AGREEMENT AMONG UNDERWRITERS
Agreement dated as of [______], 1998 between Xxxxxxx Xxxxxxxx
Securities Corp. ("KDSC") and Xxxxxx Xxxxxxx & Associates, Inc. ("JCAI"). KDSC
and JCAI are herein collectively referred to as the "Underwriters."
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, FirsLink Communications, Inc. (the "Company") has filed with
the Securities and Exchange Commission ("Commission"), a registration statement
on Form SB-2 (Registration No. 333-[______]) and one or more amendments thereto
(collectively, the "Registration Statement") for the public sale ("Offering")
through the Underwriters, severally and not jointly, of 1,400,000 units (the
"Units"), each Unit consisting of one share of common stock, no par value per
share (the "Common Stock"), and one common stock purchase warrant (the
"Warrants"), _______ Units to be underwritten by KDSC and _____ Units to be
underwritten by JCAI, plus an option, exercisable for a period of 45 days from
the effective date of the Registration Statement, to purchase up to an
additional 210,000 Units to cover over-allotments, if any (the "Over-allotment
Option"); and
WHEREAS, the Company and the Underwriters are, on the date hereof,
entering into an underwriting agreement (the "Underwriting Agreement") which
provides that the Underwriters will (a) purchase the Units (the Units, and the
Common Stock and Warrants underlying the Units are sometimes collectively
referred to herein as the "Securities"), severally and not jointly, at a price
that reflects a 10% discount, (b) receive an expense allowance equal to 3% of
the gross proceeds of the offering the ("Expense Allowance"), and (c) be sold,
for nominal consideration, five-year warrants to purchase up to an aggregate of
140,000 Units (the "Underwriters' Warrants").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. UNDERWRITING FEES AND EXPENSES. Of the 10% underwriting discount
per Unit, each Underwriter shall receive 2% with respect to underwritten
Securities and an additional 8% with respect to Securities actually sold. Each
Underwriter shall bear its own expenses in connection with the transactions
contemplated herein, provided that the following expenses shall be deducted from
the Expense Allowance prior to distribution: fees and disbursements of
Sichenzia, Ross & Xxxxxxxx, LLP, counsel to the Underwriters in connection with
the transaction (other than for blue sky matters which, pursuant to the
Underwriting Agreement, shall be borne by the Company). It is understood amount
the Underwriters that Sichenzia, Ross & Xxxxxxxx, LLP is acting as legal counsel
for all the Underwriters and that the interests of one Underwriter is not
superior to the others.
After such deductions, the balance of the Expense Allowance shall be divided
equally among the Underwriters. However, any reduction in compensation payable
to the Underwriters in connection with the Offering as a result of the
determination of the National Association of Securities Dealers, Inc. that
compensation had previously accrued to one, but not all the Underwriters, shall
be deducted in its entirety from the compensation otherwise payable to such
Underwriter pursuant to the terms of this Agreement
2. PURCHASE OF COMMON STOCK AND WARRANTS AND OVER-ALLOTMENT OPTION.
Each Underwriter shall underwrite, severally and not jointly, the Units set
forth in the first Whereas clause hereof. KDSC shall retain [_____] Units and
JCAI shall retain [_____] Units. KDSC and JCAI shall have the mutual right to
exercise the Over-allotment Option on a pro-rata basis.
3. UNDERWRITERS' WARRANTS. Each Underwriter shall be entitled to
purchase a pro rata portion of the Underwriters' Warrants.
4. NOMINEE TO BOARD OF DIRECTORS. The Underwriters shall be
entitled to designate one mutually agreed upon nonvoting advisor to the
Company's Board of Directors as set forth in the Underwriting Agreement.
5. INDEMNITY AND CONTRIBUTION.
5.1. Each Underwriter agrees to indemnify and hold harmless the
other Underwriters, its officers, directors, partners, employees, agents, and
counsel and each person, if any, who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act ("Control
Persons"), with respect to written information provided to the Company by such
Underwriter as stated in Section 2(c) of the Underwriting Agreement, to the
extent and upon the terms which the Underwriters agree to indemnify and hold
harmless the Company as set forth in the Underwriting Agreement.
5.2. Each Underwriter will pay as contribution, its ratable share
(based upon the number of Units underwritten by each) of any losses,
liabilities, claims, or damages, joint or several, paid or incurred by any
Underwriter to any person other than an Underwriter, arising out of, based upon,
or in connection with any untrue statement or alleged untrue statement of any
material fact contained in any preliminary prospectus, the Registration
Statement, the Prospectus (as from time to time amended or supplemented), any
amendment or supplement thereto, or in any application or other document or
communication executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Units under the "blue sky" or securities laws thereof or
filed with the Commission or any securities exchange, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (other than a statement
or omission made in reliance upon and in conformity with written information
furnished to the Company as stated in Section 2(c) of the Underwriting Agreement
with respect to any Underwriter by or on behalf of such Underwriter expressly
for inclusion therein); and will pay its
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pro rata portion of all attorney's fees and any and all expenses whatsoever
reasonably incurred in investigating, preparing, or defending against any such
loss, liability, claim, or damage, or any action in respect thereof and any
amounts paid in settlement of any claim or litigation. In determining the
amount of each of the Underwriters' obligation under this Section 5, appropriate
adjustment will be made to reflect any amounts received by any Underwriter in
respect of such untrue statement, alleged untrue statement, omission, or alleged
omission from the Company pursuant to Section 10 of the Underwriting Agreement
or otherwise. There shall be credited against any amount paid or payable by the
Underwriters pursuant to this Section 5.2 any loss, liability, claim, damage, or
expense which is reasonably incurred as a result of any such claim asserted
against the Underwriters (other than fees and disbursements of an Underwriter's
separate counsel if such counsel is not jointly approved by the Underwriters as
provided in the next sentence), and if such loss, liability, claim, damage, or
expense is incurred by the Underwriters subsequent to any payment by the
Underwriters pursuant to this Section 5.2, appropriate provision shall made to
effect such credit, by refund or otherwise. If any such claim is asserted or
any action in connection therewith as we jointly deem necessary or desirable,
including retaining counsel for the Underwriters, and in the Underwriters' joint
discretion separate counsel for any particular Underwriter and the fees and
disbursements of any counsel so retained shall be included in the amounts
payable pursuant to this Section 5.2.
5.3. The indemnity and contribution contained in this Section 5
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of such other Underwriter or its officers,
directors, partners, employees, agents, counsel, or Control Persons (if any) and
shall survive the delivery of the Units to the Underwriters and the termination
of this Agreement. In determining amounts payable pursuant to Section 5.2
hereof, any loss, liability, claim, damage or expense incurred by any person who
controls any Underwriter within the meaning of Section 15 of the Act or any
Underwriter which has been incurred by reason of such control or other
relationship shall be deemed to have been incurred by such Underwriter. Any
Underwriter shall have the right to employ its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Underwriter. No
Underwriter may settle any such claim or action without the prior written
consent of the other. Whenever an Underwriter receives notice of the assertion
of any claim or the commencement of any action to which the provisions of
Section 5.2 hereof would be applicable, such Underwriter will give prompt notice
thereof to the other Underwriter.
6. REDEMPTION OF WARRANTS. It is hereby agreed that during such
period as the redemption of the Warrants requires the mutual consent of the
Underwriters pursuant to the Underwriting Agreement.
7. BOARD OF DIRECTOR DESIGNEE. Pursuant to the provisions of the
Underwriting Agreement, a mutually agreed upon designee of each of the
Underwriters will be invited to attend meetings of the Board of Directors of the
Company. Subject to obligations of confidentiality, upon the request of any
other Underwriter, the designee will inform such Underwriter on a timely basis
of any material information regarding the Company or its business or operations.
Provided, however, that nothing contained herein shall obligate such designee to
attend any meeting or
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meetings of the Board of Directors.
8. MISCELLANEOUS. This Agreement is made solely for the benefit of
the Underwriters and their respective officers, partners, agents, counsel and
Control Persons and their respective successors and assigns, and not other
person shall acquire or have any rights by virtue of this Agreement. The
validity, interpretation and construction of this Agreement and of each part
hereof will be governed by, and construed in accordance with, the laws of the
State of New York without giving effect to conflicts of laws. This Agreement
constitutes the parties' full agreement and may not be modified by anything
other than a writing signed by the parties. This Agreement may be executed in
any number of counterparts, each of which may be deemed an original and all of
which together will constitute one and the same instrument.
All notices, requests, demands and other communications which are
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given upon the delivery or mailing thereof, as
the case may be, if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid:
(a) If to KDSC, to: Xxxxxxx Xxxxxxxx Securities Corp.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxxx
If to Aegis, to: Xxxxxx Xxxxxxx & Associates, Inc.
Mellon Financial Center
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxx
(b) With a copy of all notices to either KDSC or JCAI to:
Sichenzia, Ross & Xxxxxxxx, LLP
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxxx Xxxxxxxxx, Esq.
or to such other addresses as any party shall have specified by notice in
writing to the others.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
XXXXXXX XXXXXXXX SECURITIES CORP.
By:
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XXXXXX XXXXXXX & ASSOCIATES, INC.
By:
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