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EXHIBIT 1.0
XXXXXXX SECURITIES, INC.
000X XXX XXXXXX XXXXX
XXXXXXXXXX, XX 00000
__________, 2001
Xxxxxxxx X. Xxxxxxxxx, Xx., Chief
Executive Officer
Pathfinder Business Resources, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Re: Underwriter's Agreement regarding Xxxxxxx Securities, Inc. and
Pathfinder Business Resources, Inc.
Gentlemen:
Pathfinder Business Resources, Inc., a New York corporation (the
"Company"), of 00 Xxxxxxxx Xxxxxx, Xxxxxxxxxx Xxxxxxx, Xxx Xxxx 00000, hereby
confirms its agreement with Xxxxxxx Securities, Inc. ("Xxxxxxx"), for use of the
services and facilities of Xxxxxxx for purposes of underwriting the Company's
public offering on the following terms and conditions:
Company's offering is a Best Efforts minimum offering of 120,000 common
shares at an initial public offering price of $2.50 per share with a maximum
offering of 400,000 common shares at an initial public offering price of $2.50
per share with all funds derived from the sales to be deposited with an escrow
agent listed herein.
SECTION 1
DESCRIPTION OF SECURITIES
The Company's authorized and outstanding capitalization when the
offering of the securities contemplated hereby is permitted to commence and at
the Closing Date, will be as set forth in the Registration Statement and
Prospectus. The Company proposes to issue through Xxxxxxx a minimum of 120,000
shares and a maximum of 400,000 common shares of the Company's $.001 par value
common stock.
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SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.01 REGISTRATION STATEMENT AND PROSPECTUS. A Registration Statement on
Form SB-2 (the "Registration Statement") with respect to the shares, including
the related Prospectus, copies of which have heretofore been delivered by the
Company to Xxxxxxx, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations ("Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, and said Registration Statement has
been filed with the Commission.
2.02 ACCURACY OF REGISTRATION STATEMENT AND PROSPECTUS. The Commission
has not issued any order preventing or suspending the use of any Preliminary
Prospectus with respect to the Stock, and each Preliminary Prospectus has
conformed in all material respects with the requirements of the Act and the
applicable rules and regulations of the Commission thereunder and to the best of
the Company's knowledge has not included at the time of filing any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein not misleading.
2.03 FINANCIAL STATEMENTS. The financial statements of the Company
together with related schedules and notes as set forth in the Registration
Statement and Prospectus will present fairly the financial position of the
Company and the results of its operations and the changes in its financial
position at the respective dates and for the respective periods for which they
apply.
2.04 INDEPENDENT PUBLIC ACCOUNTANT. Baron & Baron, which has certified
or shall certify certain of the financial statements filed or to be filed with
the Commission as part of the Registration Statement and Prospectus, are
independent certified public accountants within the meaning of the Act and the
rules and regulations.
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2.05 NO MATERIAL ADVERSE CHANGE. Subsequent to the dates as of which
information is given in the Registration Statement and Prospectus, and prior to
the Closing Date, (i) there shall not be any material adverse change in the
condition, financial or otherwise, of the Company or in its business taken as a
whole; (ii) there shall not have been any material transaction entered into by
the Company other than transactions in the ordinary course of business; (iii)
the Company shall not have incurred any material obligations, contingent or
otherwise, which are not disclosed in the prospectus; (iv) there shall not have
been nor will there be any change in the capital stock or long-term debt of the
Company (except current payments); and (v) the Company has not and will not have
paid or declared any dividends or other distributions on its common stock.
2.06 NO DEFAULTS. The Company is not in any default which has not been
waived in the performance of any obligation, agreement or condition contained in
any debenture, note or other evidence of indebtedness or any indenture or loan
agreement of the Company.
2.07 INCORPORATION AND STANDING. The Company is and at the Closing Date
will be duly incorporated and validly existing in good standing as a corporation
under the laws of the State of New York with authorized and outstanding capital
stock as set forth in the Registration Statement and the Prospectus, and with
full power and authority (corporate and other) to own its property and conduct
its business, present and proposed, as described in the Registration Statement
and Prospectus; the Company has full power and authority to enter into this
Agreement.
2.08 LEGALITY OF OUTSTANDING STOCK. The outstanding common stock of the
Company has been duly and validly authorized, issued and is fully paid and
nonassessable and will conform to all statements with regard thereto contained
in the Registration Statement and Prospectus. No sales of securities have been
made by the Company in violation of the registration provisions of the
Securities Act of 1933.
2.09 LEGALITY OF STOCK AND WARRANTS. The Stock and Warrant Stock have
been duly and validly authorized and, when issued and delivered against payment
therefor as provided in this Agreement, will be validly issued, fully paid and
nonassessable.
2.10 LITIGATION. Except as set forth in the Registration Statement and
Prospectus, there is and at the Closing Date there will be no action, suit or
proceeding before any court or governmental agency, authority or body pending or
to the knowledge of the Company threatened which might result in judgments
against the Company.
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2.11 AUTHORITY. The execution and delivery by the Company of this
Agreement has been duly authorized by all necessary corporate action and this
Agreement is the valid, binding and legally enforceable obligation of the
Company.
SECTION 3
PURCHASE AND SALE OF THE STOCK
3.01 GENERAL AND COMMISSION. The Company is offering to the public
400,000 shares of common stock at an initial public offering price of $2.50 per
share. The Company agrees to a 10% commission on all shares sold by Xxxxxxx, the
underwriter herein for a minimum of $30,000.00 in the event only 120,000 shares
are sold and a maximum of $100,000.00 in the event all 400,000 shares are sold.
3.02 PUBLIC OFFERING PRICE. After the Commission notifies the Company
that the Registration Statement has become effective, Xxxxxxx shall offer the
Stock to the public at a public offering price of $2.50 per share as set forth
in the Prospectus.
3.03 UNDERWRITER'S EXPENSE ALLOWANCE. It is understood that the Company
shall reimburse Xxxxxxx for its expenses on a nonaccountable basis in the amount
of 3% of the gross proceeds from the offering which means $9,000.00 to Xxxxxxx
if the minimum is sold and $30,000.00 if the maximum is sold. Xxxxxxx
acknowledges receipt of a $10,000 advance toward its non-accountable expense
allowance. In the event that the Company sells less than 133,334 shares in this
offering, the $10,000 advance will first be applied to the non-accountable
expense allowance and the balance to the consulting fee referenced referenced in
Section 3.05. In the event that the offering is not successfully completed,
Xxxxxx shall account to the Company for the advance and return to the Company
any portion of the advance that has not been accounted for in accordance with
NASD By-Laws.
3.04. The Prior Underwriter. The Company paid $15,000 to Creative
Capital Management Corp., the prior underwriter of our offering as an advance
toward its then non-accountable expense allowance. Subsequently, Creative
withdrew is membership from the NASD. Creative has not refunded any portion of
the $15,000 to us and no credit will be given to the Company by Xxxxxxx.
3.05 CONSULTING AGREEMENT. Company and Xxxxxxx shall enter into a one
year consulting agreement whereby Xxxxxxx shall provide to Company consulting
services. The aggregate fee due Xxxxxxx for such consulting services shall be an
amount equal to two (2%) percent of the gross proceeds of the offering and shall
be paid in full upon the closing date of the offering. A separate consulting
agreement has been prepared and entered into by the parties hereto.
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3.06 PAYMENT FOR STOCK. Payment for sales of stock shall be made by
Xxxxxxx to an escrow account with Continental Stock Transfer & Trust Company,
Xxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
3.07 UNDERWRITERS WARRANTS. The Company agrees to sell Xxxxxxx at the
closing of the offering one (1) warrant to purchase one (1) share of Company's
common stock for every ten (10) shares of common stock sold by Xxxxxxx in the
offering. The Underwriters warrant shall not be transferable for a period of One
(1) year after the effective date of the Registration Statement except to other
underwriters, selling group members and/or officers or partners. The warrant
shall have a term of Five (5) years and shall be exercisable at $3.75 per share
and shall have such registration rights as are provided in the Underwriting
section of the Prospectus. A more detailed Underwriter's Warrant has been
prepared between Company and Xxxxxxx and is incorporated by reference hereto.
SECTION 4
COVENANTS OF THE COMPANY
4.01 BLUE SKY. The Company counsel agrees to use reasonable efforts to
qualify the stock being offered for sale under the so-called Blue-Sky laws of
the States of Connecticut, Florida, Georgia, Illinois, New Jersey, and New York.
The fees and expenses associated with compliance with the Blue Sky laws of the
states above listed shall be paid by Company. A fee of $5,000 has been paid to
Underwriter's counsel for review of Company counsel blue sky filings. Any other
states requiring Blue Sky registration may be added as from time to time
required by Company or Xxxxxxx after consultation.
4.02 FINANCIAL STATEMENTS. The Company at its own expense will prepare
and give and will continue to give such financial statements and other
information to and as may be required by the Commission, or the proper public
bodies of the states in which the Stock may be qualified.
4.03 REPORTS AND FINANCIAL STATEMENTS TO UNDERWRITER. The Company shall
deliver to Xxxxxxx all financial information, including but not limited to all
annual reports as well as copies of all other statements, documents or other
information which the Company shall mail or otherwise make available to any
class of its security holders or shall file with the commission.
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4.04 PREPARATION AND FILING OF AMENDMENTS AND SUPPLEMENTS. The Company
will prepare and file promptly with the Commission, upon request of Xxxxxxx,
such amendments or supplements to Registration Statement or Prospectus, as from
time to time may be necessary in connection with the offering or distribution of
the Stock and will use its best efforts to cause the same to become effective as
promptly as possible.
4.05 APPLICATION OF PROCEEDS. The Company will apply the net proceeds
from the sale of the Stock substantially in the manner set forth in the
Registration Statement and Prospectus.
SECTION 5
INDEMNIFICATIONS
5.01 INDEMNIFICATION BY COMPANY. The Company agrees to indemnify and
hold harmless Xxxxxxx and each person who controls any underwriter within the
meaning of Section 15 of the Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act or any other statute or at common law and to reimburse persons
indemnified as above for any legal or other expenses incurred by them in
connection with any litigation, whether or not resulting in any liability, but
only insofar as such losses, claims, damages, liabilities and litigation arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereto
or any application or other document filed in order to qualify the Stock under
the Blue Sky or securities laws of the states where filings were made, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading.
5.02 INDEMNIFICATION BY XXXXXXX. Xxxxxxx severally agrees, to indemnify
and hold harmless the Company, the directors of the Company and each person, if
any, who controls the Company within the meaning of Section 15 of the Act with
respect to any statement in or omission from the Registration Statement or any
amendment thereto, or the Prospectus or any application or other document filed
in any state or jurisdiction in order to qualify the Stock under the blue sky or
securities laws thereof, if such statement or omission was made in reliance upon
information peculiarly within Xxxxxxx'x knowledge and furnished in writing to
the Company by Xxxxxxx on its behalf specifically for use in connection with the
preparation thereof or supplement thereto.
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SECTION 6
EFFECTIVENESS OF CONTRACT
This Contract shall become effective upon release by Xxxxxxx of the
Stock for offering after the effective date.
SECTION 7
CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS
Xxxxxxx'x obligations hereunder to act as agent for the sale of the
shares and to make payment to the Company hereunder on the Closing Date of the
offering shall be subject to the accuracy of the representations and warranties
on the part of the Company herein contained, to the performance of the Company
of all of its agreements herein contained, to the fulfillment of or compliance
by the Company with all covenants and conditions hereof, and to the following
additional conditions:
7.01 EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement shall have become effective on or prior to ___________, 2001, or such
later date as the Company and Xxxxxxx agree to.
7.02 ACCURACY OF REGISTRATION STATEMENT. Xxxxxxx shall not have
disclosed in writing to the Company that the Registration Statement of
Prospectus or any amendment thereof or supplement thereto contains an untrue
statement of a fact, which in the opinion of Xxxxxxx'x counsel is material.
7.03 CASUALTY AND OTHER CALAMITY. Between the date hereof and the
Closing Date, the Company shall not have sustained any loss on account of fire,
explosion, flood, accident, calamity or any other cause, of such character as
materially adversely affects its business or property considered as an entire
entity.
7.04 LITIGATION AND OTHER PROCEEDINGS. Between the date hereof and the
Closing Date, there shall be no litigation instituted or threatened against the
Company and there shall be no proceeding instituted or threatened against the
Company before or by any federal or state commission, regulatory body or
administrative agency wherein an unfavorable ruling, decision or finding would
materially adversely affect the business of the Company considered as an entity.
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7.05 TENDER OF DELIVERY OF STOCK. All of the Stock being offered by the
Company and the Warrants being purchased from the Company by the Underwriter
shall be tendered for delivery in accordance with the terms and provisions of
this Agreement.
7.06 BLUE-SKY QUALIFICATION. The Stock shall be qualified in such
states as the Company and Xxxxxxx determine, and each such qualification shall
be in effect and not subject to any stop order or other proceeding on the
Closing Date.
SECTION 8
TERMINATION
8.01 IN GENERAL. This Agreement shall be for a period of time from the
effective date of the Registration Statement as specified in the Prospectus and
shall automatically terminate on its own terms based upon the inability to sell
a minimum of 120,000 common shares within the offering period, in which case all
funds raised shall promptly be reimbursed by the Escrow Agent directly to the
purchasers without interest or deduction therefrom.
8.02 RENEWAL. This Agreement shall be subject to renewal in accordance
with the terms specified in the Prospectus.
8.03 EFFECT OF TERMINATION. Any termination of this Agreement pursuant
to this Section 8 shall be without liability of any character (including, but
not limited to, loss of anticipated profits or consequential damages) on the
part of one party thereto. Company shall be obligated to pay its own costs and
expenses.
SECTION 9
UNDERWRITERS' REPRESENTATIONS AND WARRANTIES
Xxxxxxx represents and warrants to and agrees with the Company that:
9.01 REGISTRATION AS BROKER-DEALER AND MEMBER OF NASD. Xxxxxxx is
registered as a broker-dealer with the Securities and Exchange Commission and is
registered as a broker-dealer in all states in which it conducts business and is
a member in good standing of the National Association of Securities Dealers,
Inc.
9.02 NO PENDING PROCEEDINGS. There is not now pending or threatened
against Xxxxxxx any action or proceeding of which it has been advised , either
in any court of competent jurisdiction, before the Securities and Exchange
Commission or any state securities commission concerning its activities as a
broker or dealer, nor has Xxxxxxx been named as a "cause" in any such action or
proceeding.
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SECTION 10
NOTICE
Except as otherwise expressly provided in this Agreement:
10.01 NOTICE TO THE COMPANY. Whenever notice is required by the
provisions of this Underwriting Agreement to be given to the Company, such
notice shall be in writing addressed to the Company as follows:
Xxxxxxxx X. Xxxxxxxxx, Xx.
Chief Executive Officer
Pathfinder Business Resources, Inc.
00 00xx Xxxxxx
Xxxxxxxxxx Xxxxxxx, Xxx Xxxx 00000
10.02 NOTICE TO THE UNDERWRITER. Whenever notice is required by the
provisions of this Agreement to be given to Xxxxxxx, such notice shall be given
in writing addressed to Xxxxxxx at the address below:
Xx. Xxxxx Xxxxxxxx
Xxxxxxx Securities, Inc.
000X Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
SECTION 11
MISCELLANEOUS
11.01 BENEFIT. This Agreement is made solely for the benefit of Xxxxxxx
and the Company, their respective officers and directors and any controlling
person referred to in Section 15 of the Act, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement.
11.02 SURVIVAL. The respective indemnities, agreements,
representations, warranties, covenants and other statements of the Company or
its officers as set forth in or made pursuant to this Agreement shall survive
and remain in full force and effect.
11.03 MODIFICATION. This Agreement may only be modified by an
instrument in writing duly executed by the Company's authorized representative
and Xxxxxxx and its authorized representative.
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11.04 ENTIRE AGREEMENT. This Agreement contains the entire
understanding among Company and Xxxxxxx and there exist no other oral or written
agreements which may amend or change this Agreement.
11.05 GOVERNING LAW. The validity, interpretation and construction of
this Agreement and of each part hereof will be governed by the laws of the State
of New York.
11.06 COUNTERPARTS. This Agreement may be executed in any number of
facsimile counterparts, each of which may be deemed an original and all of which
together will constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the Agreement
between Company and Xxxxxxx and if so then please affirm your agreement hereto
by placing your signatures below.
PATHFINDER BUSINESS RESOURCES, INC.
By:
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Xxxxxxxx Xxxxxxxxx, President
ATTEST:
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Secretary
WE HEREBY CONFIRM AS OF THE DATE HEREOF THAT THE ABOVE LETTER SETS FORTH THE
AGREEMENT BETWEEN THE COMPANY AND XXXXXXX.
XXXXXXX SECURITIES, INC.
By:
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Xxxxx Xxxxxxxx, President
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