FORM OF UNDERWRITING AGREEMENT
EXHIBIT
1.1
FORM
OF UNDERWRITING AGREEMENT
Healthy
Fast Food, Inc.
dated
_____________, 2007
Xxxxxxx
Investment Company, Inc.
_______________,
2007
Xxxxxxx
Investment Company, Inc.
000
XX
Xxxxx Xxxxxxx
Xxxxxxxx,
Xxxxxx 00000
Ladies
and Gentlemen:
Introductory. Healthy
Fast Food, Inc., a Nevada corporation (the “Company”), proposes to issue
and sell to the several underwriters named in Schedule A (the
“Underwriters”) an aggregate of 2,500,000 Units, each Unit consisting of
(i) one share of the Company’s common stock (“Common Stock”), (ii) one
Class A warrant to purchase one share of Common Stock (each a “Class A
Warrant” and, collectively, the “Class A Warrants”), and (iii) one
Class B warrant to purchase one share of Common Stock (each a “Class B
Warrant”, collectively, the “Class B Warrants” and, together with the
Class A Warrants, the “Warrants”). The Warrants are to be
issued under the terms of a Warrant Agreement (the “Warrant Agreement”)
by and between the Company and Computershare Trust Company, as warrant agent
(the “Warrant Agent”), substantially in the form most recently filed as
an exhibit to the Registration Statement (hereinafter defined). The
2,500,000 Units to be sold by the Company are collectively called the “Firm
Units”. In addition, the Company has granted to the Underwriters
an option to purchase up to an additional 375,000 Units (the “Optional
Units”), as provided in Section 2. The Firm Units and, if and to
the extent such option is exercised, the Optional Units are collectively called
the “Units”. Xxxxxxx Investment Company, Inc. has agreed to
act as representative of the several Underwriters (in such capacity, the
“Representative”) in connection with the offering and sale of the
Units.
The
Company confirms its agreement with
the Underwriters as follows:
Section 1. Representations and Warranties of the
Company.
The
Company represents, warrants and
covenants to each Underwriter as follows:
(a) Filing
of the Registration Statement. The Company has prepared and
filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form SB-2 (File No. 333-_________), which contains
a
form of prospectus to be used in connection with the public offering and sale
of
the Units. Such registration statement, as amended, including the
financial statements, exhibits and schedules thereto, and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such registration statement became effective, in the
form
in which it was declared effective by the Commission under the Securities Act
of
1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), and including any
required
information
deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A,
Rule 430B or Rule 430C under the Securities Act, or pursuant to the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder
(collectively, the “Exchange Act”), is called the “Registration
Statement.” Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b)
Registration Statement,” and from and after the date and time of filing of
the Rule 462(b) Registration Statement the term “Registration Statement”
shall include the Rule 462(b) Registration Statement. Such
prospectus, in the form first filed pursuant to Rule 424(b) under the Securities
Act after the date and time that this Agreement is executed and delivered by
the
parties hereto (the “Execution Time”), or, if no filing pursuant to Rule
424(b) under the Securities Act is required, the form of final prospectus
relating to the Units included in the Registration Statement at the effective
date of the Registration Statement, is called the
“Prospectus.” All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, the Company’s
preliminary prospectus included in the Registration Statement (each a
“preliminary prospectus”), the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (“XXXXX”). Any reference herein to any preliminary
prospectus or the Prospectus or any supplement or amendment to either thereof
shall be deemed to refer to and include any documents incorporated by reference
therein as of the date of such reference.
(b) Compliance
with Registration Requirements. The Registration
Statement has been declared effective by the Commission under the Securities
Act. The Company has complied to the Commission’s satisfaction with
all requests of the Commission for additional or supplemental
information. No stop order preventing or suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration Statement is
in
effect and no proceedings for such purpose have been instituted or are pending
or, to the best knowledge of the Company, are contemplated or threatened by
the
Commission.
Each
preliminary prospectus and the Prospectus when filed complied or will comply
in
all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical in content to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale
of
the Units other than with respect to any artwork and graphics that were not
filed. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time
it
became effective and at all subsequent times until the expiration of the
prospectus delivery period required under Section 4(3) of the Securities Act,
complied and will comply in all material respects with the Securities Act and
did not and will not contain any untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus (including any
Prospectus wrapper), as amended or supplemented, as of its date and at all
subsequent times until the Underwriters have completed their distribution of
the
offering of the Units, did not and will not contain 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. The representations and warranties set forth in
the two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective
2
amendment
thereto, or the Prospectus, or any amendments or supplements thereto, made
in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by the Representative expressly for use
therein, it being understood and agreed that the only such information furnished
by the Representative consists of the information described as such in Section
8
hereof. There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the Registration
Statement that have not been described or filed as required.
(c) Disclosure
Package. The term “Disclosure Package” shall mean (i) the
preliminary prospectus, as amended or supplemented, (ii) the issuer free writing
prospectuses as defined in Rule 433 of the Securities Act (each, an “Issuer
Free Writing Prospectus”), if any, identified in Schedule B hereto, (iii)
the pricing terms set forth in Schedule C to this Agreement, and (iv) any other
free writing prospectus that the parties hereto shall hereafter expressly agree
in writing to treat as part of the Disclosure Package. As of 9:00
a.m. (Eastern time) on the date of this Agreement (the “Initial Sale
Time”), the Disclosure Package did not contain 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. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representative specifically for use therein, it being understood
and
agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8
hereof.
(d) Company
Not Ineligible Issuer. (i) At the time of filing the
Registration Statement and (ii) as of the date of the execution and delivery
of
this Agreement (with such date being used as the determination date for purposes
of this clause (ii)), the Company was not and is not an Ineligible Issuer (as
defined in Rule 405 of the Securities Act), without taking account of any
determination by the Commission pursuant to Rule 405 of the Securities Act
that
it is not necessary that the Company be considered an Ineligible
Issuer
(e) Issuer
Free Writing Prospectuses. No Issuer Free Writing Prospectus
includes any information that conflicts with the information contained in the
Registration Statement, including any document incorporated by reference therein
that has not been superseded or modified. The foregoing sentence does
not apply to statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company
by any Underwriter through the Representative specifically for use therein,
it
being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 8
hereof.
(f) Offering
Materials Furnished to Underwriters. The Company has
delivered to the Representative five complete manually signed copies of the
Registration Statement and of each consent and certificate of experts filed
as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representative have
reasonably requested for each of the Underwriters.
3
(g) Distribution
of Offering Material By the Company. The Company has
not distributed and will not distribute, prior to the later of each Subsequent
Closing Date (as defined below) and the completion of the Underwriters’
distribution of the Units, any offering material in connection with the offering
and sale of the Units other than a preliminary prospectus, the Prospectus, any
Issuer Free Writing Prospectus reviewed and consented to by the Representative,
and the Registration Statement.
(h) The
Underwriting Agreement. This Agreement has been duly
authorized (to the extent applicable), executed and delivered by, and is a
valid
and binding agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable
law
and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable
principles.
(i) Authorization
of the Common Stock; Validity of Warrants and Warrant
Agreement.
(i) The
Common Stock included in the Units to be purchased by the Underwriters from
the
Company (including units purchasable on exercise of the Underwriters’
overallotment option described in Section 2(c) and the Representative’s Warrants
described in Section 2(h)) has been duly authorized and reserved for issuance
and sale pursuant to this Agreement and, in the case of Common Stock issuable
on
exercise of the Representative’s Warrants, the terms thereof and, when so issued
and delivered by the Company, will be validly issued, fully paid and
nonassessable.
(ii) The
Warrants included in the Units to be purchased by the Underwriters from the
Company have been duly and validly authorized by all required corporate actions
and will, when issued and delivered by the Company pursuant to this Agreement,
be validly executed and delivered by, and will be valid and binding agreements
of, the Company, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(iii) The
Representative’s Warrants have been duly and validly authorized by all required
corporate actions and will, when issued and delivered by the Company pursuant
to
this Agreement, be validly executed and delivered by, and will be valid and
binding agreements of, the Company, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable
principles.
(iv) The
Common Stock issuable on exercise of the Warrants has been duly authorized
and
reserved for issuance and sale pursuant to their terms and, when issued
and delivered by the Company pursuant to such warrants, will be validly issued,
fully paid and nonassessable.
4
(v) The
Warrant Agreement has been duly and validly authorized by all required corporate
actions of the Company and will, when executed and delivered (and assuming
due
and valid execution by the Warrant Agent) constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(vi) Each
of the Warrants and the Representative’s Warrants will, when issued, possess
rights, privileges, and characteristics as represented in the most recent form
of Warrant Agreement or Representative’s Warrants, as the case may be, filed as
an exhibit to the Registration Statement.
(j) No
Applicable Registration or Other Similar Rights. Except
as fairly and accurately described in the Registration Statement, there are
no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included
in
the offering contemplated by this Agreement, except for such rights as have
been
duly waived.
(k) No
Material Adverse Change. Except as otherwise disclosed
in the Disclosure Package, subsequent to the respective dates as of which
information is given in the Disclosure Package: (i) there has been no
material adverse change, or any development that could reasonably be expected
to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company (any such
change is called a “Material Adverse Change”); (ii) the Company has not
incurred any material liability or obligation, indirect, direct or contingent,
not in the ordinary course of business nor entered into any material transaction
or agreement not in the ordinary course of business; and (iii) there has been
no
dividend or distribution of any kind declared, paid or made by the Company
in
respect of its capital stock.
(l) Independent
Accountants. Reeves, Evans, XxXxxxx & Zhang, LLP,
who have expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) filed with
the Commission as a part of the Registration Statement and included in the
Disclosure Package and the Prospectus, is an independent registered public
accounting firm as required by the Securities Act and the Exchange
Act.
(m) Preparation
of the Financial Statements. Each of the historical and
pro-forma financial statements filed with the Commission as a part of or
incorporated by reference in the Registration Statement, and included or
incorporated by reference in the Disclosure Package and the Prospectus, presents
fairly the information provided as of and at the dates and for the
periods
5
indicated. Such
financial statements comply as to form with the applicable accounting
requirements of the Securities Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements or supporting
schedules are required to be included or incorporated by reference in the
Registration Statement. Each item of historical or pro-forma
financial data relating to the operations, assets or liabilities of the Company
set forth in summary form in each of the preliminary prospectus and the
Prospectus fairly presents such information on a basis consistent with that
of
the complete financial statements contained in the Registration
Statement.
(n) Incorporation
and Good Standing; Subsidiaries. The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Disclosure Package and the Prospectus and to enter
into and perform its obligations under this Agreement. The Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required except
for
such jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change. The Company does not own or control, directly or indirectly,
any corporation, association or other entity.
(o) Capitalization
and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the each of
the
Disclosure Package and the Prospectus under the caption “Capitalization” (other
than for subsequent issuances, if any, pursuant to employee benefit plans
described in each of the Disclosure Package and the Prospectus or upon exercise
of outstanding options or warrants described in the Disclosure Package and
Prospectus, as the case may be). The Common
Stock conforms, and, when issued and delivered as provided in this
Agreement, the Class A Warrants, the Class B Warrants and the Representative’s
Warrants will comply in all material respects to the description thereof
contained in the each of the Disclosure Package and Prospectus. All
of the issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with federal and state securities laws. None of
the outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company other than
those accurately described in the Disclosure Package and the
Prospectus. The description of the Company’s stock option, stock
bonus and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth or incorporated by reference in each of the
Disclosure Package and the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(p) Quotation. The
Units, the Common Stock, the Class A Warrants and the Class B Warrants have
been
approved for quotation on the Nasdaq Capital Market under the symbols “_______,”
“_______,” “_______” and “_______,” respectively.
6
(q) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required. The Company is not in violation of its
charter or by-laws or in default (or, with the giving of notice or lapse of
time, would be in default) (“Default”) under any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other instrument
to which it is a party or by which it or it may be bound (including, without
limitation, such agreements and contracts filed as exhibits to the Registration
Statement or to which any of the property or assets of the Company is subject
(each, an “Existing Instrument”)), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse
Change. The Company’s execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and by the
Disclosure Package and the Prospectus (i) have been duly authorized by all
necessary corporate action and will not result in any violation of the
provisions of the charter or by-laws of the Company, (ii) will not conflict
with
or constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the
Company pursuant to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby and by the Disclosure Package and the Prospectus, except the registration
or qualification of the Units under the Securities Act and applicable state
securities or blue sky laws and from the Financial Industry Regulatory Authority
(the “FINRA”).
(r) No
Material Actions or Proceedings. Except as otherwise
disclosed in the Disclosure Package and the Prospectus, there are no legal
or
governmental actions, suits or proceedings pending or, to the best of the
Company’s knowledge, threatened (i) against or affecting the Company, (ii) which
have as the subject thereof any officer or director (in such capacities) of,
or
property owned or leased by, the Company or (iii) relating to environmental
or
discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely
to the Company and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this
Agreement. No material labor dispute with the employees of the
Company exists or, to the best of the Company’s knowledge, is threatened or
imminent except for such disputes as would not, individually or in the
aggregate, result in a Material Adverse Change.
(s) Intellectual
Property Rights. The Company owns or possesses
sufficient trademarks, trade names, patent rights, copyrights, domain names,
licenses, approvals, trade secrets and other similar rights (collectively,
“Intellectual Property Rights”) reasonably necessary to conduct its
businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse
Change. The Company has not received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change. The Company is not a party to or
bound by any options, licenses or agreements with respect to the Intellectual
Property Rights of any other person or entity that are
7
required
to be set forth in the Disclosure Package and the Prospectus and are not
described in all material respects. None of the technology employed
by the Company has been obtained or is being used by the Company in violation
of
any contractual obligation binding on the Company or, to the Company’s
knowledge, any of its officers, directors or employees or otherwise in violation
of the rights of any persons.
(t) All
Necessary Permits, etc. Except as otherwise disclosed in the
Disclosure Package and the Prospectus or except as would not result in a
Material Adverse Change, the Company possesses such valid and current
certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct its businesses,
and the Company has not received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of
an
unfavorable decision, ruling or finding, could result in a Material Adverse
Change.
(u) Title
to Properties. The Company has good and marketable
title to all the properties and assets reflected as owned in the financial
statements referred to in Section 1(n) above (or elsewhere in the Disclosure
Package and the Prospectus), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such property
and do not materially interfere with the use made or proposed to be made of
such
property by the Company. The real property, improvements, equipment
and personal property held under lease by the Company are held under valid
and
enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the
Company.
(v) Tax
Law Compliance. The Company has filed all necessary
federal, state and foreign income and franchise tax returns and has paid all
taxes required to be paid by it and, if due and payable, any related or similar
assessment, fine or penalty levied against it. The Company has made
adequate charges, accruals and reserves in the applicable financial statements
referred to in Section 1(n) above in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax liability of
the
Company has not been finally determined.
(w) Company
Not an “Investment Company.” The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the “Investment Company Act”). The Company is not,
and after receipt of payment for the Units and the application of the proceeds
thereof as contemplated under the caption “Use of Proceeds” in each of the
preliminary prospectus and the Prospectus will not be, an “investment company”
within the meaning of the Investment Company Act and will conduct its business
in a manner so that it will not become subject to the Investment Company
Act.
(x) Insurance. The
Company is insured by recognized, financially sound and reputable institutions
with policies in such amounts and with such deductibles and covering such risks
as the Company reasonably believes are adequate and customary for its business
including, but not limited to, policies covering real and personal property
owned or leased by the Company against theft, damage, destruction, acts of
vandalism and earthquakes. The Company reasonably
8
believes
that it will be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as
now
conducted and at a cost that would not result in a Material Adverse
Change. The Company has not been denied any insurance coverage which
it has sought or for which it has applied.
(y) No
Price Stabilization or Manipulation. The Company has
not taken and will not take, directly or indirectly, any action designed to
or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of any securities of the Company to facilitate the
sale or resale of the Units or the underlying securities. The Company
acknowledges that the Underwriters may engage in passive market making
transactions in the Units on the Nasdaq Capital Market in accordance with
Regulation M under the Exchange Act.
(z) Related
Party Transactions. There are no business relationships
or related-party transactions involving the Company or any other person required
to be described in the preliminary prospectus or the Prospectus that have not
been described as required.
(aa) Disclosure Controls and
Procedures. The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under the
Exchange Act), which (i) are designed to ensure that material information
relating to the Company is made known to the Company’s principal executive
officer and its principal financial officer by others within those entities,
particularly during the periods in which the periodic reports required under
the
Exchange Act are being prepared, (ii) will be evaluated for effectiveness as
of
the end of each fiscal quarter and fiscal year of the Company and (iii) are
effective in all material respects to perform the functions for which they
were
established. The Company is not aware of (a) any significant
deficiency in the design or operation of internal controls which could adversely
affect the Company’s ability to record, process, summarize and report financial
data or any material weaknesses in internal controls or (b) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company’s internal controls.
(bb) Company’s
Accounting System. The Company maintains a system of accounting
controls sufficient to provide reasonable assurances that (i) transactions
are
executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to
maintain accountability for assets; (iii) access to assets is permitted only
in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(cc) No
Unlawful Contributions or Other Payments. Neither the
Company nor, to the best of the Company’s knowledge, any employee or agent of
the Company has made any contribution or other payment to any official of,
or
candidate for, any federal, state or foreign office in violation of any law
or
of the character required to be disclosed in the Disclosure Package and the
Prospectus.
9
(dd) Compliance
with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change (i) the
Company is not in violation of any federal, state, local or foreign law or
regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases
or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environment Concern
(collectively, “Environmental Laws”), which violation includes, but is
not limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the Company under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company received any written communication, whether from
a
governmental authority, citizens group, employee or otherwise, that alleges
that
the Company is in violation of any Environmental Law; (ii) there is no claim,
action or cause of action filed with a court or governmental authority, no
investigation with respect to which the Company has received written notice,
and
no written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys’ fees or
penalties arising out of, based on or resulting from the presence, or release
into the environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company, now or in the past (collectively,
“Environmental Claims”), pending or, to the best of the Company’s
knowledge, threatened against the Company or any person or entity whose
liability for any Environmental Claim the Company has retained or assumed either
contractually or by operation of law; and (iii) to the best of the Company’s
knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
emission, discharge, presence or disposal of any Material of Environmental
Concern, that reasonably could result in a violation of any Environmental Law
or
form the basis of a potential Environmental Claim against the Company or against
any person or entity whose liability for any Environmental Claim the Company
has
retained or assumed either contractually or by operation of law.
(ee) ERISA
Compliance. The Company and any “employee benefit plan”
(as defined under the Employee Retirement Income Security Act
of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, “ERISA”)) established or maintained by the Company or its
“ERISA Affiliates” (as defined below) are in compliance in all material respects
with ERISA. “ERISA Affiliate” means, with respect to the
Company, any member of any group of organizations described in Sections 414(b),
(c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the “Code”) of
which the Company is a member. No “reportable event” (as defined
under ERISA) has occurred or is reasonably expected to occur with respect to
any
“employee benefit plan” established or maintained by the Company or any of its
ERISA Affiliates. No “employee benefit plan” established or
maintained by the Company or any of its ERISA Affiliates, if such “employee
benefit plan” were terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). Neither the Company nor any of
its ERISA Affiliates has incurred or reasonably expects to incur any liability
under (i) Title IV of ERISA with respect to
10
termination
of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan” established
or maintained by the Company, or any of its ERISA Affiliates that is intended
to
be qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification.
(ff) Compliance
with Xxxxxxxx-Xxxxx Act of 2002. The Company and, to the best of
its knowledge, its officers and directors are in compliance with applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”) that are
effective and are actively taking steps to ensure that they will be in
compliance with other applicable provisions of the Xxxxxxxx-Xxxxx Act upon
the
effectiveness of such provisions, including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(gg) Material
Understandings, Generally. Except as fairly described in the
Prospectus and the Disclosure Package, the Company has not made a determination
to take any action and is not a party to any understanding, whether or not
legally binding, with any other person with respect to the taking of any action
that, if known to prospective purchasers of the Units, would be likely to affect
their assessment of the value or prospects of the Company or their decision
to
invest in the Units.
Any
certificate signed by an officer of
the Company and delivered to the Representative or to counsel for the
Underwriters shall be deemed to be a representation and warranty by the Company
to each Underwriter as to the matters set forth therein.
The
Company acknowledges that the Underwriters and, for purposes of the opinions
to
be delivered pursuant to Section 5 hereof, counsel to the Company and counsel
to
the Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
Section
2. Purchase, Sale and Delivery of the
Units.
(a) The
Firm Units. Upon the terms herein set forth, the
Company agrees to issue and sell the Firm Units to the several
Underwriters. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriters agree, severally and not jointly, to purchase
the Firm Units from the Company. The purchase price per Firm Unit to
be paid by the several Underwriters to the Company shall be $________ per
Unit.
(b) The
First Closing Date. Delivery of the Firm Units to be
purchased by the Underwriters and payment therefor shall be made at 9:00 a.m.
New York time on ___________, 2007, or such other time and date as the
Representative shall designate by notice to the Company (the time and date
of
such closing are called the “First Closing Date”). The Company hereby
acknowledges that circumstances under which the Representative may provide
notice to postpone the First Closing Date as originally scheduled include,
but
are in no way limited to, any determination by the Company or the Representative
to recirculate to the public copies of an amended
or supplemented Prospectus or Disclosure Package or a delay as contemplated
by
the provisions of Section 10.
11
(c) The
Optional Units; Each Subsequent Closing Date. In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Company hereby grants an option to the Underwriters to purchase up to an
aggregate of 375,000 Optional Units from the Company at the purchase price
per
share to be paid by the Underwriters for the Firm Units. The option
granted hereunder may be exercised at any time and from time to time upon notice
by the Representative to the Company which notice may be given at any time
within 45 days from the date of this Agreement. Such notice shall set
forth (i) the aggregate number of Optional Units as to which the Underwriters
are exercising the option, (ii) the names and denominations in which the
Optional Units are to be registered and (iii) the time, date and place at which
such Optional Units will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the term
“First Closing Date” shall refer to the time and date of delivery of the Firm
Units and the Optional Units). Each time and date of delivery, if
subsequent to the First Closing Date, is called the “Subsequent Closing
Date” and shall be determined by the Representative and shall not be earlier
than three nor later than five full business days after delivery of such notice
of exercise.
(d) Public
Offering of the Units. The Representative hereby
advises the Company that the Underwriters intend to offer for sale to the
public, as described in the Prospectus, their respective portions of the Units
as soon after this Agreement has been executed and the Registration Statement
has been declared effective as the Representative, in its sole judgment, has
determined is advisable and practicable.
(e) Payment
for the Units. Payment for the Units to be sold by the
Company shall be made at the First Closing Date (and, if applicable, at any
Subsequent Closing Date) by wire transfer of immediately available funds to
the
order of the Company.
It
is
understood that the Representative has been authorized, for its own account
and
the accounts of the several Underwriters, to accept delivery of and receipt
for,
and make payment of the purchase price for, the Firm Units and any Optional
Units the Underwriters have agreed to purchase. The Representative,
individually and not as the Representative of the Underwriters, may (but shall
not be obligated to) make payment for any Units to be purchased by any
Underwriter whose funds shall not have been received by the Representative
by
the First Closing Date or any Subsequent Closing Date, as the case may be,
for
the account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
(f) Delivery
of the Units. Delivery of the Firm Units and the
Optional Units shall be made through the facilities of The Depository Trust
Company unless the Representative shall otherwise instruct. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the
Underwriters.
12
(g) Delivery
of Prospectus to the Underwriters. Not later than 10:00
p.m. on the second business day following the date the Units are first released
by the Underwriters for sale to the public, the Company shall deliver or cause
to be delivered, copies of the Prospectus in such quantities and at such places
as the Representative shall request.
(h) Representative’s
Warrants. In addition to the sums payable to the Representative
as provided elsewhere herein, the Representative shall be entitled to receive
at
the closing occurring on the First Closing Date, for itself alone and not as
Representative of the Underwriters, as additional compensation for its services,
Representative’s Warrants for the purchase of up to 250,000 Units at a price of
$_______ per Unit, upon the terms and subject to adjustment and conversion
as
described in the form of Representative’s Warrants filed as an exhibit to the
Registration Statement.
SECTION
3. Covenants of the
Company.
The
Company covenants and agrees with each Underwriter as follows:
(a) Representative’
Review of Proposed Amendments and Supplements. During
the period beginning at the Initial Sale Time and ending on the later of the
First Closing Date or such date as, in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer, including under circumstances
where such requirement may be satisfied pursuant to Rule 172 under the
Securities Act (the “Prospectus Delivery Period”), prior to amending or
supplementing the Registration Statement or the Prospectus, including any
amendment or supplement through incorporation by reference of any report filed
under the Exchange Act, the Company shall furnish to the Representative for
review a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which the
Representative reasonably object.
(b) Securities
Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representative in writing (i) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (ii) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (iii) of the time
and date of any filing of any post-effective amendment to the Registration
Statement or any amendment or supplement to any preliminary prospectus or the
Prospectus, (iv) of the time and date that any post-effective amendment to
the
Registration Statement becomes effective and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order or notice
preventing or suspending the use of the Registration Statement, any preliminary
prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. The Company shall use its best efforts to prevent the
issuance of any such stop order or prevention or suspension of such
use. If the Commission shall enter any such stop order or order or
notice of prevention or suspension at any time, the Company will use its best
efforts to obtain the lifting of such order at the earliest possible moment,
or
will file a new registration statement
and use its best efforts to have such new registration statement declared
effective as soon as practicable. Additionally, the Company agrees
that it shall comply with the provisions of Rules 424(b) and 430A, as
applicable, under the Securities Act, including with respect to the timely
filing of documents thereunder, and will use its reasonable efforts to confirm
that any filings made by the Company under such Rule 424(b) were received in
a
timely manner by the Commission.
13
(c) Exchange
Act Compliance. During the Prospectus Delivery Period, the
Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within
the time periods required by the Exchange Act.
(d) Amendments
and Supplements to the Registration Statement, Prospectus and Other Securities
Act Matters. If, during the Prospectus Delivery Period,
any event or development shall occur or condition exist as a result of which
the
Disclosure Package or the Prospectus as then amended or supplemented would
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, as the case may be, not misleading,
or
if it shall be necessary to amend or supplement the Disclosure Package or the
Prospectus, or to file under the Exchange Act any document incorporated by
reference in the Disclosure Package or the Prospectus, in order to make the
statements therein, in the light of the circumstances under which they were
made, as the case may be, not misleading, or if in the opinion of the
Representative it is otherwise necessary to amend or supplement the Registration
Statement, the Disclosure Package or the Prospectus, or to file under the
Exchange Act any document incorporated by reference in the Disclosure Package
or
the Prospectus, or to file a new registration statement containing the
Prospectus, in order to comply with law, including in connection with the
delivery of the Prospectus, the Company agrees to (i) notify the Representative
of any such event or condition (unless such event or condition was previously
brought to the Company’s attention by the Representative during the Prospectus
Delivery Period) and (ii) promptly prepare (subject to Section 3(a) and 3(e)
hereof), file with the Commission (and use its best efforts to have any
amendment to the Registration Statement or any new registration statement to
be
declared effective) and furnish at its own expense to the Underwriters and
to
dealers, amendments or supplements to the Registration Statement, the Disclosure
Package or the Prospectus, or any new registration statement, necessary in
order
to make the statements in the Disclosure Package or the Prospectus as so amended
or supplemented, in the light of the circumstances under which they were made,
as the case may be, not misleading or so that the Registration Statement, the
Disclosure Package or the Prospectus, as amended or supplemented, will comply
with law.
(e) Permitted
Free Writing Prospectuses. The Company represents that it has
not made, and agrees that, unless it obtains the prior written consent of the
Representative, it will not make, any offer relating to the Units that would
constitute an Issuer Free Writing Prospectus or that would otherwise constitute
a “free writing prospectus” (as defined in Rule 405 of the Securities
Act) required to be filed by the Company with the Commission or retained by
the
Company under Rule 433 of the Securities Act; provided that the prior written
consent of the Representative hereto shall be deemed to have been given in
respect of the Free Writing Prospectuses included in Schedule B
hereto. Any such free writing prospectus consented to by the
Representative is hereinafter referred to as a “Permitted Free Writing
Prospectus”. The Company agrees that (i) it has treated and will
treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus, and (ii) has complied and will comply, as the case
may
be, with the requirements of Rules 164 and 433 of the Securities Act applicable
to any Permitted Free Writing Prospectus, including in respect of timely filing
with the Commission, legending and record keeping.
14
(f) Copies
of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the
Representative, without charge, during the Prospectus Delivery Period, as many
copies of each of the preliminary prospectus, the Prospectus and the Disclosure
Package and any amendments and supplements thereto (including any documents
incorporated or deemed incorporated by reference therein) as the Representative
may reasonably request.
(g) Blue
Sky Compliance. The Company shall cooperate with the
Representative and counsel for the Underwriters to qualify or register the
Units
for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws of those jurisdictions designated by the
Representative, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required
for
the distribution of the Units. The Company shall not be required to
qualify as a foreign corporation or to take any action that would subject it
to
general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Representative promptly of
the suspension of the qualification or registration of (or any such exemption
relating to) the Units for offering, sale or trading in any jurisdiction or
any
initiation or threat of any proceeding for any such purpose, and in the event
of
the issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.
(h) Use
of Proceeds. The Company shall apply the net proceeds
from the sale of the Units sold by it in the manner described under the caption
“Use of Proceeds” in the Disclosure Package and the Prospectus.
(i) Transfer
Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(j) Earnings
Statement. As soon as practicable and in any event no
later than 15 months after the effective date of the Registration Statement,
the
Company will make generally available to its security holders and to the
Representative an earnings statement (which need not be audited) covering a
period of at least 12 months beginning after the effective date of the
Registration Statement that satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 under the Securities Act.
(k) Periodic
Reporting Obligations. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and the
Nasdaq Capital Market all reports and documents required to be filed under
the
Exchange Act. Additionally, the Company shall report the use of
proceeds from the issuance of the Units as may be required under Rule 463 under
the Securities Act.
15
(l) Company
to Provide Interim Financial Statements. Prior to the First
Closing Date and, if applicable, each Subsequent Closing Date, the Company
will
furnish the Underwriters, as soon as they have been prepared by or are available
to the Company, a copy of any unaudited interim financial statements of the
Company for any period subsequent to the period covered by the most recent
financial statements appearing in the Registration Statement and the
Prospectus.
(m) Quotation. The
Company will use its best efforts to include, subject to notice of issuance,
the
Units on the Nasdaq Capital Market.
(n) Agreement
Not to Offer or Sell Additional Securities. During
the period commencing on the date hereof and ending on the 365th day following
the
date of the Prospectus, the Company will not, without the prior written consent
of the Representative (which consent may be withheld at the Representative’s
sole discretion), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent
position” within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act (except as contemplated by
the
Prospectus) in respect of, any shares of Common Stock, options or warrants
to
acquire shares of the Common Stock or securities exchangeable or exercisable
for
or convertible into shares of Common Stock (other than as contemplated by this
Agreement with respect to the Units); provided, however, that the Company may
issue shares of its Common Stock or options to purchase its Common Stock, or
shares of Common Stock upon exercise of options, in each case, pursuant to
any
stock option, stock bonus or other stock plan, arrangement or contractual
obligation described in the Prospectus, but only if the holders of such shares,
options, or shares issued upon exercise of such options, agree in writing not
to
sell, offer, dispose of or otherwise transfer any such shares or options during
such 365-day period without the prior written consent of the Representative
(which consent may be withheld at the Representative’s sole
discretion).
(o) Warrant
Solicitation Fees. The Company hereby engages the
Representative, on a non-exclusive basis, as its agent for the solicitation
of
the exercise of the Warrants. The Company will (i) assist the
Representative with respect to the solicitation, if requested by the
Representative, and (ii) provide the Representative, and direct the Company's
transfer and warrant agent to provide to the Representative, at the Company’s
cost, lists of the record and, to the extent known, beneficial owners of the
Warrants. Commencing one year from the effective date of the
Registration Statement, the Company will pay the Representative a commission
of
five percent (5%) of the exercise price of the Warrants for each Warrant
exercised, payable on the date of such exercise, on the terms provided for
in
the Warrant Agreement, only if permitted under the rules and regulations of
the
FINRA and only to the extent that a holder who exercises Warrants specifically
designates, in writing, that the Representative solicited the
exercise. The Representative may engage sub-agents in its
solicitation efforts. The Company agrees to disclose the arrangement
to pay solicitation fees to the Representative in any prospectus used by the
Company in connection with the registration of the shares of Common Stock
underlying the Warrants.
16
(p) Future
Reports to the Representative. During the period of
five years hereafter the Company will furnish, if not otherwise available on
XXXXX, to the Representative at 000 XX Xxxxx Xxxxxxx, Xxxxxxxx, Xxxxxx 00000
Attention: Syndicate Department: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report
of
the Company containing the balance sheet of the Company as of the close of
such
fiscal year and statements of income, stockholders’ equity and cash flows for
the year then ended and the opinion thereon of the Company’s independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the FINRA or any securities exchange; and (iii)
as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.
(q) Investment
Limitation. The Company shall not invest, or otherwise
use the proceeds received by the Company from its sale of the Units in such
a
manner as would require the Company to register as an investment company under
the Investment Company Act.
(r) No
Manipulation of Price. The Company will not take,
directly or indirectly, any action designed to cause or result in, or that
has
constituted or might reasonably be expected to constitute, the stabilization
or
manipulation of the price of any securities of the Company.
(s) Existing
Lock-Up Agreements. Except as described in the
Prospectus, there are no existing agreements between the Company and its
security holders that prohibit the sale, transfer, assignment, pledge or
hypothecation of any of the Company’s securities. The Company will
direct the transfer agent to place stop transfer restrictions upon the
securities of the Company that are bound by such “lock-up” agreements for the
duration of the periods contemplated therein.
SECTION
4. Payment of Expenses.
(a) The
Representative shall be entitled to reimbursement from the Company, for itself
alone and not as Representative of the Underwriters, to a non-accountable
expense allowance equal to 3% of the aggregate initial public offering price
of
the Firm Units. The Representative shall be entitled to withhold this
allowance on the Closing Date related to the purchase of the Firm Units or
the
Option Units, as the case may be.
(b) In
addition to the payment described in Paragraph (a) of this Section 4, the
Company agrees to pay all costs, fees and expenses incurred in connection with
the performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Units (including all printing
and
engraving costs, if any), (ii) all fees and expenses of the registrar and
transfer agent of the Common Stock, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Units to
the
Underwriters, (iv) all fees and expenses of the Company’s counsel, independent
public or certified public accountants and other advisors, (v) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each Issuer Free
Writing Prospectus, each preliminary prospectus and the Prospectus, and all
amendments and supplements thereto, and
17
this
Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by the
Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any
part
of the Units for offer and sale under the state securities or blue sky laws,
and, if requested by the Representative, preparing and printing a “Blue Sky
Survey” or memorandum, and any supplements thereto, advising the Underwriters of
such qualifications, registrations and exemptions, (vii) the filing fees
incident to the FINRA’s review and approval of the Underwriters’ participation
in the offering and distribution of the Units, (viii) the fees and expenses
associated with including the Units on the Nasdaq Capital Market, (ix) all
other
fees, costs and expenses referred to in Item 25 of Part II of the Registration
Statement,and (x) all reasonable out-of-pocket costs and expenses of the
Underwriters. Except as provided in this Section 4, Section 6,
Section 8 and Section 9 hereof, the Underwriters shall pay their own expenses,
including the fees and disbursements of their counsel.
SECTION
5. Conditions of the Obligations of the
Underwriters. The obligations of the several
Underwriters to purchase and pay for the Firm Units as provided herein on the
First Closing Date and, with respect to the Optional Units, each Subsequent
Closing Date, shall be subject to (1) the accuracy of the representations and
warranties on the part of the Company set forth in Section 1 hereof as of the
date hereof and as of the First Closing Date and each Subsequent Closing Date
as
though then made; (2) the timely performance by the Company of its covenants
and
other obligations hereunder; and (3) each of the following additional
conditions:
(a) Accountants’
Comfort Letter. On the date hereof, the Representative
shall have received from Reeves, Evans, XxXxxxx & Zhang, LLP, independent
registered public accounting firm of the Company, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the
Representative, containing statements and information of the type ordinarily
included in accountant’s “comfort letters” to underwriters, delivered according
to Statement of Auditing Standards No. 72 (or any successor bulletin), with
respect to the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus (and
the
Representative shall have received an additional four conformed copies of such
accountants’ letter for the several Underwriters).
(b) Effectiveness
of Registration Statement; Compliance with Registration Requirements; No Stop
Order. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to the
Optional Units, any Subsequent Closing Date:
(i) the
Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner and
within the time period required by Rule 424(b) under the Securities Act; or
the
Company shall have filed a post-effective amendment to the Registration
Statement containing the information required by such Rule 430A, and such
post-effective amendment shall have become effective; and
(ii) no
stop order suspending the effectiveness of the Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect
and
no
proceedings for such purpose shall have been instituted or threatened by the
Commission.
18
(c) No
Material Adverse Change. For the period from and after
the date of this Agreement and prior to the First Closing Date and, with respect
to the Optional Units, each Subsequent Closing Date, in the judgment of the
Representative there shall not have occurred any Material Adverse
Change.
(d) Opinion
of Counsel for the Company. On each of the First
Closing Date and each Subsequent Closing Date the Representative shall have
received the opinion of Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C., counsel
for the Company, dated as of the First Closing Date or the Subsequent Closing
Date, as applicable, substantially in the form attached as Exhibit A (and the
Representative shall have received an additional four conformed copies of such
counsel’s legal opinion for the several Underwriters).
(e) Opinion
of Counsel for the Underwriters. On each of the First
Closing Date and each Subsequent Closing Date the Representative shall have
received the opinion of Holland & Knight LLP, counsel for the Underwriters,
dated as of the First Closing Date or the Subsequent Closing Date, as
applicable, in a form satisfactory to the Representative (and the Representative
shall have received an additional four conformed copies of such counsel’s legal
opinion for the several Underwriters).
(f) Officers’
Certificate. On each of the First Closing Date and each
Subsequent Closing Date the Representative shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer
or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect that the
signers of such certificate have reviewed the Registration Statement, the
Prospectus and any amendment or supplement thereto, any Issuer Free Writing
Prospectus and any amendment or supplement thereto and this Agreement, to the
effect set forth in subsection (b)(ii) of this Section 5, and further to the
effect that:
(i) for
the period from and after the date of this Agreement and prior to such Closing
Date, there has not occurred any Material Adverse Change;
(ii) the
representations, warranties and covenants of the Company set forth in Section
1
of this Agreement are true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) the
Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date.
(g) Bring-down
Comfort Letter. On each of the First Closing Date and
each Subsequent Closing Date, the Representative shall have received from
Reeves, Evans, XxXxxxx & Zhang, LLP, independent public or certified public
accountants for the Company, a letter dated such date, in form and substance
satisfactory to the Representative, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a)
of
this
19
Section
5, except that the specified date referred to therein for the carrying out
of
procedures shall be no more than three business days prior to the First Closing
Date or Subsequent Closing Date, as the case may be (and the Representative
shall have received an additional four conformed copies of such accountants’
letter the several Underwriters).
(h) Lock-Up
Agreement from Certain Securityholders of the
Company. On or prior to the date hereof, the Company
shall have furnished to the Representative an agreement in the form of Exhibit
B
hereto from each [officer, director and more than 5%] stockholder of the
Company, and such agreement shall be in full force and effect on each of the
First Closing Date and each Subsequent Closing Date.
(i) Additional
Documents. On or before each of the First Closing Date
and each Subsequent Closing Date, the Representative and counsel for the
Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon
the
issuance and sale of the Units as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If
any
condition specified in this Section 5 is not satisfied when and as required
to
be satisfied, this Agreement may be terminated by the Representative by notice
to the Company at any time on or prior to the First Closing Date and, with
respect to the Optional Units, at any time prior to each Subsequent Closing
Date, which termination shall be without liability on the part of any party
to
any other party, except that Section 4, Section 6, Section 8 and Section 9
shall
at all times be effective and shall survive such termination.
SECTION
6. Reimbursement of Underwriters’
Expenses. If this Agreement is terminated by the
Representative pursuant to Section 5 or Section 11, or by the Company pursuant
to Section 7, or if the sale to the Underwriters of the Units on the First
Closing Date or Subsequent Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, the Company agrees
to
reimburse the Representative and the other Underwriters (or such Underwriters
as
have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representative and the Underwriters in connection with the proposed
purchase and the offering and sale of the Units, including but not limited
to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
SECTION
7. Effectiveness of this Agreement. This
Agreement shall not become effective until the later of (i) the execution of
this Agreement by the parties hereto and (ii) notification (including by way
of
oral notification from the reviewer at the Commission) by the Commission to
the
Company of the effectiveness of the Registration Statement under the Securities
Act; provided that Sections 4, 6, 8 and 9 shall at all times be
effective.
Prior
to
such effectiveness, this Agreement may be terminated by any party by notice
to
each of the other parties hereto, and any such termination shall be without
liability on the part of (a) the Company to any Underwriter, except that (solely
in the case where the Company has
20
terminated
this Agreement pursuant to this Section 7) the Company shall be obligated to
reimburse the expenses of the Representative and the Underwriters pursuant
to
Sections 4 and 6 hereof, or (b) any Underwriter to the Company except that
the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION
8. Indemnification.
(a) Indemnification
of the Underwriters.
(1) The
Company agrees to indemnify and hold harmless each Underwriter, its officers
and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law
or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any
amendment thereto, including any information deemed to be a part thereof
pursuant to Rule 430A, Rule 430B and Rule 430C under the Securities Act, or
the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (ii)
upon
any untrue statement or alleged untrue statement of a material fact contained
in
any Issuer Free Writing Prospectus, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged omission
therefrom of 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
(iii) in whole or in part upon any inaccuracy in the representations and
warranties of the Company contained herein; or (iv) in whole or in part upon
any
failure of the Company to perform its obligations hereunder or under law; or
(v)
upon any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Common Stock
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of
or
based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court
of
competent jurisdiction shall have determined by a final judgment that such
loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and
each
such controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by the Representative) as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply to any loss, claim,
damage, liability or expense to the extent, but only to the extent, arising
out
of or based upon any untrue statement or alleged untrue statement or omission
or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Representative expressly for use
in
the Registration Statement, any Issuer Free Writing Prospectus, any preliminary
prospectus or the Prospectus (or any amendment or
21
supplement
thereto). The indemnity agreement set forth in this Section 8(a)(1) shall be
in
addition to any liabilities that the Company may otherwise have.
(b) Indemnification
of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to 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 the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer, or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based
upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Issuer Free Writing Prospectus, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or arises
out of or is based upon 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, 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 the Registration Statement, any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment
or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by the Representative expressly for use therein; and
to
reimburse the Company, or any such director, officer, or controlling person
for
any legal and other expense reasonably incurred by the Company, or any such
director, officer, or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that
the only information that the Underwriters have furnished to the Company
expressly for use in the Registration Statement, any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment
or
supplement thereto) are the statements set forth in the table in the first
paragraph and in the Section entitled “Stabilization” under the caption
“Underwriting” in the preliminary prospectus and the Prospectus; and the
Underwriters confirm that such statements are correct. The indemnity
agreement set forth in this Section 8(b) shall be in addition to any liabilities
that each Underwriter may otherwise have.
(c) Notifications
and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing 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 for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is
not
prejudiced as a proximate result of such failure. In case any such
action is brought against any indemnified party and such indemnified party
seeks
or intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to
22
assume
the defense thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, 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 a conflict may arise between the positions of
the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to
the indemnifying party, the indemnified party or parties shall have the right
to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or
parties. Upon receipt of notice from the indemnifying party to such
indemnified party of such indemnifying party’s election so to assume the defense
of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses 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 (it being understood, however, that
the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (the Representative in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii)
the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees
and
expenses of counsel shall be at the expense of the indemnifying
party.
(d) Settlements. The
indemnifying party under this Section 8 shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with
such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could
have been a party and indemnity was or could have been sought hereunder by
such
indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
SECTION
9. Contribution. If the indemnification
provided for in Section 8 is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of
any
losses, claims, damages, liabilities or expenses referred to therein, then
each
indemnifying party shall contribute to the aggregate amount paid or payable
by
such indemnified
23
party,
as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying parties on the one hand, and
the
indemnified parties, on the other hand, from the offering of the Units pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is
not
permitted by applicable law, in such proportion as is appropriate to reflect
not
only the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying parties, on the one hand, and the indemnified parties,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein which resulted in
such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the
indemnifying parties, on the one hand, and the indemnified parties, on the
other
hand, in connection with the offering of the Units pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Units pursuant to this Agreement (before
deducting expenses) received by the indemnifying parties, and the total
underwriting discount received by the indemnified parties, in each case as
set
forth on the front cover page of the Prospectus bear to the aggregate initial
public offering price of the Units as set forth on such cover. The
relative fault of the indemnifying parties, on the one hand, and the indemnified
parties, on the other hand, shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact or any such inaccurate
or alleged inaccurate representation or warranty relates to information supplied
by indemnifying parties, on the one hand, or the indemnified parties, on the
other hand, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or
defending any action or claim. The provisions set forth in Section
8(c) with respect to notice of commencement of any action shall apply if a
claim
for contribution is to be made under this Section 9; provided, however, that
no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The
Company and the Underwriters agree that it would not be just and equitable
if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by
any
other method of allocation which does not take account of the equitable
considerations referred to in this Section 9.
24
each
person, if any, who controls an Underwriter within the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as such
Underwriter; 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 the Securities Act and the Exchange Act shall
have
the same rights to contribution as the Company.
SECTION
10. Default of One or More of the Several
Underwriters. If, on the First Closing Date or each
Subsequent Closing Date, as the case may be, any one or more of the several
Underwriters shall fail or refuse to purchase Units that it or they have agreed
to purchase hereunder on such date, and the aggregate number of Units which
such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
does not exceed 10% of the aggregate number of the Units to be purchased on
such
date, the other Underwriters shall be obligated, severally, in the proportions
that the number of Firm Units set forth opposite their respective names on
Schedule A bears to the aggregate number of Firm Units set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions
as
may be specified by the Representative with the consent of the non-defaulting
Underwriters, to purchase the Units which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on
the
First Closing Date or each Subsequent Closing Date, as the case may be, any
one
or more of the Underwriters shall fail or refuse to purchase Units and the
aggregate number of Units with respect to which such default occurs exceeds
10%
of the aggregate number of Units to be purchased on such date, and arrangements
satisfactory to the Representative and the Company for the purchase of such
Units are not made within 48 hours after such default, this Agreement shall
terminate without liability of any party to any other party except that the
provisions of Section 4, Section 6, Section 8 and Section 9 shall at all times
be effective and shall survive such termination. In any such case
either the Representative or the Company shall have the right to postpone the
First Closing Date or each Subsequent Closing Date, as the case may be, but
in
no event for longer than seven days in order that the required changes, if
any,
to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
As
used
in this Agreement, the term “Underwriter” shall be deemed to include any
person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION
11. Termination of this Agreement. Prior
to the First Closing Date and, with respect to Optional Units, each Subsequent
Closing Date, whether before or after notification by the Commission to the
Company of the effectiveness of the Registration Statement under the Securities
Act, this Agreement may be terminated by the Representative by notice given
to
the Company if at any time (i) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission or by the
Nasdaq Capital Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established
on
any of such stock exchanges by the Commission or the FINRA; (ii) a general
banking moratorium shall have been declared by any of federal, New York or
Nevada authorities; (iii) there shall have occurred any outbreak or escalation
of national or international hostilities or any crisis or calamity, or any
change in the United States or international financial
25
markets,
or any substantial change or development involving a prospective substantial
change in United States’ or international political, financial or economic
conditions that, in the judgment of the Representative is material and adverse
and makes it impracticable to market the Units in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
or (iv) in the judgment of the Representative there shall have occurred any
Material Adverse Change (regardless of whether any loss associated with such
Material Adverse Change shall have been insured). Any termination
pursuant to this Section 11 shall be without liability on the part of (a) the
Company to any Underwriter, except that the Company shall be obligated to
reimburse the expenses of the Representative and the Underwriters pursuant
to
Sections 4 and 6 hereof, (b) any Underwriter to the Company, or (c) of any
party
hereto to any other party except that the provisions of Section 8 and Section
9
shall at all times be effective and shall survive such termination.
SECTION
12. No Advisory or Fiduciary Responsibility. The
Company acknowledges and agrees that: (i) the purchase and sale of the Units
pursuant to this Agreement, including the determination of the public offering
price of the Units and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company, on the one hand, and the several
Underwriters, on the other hand, and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of
the
transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction
each
Underwriter is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) no Underwriter
has assumed or will assume an advisory, agency or fiduciary responsibility
in
favor of the Company with respect to any of the transactions contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter has
advised or is currently advising the Company on other matters) and no
Underwriter has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement; (iv) the several Underwriters and their respective affiliates may
be
engaged in a broad range of transactions that involve interests that differ
from
those of the Company and that the several Underwriters have no obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and
the Company has consulted its own legal, accounting, regulatory and tax advisors
to the extent it deemed appropriate. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the several Underwriters with respect to any breach or alleged
breach of agency or fiduciary duty.
This
Agreement supersedes all prior agreements and understandings (whether written
or
oral) between the Company and the several Underwriters, or any of them, with
respect to the subject matter hereof.
SECTION
13. Representations and Indemnities to Survive
Delivery. The respective indemnities, agreements,
representations, warranties and other statements of the Company, of its
officers, and of the several Underwriters set forth in or made pursuant to
this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any
26
Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Units sold hereunder and any termination of this Agreement.
SECTION
14. Notices. All communications
hereunder shall be in writing and shall be mailed, hand delivered or telecopied
and confirmed to the parties hereto as follows:
If
to the
Representative:
Xxxxxxx Investment Company, Inc.
000
XX Xxxxx Xxxxxxx, Xxxxx
000
Xxxxxxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: Syndicate
Department
with
a copy to:
Holland
&
Knight
LLP
000
XX Xxxxx Xxxxxx, Xxxxx
0000
Xxxxxxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: Xxxx
X. xxx
Xxxxxx
If
to the
Company:
Healthy
Fast Food, Inc.
0000
Xxxxxxxx Xxxxxxx, Xxxxx X
Xxxxxxxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: Xxxxx
X. Xxxxxxxxxx
with
a copy to:
Xxxx
Xxxx
Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C.
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: Xxx
X. Xxxxxxxxx
Any
party
hereto may change the address for receipt of communications by giving written
notice to the others.
SECTION
15. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Underwriters pursuant to Section 10 hereof, and to
the
benefit of the employees, officers and directors and controlling persons
referred to in Section 8 and Section 9, and in each case their respective
successors, and personal
27
representatives
and no other person will have any right or obligation hereunder. The
term “successors” shall not include any purchaser of the Units as such
from any of the Underwriters merely by reason of such purchase.
SECTION
16. Partial
Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary
to
make it valid and enforceable.
SECTION
17. Governing Law
Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
SECTION
18. Consent to
Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby (“Related Proceedings”) may be instituted in the federal courts of
the United States of America located in Portland, Oregon or the courts of the
Oregon in each case located in Portland, Oregon (collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment
of
any such court (a “Related Judgment”), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by
mail to such party’s address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in
the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient
forum.
SECTION
19. General
Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written
or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same
instrument. This Agreement may not be amended or modified unless in
writing by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition
is meant to benefit. The Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
Each
of
the parties hereto acknowledges that it is a sophisticated business person
who
was adequately represented by counsel during negotiations regarding the
provisions hereof, including, without limitation, the indemnification provisions
of Section 8 and the contribution provisions of Section 9, and is fully informed
regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate
the
28
risks
in
light of the ability of the parties to investigate the Company, its affairs
and
its business in order to assure that adequate disclosure has been made in the
Registration Statement, any preliminary prospectus and the Prospectus (and
any
amendments and supplements thereto), as required by the Securities Act and
the
Exchange Act.
The
respective indemnities, contribution agreements, representations, warranties
and
other statements of the Company and the several Underwriters set forth in or
made pursuant to this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the officers or employees
of
any Underwriter, any person controlling any Underwriter, the Company, the
officers or employees of the Company, or any person controlling the Company,
(ii) acceptance of the Units and payment for them hereunder and (iii)
termination of this Agreement.
Except
as
otherwise provided, this Agreement has been and is made solely for the benefit
of and shall be binding upon the Company, the Underwriters, the Underwriters’
officers and employees, any controlling persons referred to herein, the
Company’s directors and the Company’s officers who sign the Registration
Statement and their respective successors and assigns, all as and to the
extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term
“successors and assigns” shall not include a purchaser of any of the
Units from any of the several Underwriters merely because of such purchase.
29
If
the
foregoing is in accordance with your understanding of our agreement, kindly
sign
and return to the Company the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in
accordance with its terms.
Very
truly yours,
HEALTHY
FAST FOOD, INC.
By: _______________________________________
Name: Xxxxx
X.
Xxxxxxxxxx
Title: President
The
foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representative as of the date first above written.
XXXXXXX
INVESTMENT COMPANY, INC.
Acting
as
Representative of the several
Underwriters
named in the attached Schedule A.
By:____________________________________
Name:
Title:
#
4708423_v2
30
SCHEDULE
A
Underwriters
|
Number
of Firm Units to be Purchased
|
Xxxxxxx
Investment Company, Inc.
|
|
|
|
Total
|
2,500,000
|
SCH.
A-1
SCHEDULE
B
Issuer
Free Writing Prospectus
SCH.
B-1
Schedule
C
Pricing
Terms
Price
per
Unit to public: $_______
Underwriting
discounts and commissions per Unit: $_______
Offering
proceeds to the Company, before expenses: $_______
Closing
Date: ___________, 2007
SCH.
C-1
EXHIBIT
A
Opinion
of counsel for the Company
to
be
delivered pursuant to Section 5(d) of the Underwriting
Agreement.
References
to the Prospectus in this Exhibit A include any supplements thereto at the
First
Closing Date and, if applicable, each Subsequent Closing
Date. Capitalized terms used and not defined herein shall have the
meanings ascribed to them in the Underwriting Agreement.
(i) The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Nevada.
(ii) The
Company has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Disclosure Package
and the Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The
Company is duly qualified as a foreign corporation to transact business and
is
in good standing in each other jurisdiction in which such qualification is
required, except for such jurisdictions where the failure to so qualify or
to be
in good standing would not, individually or in the aggregate, result in a
Material Adverse Change.
(iv) To
the best of such counsel’s knowledge, the Company does not own an equity
interest in any other entity.
(v) The
authorized, issued and outstanding capital stock of the Company (including
the
Common Stock) conforms to the descriptions thereof set forth in the Disclosure
Package and the Prospectus. All of the outstanding shares of Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable and, to the best of such counsel’s knowledge, have been issued in
compliance with the registration and qualification requirements of federal
and
state securities laws. The form of certificate used to evidence the
Common Stock complies with all applicable requirements of the charter and
by-laws of the Company and the Nevada Corporation Law of the State of
Nevada. The description of the Company’s stock option, stock bonus
and other stock plans or arrangements, and the options or other rights granted
and exercised thereunder, set forth in the Disclosure Package and the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(vi) No
stockholder of the Company or any other person has any preemptive right, right
of first refusal or other similar right to subscribe for or purchase securities
of the Company arising (i) by operation of the charter or by-laws of the Company
or the Nevada Corporation Law of the State of Nevada or (ii) to the best
knowledge of such counsel, otherwise.
(vii) The
Underwriting Agreement has been duly authorized, executed and delivered by
the
Company.
(viii) The
Common Stock included in the Units to be purchased by the Underwriters from
the
Company (including units purchasable on exercise of the Underwriters’
overallotment option and the Representative’s Warrants) has been duly authorized
and reserved for issuance
EX.
A-1
and
sale
pursuant to this Agreement and, in the case of Common Stock issuable on exercise
of the Representative’s Warrants, the terms thereof and, when so issued and
delivered by the Company, will be validly issued, fully paid and
nonassessable. The Class A Warrants and Class B Warrants included in
the Units to be purchased by the Underwriters from the Company have been duly
and validly authorized by all required corporate actions and will, when issued
and delivered by the Company pursuant to this Agreement, be validly executed
and
delivered by, and will be valid and binding agreements of, the Company,
enforceable in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by
general equitable principles. The Representative’s Warrants have been
duly and validly authorized by all required corporate actions and will, when
issued and delivered by the Company pursuant to this Agreement, be validly
executed and delivered by, and will be valid and binding agreements of, the
Company, enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles. The Common Stock issuable on
exercise of Class A Warrants, Class B Warrants has been duly authorized and
reserved for issuance and sale pursuant to the terms of such warrants and,
when
issued and delivered by the Company pursuant to such warrants, will be validly
issued, fully paid and nonassessable.
(ix) The
Warrant Agreement has been duly authorized by the Company. When duly
executed, authenticated, issued and delivered as contemplated in the
Registration Statement and the Warrant Agreement, the Warrant Agreement will
constitute the legally binding agreement of the Company, enforceable against
it
in accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(ix) The
Registration Statement and the Rule 462(b) Registration Statement, if any,
has
been declared effective by the Commission under the Securities
Act. To the best knowledge of such counsel, no stop order suspending
the effectiveness of either of the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued under the Securities Act and
no
proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of
the Disclosure Package and the Prospectus and any supplement thereto pursuant
to
Rule 424(b) under the Securities Act has been made in the manner and within
the
time period required by such Rule 424(b).
(x) The
Registration Statement, including any Rule 462(b) Registration Statement, the
Prospectus, and each amendment or supplement to the Registration Statement
and
the Prospectus, and each document deemed to be part of the Disclosure Package,
as of their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or in exhibits to or
excluded from the Registration Statement, as to which no opinion need be
rendered) comply as to form in all material respects with the applicable
requirements of the Securities Act.
EX.
A-2
(xi) The
Units, the Common Stock, the Class A Warrants and the Class B Warrants have
been
approved for quotation on the Nasdaq Capital Market under the symbols “_______,”
“_______,” “_______” and “_______,” respectively.
(xiv) The
statements (i) in each of the Disclosure Package and the Prospectus under the
captions “Related Party Transactions”, “Description of Securities” and “Shares
Eligible for Future Sale”, (ii) under the caption “Indemnification of Officers
and Directors” in Item 24 of the Registration Statement, (iii) under the caption
“Recent Sales of Unregistered Securities in Item 26 of the Registration
Statement, insofar as such statements constitute matters of law, legal
conclusions or summaries of legal matters or documents or the Company’s charter
or by-law provisions, have been reviewed by such counsel and fairly present
and
summarize, in all material respects, the matters referred to
therein.
(xv) To
the best knowledge of such counsel, there are no legal or governmental actions,
suits or proceedings pending or threatened which are required to be disclosed
in
the Registration Statement or the Disclosure Package, other than those disclosed
therein.
(xvi) To
the best knowledge of such counsel, there are no Existing Instruments required
to be described or referred to in the Registration Statement or to be filed
as
exhibits thereto other than those described or referred to therein or filed
as
exhibits thereto; and the descriptions thereof and references thereto are
correct in all material respects.
(xvii) No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental authority or agency, is required for
the
Company’s execution, delivery and performance of the Underwriting Agreement and
consummation of the transactions contemplated thereby and by the Prospectus,
except as required under the Securities Act, the applicable laws of any foreign
jurisdiction, applicable state securities or blue sky laws and from the
FINRA.
(xviii) The
execution and delivery of the Underwriting Agreement by the Company and the
performance by the Company of its obligations thereunder (other than performance
by the Company of its obligations under the indemnification section of the
Underwriting Agreement, as to which no opinion need be rendered) (i) have been
duly authorized by all necessary corporate action on the part of the Company;
(ii) will not result in any violation of the provisions of the charter or
by-laws of the Company; (iii) will not (A) constitute a breach of, or Default
under any Existing Instrument, or (B) result in the creation or imposition
of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, in the case of each of clauses (A) and (B), any Existing Instrument
filed as an exhibit to the Registration Statement or, to the best knowledge
of
such counsel, any other material Existing Instrument; or (iv) to the best
knowledge of such counsel, will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company.
(xix) The
Company is not, and after receipt of payment for the Units and the application
of the proceeds thereof as contemplated under the caption “Use of Proceeds” in
the Prospectus and in the Disclosure Package will not be, an “investment
company” within the meaning of Investment Company Act.
EX.
A-3
(xx) To
the best knowledge of such counsel, there are no persons with registration
or
other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by
the
Underwriting Agreement, except for such rights as have been duly
waived.
(xxi) To
the best knowledge of such counsel, the Company is not in violation of its
charter or by-laws or any law, administrative regulation or administrative
or
court decree applicable to the Company or is in Default in the performance
or
observance of any obligation, agreement, covenant or condition contained in
any
material Existing Instrument, except in each such case for such violations
or
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change.
In
addition, such counsel shall state that they have participated in conferences
with officers and other representatives of the Company, representatives of
the
independent public or certified public accountants for the Company and with
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, including the documents incorporated by reference therein (other
than as specified above), and any supplements or amendments thereto, on the
basis of the foregoing, nothing has come to their attention which has caused
them to believe that (i) either the Registration Statement or any amendments
thereto, at the time the Registration Statement or such amendments became
effective, 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 not misleading; (ii) the Prospectus, as of its date or at
the
First Closing Date or each Subsequent Closing Date, as the case may be,
contained an untrue statement of a 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; or (iii) the items
specified in Schedule I, consisting of those included in the Disclosure Package,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light
of
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief as to the financial statements or
schedules or other financial data derived therefrom, included or incorporated
by
reference in the Registration Statement or the Prospectus or any amendments
or
supplements thereto).
In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the Nevada Corporation Law
of
the State of Nevada, or the federal law of the United States, to the extent
they
deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or each Subsequent Closing Date, as the case may
be, shall be satisfactory in form and substance to the Underwriters, shall
expressly state that the Underwriters may rely on such opinion as if it were
addressed to them and shall be furnished to the Representative) of other counsel
of good standing whom they believe to be reliable and who are satisfactory
to
counsel for the Underwriters; provided, however, that such counsel shall further
state that they believe that they and the Underwriters are justified
in relying upon such opinion of other counsel, and (B) as to matters of fact,
to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials.
EX.
A-4
Exhibit
B
Form
of Lock-Up Agreement
EX.
B-1