EXHIBIT 1.2
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AquaCell Technologies, Inc.
1,750,000 Shares of Common Stock
AGREEMENT AMONG UNDERWRITERS
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_________, 2000
To each of the Underwriters named in Schedule I
to the attached Underwriting Agreement
Dear Sirs:
1. Underwriting Agreement. AquaCell Technologies, Inc. (the "Company"),
proposes to enter into an underwriting agreement in the form of the Underwriting
Agreement attached hereto as Exhibit "A" (the "Underwriting Agreement") with the
underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), acting severally and not jointly, with respect to the purchase
from the Company of 1,750,000 Shares of Common Stock. Such Shares are
hereinafter sometimes referred to as the "Firm Common Stock." Upon our request,
and as provided in Section 3 of the Underwriting Agreement, the Company will
sell to the Underwriters up to a maximum of 262,500 Shares of Common Stock.
Such additional Securities are hereinafter sometimes referred to as the
"Optional Common Stock." Both the Firm Common Stock and the Optional Common
Stock are sometimes collectively referred to herein as the "Securities." All of
the Securities which are the subject of this Agreement are more fully described
in the Prospectus of the Company described below. Under the terms of the
Underwriting Agreement, each of the Underwriters will agree, in accordance with
the terms thereof to purchase the aggregate number of Common Stock set forth
opposite its name in said Schedule I, subject to adjustment pursuant to Section
12 hereof and Section 14 of the Underwriting Agreement.
2. Registration Statement and Prospectus. The Securities are described
in a registration statement and related prospectus which have been filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"). An amendment to such registration statement
has been or will be filed in which you have been or will be named as one of the
Underwriters of the Securities. Copies of the registration statement as filed
and as amended have been delivered to you, and you hereby authorize us to
approve on your behalf any further amendments or supplements which may be
necessary or appropriate. The registration statement, as amended at the time it
becomes effective, is called the "Registration Statement" and the final
prospectus relating to the Securities as filed by the Company with the
Commission pursuant to Rule 424(b) under the Act is referred to as the
"Prospectus."
3. Authority of Representative. You authorize us as your Representative
to execute the Underwriting Agreement with the Company in the form attached with
such insertions, deletions or other changes as we may approve (but not as to the
number of, and price of, the Securities to be purchased by you except as
provided herein and therein) and to take such action as in our discretion we may
deem advisable in respect of all matters pertaining to the Underwriting
Agreement, this Agreement, the transactions for the accounts of the several
Underwriters contemplated thereby and hereby, and the purchase, carrying, sale
and distribution of the Securities.
4. Public Offering. In connection with the public offering of the
Securities, you authorize us, in our discretion:
(a) To determine the time and manner of the initial public offering
(after the Registration Statement becomes effective), the initial public
offering price, and the concessions and reallowances to dealers, to change the
public offering price and such concessions and reallowances after the initial
public offering, to furnish the Company with the information to be included in
the Registration Statement and the Prospectus (and any amendment or supplement
thereto) with respect to the terms of the public offering, and to determine all
matters relating to the public advertisement of the Securities and any
communications with dealers or others;
(b) To reserve all or any part of your Securities for sale to retail
purchasers (including institutions) and to dealers selected by us ("Selected
Dealers") among which may be included any Underwriter (including ourselves) and
each of which shall be a member of the National Association of Securities
Dealers, Inc., and each of which shall agree that in making sales to purchasers
in the United States it will conform to the Rules of Fair Practice of said
Association (or, in the case of a foreign dealer not eligible for membership in
such Association, which shall agree not to reoffer, resell or deliver Securities
in the United States, its territories or its possessions, or to persons whom it
has reason to believe are citizens thereof or residents therein), such
reservations for sales to retail purchasers to be as nearly as practicable in
proportion to the respective underwriting obligations of the Underwriters and
such reservations for sales to Selected Dealers to be in such proportion as we
determine, and from time to time to add to the reserved Securities such
Securities retained by you remaining unsold and to release to you any of your
Securities reserved but not sold;
(c) To sell reserved Securities as nearly as practicable in
proportion to the respective reservations to retail purchasers at the public
offering price, and to Selected Dealers at the public offering price less the
Selected Dealer's concession pursuant to the Selected Dealers Agreement in
substantially the form attached; and
(d) To buy Securities for your account from Selected Dealers at the
public offering price less such amount not in excess of the Selected Dealer's
concession as we may determine.
After advice from us that the Securities are released for public offering,
you will offer to the public in conformity with the terms of offering set forth
in the Prospectus, or
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any amendment or supplement, such of your Securities as we advise you are not
reserved.
You recognize the importance of a broad distribution of the Securities
among bona fide investors and you agree to use your best efforts to obtain such
broad distribution and to that end, to the extent you deem practicable, to give
priority to small orders. In offering the Securities to Selected Dealers we
will take such action as we deem appropriate to effect a broad distribution.
5. Repurchase of Securities Not Effectively Placed for Investment. You
are requested to place for investment those of your Securities which are not
reserved as aforesaid. Any Securities sold by you (otherwise than through us)
which may be delivered to us against a purchase contract made by us for the
account of any Underwriter prior to termination of the provisions referred to in
Section 11 of this Agreement, shall be purchased by you upon demand from us at
the cost of such purchase plus brokerage commissions and transfer taxes on
redelivery. Securities delivered on such repurchase need not be identical to
those purchased by you. In lieu of demand repurchase by you we may in our
discretion (i) sell for your account the Securities so purchased by us, at such
price and upon such terms as we may determine, and debit or credit your account
with the loss and expense or net profit resulting from such sale, or (ii) charge
your account with an amount not in excess of the Selected Dealer's concession
with respect to such Securities plus brokerage commissions and transfer taxes
paid in connection with such purchase.
6. Payment and Delivery. We shall give you at least 24 hours prior
notice of the Closing Date. You agree to deliver payment and receive securities
through the facilities of the Depository Trust Company ("DTC") or, at our
option, to deliver to us at or before 9:00 a.m. New York City Time, on such
Closing Date at the office of Xxxxx & Xxxxx and Company, Inc., 00 Xxxxxxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (or such other office as we may direct), a
certified check or bank cashier's check payable in New York Clearing House funds
to the order of Xxxxx & Hatch and Company, Inc., as Representative, for the full
purchase price of the Securities which you shall have agreed to purchase from
the Company less the concession to selected dealers. The proceeds to the Company
shall be delivered by us in the amount required in payment of the full purchase
price to the Company against delivery of the Securities to us for your account.
We are authorized to accept that delivery and to give a receipt therefor. You
authorize us, as your custodian, to take delivery of your Securities, registered
as we may direct in order to facilitate deliveries. You also authorize us to
hold for your account such of your Securities as we have reserved for sale to
retail purchasers and to Selected Dealers, and to deliver your reserved
Securities against such sales. We will deliver your unreserved Securities to you
promptly and, after we receive payment for reserved Securities sold by us for
your account, we will remit to you, as promptly as practicable, an amount equal
to the price paid by you for such Securities. As soon as practicable after
termination of Sections 4, 5 and 9 and the first and penultimate sentences of
Section 8 of this Agreement (pursuant to Section 11 hereof) we will deliver to
you any of your Securities reserved but not sold. All Securities delivered to
you pursuant to this Section will be evidenced by certificates in such
denominations as you shall direct by
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written notice received by us not later than the second full business day
preceding the Closing Date.
7. Authority to Borrow. In connection with the purchase or carrying of
any Securities purchased hereunder for your account, you authorize us, in our
discretion, to advance funds for your account, charging current interest rates,
or to arrange loans for your account, and in connection therewith to execute and
deliver any notes or other instruments and hold or pledge as security any of
your Securities. Any lender may rely on our instructions in all matters relating
to any such loan. Any of your Securities held by us for your account may be
delivered to you for carrying purposes only, and subject to our further
direction.
8. Stabilization and Over-Allotment. To facilitate the distribution of
the Securities, you authorize us during the term of this Agreement, or for such
longer period as may be necessary in our discretion, to make purchases and sales
of the Securities for your account in the open market or otherwise, for long or
short account, on such terms as we deem advisable and, in arranging sales, to
over-allot. You also authorize us to cover any short position incurred pursuant
to this Section on such terms as we deem advisable. Included in the authority
granted to us by you is the authority to exercise the over-allotment option for
you to purchase the Optional Securities granted by Section 3 of the Underwriting
Agreement. All such purchases and sales shall be made for the accounts of the
several Underwriters as nearly as practicable in proportion to their respective
underwriting obligations. Your net commitment under this Section shall not, at
the end of any business day, exceed 15% of your maximum underwriting obligation.
You will on our demand take up at cost or deliver against payment any Securities
purchased or sold for your account and, if any such other Underwriter defaults
in its corresponding obligation, you will assume your proportionate share of
such obligation without relieving the defaulting Underwriter from liability. You
will be obligated in respect to purchases and sales made for your account
hereunder whether or not the proposed purchase of the Securities is consummated.
Upon request you will advise us of Securities retained by you and unsold and
will sell to us for the account of one or more of the Underwriters such of your
unsold Securities as we may designate, at the public offering price thereof less
such amount as we may determine, but not in excess of the Selected Dealer's
concession with respect thereto. Until the termination of this Agreement
pursuant to Section 11 hereof, or prior notification by us, we shall have the
sole right to effect stabilizing transactions in the Securities. You agree that
until such time you will not make any purchases or sales of any of such
securities except as provided in Section 9 hereof. You also agree to timely
provide us with the information required by Rule 1 7a-2(d) under the Securities
Exchange Act of 1934, as amended (the "1934 Act").
9. Open Market Transactions. You agree not to bid for, purchase,
attempt to induce others to purchase, or sell, directly or indirectly, any
Securities, except as brokers pursuant to unsolicited orders and as otherwise
provided in this Agreement or in the Underwriting Agreement. You further agree
not to offer the Securities for sale until notified by us, as the Representative
of the Underwriters, that they are released for that purpose.
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10. Expenses and Settlement. We may charge your account with Selected
Dealer's concessions and all transfer taxes on sales made by us for your account
and with your proportionate share (based upon your underwriting obligation) of
all other expenses incurred by us under the terms of this Agreement or the
Underwriting Agreement, in excess of those reimbursed by the Company pursuant to
Section 8 of the Underwriting Agreement, or in connection with the purchase,
carrying, sale or distribution of the Securities. Our determination of the
amount and allocation of expenses shall be conclusive. As soon as practicable
after termination of the provisions referred to in Section 11, the accounts
hereunder will be settled, but we may reserve from distribution such amount as
we deem advisable to cover possible additional expenses. We may at any time
make partial distribution of credit balances or call for payment of debit
balances. Any of your funds in our hands may be held with our general funds
without accountability for interest. Notwithstanding any settlement, you will
pay (i) your proportionate share (based upon your underwriting obligation) of
any liability which may be incurred by the Underwriters, or any of them, based
on the claim that the Underwriters constitute an association, partnership,
unincorporated business or other separate entity, and of any expenses incurred
by us, or by any other Underwriter with our approval, in contesting any such
liability, and (ii) any transfer taxes which may be assessed and paid after such
settlement on account of any sale or transfer for your account.
11. Termination and Settlement. This Agreement will terminate (a) at the
close of business on the 30th day after the date of the Underwriting Agreement;
or (b) on such earlier or later date, not more than 30 days after the date
specified in (a), as we may determine; or (c) on the date of termination of the
Underwriting Agreement, if the same shall be terminated as provided by its
terms.
Upon termination of this Agreement, all authorizations, rights and
obligations hereunder will cease, except (a) the mutual obligation to settle
accounts hereunder, (b) your obligation to pay any claims referred to in the
last paragraph of this Section, (c) the obligations with respect to indemnity
set forth in Section 15 hereof (all obligations of which will continue until
fully discharged), and (d) your obligation with respect to purchases which may
be made by us from time to time thereafter to cover any short position with
respect to the offering, all of which will continue until fully discharged, and
except our authority with respect to matters to be determined by us, or by us
and the Company, pursuant to the terms of the Underwriting Agreement, which will
survive the termination of this Agreement.
The accounts arising pursuant to this Agreement will be settled and paid as
soon as practicable after termination. The determination by us of the amounts
to be paid to or by you will be final and conclusive.
Notwithstanding any settlement upon the termination of this Agreement, you
will pay your proportionate share of any amount asserted against and discharged
by the Underwriters, or any of them, based upon the claim that the Underwriters
constitute an association, unincorporated business or other separate entity, or
based upon or arising out of a claim that this Agreement or the Underwriting
Agreement is invalid or illegal for
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any reason, including any expense incurred in defending against such claim, and
will pay any transfer taxes which may be assessed thereafter on account of any
sale or transfer of Securities for our account.
12. Default by Underwriters. Default by one or more Underwriters
hereunder or under the Underwriting Agreement shall not release the other
Underwriters from their obligations or affect the liability of any defaulting
Underwriter to the other Underwriters for damages resulting from such default.
In case of default under the Underwriting Agreement by one or more Underwriters,
we may arrange for the purchase by others, including nondefaulting Underwriters,
of Securities not taken up by such defaulting Underwriter and you will, at our
request, increase pro rata with the other non-defaulting Underwriters the
aggregate principal amount of Securities which you are to purchase, or both, by
an amount not exceeding one-ninth of your original underwriting obligations. In
the event any such arrangements are made, the respective Securities to be
purchased by non-defaulting Underwriters and by such others shall be taken as
the basis for the underwriting obligations under this Agreement.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement, each non-defaulting Underwriter shall assume
its proportionate share of the obligations under this Agreement of each such
defaulting Underwriter (other than, to the extent stated in the first paragraph
of this Section, the purchase obligation of such defaulting Underwriter).
13. Position of Representative. We shall be under no liability to you
for any act or omission except for obligations expressly assumed by us in this
Agreement, but no obligation on our part shall be implied or inferred. Nothing
shall constitute the Underwriters, or any of them, an association, partnership,
unincorporated business or other separate entity and the rights and liability of
ourselves and each of the Underwriters are several and not joint.
14. Compensation to Representative. As compensation for our services as
Representative, you agree to pay us $_____ per share of Common Stock out of the
aggregate underwriting discount attributable to Securities which you agree to
purchase from the Company pursuant to the Underwriting Agreement. We are
authorized to charge your account with such an amount.
15. Indemnification. You will indemnify and hold harmless each other
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act to the extent and upon the terms by which each
Underwriter agrees to indemnify the Company in the Underwriting Agreement. Such
indemnity agreement shall survive the termination of any of the provisions of
this Agreement.
In the event that at any time any claim shall be asserted against us as or
as a result of our having acted as Representative, or otherwise involving the
Underwriters generally, relating to the Registration Statement or any
preliminary prospectus or the Prospectus, as from time to time amended or
supplemented, the public offering of the Securities or any of the transactions
contemplated by this Agreement, you authorize us
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to make such investigation, to retain such counsel and to take such other action
as we shall deem necessary or desirable under the circumstances, including
settlement of any claim or claims if such course of action shall be recommended
by counsel retained by us. You agree to pay to us, on request, your
proportionate share (based upon your underwriting obligation) of all expenses
incurred by us (including, but not limited to, the disbursements and fees of
counsel so retained) in investigating and defending against such claim or
claims, and your proportionate share (based upon your underwriting obligation)
of any liability incurred by us in respect of such claim or claims, whether such
liability shall be the result of a judgment against us or as a result of any
such settlement.
16. Blue Sky Matters. We shall not have any responsibility with respect
to the right of any Underwriter or other person to sell Securities in any
jurisdiction, notwithstanding any information we may furnish in that connection.
You hereby authorize us to take such action as may be necessary or advisable to
qualify the Securities for offering and sale in any jurisdiction. We have caused
to be filed Further State Notices respecting the Securities to be offered to the
public in New York in the form required by, and pursuant to, the provisions of
Article 23A of the General Business Law of the State of New York.
17. Title to Securities. The Securities purchased for the respective
accounts of the several Underwriters shall remain the property of those
Underwriters until sold; and no title to such securities shall in any event pass
to us, as Representative, by virtue of any of the provisions of this Agreement.
18. Capital Requirements. Unless the provisions of clause (b) of the
second sentence of the last paragraph of this Agreement are applicable to you,
you confirm that your commitment hereunder will not result in any violation of
Section 8(b) or 15(c) of the 1934 Act or in any violation of any of the rules
and regulations promulgated under the 1934 Act, including, without limitation,
Rule 15c3-1, or any provision of any applicable rules of any securities exchange
to which you are subject or of any restriction imposed upon you by such
exchange.
19. Notices and Governing Laws. Any notice from you to us shall be
mailed or transmitted by any standard form of written telecommunication to us at
00 Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000. Any notice from us to you
shall be mailed or transmitted by any standard from of written telecommunication
to you at your address as set forth in your Underwriter's Questionnaire. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
We represent that we are a member in good standing of the National
Association of Securities Dealers, Inc. You represent that you are (a) a member
in good standing of such Association or (b) a foreign dealer which is not
eligible for membership in such Association, in which event you will make sales
of any Securities only outside the United States and its territories and
possessions to persons who are not citizens or residents of the United States or
its territories or possessions, and that in making any such sales, you will
comply with such Association's Interpretation with respect to Free-Riding and
Withholding. You further represent that: (i) you will notify each of your
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customers with respect to whose account you have investment discretion and to
whose account you intend to sell any Securities that you propose to sell
Securities to such account as a principal and you will obtain the customers
written consent to such sale; and (ii) you will comply with the requirements of
Rule 15c2-8 under the 1934 Act and have distributed or are distributing copies
of a Preliminary Prospectus to all persons to whom you then expected to mail
confirmations of sale, not less than 48 hours prior to the time it is expected
to mail such confirmations.
Very truly yours,
XXXXX & XXXXX AND COMPANY, INC.
By: ___________________________________
As Representative of the several
Underwriters
Confirmed and accepted as of
the date first above written.
________________________________
Attorney-in-fact for the several
Underwriters named in Schedule I
to the Underwriting Agreement
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