.
(c) The Company is duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdictions of
incorporation, and duly qualified or authorized to transact business as a
foreign corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its businesses require
such qualification or authorization.
(d) The Company has full corporate power and authority, and
all necessary material authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory authorities, to own or lease
its property and conduct its business as now being conducted and as proposed to
be conducted as described in the Registration Statement and the Prospectus (and,
if the Prospectus is not in existence, the most recent Preliminary Prospectus).
(e) Other than as described in the Registration Statement,
the Company does not own, directly or indirectly, an interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business entity.
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(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). All of the issued shares of
capital stock of the Company, have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights. There are no
outstanding options, warrants or other rights granted by the Company to purchase
shares of its Common Stock or other securities, other than as described in the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). The Firm Shares and the Free Shares have been duly
authorized, by all necessary corporate action on the part of the Company and,
when the Firm Shares and the Free Shares are issued and delivered to and (with
respect to the Firm Shares only) paid for by the Underwriters pursuant to this
Agreement, the Firm Shares and the Free Shares will be validly issued, fully
paid, nonassessable and free of preemptive rights and will conform to the
description thereof in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). No holder of outstanding
securities of the Company is entitled as such to any preemptive or other right
to subscribe for any of the Securities, and no person is entitled to have
securities registered by the Company under the Registration Statement or
otherwise under the Act other than as described in the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(g) The capital stock of the Company conforms to the
description thereof contained in the Prospectus (and, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(h) All issuances of securities of the Company have been
effected pursuant to an exemption from the registration requirements of the Act.
No compensation was paid to or on behalf of any member of the National
Association of Securities Dealers, Inc. ("NASD"), or any affiliate or employee
thereof, in connection with any such issuance.
(i) The financial statements of the Company included in the
Registration Statement and the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the financial
position of the Company as of the dates indicated and the results of operations
of the Company for the periods specified. Such financial statements have been
prepared in accordance with accounting principles generally accepted in effect
in the United States of America, consistently applied, except to the extent that
certain footnote disclosures regarding unaudited interim periods may have been
omitted in accordance with the applicable rules of the Commission under the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The financial data
set forth under the caption "Summary Financial Information" in the Prospectus
(and, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly present, on the basis stated in the Prospectus (or such
Preliminary Prospectus), the information included therein.
(j) Xxxxxxx, Xxxxx & Xxxxxx, LLP has audited certain
financial statements of the Company and delivered their report with respect to
the financial statements included in the Registration Statement and the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), and are independent public accountants with respect to
the Company as required by the Act and the applicable rules and regulations
thereunder.
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(k) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (and, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), (i) except as
otherwise contemplated therein, there has been no material adverse change in the
business, operations, condition (financial or otherwise), earnings or prospects
of the Company, whether or not arising in the ordinary course of business, (ii)
except as otherwise stated therein, there have been no transactions entered into
by the Company and no commitments made by the Company that, individually or in
the aggregate, are material with respect to the Company, (iii) there has not
been any change in the capital stock or indebtedness, other than indebtedness
incurred in the ordinary course of business, of the Company, and (iv) there has
been no dividend or distribution of any kind declared, paid or made by the
Company in respect of any class of its capital stock.
(l) The Company has full corporate power and authority to
enter into and perform its obligations under this Agreement and the
Underwriters' Warrant Agreement (as hereinafter defined). The execution and
delivery of this Agreement and the Underwriters' Warrant Agreement have been
duly authorized by all necessary corporate action on the part of the Company and
this Agreement and the Underwriters' Warrant Agreement have each been duly
executed and delivered by the Company and assuming execution and acceptance by
the Underwriters, each is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and except as
rights to indemnity and contribution under this Agreement may be limited by
applicable law. The issuance, offering and sale by the Company to the
Underwriters of the Securities pursuant to this Agreement or the Underwriters'
Warrant Shares (as hereinafter defined) pursuant to the Underwriters' Warrant
Agreement, the compliance by the Company with the provisions of this Agreement
and the Underwriters' Warrant Agreement, and the consummation of the other
transactions contemplated by this Agreement and the Underwriters' Warrant
Agreement do not (i) require the consent, approval, authorization, registration
or qualification of or with any court or governmental or regulatory authority,
except such as have been obtained or may be required under state securities or
blue sky laws and, if the registration statement filed with respect to the
Securities (as amended) is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act, or (ii) conflict with or result in a breach or
violation of, or constitute a default under, any material contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other material agreement
or instrument to which the Company is a party or by which the Company or any of
its property is bound or subject, or the certificate of incorporation or by-laws
of the Company, or any statute or any rule, regulation, judgment, decree or
order of any court or other governmental or regulatory authority or any
arbitrator applicable to the Company.
(m) No legal or governmental proceedings are pending to
which the Company is a party or to which the property of the Company is subject,
and to the best of the Company's knowledge, no such proceedings have been
threatened against the Company or with respect to any of its property, except
such as are described in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). No contract or other
document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that is
not described therein (and, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus) or filed as required.
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(n) The Company is not in (i) violation of its certificate
of incorporation, by-laws or other governing documents, (ii) violation to the
best of the Company's knowledge, in any material respect of any law, statute,
regulation, ordinance, rule, order, judgment or decree of any court or any
governmental or regulatory authority applicable to it, or (iii) other than as
described in the Prospectus, default in any material respect in the performance
or observance of any obligation, agreement, covenant or condition contained in
any material contract, indenture, mortgage, deed of trust, loan agreement, note,
lease or other material agreement or instrument to which it is a party or by
which it or any of its property may be bound or subject, and no event has
occurred which with notice or lapse of time or both would constitute such a
default.
(o) The Company currently owns or possesses adequate rights
to use all intellectual property, including all trademarks, service marks, trade
names, copyrights, inventions, know-how, trade secrets, proprietary
technologies, processes and substances, or applications or licenses therefor,
that are described in the Prospectus (and if the Prospectus is not in existence,
the most recent Preliminary Prospectus), and any other rights or interests in
items of intellectual property as are necessary for the conduct of the business
now conducted or proposed to be conducted by them as described in the Prospectus
(or, such Preliminary Prospectus), and, except as disclosed in the Prospectus
(and such Preliminary Prospectus), the Company is not aware of the granting of
any patent rights to, or the filing of applications therefor by, others, nor is
the Company aware of, nor has the Company received notice of, infringement of or
conflict with asserted rights of others with respect to any of the foregoing.
All such intellectual property rights and interests are (i) valid and
enforceable and (ii) to the best knowledge of the Company, not being infringed
by any third parties.
(p) To the best of the Company's knowledge, the Company
possesses adequate licenses, orders, authorizations, approvals, certificates or
permits issued by the appropriate federal, state or foreign regulatory agencies
or bodies necessary to conduct its business as described in the Registration
Statement and the Prospectus (and, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), and, except as disclosed in the Prospectus
(and, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no pending or, to the best knowledge of the Company,
threatened, proceedings relating to the revocation or modification of any such
license, order, authorization, approval, certificate or permit.
(q) The Company has good and marketable title to all of the
properties and assets reflected in the Company's financial statements or as
described in the Registration Statement and the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind, except those
reflected in such financial statements or as described in the Registration
Statement and the Prospectus (and such Preliminary Prospectus). Except as
disclosed in the Prospectus, the Company occupies its leased properties under
valid and enforceable leases conforming to the description thereof set forth in
the Registration Statement and the Prospectus (and such Preliminary Prospectus).
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(r) The Company is not and does not intend to conduct its
business in a manner in which it would be an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940 (the "Investment Company
Act").
(s) The Company has obtained and delivered to the Under-
writers the agreements (the "Lock-up Agreements") with the officers, directors
and 5% shareholders of the Company substantially to the effect that, among other
things, each such person will not, commencing on the date that the Registration
Statement is declared effective by the SEC (the "Effective Date") and continuing
for a period of eighteen (18) months thereafter, without the prior written
consent of the Underwriters, directly or indirectly, publicly sell, offer or
contract to sell or grant any option to purchase, transfer, assign or pledge, or
otherwise encumber, or dispose of any shares of Common Stock now or hereafter
owned by such person and that the purchaser or transferee in any private sale
agrees to be bound by the Lock-Up Agreement.
(t) No labor dispute with the employees of the Company
exists, or, to the best of the Company's knowledge, is threatened or imminent
that could result in a material adverse change in the condition (financial or
otherwise), business, prospects, net worth or results of operations of the
Company, except as described in or contemplated by the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(u) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which it is engaged; the Company
has not been refused any insurance coverage sought or applied for; and the
Company has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not materially and adversely affect the condition (financial or
otherwise), business, prospects, net worth or results of operations of the
Company, except as described in or contemplated by the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(v) The Underwriters' Warrant (as hereinafter defined) will
conform to the description thereof in the Registration Statement and in the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and, when sold to and paid for by the Underwriters' in
accordance with the Underwriters' Warrant Agreement, will have been duly
authorized and validly issued and will constitute valid and binding obligations
of the Company, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and except as rights to indemnity and
contribution may be limited by applicable law. The shares of Common Stock
issuable upon exercise of the Underwriters' Warrant (the "Underwriters' Warrant
Shares") have been duly authorized and reserved for issuance upon exercise of
the Underwriters' Warrant by all necessary corporate action on the part of the
Company and, when issued and delivered and paid for upon such exercise in
accordance with the terms of the
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Underwriters' Warrant Agreement and the Underwriters' Warrant, respectively,
will be validly issued, fully paid, nonassessable and free of preemptive rights
and will conform to the description thereof in the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) No person has acted as a finder in connection with, or
is entitled to any commission, fee or other compensation or payment for services
as a finder for or for originating, or introducing the parties to, the trans-
actions contemplated herein and the Company will indemnify the Underwriters with
respect to any claim for finder's fees in connection herewith. Except as set
forth in the Registration Statement and the Prospectus (and, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), the Company has no
management or financial consulting agreement with anyone. No promoter, officer,
director or stockholder of the Company is, directly or indirectly, affiliated or
associated with an NASD member and no securities of the Company have been
acquired by an NASD member, except as previously disclosed in writing to the
Underwriters.
(x) The Company has filed all federal, state, local and
foreign tax returns which are required to be filed through the date hereof, or
has received extensions thereof, except where such failure to file would not
have a material adverse effects of the Company, and has paid all taxes shown on
such returns and all assessments received by it to the extent that the same are
material and have become due, except for any such tax that currently is being
contested in good faith or that the failure to pay would not have a material
adverse effect on the Company.
(y) Neither the Company nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company has,
directly or indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment. No transaction has occurred between or
among the Company and any of its officers or directors or any affiliates of any
such officer or director, that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(z) Neither the Company nor any of its officers, directors
or affiliates (as defined in the Regulations), has taken or will take, directly
or indirectly, prior to the completion of the Offering, any action designed to
stabilize or manipulate the price of any security of the Company, or which has
caused or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company, to facilitate the sale or resale of any of the Securities or the
Option Securities.
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2. Purchase, Sale and Delivery of the Securities and the
Underwriters' Warrants.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, (i) the Company agrees to issue and sell to the
Underwriters, and the Underwriters agree, to purchase from the Company, the
number of Firm Shares as set forth opposite its name on Schedule 1 annexed
hereto, at a purchase price of $___ per share and (ii) the Company agrees to
issue to the Underwriters at no cost, and the Underwriters agree to distribute
to doctors affiliated with the Company as described in the Prospectus at no
cost, the Free Shares..
(b) Certificates in definitive form for the Firm Shares that
the Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Underwriters request
upon notice to the Company at least 48 hours prior to the Firm Closing Date,
shall be delivered by or on behalf of the Company to the Underwriters, against
payment by or on behalf of the Underwriters of the purchase prices therefor by
wire transfer of immediately available funds to a bank account specified by the
Company. Certificates in definitive form for the Free Shares that the
Underwriters have agreed to distribute shall be delivered by or behalf of the
Company to the Underwriters in the names and in the denominations determined by
the Company. Such delivery of the Firm Shares shall be made at the offices of
Counsel for the Underwriters, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 9:30
A.M., New York City time on ______, 2002, within ten (10) business days from the
Effective Date, or at such other place, time or date as the Underwriters and the
Company may agree upon, such time and date of delivery against payment being
herein referred to as the "Firm Closing Date." The Company will make such
certificates for the Firm Shares available for checking and packaging by the
Underwriters, at such offices as may be designated by the Underwriters, at least
24 hours prior to the Firm Closing Date. In lieu of physical delivery, the
closing may occur by "DTC" delivery.
(c) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as contemplated by
the Prospectus, the Company hereby grants to the Underwriters an option to
purchase any or all of the Option Shares, which options are exercisable by the
Underwriters on behalf of and for the account of the Underwriters. The purchase
price to be paid for any of the Option Shares shall be the same price per share
for the Firm Shares set forth above in paragraph (a) of this Section 2. The
option granted hereby may be exercised as to all or any part of the Option
Shares from time to time within 45 calendar days after the Firm Closing Date.
The Underwriters shall not be under any obligation to purchase any of the Option
Shares prior to the exercise of such option. The Underwriters may from time to
time exercise the option granted hereby by giving notice in writing or by
telephone (confirmed in writing) to the Company setting forth the aggregate
number of Option Shares as to which the Underwriters are then exercising the
option and the date and time for delivery of and payment for such Option Shares.
Any such date of delivery shall be determined by the Underwriters but shall not
be earlier than two business days or later than three business days after such
exercise of the option and, in any event, shall not be earlier than the Firm
Closing Date. The time and date set forth in such notice, or such other time on
such other date as the Underwriters and the Company may agree upon, is herein
called the "Option Closing Date" with respect to such Option Shares. Upon
exercise of the option as provided herein, the Company shall become obligated to
sell to the Underwriters, and, subject to the terms and conditions herein set
forth, the Underwriters shall become obligated to purchase from the Company, the
Option Shares as to which the Underwriters are then exercising its option. If
the
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option is exercised as to all or any portion of the Option Shares, certificates
in definitive form for such Option Shares, and payment therefor, shall be
delivered on the related Option Closing Date in the manner, and upon the terms
and conditions, set forth in paragraph (b) of this Section 2, except that
reference therein to the Firm Shares and the Firm Closing Date shall be deemed,
for purposes of this paragraph (c), to refer to such Option Shares and Option
Closing Date, respectively.
(d) On the Firm Closing Date, the Company will further issue
and sell to the Underwriters or, at the direction of the Underwriters, to bona
fide officers of the Underwriters, for an aggregate purchase price of $10,
warrants to purchase Common Stock (the "Underwriters' Warrant") entitling the
holders thereof to purchase an aggregate of 100,000 shares of Common Stock for a
period of four years, such period to commence on the first anniversary of the
Effective Date. The Underwriters' Warrant shall be exercisable at a price equal
to 165% of the public offering price of the Common Stock, and shall contain
terms and provisions more fully described herein below and as set forth more
particularly in the warrant agreement relating to the Underwriters' Warrant to
be executed by the Company on the Effective Date (the "Underwriters' Warrant
Agreement"), including, but not limited to, (i) customary anti-dilution
provisions in the event of stock dividends, split mergers, sales of all or
substantially all of the Company's assets, sales of stock below then prevailing
market or exercise prices and other events, and (ii) prohibitions of mergers,
consolidations or other reorganizations of or by the Company or the taking by
the Company of other action during the five-year period following the Effective
Date unless adequate provision is made to preserve, in substance, the rights and
powers incidental to the Underwriters' Warrant. As provided in the Underwriters'
Warrant Agreement, the Underwriters may designate that the Underwriters' Warrant
be issued in varying amounts directly to bona fide officers of the Underwriters.
As further provided, no sale, transfer, assignment, pledge or hypothecation of
the Underwriters' Warrant shall be made for a period of 12 months from the
Effective Date, except (i) by operation of law or reorganization of the Company,
or (ii) to the Underwriters and bona fide partners, officers of the Underwriters
and selling group members.
3. Offering by the Underwriters. The Underwriters propose to
offer the Firm Shares for sale to the public upon the terms set forth in the
Prospectus (the "Offering").
4. Covenants of the Company. The Company covenants and agrees with
the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, to become effective as promptly as possible. If required, the Company
will file the Prospectus and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rule 424(b)
under the Act. During any time when a prospectus relating to the Securities is
required to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act and the rules and regulations of the
Commission thereunder to the extent necessary to permit the continuance of sales
of or dealings in the Securities in accordance with the provisions hereof and of
the Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission any prospectus or
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amendment referred to in the first sentence of section (a) (i) hereof, any
amendment or supplement to such prospectus or any amendment to the Registration
Statement as to which the Underwriters shall not previously have been advised
and furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Underwriters shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon reasonable
request by the Underwriters or counsel to the Underwriters, any amendments to
the Registration Statement or amendments or supplements to the Prospectus that
may be necessary or advisable in connection with the distribution of the
Securities by the Underwriters, and will use its reasonable best efforts to
cause any such amendment to the Registration Statement to be declared effective
by the Commission as promptly as possible. The Company will advise the
Underwriters, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence satisfactory to the Underwriters of each such
filing or effectiveness.
(b) The Company will advise the Underwriters, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of any Securities for offering or sale in any
jurisdiction, (iii) the institution, threat or contemplation of any proceeding
for any such purpose, or (iv) any request made by the Commission for amending
the Registration Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its reasonable best efforts to
prevent the issuance of any such stop order and, if any such stop order is
issued, to obtain the withdrawal thereof as promptly as possible.
(c) The Company will, in cooperation with counsel to the
Underwriters, arrange for the qualification of the Securities for offering and
sale under the blue sky or securities laws of such jurisdictions as the
Underwriters may designate and will continue such qualifications in effect for
as long as may be necessary to complete the distribution of the Securities.
(d) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs 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 a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any other
reason it is necessary at any time to amend or supplement the Prospectus to
comply with the Act or the rules or regulations of the Commission thereunder,
the Company will promptly notify the Underwriters thereof and, subject to
Section 4(a) hereof, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects
such compliance.
(e) Intentionally left blank.
11
(f) The Company will, without charge, provide to the
Underwriters and to counsel for the Underwriters (i) as many signed copies of
the registration statement originally filed with respect to the Securities and
each amendment thereto (in each case including exhibits thereto) as the
Underwriters may reasonably request, (ii) as many conformed copies of such
registration statement and each amendment thereto (in each case without exhibits
thereto) as the Underwriters may reasonably request, and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Underwriters may reasonably request.
(g) The Company, as soon as practicable, will make generally
available to its security holders and to the Underwriters an earnings statement
of the Company that satisfies the provisions of Section 11 (a) of the Act and
Rule 158 thereunder.
(h) The Company will reserve and keep available for issuance
that maximum number of authorized but unissued shares of Common Stock which are
issuable upon exercise of any outstanding warrants and the Underwriters' Warrant
outstanding from time to time.
(i) The Company will apply the net proceeds from the sale of
the Securities being sold by it as set forth under "Use of Proceeds" in the
Prospectus.
(j) Intentionally left blank.
(k) Prior to the Closing Date or the Option Closing Date (if
any), the Company will not, directly or indirectly, without prior written
consent of the Underwriters, issue any press release or other public
announcement or hold any press conference with respect to the Company or its
activities with respect to the Offering (other than trade releases issued in the
ordinary course of the Company's business consistent with past practices with
respect to the Company's operations).
(l) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance upon
Rule 430A under the Act, then immediately following the execution of this
Agreement, the Company will prepare, and file or transmit for filing with the
Commission in accordance with Rule 430A and Rule 424(b) under the Act, copies of
the Prospectus including the information omitted in reliance on Rule 430A, or,
if required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted.
(m) The Company will assist the Underwriters in causing the
Securities to be listed on the Nasdaq SmallCap Market on the Effective Date and
to maintain such listing thereafter.
(n) During the period of five years from the Firm Closing
Date, the Company will, as promptly as possible, not to exceed 135 days, after
each annual fiscal period render and distribute reports to its stockholders
which will include audited statements of its operations and
12
changes of financial position during such period and its audited balance sheet
as of the end of such period, as to which statements the Company's independent
certified public accountants shall have rendered an opinion and shall timely
file all reports required to be filed under the securities laws.
(o) During a period of five years commencing with the Firm
Closing Date, the Company will furnish to the Underwriters, at the Company's
expense, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(p) The Company has appointed Registrar and Transfer Company
as transfer agent for the Common Stock, subject to the Closing. The Company will
not change or terminate such appointment for a period of three years from the
Firm Closing Date without first obtaining the written consent of the
Underwriters. For a period of three years after the Effective Date, the Company
shall cause the transfer agent to deliver promptly to the Underwriters a
duplicate copy of the daily transfer sheets relating to trading of the
Securities. The Company shall also provide to the Underwriters, on a weekly
basis, copies of the DTC special securities positions listing report.
(q) During the period of 180 days after the date of this
Agreement, the Company will not at any time, directly or indirectly, take any
action designed to or that will constitute, or that might reasonably be expected
to cause or result in, the stabilization of the price of the Common Stock to
facilitate the sale or resale of any of the Securities.
(r) The Company will not take any action to facilitate the
sale of any shares of Common Stock pursuant to Rule 144 under the Act if any
such sale would violate any of the terms of the Lock-up Agreements.
(s) Prior to the 120th day after the Firm Closing Date, the
Company will provide the Underwriters and their designees with four bound
volumes of the transaction documents relating to the Registration Statement and
the closing(s) hereunder, in form and substance reasonably satisfactory to the
Underwriters.
(t) The Company shall consult with the Underwriters prior to
the distribution to third parties of any financial information news releases or
other publicity regarding the Company, its business, or any terms of this
offering and the Underwriters will consult with the Company prior to the
issuance of any research report or recommendation concerning the Company's
securities. Copies of all documents that the Company or its public relations
firm intend to distribute will be provided to the Underwriters for review prior
to such distribution.
(u) The Company and the Underwriters will advise each other
immediately in writing as to any investigation, proceeding, order, event or
other circumstance, or any threat thereof, by or relating to the Commission or
any other governmental authority, that could impair or prevent the Offering.
Except as required by law or as otherwise mutually agreed in writing, neither
the Company nor the Underwriters will acquiesce in such circumstances and each
will actively defend any proceedings or orders in that connection.
13
(v) The Company shall first submit to the Underwriters
certificates representing the Securities for approval prior to printing, and
shall, as promptly as possible, after filing the Registration Statement with the
Commission, obtain CUSIP numbers for the Securities.
(w) The Company will prepare and file a registration state-
ment with the Commission pursuant to section 12 of the 1934 Act, and will use
its best efforts to have such registration statement declared effective by the
Commission on an accelerated basis on the day after the Effective Date. For this
purpose the Company shall prepare and file with the Commission a General Form of
Registration of Securities (Form 8-A or Form 10).
(x) For so long as the Securities are registered under the
1934 Act, the Company will hold an annual meeting of stockholders for the
election of directors within 180 days after the end of each of the Company's
fiscal years and within 135 days after the end of each of the Company's fiscal
years will provide the Company's stockholders with the audited financial
statements of the Company as of the end of the fiscal year just completed prior
thereto. Such financial statements shall be those required by Rule 14a-3 under
the 1934 Act and shall be included in an annual report pursuant to the
requirements of such Rule.
(y) The Company will take all necessary and appropriate
actions to be included in Standard and Poor's Corporation Descriptions or other
equivalent manual and to maintain its listing therein for a period of five (5)
years from the Effective Date. Such application shall be made on an accelerated
basis no more than two days following the Effective Date.
(z) On or prior to the Effective Date, the Company will give
written instructions to the transfer agent for the Common Stock directing said
transfer agent to place stop-order restrictions against, and appropriate legends
advising of the Lock-Up Agreements on, the certificates representing the
securities of the Company owned by the persons who have entered into the Lock-up
Agreements.
(aa) For a period of two years following the Effective Date,
the Company will not issue any shares of Common Stock or Securities convertible
into Common Stock without the prior written consent of the Underwriter.
4. Expenses
(a) The Company shall pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including all costs and expenses incident to (i)
the preparation, printing and filing or other production of documents with
respect to the transactions, including any costs of printing the Registration
Statement originally filed with respect to the Securities and any amendment
thereto, any Preliminary Prospectus and the Prospectus and any amendment or
supplement thereto, this Agreement, the selected dealer
14
agreement and the other agreements and documents governing the underwriting
arrangements and any blue sky memoranda, (ii) all reasonable and necessary
arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, and the costs and expenses of the Underwriters in mailing
or otherwise distributing the same including telephone charges, duplications and
other accountable expenses, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv) the
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's, warrant agent's and
registrar's fees or any transfer or other taxes payable thereon, (v) the
qualification of the Securities under state blue sky or securities laws,
including filing fees and fees and disbursements of counsel relating thereto and
any fees and disbursements of local counsel, if any, retained for such purpose,
(vi) the filing fees of the Commission and the NASD relating to the Securities,
(vii) the inclusion of the Securities on The Nasdaq SmallCap Market and in the
Standard and Poor's Corporation Descriptions Manual, (viii) any "road shows" or
other meetings with prospective investors in the Securities, including
transportation, accommodation, meal, conference room, audio-visual presentation
and similar expenses, but not including such expenses for the Underwriters or
their Underwriters or designees in excess of $15,000 and (ix) the publication of
"tombstone advertisements" in newspapers or other publications selected by the
Underwriters, and the manufacture of prospectus memorabilia. In addition to the
foregoing, the Company, shall reimburse the Underwriters for its expenses on the
basis of a non-accountable expense allowance in the amount of 3.00% of the gross
offering proceeds to be received by the Company. The non-accountable expense
allowance, based on the gross proceeds from the sale of the Firm Shares, shall
be deducted from the funds to be paid by the Underwriters in payment for the
Firm Shares, pursuant to Section 2 of this Agreement, on the Firm Closing Date.
To the extent any Option Shares are sold, any remaining non-accountable expense
allowance based on the gross proceeds from the sale of the Option Shares shall
be deducted from the funds to be paid by the Underwriters in payment for the
Option Shares, pursuant to Section 2 of this Agreement, on the Option Closing
Date. The Company warrants, represents and agrees that all such payments and
reimbursements will be promptly and fully made.
(b) Notwithstanding any other provision of this Agreement,
if the Offering is terminated in accordance with the provisions of Section 6 or
Section 10(a)(i), the Company agrees that, in addition to the Company paying its
own expenses as described in subparagraph (a) above, the Company shall reimburse
the Underwriters for its actual accountable out-of-pocket expenses (in addition
to blue sky legal fees and expenses referred to in subparagraph (a) above) net
of the $25,000 which has previously been advanced to the Underwriters, up to a
maximum of $100,000. Such expenses shall include, but are not to be limited to,
fees for the services and time of counsel for the Underwriters to the extent not
covered by clause (a) above, plus any additional expenses and fees, including,
but not limited to, travel expenses, postage expenses, duplication expenses,
long-distance telephone expenses, and other expenses incurred by the
Underwriters in connection with the proposed offering.
5. Intentionally left blank.
15
6. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Shares shall be subject, in
the Underwriters' sole discretion, to the accuracy of the representations and
warranties of the Company contained herein as of the date hereof and as of the
Firm Closing Date as if made on and as of the Firm Closing Date, to the accuracy
of the statements of the Company's officers made pursuant to the provisions
hereof, to the performance by the Company of its covenants and agreements
hereunder and to the following additional conditions:
(a) If the Registration Statement, as heretofore amended,
has not been declared effective as of the time of execution hereof, the
Registration Statement, as heretofore amended or as amended by an amendment
thereto to be filed prior to the Firm Closing Date, shall have been declared
effective not later than 5:30 P.M., New York City time, on the date on which the
amendment to such Registration Statement containing information regarding the
initial public offering price of the Securities has been filed with the
Commission, or such later time and date as shall have been consented to by the
Underwriters; if required, the Prospectus and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within the
time period required by Rule 424(b) under the Act, 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 threatened or, to the
knowledge of the Company or the Underwriters, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) The Underwriters shall have received an opinion, dated
the Firm Closing date, of Xxxxx & Xxxxxxx, LLP, counsel to the Company,
substantially to the effect that:
(1) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its organization and is duly qualified to transact business as a
foreign corporation and is in good standing under the laws of each other
jurisdiction in which its ownership or leasing of any properties or the conduct
of its business requires such qualification, except where the failure to be in
good standing or so qualify would not have a materially adverse effect upon the
Company;
(2) the Company has full corporate power and
authority to own or lease its property and conduct its business as it is now
being conducted and as it is proposed to be conducted, as described in the
Registration Statement and the Prospectus, and the Company has full corporate
power and authority to enter into this Agreement and the Underwriters' Warrant
Agreement and to carry out all the terms and provisions hereof and thereof to be
carried out by it;
(3) to the knowledge of such counsel, there are no
outstanding options, warrants or other rights granted by the Company to purchase
shares of its Common Stock, preferred stock or other securities other than as
described in the Prospectus; the Shares have been duly
16
authorized and the Underwriters' Warrant Shares have been duly reserved for
issuance by all necessary corporate action on the part of the Company and the
Shares when issued and delivered to and paid for by the Underwriters, pursuant
to this Agreement, the Underwriters' Warrant when issued and delivered and paid
for in accordance with this Agreement and the Underwriters' Warrant Agreement by
the Underwriters, and the Underwriters' Warrant Shares when issued upon payment
of the exercise price specified in the Underwriters' Warrant, will be validly
issued, fully paid, nonassessable and free of preemptive rights and will conform
to the description thereof in the Prospectus; to the knowledge of such counsel,
no holder of outstanding securities of the Company is entitled as such to any
preemptive or other right to subscribe for any of the Shares or the Under-
writers' Warrant Shares; and to the knowledge of such counsel, no person is
entitled to have securities registered by the Company under the Registration
Statement or otherwise under the Act other than as described in the Prospectus;
(4) the execution and delivery of this Agreement and
the Underwriters' Warrant Agreement have been duly authorized by all necessary
corporate action on the part of the Company and this Agreement and the Under-
writers' Warrant Agreement have been duly executed and delivered by the Company,
and each is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and other similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) and except as rights to indemnity and
contribution under this Agreement and the Underwriters' Warrant Agreement may be
limited by applicable securities laws and the public policy underlying such
laws;
(5) the Underwriters' Warrant has been duly
authorized and upon payment of the purchase price therefore specified in Section
2(d) of this Agreement will be validly issued and constitute valid and binding
obligations of the Company; except as enforceability may be limited by
bankruptcy insolvency, reorganization, fraudulent conveyance moratorium and
other similar laws affecting creditor's rights generally and by general
principles of equity (regardless or whether enforcement is considered in a
proceeding in equity or at law) and except as rights to indemnity and
contribution under this Agreement and the Underwriters' Warrant Agreement may be
limited by applicable securities laws and the public policy underlying such
laws; and the certificates representing the Securities are in due and proper
form under law;
(6) the statements set forth in the Prospectus
under the caption "Description of Securities" insofar as those statements
purport to summarize the terms of the capital stock and warrants of the Company,
provide a fair summary of such terms; to the knowledge of such counsel, the
statements set forth in the Prospectus describing statutes and regulations and
the descriptions of the consequences to the Company under such statutes and
regulations are fair summaries of the information set forth therein and are
accurate in all material respects; to the knowledge of such counsel, the
statements in the Prospectus, insofar as those statements constitute summaries
of the contracts, instruments, leases or licenses referred to therein,
constitute a fair summary in all material respects of those contracts,
instruments, leases or licenses and include all material terms thereof, as
applicable;
17
(7) none of (A) the execution and delivery of this
Agreement and the Underwriters' Warrant Agreement, (B) the issuance, offering
and sale by the Company to the Underwriters of the Securities pursuant to this
Agreement and the Underwriters' Warrant Shares pursuant to the Underwriters'
Warrant Agreement, or (C) the compliance by the Company with the other
provisions of this Agreement and the Underwriters' Warrant Agreement and the
consummation of the transactions contemplated hereby and thereby, to the
knowledge of such counsel (1) requires the consent, approval, authorization,
registration or qualification of or with any court or governmental authority
known to us, except such as have been obtained and such as may be required under
state blue sky or securities laws as to which we express no opinion or (2)
conflicts with or results in a breach or violation of, or constitutes a default
under, any material contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other material agreement or instrument known to such
counsel to which the Company is a party or by which the Company or any of its
property is bound or subject, or the certificate of incorporation or by-laws of
the Company, or any material statute or any judgment, decree, order, rule or
regulation of any court or other governmental or regulatory authority known to
us applicable to the Company;
(8) to the knowledge of such counsel, (A) no legal
or governmental proceedings are pending to which the Company is a party or to
which the property of the Company is subject except those arising in the
ordinary course of business and fully covered by insurance and (B) no contract
or other document is required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required;
(9) to the knowledge of such counsel, the Company
possesses adequate licenses, orders, authorizations, approvals, certificates or
permits issued by the appropriate federal, state or local regulatory agencies or
bodies necessary to conduct its business as described in the Registration
Statement and the Prospectus, and to the best of the Company's knowledge there
are no pending or threatened proceedings relating to the revocation or
modification of any such license, order, authorization, approval, certificate or
permit, except as disclosed in the Registration Statement and the Prospectus,
which would have a material adverse effect on the Company;
(10) The Company is not in violation or breach of, or
in default with respect to, any term of its articles of incorporation or by-
laws, and to the knowledge of such counsel, the Company is not in (i) violation
in any material respect of any law, statute, regulation, ordinance, rule, order,
judgment or decree of any court or any governmental or regulatory authority
applicable to it, or (ii) default in any material respect in the performance or
observance of any obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, deed of trust, loan agreement, note,
lease or other material agreement or instrument to which it is a party or by
which it or any of its property may be bound or subject, and no event has
occurred which with notice, lapse of time or both would constitute such a
default;
18
(11) the Shares have been approved for inclusion on
the AMEX Stock Market or the Nasdaq SmallCap Market;
(12) the Registration Statement is effective under
the Act; any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); and to
the knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission;
(13) the Registration Statement originally filed with
respect to the Securities and each amendment thereto and the Prospectus (in each
case, other than the financial statements, the notes, schedules and other
financial and statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all material respects with
the applicable requirements of the Act and the rules and regulations of the
Commission thereunder; and
(14) the Company is not an "investment company" as
defined in Section 3(a) of the Investment Company Act of 1940 and, if the
Company conducts its business as set forth in the Prospectus, it will not become
an "investment company" and will not be required to register under the
Investment Company.
Such counsel also shall state in its opinion that it has
participated in the preparation of the Registration Statement and the Prospectus
and that nothing has come to its attention that has caused it to believe that
the Registration Statement, at the time it became effective (including the
information deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b), if applicable), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading or that the Prospectus,
as of its date or as of the Firm Closing Date, contained an untrue statement of
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials, copies of which certificates will
be provided to the Underwriters, and, as to matters of the laws of certain
jurisdictions, on the opinions of other counsel to the Company, which opinions
shall also be delivered to the Underwriters, in form and substance reasonably
acceptable to the Underwriters, if such other counsel expressly authorize such
reliance and counsel to the Company expressly states in their opinion that such
counsel's and the Underwriters' reliance upon such opinion is justified.
19
(c). A. At the time this Agreement is executed, the
Underwriters shall have received a letter, dated such date, addressed to the
Underwriters in form and substance satisfactory (including the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
in all respects to the Underwriters and Underwriters' counsel, from Xxxxxxx,
Xxxxx & Xxxxxx, LLP:
i. confirming that it is a independent certified
public accountant with respect to the Company within the meaning of the Act and
the applicable Rules and Regulations;
ii. stating that it is their opinion that the
financial statements of the Company included in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations thereunder and that the
Underwriters may rely upon the opinion of Xxxxxxx, Xxxxx & Xxxxxx, LLP with
respect to the financial statements included in the Registration Statement;
iii. stating that, on the basis of a limited review
which included a reading of the latest available unaudited interim financial
statements of the Company, a reading of the latest available minutes of the
stockholders and board of directors and the various committees of the boards of
directors of the Company, consultations with officers and other employees of the
Company responsible for financial and accounting matters and other specified
procedures and inquiries (which, as to the interim financial statements included
in the Registration Statement, shall constitute a review as described in SAS No.
71, Interim Financial Statements), nothing has come to Xxxxxxx, Xxxxx & Xxxxxx,
LLP's attention which would lead them to believe that (A) the unaudited
financial statements of the Company included in the Registration Statement do
not comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations or are not fairly
presented in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial statements
of the Company included in the Registration Statement, or (B) at a specified
date not more than five (5) days prior to the Effective Date, there has been any
change in the capital stock or long-term debt of the Company, or any decrease in
the stockholders' equity or net current assets or net assets of the Company as
compared with amounts shown in the June 30, 2001 consolidated balance sheet
included in the Registration Statement, other than as set forth in or
contemplated by the Registration Statement, or, if there was any change or
decrease, setting forth the amount of such change or decrease, and (C) during
the period from June 30, 2001 to a specified date not more than five (5) days
prior to the Effective Date, there was any decrease (increase) in net revenues,
net income (loss) or in net earnings (loss) per common share of the Company, in
each case as compared with the corresponding period June 30, 2001 beginning,
other than as set forth in or contemplated by the Registration Statement, or, if
there was any such decrease, setting forth the amount of such decrease
(increase);
iv. setting forth, at a date not later than five (5)
days prior to the Effective Date, the amount of liabilities of the Company;
20
v. stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings, statements and
other financial information pertaining to the Company set forth in the
Prospectus in each case to the extent that such amounts, numbers, percentages,
statements and information may be derived from the general accounting records,
including work sheets, of the Company and excluding any questions requiring an
interpretation by legal counsel, with the results obtained from the application
of specified readings, inquiries and other appropriate procedures (which
procedures do not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter and found them to be in
agreement; and
vi. statements as to such other matters incident to
the transaction contemplated hereby as the Underwriters may request.
B. At the Firm Closing Date and the Option Closing
Date, if any, the Underwriters shall have received from Xxxxxxx, Xxxxx &
Xxxxxx, LLP, a letter, dated as of the Firm Closing Date or the Option Closing
Date, as the case may be, to the effect that it reaffirms that statements made
in the letter furnished pursuant to subsection A of this Section 6(c), except
that the specified date referred to shall be a date not more than five (5) days
prior to the Firm Closing Date or the Option Closing Date, as the case may be,
and, if the Company has elected to rely on Rule 430A of the Rules and
Regulations, to the further effect that they have carried out procedures as
specified in clause (v) of subsection A of this Section 6(c) with respect to
certain amounts, percentages and financial information as specified by the
Underwriters and deemed to be a part of the Registration Statement pursuant to
Rule 430A(b) and have found such amounts, percentages and financial information
to be in agreement with the records specified in such clause (v).
(d) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
as if made on and as of the Firm Closing Date; the Registration Statement shall
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein in order to make the statements
therein not misleading, and the Prospectus, as amended or supplemented as of the
Firm Closing Date, shall not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and the Company shall have performed all covenants and agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Firm Closing Date.
(e) No stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or
contemplated by the Commission.
(f) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall not have been any material adverse change, or any development involving a
prospective material adverse change, in the business, operations, condition
(financial or otherwise), earnings or prospects of the Company, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto).
21
(g) The Underwriters shall have received a certificate,
dated the Firm Closing Date, of the Chief Executive Officer and the Secretary of
the Company to the effect set forth in subparagraphs (d) through (f) above.
(h) The Common Stock shall be qualified in such
jurisdictions as the Underwriters may reasonably request pursuant to Section
4(c), and each such qualification shall be in effect and not subject to any stop
order or other proceeding on the Firm Closing Date.
(i) The Company shall have executed and delivered to the
Underwriters the Underwriters' Warrant Agreement and a certificate or
certificates evidencing the Underwriters' Warrant, in each case in a form
acceptable to the Underwriters.
(i) The Underwriters shall have received twenty four month
Lock-up Agreements executed by each of the owners of more than 5% of the
Company's common stock and twelve month lockup agreements from all of the other
shareholders of the Company..
(j) On or before the Firm Closing Date, the Underwriters and
counsel for the Underwriters shall have received such further certificates,
documents, letters or other information as they may have reasonably requested
from the Company and other security holders of the Company.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Underwriters and counsel
for the Underwriters. The Company shall furnish to the Underwriters such
conformed copies of such opinions, certificates, letters and documents in such
quantities as the Underwriters and counsel for the Underwriters shall reasonably
request.
The obligation of the Underwriters to purchase and pay for any Option
Shares shall be subject, in its discretion, to each of the foregoing conditions,
except that all references to the Firm Shares and the Firm Closing Date shall be
deemed to refer to such Option Shares and the related Option Closing Date,
respectively.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Underwriters and each person, if any, who controls the Underwriters within the
meaning of Section 15 of the Act or Section 20 of the 1934 Act against any
losses, claims, damages, or liabilities, joint or several, to which the
Underwriters, or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
22
(1) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Securities under the Blue Sky or securities laws thereof
or filed with the Commission or any securities association or securities
exchange (each an "Application"), or
(2) the omission or alleged omission to state in
such Registration Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstance under which they were made not misleading,
and will reimburse, as incurred, the Underwriters and such controlling person
for any legal or other expenses reasonably incurred by the Underwriters or such
controlling person in connection with investigating or defending against any
loss, claim, damage, liability, action, investigation, litigation or proceeding;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or any Application in reliance upon and in conformity with written information
furnished to the Company by the Underwriters, specifically for use therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have. The Company will not, without the prior written consent of the
Underwriters, or controlling person, which consent shall not be unreasonably
withheld, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Underwriters or any
person who controls the Underwriters or within the meaning of Section 15 of the
Act or Section 20 of the 1934 Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Underwriters and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(b) The Underwriters will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the 1934 Act against, any losses,
claims, damages or liabilities to which the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
but only insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or any Application, or (ii) the omission
or the alleged omission to state therein a material fact required to be stated
in the Registration Statement or any
23
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by the Underwriters specifically for use therein; and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company or any such director, officer, or controlling person in connection with
investigating or defending against any such loss, claim, damage, liability,
action investigation, litigation or proceedings, in respect thereof. This
indemnity agreement will be in addition to any liability which the Underwriters
may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 7 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence or (ii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party.
(d) In circumstances in which the indemnity obligation
provided for in the preceding paragraphs of this Section 7 is unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or
24
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect (i) the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party on the other from the offering
of the Securities, or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the Offering (net of under-
writing discounts and commissions but before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and the other equitable considerations
appropriate in the circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the first sentence
of this paragraph (d). Notwithstanding any other provision of this paragraph
(d), the Underwriters shall not be obligated to make contributions hereunder
that in the aggregate exceed the total public offering price of the Securities
purchased by the Underwriters under this Agreement, less the aggregate amount of
any damages that the Underwriters has otherwise been required to pay in respect
of the same or any substantially similar claim, and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11 (f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person,
if any, who controls an Underwriters within the meaning of Section 15 of the Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Underwriters, and each director of the Company, each officer of the Company who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the 1934
Act, shall have the same rights to contribution as the Company.
8. Substitution of Underwriters.
If any Underwriter shall for any reason not permitted hereunder cancel
its obligations to purchase the Firm Securities hereunder, or shall fail to take
up and pay for the number of Firm Securities set forth opposite names in
Schedule 1 hereto upon tender of such Firm Securities in accordance with the
terms hereof, then:
(a) If the aggregate number of Firm Shares which such
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total number of Firm Shares, the other Underwriter shall be obligated to
purchase the Firm Shares which such defaulting Underwriters agreed but failed to
purchase.
25
(b) If any Underwriter so defaults and the agreed number of
Firm Shares with respect to which such default or defaults occurs is more than
10% of the total number of Firm Shares, the remaining Underwriter shall have the
right to take up and pay for the Firm Shares which the defaulting Underwriter
agreed but failed to purchase. If such remaining Underwriter does not, at the
Firm Closing Date, take up and pay for the Firm Shares which the defaulting
Underwriter agreed but failed to purchase, the time for delivery of the Firm
Shares shall be extended to the next business day to allow the remaining
Underwriters the privilege of substituting within twenty-four hours (including
nonbusiness hours) another Underwriter or Underwriters satisfactory to the
Company. If no such Underwriter or Underwriters shall have been substituted as
aforesaid, within such twenty-four hour period, the time of delivery of the Firm
Shares may, at the option of the Company, be again extended to the next
following business day, if necessary, to allow the Company the privilege of
finding within twenty-four hours (including nonbusiness hours) another
Underwriter or Underwriters to purchase the Firm Shares which the defaulting
Underwriters or Underwriters agreed but failed to purchase. If it shall be
arranged for the remaining Underwriters or substituted Underwriters to take up
the Firm Shares of the defaulting Underwriters as provided in this section, (i)
the Company or the Underwriters shall have the right to postpone the time of
delivery for a period of not more than seven business days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other document or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of Firm Shares to be purchased by the remaining Underwriters or
substituted Underwriters shall be taken as the basis of the underwriting
obligation for all purposes of this agreement.
If in the event of a default by any Underwriter and the remaining
Underwriters shall not take up and pay for all the Firm Shares agreed to be
purchased by the defaulting Underwriter or substitute another Underwriters or
Underwriters as aforesaid, the Company shall not find or shall not elect to seek
another Underwriters or Underwriters for such Firm Shares as aforesaid, then
this Agreement shall terminate.
If, following exercise of the option provided in Section 2(c) hereof,
any Underwriter or Underwriters shall for any reason not permitted hereunder
cancel their obligations to purchase Option Shares at the Option Closing Date,
or shall fail to take up and pay for the number of Option Shares, which it
became obligated to purchase at the Option Closing Date upon tender of such
Option Shares in accordance with the terms hereof, then the remaining
Underwriters or substituted Underwriters may take up and pay for the Option
Shares of the defaulting Underwriters in the manner provided in Section 8(b)
hereof. If the remaining Underwriters or substituted Underwriters shall not take
up and pay for all such Option Shares, the Underwriters shall be entitled to
purchase the number of Option Shares for which there is no default or, at their
election, the option shall terminate, the exercise thereof shall be of no
effect.
26
As used in this Agreement, the term "Underwriters" includes any person
substituted for an Underwriter under this Section. In the event of termination,
there shall be no liability on the part of any non-defaulting Underwriters to
the Company, provided that the provisions of this Section 8 shall not in any
event affect the liability of any defaulting Underwriters to the Company arising
out of such default.
9. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, any of
its officers or directors and the Underwriters set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, any of its officers or directors, the Underwriters or
any controlling person referred to in Section 7 hereof, and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 4 and 7 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
10. Termination.
(a) This Agreement may be terminated with respect to the
Firm Shares or any Option Shares in the sole reasonable discretion of the
Underwriters by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied under Section 6
hereunder at or prior thereto or if at or prior to the Firm Closing Date or such
Option Closing Date, respectively:
(1) the Company sustains a loss by reason of
explosion, fire, flood, accident or other calamity, which, in the opinion of the
Underwriters, substantially affects the value of the properties of the Company
or which materially interferes with the operation of the business of the Company
regardless of whether such loss shall have been insured; there shall have been
any material adverse change, or any development involving a prospective material
adverse change (including, without limitation, a change in management or control
of the Company), in the business, operations, condition (financial or other-
wise), earnings or prospects of the Company, except in each case as described in
or contemplated by the Prospectus (exclusive of any amendment or supplement
thereto);
(2) any action, suit or proceeding shall be
instituted or pending, at law or in equity, against the Company, by any person
or by any federal, state, foreign or other governmental or regulatory
commission, board or agency wherein any unfavorable result or decision could
materially adversely affect the business, operations, condition (financial or
otherwise), earnings or prospects of the Company;
(3) trading in the Common Stock shall have been
suspended by the Commission, the NASD or on Nasdaq, or trading in securities
generally on the New York Stock Exchange shall have been suspended or minimum or
maximum prices shall have been established on either such exchange or quotation
system;
27
(4) a banking moratorium shall have been declared by
New York or United States authorities;
(5) there shall have been (A) an outbreak of
hostilities between the United States and any foreign power (or, in the case of
any ongoing hostilities, a material escalation thereof), (B) an outbreak of any
other insurrection or armed conflict involving the United States or (C) any
other calamity or crisis or material change in financial, political or economic
conditions, having an effect on the financial markets that, in any case referred
to in this clause (5), in the sole reasonable judgment of the Underwriters makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration Statement; and
(6) termination of this Agreement pursuant to this
Section 10 shall be without liability of any party to any other party, except as
provided in Section 5(b) and Section 7 hereof.
11. Information Supplied by the Underwriters. The statements set
forth in the first paragraph on page 41, (as to the underwriting commitment of
the Underwriters) and the fourth paragraph under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by the
Underwriters to the Company for the purposes of Section 7(b) hereof. The
Underwriters confirm that such statements (to such extent) are correct.
12. Notices. All notice hereunder to or upon either party hereto
shall be deemed to have been duly given for all purposes if in writing and (i)
delivered in person or by messenger or an overnight courier service against
receipt, or (ii) sent by certified or registered mail, postage paid, return
receipt requested, or (iii) sent by telegram, facsimile, telex or similar means,
provided that a written copy thereof is sent on the same day by postage paid
first-class mail, to such party at the following address:
To the Company: EONNET MEDIA, INC.
0000 000xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxxx Xxxxxx
and a copy to:
Xxxxx & Lardner
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn.: Xxxxx Xxxxxxx
28
To the Underwriters: ViewTrade Securities, Inc.
000 Xxxx Xxxxxxxx Xxxx Xx., Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxx
or such other address as either party hereto may at any time, or from time to
time, direct by notice given to the other party in accordance with this section.
The date of giving of any such notice shall be, in the case of clause (i), the
date of the receipt; in the case of clause (ii), five business days after such
notice or demand is sent; and, in the case of clause (iii), the business day
next following the date such notice is sent.
13. Amendment. Except as otherwise provided herein, no amendment of
this Agreement shall be valid or effective, unless in writing and signed by or
on behalf of the parties hereto.
14. Waiver. No course of dealing or omission or delay on the part of
either party hereto in asserting or exercising any right hereunder shall
constitute or operate as a waiver of any such right. No waiver of any provision
hereof shall be effective, unless in writing and signed by or on behalf of the
party to be charged therewith. No waiver shall be deemed a continuing waiver or
waiver in respect of any other or subsequent breach or default, unless expressly
so stated in writing.
15. Applicable Law. This agreement shall be governed by, and
interpreted and enforced in accordance with, the laws of the State of New York
without regard to principles of choice of law or conflict of laws.
16. Jurisdiction. Each of the parties hereto hereby irrevocably
consents and submits to the exclusive jurisdiction of the Supreme Court of the
State of New York and the United States District Court for the Southern District
of New York in connection with any suit, action or other proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby, waives
any objection to venue in the County of New York, State of New York, or such
District and agrees that service of any summons, complaint, notice or other
process relating to such suit, action or other proceeding may be effected in the
manner provided by clause (ii) of Section 12.
17. Remedies. In the event of any actual or prospective breach or
default by either party hereto, the other party shall be entitled to equitable
relief, including remedies in the nature of rescission, injunction and specific
performance. All remedies hereunder are cumulative and not exclusive, and
nothing herein shall be deemed to prohibit or limit either party from pursuing
any other remedy or relief available at law or in equity for such actual or
prospective breach or default, including the recovery of damages.
18. Attorneys' Fees. The prevailing party in any suit, action or
other proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, shall be entitled to recover its costs and
reasonable attorneys' fees.
29
19. Severability. The provisions hereof are severable and in the
event that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.
20. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and which together shall constitute
one and the same agreement.
21. Successors. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnities of the Company contained in
Section 7 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriters within the meaning of Section 15 of the Act
or Section 20 of the 1934 Act, and (ii) the indemnities of the Underwriters
contained in Section 7 of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the 1934 Act. No purchaser
of Securities from the Underwriters shall be deemed a successor because of such
purchase.
22. Titles and Captions. The titles and captions of the articles
and sections of this Agreement are for convenience of reference only and do not
in any way define or interpret the intent of the parties or modify or
otherwise affect any of the provisions hereof.
23. Grammatical Conventions. Whenever the context so requires, each
pronoun or verb used herein shall be construed in the singular or the plural
sense and each capitalized term defined herein and each pronoun used herein
shall be construed in the masculine, feminine or neuter sense.
24. References. The terms "herein," "hereto," "hereof," "hereby,"
and "hereafter," and other terms of similar import, refer to this Agreement as a
whole, and not to any Article, Section or other part hereof.
25. Entire Agreement. This Agreement embodies the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
any prior agreement, commitment or arrangement relating thereto.
30
[Signatures on following page]
31
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, and the
Underwriters.
Very truly yours,
EONNET MEDIA, INC.
By:______________________________________
Name: Xxxxxxx Xxxxxx
Title: CEO
The foregoing agreement is hereby confirmed and accepted as of the date first
above written.
VIEWTRADE SECURITIES, INC.
By:______________________________________
Name: Xxxxx Xxxxxx
32
Schedule I
ViewTrade Securities, Inc. [ ]
33
