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AGREEMENT AMONG UNDERWRITERS
333,333 SHARES OF
SERIES C PREFERRED STOCK
SUNRISE PRESCHOOLS, INC.
____________________, 1995
X.X. XxXxx Securities, Inc.
South Coast Financial Securities, Inc.
c/o X.X. XxXxx Securities, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
(As Representatives of the several Underwriters Named in Schedule 1 to Exhibit A
annexed hereto)
Dear Sirs:
We understand that Sunrise Preschools, Inc., a Delaware corporation
(the "Company"), desires to enter into an agreement, substantially in the form
of Exhibit A hereto (the "Underwriting Agreement"). The Underwriting Agreement
provides for (a) the sale, on behalf of the Company, by you and the other
prospective Underwriters named in Schedule 1 to the Underwriting Agreement,
severally and not jointly, of 333,333 shares of Series C Preferred Stock (the
"Preferred Stock") of the Company (the "Firm Shares") and (b) the grant by the
Company to the Underwriters, as provided in Section 3.2 of the Underwriting
Agreement, of rights to purchase up to an additional 50,000 additional shares of
Series C Preferred Stock of the Company (the "Option Shares") at the option of
the Underwriters, for the purpose of covering overallotments in the sale of the
Firm Shares (the Firm Shares and the Option Shares are collectively referred to
in this Agreement as the "Shares").
We understand that changes may be made in those who are to be
Underwriters and in the respective number of Shares to be sold by them, but that
the number of Shares to be sold by us as set forth in said Schedule 1 will not
be changed without our consent except as provided herein or in the Underwriting
Agreement. The parties on whose behalf you execute the Underwriting Agreement
are herein called the "Underwriters."
We desire to confirm the agreement among you, the undersigned and
the other Underwriters with respect to the sale of the Shares by the
Underwriters, severally and not jointly, on behalf of the Company. The aggregate
number of Shares which any Underwriter will be obligated to sell on behalf of
the Company pursuant to the terms of the Underwriting Agreement is herein called
the "Underwriting Obligation" of that Underwriter.
EXHIBIT 1.2
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1. Authority and Compensation of Representative. We hereby
authorize you, as our representatives (the "Representatives") and on our behalf,
(i) to enter into an agreement with the Company, in substantially the form
attached hereto as Exhibit A, but with such changes therein as in your judgement
will not be materially adverse to the Underwriters, providing for the sale by
us, severally and not jointly, for the account of the Company, at the purchase
price per Share set forth in said Exhibit A, of the number of Shares set forth
opposite our name in Schedule 1 to said Exhibit A, (ii) to exercise all the
authority and discretion vested in the Underwriters and in you by the provisions
of the Underwriting Agreement, including whether the Underwriters shall purchase
any Option Shares and the amount, if any, of Option Shares to be so purchased,
(iii) to take all such action as you in your discretion may deem necessary or
advisable in order to carry out the provisions of the Underwriting Agreement and
of this Agreement, and the sale and distribution of the Shares and (iv) to
determine all matters relating to the public advertisement of the Shares. As our
share of the compensation for your services hereunder, we will pay to you, and
we authorize you to charge to our account on the Closing Date referred to in the
Underwriting Agreement, $_____ per Share in respect of the aggregate number of
Shares which we shall sell pursuant to the Underwriting Agreement.
2. Public Offering of Shares. The sale of the Shares to the public
is to be made, as herein provided, as soon after the registration statement
relating to the Shares becomes effective as in your judgement is advisable. The
purchase price to be paid by the Underwriters for the Shares and the public
offering price are to be determined by agreement between you and the Company.
You will advise us by telegraph or telephone when the Shares shall be released
for offering, when the registration statement relating to the Shares shall
become effective and the price at which the Shares are initially to be offered.
We agree not to sell any of the Shares until you have released them for that
purpose. We authorize you, after the initial public offering, to change the
public offering price, the concession and the re-allowance if, in your sole
discretion, such action becomes desirable by reason of changes in general market
conditions or otherwise. As used herein, the terms "Registration Statement,
"Preliminary Prospectus" and "Prospectus" shall have the meanings ascribed
thereto in the Underwriting Agreement. The public offering price at the time in
effect is herein called the "Offering Price." After notice from you that the
Shares are released for public sale, we will offer to the public in conformity
with the provisions hereof and with the terms of offering set forth in the
Prospectus such of our Shares as you advise us are not reserved. We agree not to
offer or sell any of the Shares to persons over whose accounts we exercise
investment discretion without their specific advance consent.
3. Offering to Dealers and Retail Sales.
3.1. We authorize you to reserve for offering and sale, and on
our behalf to sell to retail purchasers (such sales being herein called "Retail
Sales") and to dealers selected by you (such dealers, among whom any Underwriter
may be included, being herein called "Selected Dealers") all or any part of our
Shares as you, in your sole discretion, shall determine. Such sales, if any,
shall be made (a) in the case of Retail Sales, at the Offering Price, and (b) in
the case of sales to Selected Dealers, at the Offering Price less such
concession or concessions as you, in your sole discretion, shall determine.
Except for such sales as are
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designated by a purchaser to be for the account of a particular Underwriter or
Selected Dealer, any sales to Selected Dealers made for our account shall be as
nearly as practicable in the ratio that the Shares reserved for our account for
offering to Selected Dealers bears to the aggregate of all Shares of all
Underwriters so reserved.
3.2. You agree to notify us promptly on the date of the public
offering as to the number of Shares, if any, which we may retain for direct sale
by us. Prior to the termination of the provisions referred to in Section 12
hereof, you may reserve for offering and sale as hereinbefore provided any
Shares theretofore retained by us remaining unsold and we may, with your
consent, retain any Shares theretofore reserved by you remaining unsold.
3.3. We agree that, from time to time prior to the termination
of the provisions referred to in Section 12 hereof, we shall furnish to you such
information as you may request in order to determine the number of Shares
allocated to us under the Underwriting Agreement which then remain unsold, and
we shall upon your request sell to you for the account of any Underwriter as
many of such unsold Shares as you may designate at the Offering Price, less all
or any part of the concession to Selected Dealers as you, in your sole
discretion, shall determine. The provisions of Section 4 hereof shall not be
applicable in respect of any such sale.
3.4. We authorize you to determine the form and manner of any
communications or agreements with the Selected Dealers. In the event that there
shall be any agreements with Selected Dealers, you are authorized to act as
manager thereunder and we agree, in such event, to be governed by the terms and
conditions of such agreements. The form of Selected Dealer Agreement attached
hereto as Exhibit B is satisfactory to us.
3.5. It is understood that any Selected Dealer to whom an offer
may be made as hereinbefore provided shall be actually engaged in the investment
banking or securities business and shall be either (a) a member in good standing
of the National Association of Securities Dealers, Inc (the "NASD") or (b) a
dealer with its principal place of business located outside the United States,
its territories and its possessions and not registered as a broker or dealer
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), who
agrees not to make any sales within the United States, its territories or its
possessions or to persons who are nationals thereof or residents therein. Each
Selected Dealer shall agree to comply with the provisions of Section 24 of
Article III of the Rules of Fair Practice of the NASD, and each foreign Selected
Dealer who is not a member of the NASD also shall agree to comply with the
NASD's interpretation with respect to free-riding and withholding, to comply, as
though it were a member of the NASD, with the provisions of Sections 8 and 36 of
Article III of such Rules of Fair Practice, and to comply with Section 25 of
Article III thereof as that Section applies to a non-member foreign dealer. The
several Underwriters may allow, and the Selected Dealers, if any, may re-allow
such concession or concessions as you may determine from time to time on sales
of Shares to any qualified dealer, all subject to the Rules of Fair Practice of
the NASD.
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3.6. Upon your request, we will advise you of the identity of
any dealer to whom we allow such a discount and any Underwriter or Selected
Dealer from whom we receive such a discount.
4. Repurchases in the Open Market. Any Shares sold by us (other
than through you) which shall be contracted for or purchased in the open market
by you on behalf of any Underwriter or Underwriters shall be repurchased by us
on demand at a price equal to the cost of such purchase plus commissions and
taxes on redelivery. Any Shares delivered on such repurchase need not be the
identical Shares originally sold by us. In lieu of delivery of such Shares to
us, you may sell such Shares in any manner for our account and charge us with
the amount of any loss or expense or credit us with the amount of any profit,
less any expense, resulting from such sale, or charge our account with an amount
not in excess of the concession to Selected Dealers.
5. Delivery and Payment.
5.1. Upon your request, we shall deliver to you payment for the
Shares to be sold by us under the Underwriting Agreement in an amount equal to
the initial Offering Price for such Shares less the concession to Selected
Dealers. Such payment shall be made in such form and at such time and place as
may be specified in the Underwriting Agreement against delivery of the Shares.
If we are a member of or clear through a member of The Depository Trust Company
("DTC"), you may, in your discretion, deliver our Shares through the facilities
of DTC.
5.2. You shall remit to us, as promptly as practicable, the
amounts received by you from Selected Dealers and retail purchasers as payment
in respect of Shares sold by you for our account pursuant to Section 3 hereof
for which payment has been received. Shares purchased by us under the
Underwriting Agreement and not reserved or sold by you for our account pursuant
to Section 3 hereof shall be delivered to us as promptly as practicable after
receipt by you. Any Shares purchased by us and so reserved which remain unsold
at any time prior to the settlement of accounts hereunder may, in your
discretion, and shall, upon your request, be delivered to us, but such delivery
shall be for carrying purposes only. In case any Shares reserved for sale in
Retail Sales or to Selected Dealers shall not be purchased and paid for in due
course as contemplated hereby, we agree (a) to accept delivery when tendered by
you of any Shares reserved for our account and not so purchased and paid for,
and (b) in case we shall have received payment from you in respect of any such
Shares, to reimburse you on demand for the full amount which you shall have paid
us in respect for such Shares.
5.3. In the event of our failure to sell the Shares as provided
in the Underwriting Agreement, you shall have the right under the provisions
thereof to arrange for other persons, who may include you and any other
Underwriter, to sell such Shares which we had agreed to sell, but without
relieving us from liability for our default.
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6. Allocation of Expenses and Liability. We authorize you to
charge our account with and we agree to pay (a) all transfer taxes on sales made
by you for our account, except as herein otherwise provided, and (b) our
proportionate share (based on our Underwriting Obligation) of all expenses
incurred by you in connection with the carrying, sale and distribution of the
Shares and all other expenses arising under the terms of the Underwriting
Agreement or this Agreement. Your determination of all such expenses and your
allocation thereof shall be final and conclusive. You may at any time make
partial distributions of credit balances or call for payment of debit balances.
Funds for our account at any time in your hands may be held in your general
funds without accountability for interest. As soon as practicable after the
termination of this Agreement, the net credit or debit balance in our account,
after proper charge and credit for all interim payments and receipts, shall be
paid to or paid by us, provided that you may establish such reserves as you, in
your sole discretion, shall deem advisable to cover possible additional expenses
chargeable to the several Underwriters. Notwithstanding any settlement, we will
remain liable for any taxes on transfers for our account and for our
proportionate share (based on our Underwriting Obligation) of all expenses and
liabilities that may be incurred for the accounts of the Underwriters.
7. Liability for Future Claims. Neither any statement by you of
any credit or debit balance in our account nor any reservation from distribution
to cover possible additional expenses relating to the Shares shall constitute
any representation by you as to the existence or non-existence of possible
unforeseen expenses or liabilities of or charges against the several
Underwriters. Notwithstanding the distribution of any net credit balance to us
or the termination of this Agreement or both, we shall be and remain liable for,
and will pay on demand, (a) our proportionate share (based on our Underwriting
Obligation) of all expenses and liabilities which may be incurred by or for the
accounts of the Underwriters, or any of them, including any liability which may
be incurred by or for the accounts of the Underwriters, or any of them, based on
the claim that the Underwriters constitute an association, unincorporated
business, partnership or any separate entity, and (b) any transfer taxes paid
after such settlement on account of any sale or transfer for our account.
8. Stabilization. We authorize X.X. XxXxx Securities, Inc., in its
discretion, to buy and sell shares of the Preferred Stock and Common Stock of
the Company (the "Common Stock") in the open market or otherwise, for either
long or short account, at such prices and on such terms as it may determine, and
to overallot in arranging for sales of Shares. We authorize X.X. XxXxx
Securities, Inc., in its discretion, to cover any short position incurred for
the accounts of the several Underwriters pursuant to this Section by exercising
the overallotment option referred to in Section 3.2 of the Underwriting
Agreement and by buying shares of the Preferred Stock, and, in lieu of
delivering to the several Underwriters any of the Shares held for their
respective accounts pursuant to this Section, to sell such Shares for the
accounts of each of the Underwriters, in each case at such prices and on such
terms as X.X. XxXxx Securities, Inc. may determine. All purchases, sales and
overallotments made pursuant to this Section shall be for the accounts of the
several Underwriters as nearly as practicable in proportion to their respective
underwriting obligations, and at no time shall our net commitment under the
foregoing provisions of this Section, either for long or short account, exceed
fifteen percent of our original underwriting obligation. We shall, on demand,
take any of the Shares sold or overallotted for
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our account. In the event of default by one or more Underwriters in respect of
their obligations under this Section, each non-defaulting Underwriter shall
assume its proportionate share of the obligations of each defaulting Underwriter
without relieving the defaulting Underwriter of its obligations under this
Section. The existence of this provision is no assurance that the price of the
Preferred Stock will be stabilized or that stabilizing, if commenced, will not
be discontinued at any time.
We agree to advise you, from time to time upon your request, of the
number of Shares retained by or released to us and remaining unsold, and shall,
upon your request, release to you for the accounts of one or more of the several
Underwriters such number of those Shares as you may designate at such price, not
less than the net price to Selected Dealers nor more than the Offering Price, as
you may determine.
You will notify us promptly if you engage in any transactions
hereunder which in your judgment may be deemed to be a "stabilizing purchase"
within the meaning of the applicable Rules and Regulations of the Securities and
Exchange Commission. If we effect a "stabilizing purchase," we will notify you
not later than the third full business day following such purchase of the
information specified in Rule 17a-2(d) under the 1934 Act.
9. Open Market Transactions. We agree that we will not make bids
or offers, or make or induce purchases or sales for our own account or the
accounts of customers, in the open market or otherwise, either before or after
the purchase of the Shares and for either long or short account, of any Common
Stock or Preferred Stock of the Company, warrants or any security of the same
class and series, or any right to purchase any such security except: (a) as
provided in this Agreement, the Underwriting Agreement and the Selected Dealer
Agreements or otherwise approved by you and (b) in brokerage transactions not
involving solicitation of the customer's order. We further agree that we will
not lend, either before or after the purchase of the Shares, to any customer,
Underwriter, Selected Dealer or to any other securities broker or dealer any
Shares, Common Stock, Preferred Stock or warrants. Prior to the completion (as
defined in Rule 10b-6 under the 0000 Xxx) of our participation in the
distribution, we will otherwise comply with Rule 10b-6.
10. Blue Sky. Prior to the initial offering by the Underwriters,
you will inform us as to the states and other jurisdictions under the respective
securities or blue sky laws of which it is believed that the Shares have been
qualified for sale or are exempt from such qualification, but you do not assume
any responsibility or obligation as to the accuracy of such information or as to
the right of any Underwriter or dealer to offer or sell the Shares in any state
or other jurisdiction.
11. Default by Underwriters. Default by one or more Underwriters in
respect of their obligations under the Underwriting Agreement shall not release
us from any of our obligations or in any way affect the liability of any
defaulting Underwriter to the other Underwriters for damages resulting from such
default.
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12. Termination. Section 2, the second paragraph and the first
sentence of the third paragraph of Section 3, Section 4, the first sentence of
section 9 (other than clause (c) thereof) and Section 10 hereof will terminate
at the close of business on the 30th calendar day after the effective date of
the Registration Statement, unless extended or sooner terminated as hereinafter
provided. You may extend such provisions, or any of them, for a period not to
exceed 60 additional calendar days by notice to us to such effect. You may
terminate any of such provisions at any time by notice to us, and you may
terminate all such provisions at any time by notice to us to the effect that the
offering provisions of this Agreement are terminated.
13. General Position of the Representative. In taking action under
this Agreement, you shall act only as agent of the several Underwriters. Your
authority shall include the taking of such action as you may deem advisable in
respect of all matters pertaining to any and all offers and sales of the Shares,
including the right to make any modifications which you consider necessary or
desirable in the arrangements with Selected Dealers or others. You shall be
under no liability for or in respect of the value of the Shares or the validity
or the form thereof, the Registration Statement, the Prospectus or agreements or
other instruments executed by the Company or others; or for or in respect of the
delivery of the Shares; or for the performance by the Company or others of any
agreement on its or their part; nor shall you as Representatives or otherwise be
liable under any of the provisions hereof or for any matters connected herewith,
except for want of good faith, and except for any liability arising under the
Securities Act of 1933, as amended (the " 1933 Act"); and only obligations
expressly assumed by you as Representatives herein shall be implied from this
Agreement. In representing the Underwriters hereunder, you shall act as the
Representatives of each of them respectively. Nothing herein contained shall
constitute the several Underwriters partners with you or with each other, or
render any Underwriter liable for the commitments of any other Underwriter,
except as otherwise provided in Section 13 hereof and in the Underwriting
Agreement. If the Underwriters shall be deemed to constitute a partnership for
Federal income tax purposes, it is the intent of each Underwriter to be excluded
from the application of Subchapter X, Chapter 1, Subtitle A, of the Internal
Revenue Code of 1986, as amended. Each Underwriter elects to be so excluded and
agrees not to take any position inconsistent with such election. Each
Underwriter authorizes you, in your discretion, to execute and file on behalf of
the Underwriters such evidence of election as may be required by the Internal
Revenue Service. The commitments and liabilities of each of the several
Underwriters are several in accordance with their respective Underwriting
Obligations and are not joint.
14. Acknowledgment of Receipt of Registration Statement, etc. We
hereby confirm that we have examined the Registration Statement relating to the
Shares as heretofore filed by the Company with the Commission and each amendment
thereto, if any, filed through the date hereof, including any documents filed
under the 1934 Act through the date hereof and incorporated by reference into
the Prospectus, that we are willing to be named as an underwriter therein and to
accept the responsibilities of an underwriter thereunder, and that we are
willing to proceed as therein contemplated. We confirm that we have authorized
you to advise the Company on our behalf (a) as to the statements to be included
in any Preliminary Prospectus and in the Prospectus under the heading
"Underwriting" insofar as they relate to us, and (b) that there is no other
information about us required to be stated in the Registration Statement or
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Prospectus. We understand that the aforementioned documents are subject to
further change and that we will be supplied with copies of any further
amendments or supplements to the Registration Statement, of any document filed
under the 1934 Act after the effective date of the Registration Statement and
before termination of the offering of the Shares by the Underwriters if such
document is deemed to be incorporated by reference into the Prospectus and of
any amended or supplemented Prospectus promptly, if and when received by you,
but the making of such changes, amendments and supplements shall not release us
or affect our obligations hereunder or under the Underwriting Agreement.
15. Indemnity.
15.1. General. We agree to indemnify and hold harmless each
other Underwriter and any person who controls any such Underwriter within the
meaning of Section 15 of the 1933 Act, to the extent that, and upon the terms on
which, we agree to indemnify and hold harmless the Company and other specified
persons as set forth in the Underwriting Agreement. Our indemnity agreement
contained in this Section 15 shall remain in full force and effect regardless of
any investigation made by or on behalf of such other Underwriter or controlling
person and shall survive the delivery of and payment for the Shares and the
termination of this Agreement and the similar agreements entered into with the
other Underwriters.
15.2. Claims Against Underwriters. Each Underwriter (including
you) will pay, upon your request, as contribution, its proportionate share,
based upon its Underwriting Obligation, of any loss, claim, damage or liability,
joint or several, paid or incurred by any Underwriter (including you) to any
person other than an Underwriter, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, any amendment or supplement thereto or
any preliminary Prospectus or any other selling or advertising material approved
by you for use by the Underwriters in connection with the sale of the Shares, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading (other
than an untrue statement or alleged untrue statement or omission or alleged
omission made in conformity with written information furnished to the Company
through you by or on behalf of an Underwriter expressly for use therein) or
relating to any transaction contemplated by this Agreement; and will pay such
proportionate share of any legal or other expense reasonably incurred by you or
with your consent in connection with investigating or defending against any such
loss, claim, damage or liability, or any action in respect thereof. In
determining the amount of our obligation under this paragraph, appropriate
adjustment may be made by you to reflect any amounts received by any one or more
Underwriters in respect of such claim from the Company pursuant to Section 9 of
the Underwriting Agreement or otherwise. There shall be credited against any
amount paid or payable by us pursuant to this paragraph any loss, claim, damage,
liability or expense which is incurred by us as a result of any such claim
asserted against us, and if such loss, claim, damage, liability or expense is
incurred by us subsequent to any payment by us pursuant to this paragraph,
appropriate provision shall be made to effect such credit, by refund or
otherwise. If any such claim is asserted, you may take such action in connection
therewith as you deem
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necessary or desirable, including retention of counsel for the Underwriters, and
in your discretion separate counsel for any particular Underwriter or group of
Underwriters, and the fees and disbursements of any counsel so retained by you
shall be included in the amounts payable pursuant to this paragraph. In
determining amounts payable pursuant to this paragraph, any loss, claim, damage,
liability or expense incurred by any person who controls any Underwriter within
the meaning of Section 15 of the 1933 Act which has been incurred by reason of
such control relationship shall be deemed to have been incurred by such
Underwriter. Any Underwriter may elect to retain, at its own expense, its own
counsel. You may settle or consent to the settlement of any such claim on advice
of counsel retained by you. Whenever you receive notice of the assertion of any
claim to which the provisions of this paragraph would be applicable, you will
give prompt notice thereof to each Underwriter. If any Underwriter or
Underwriters defaults in its or their obligation to make any payments under this
paragraph, each non-defaulting Underwriter shall be obligated to pay its
proportionate share of all defaulted payments, based upon the proportion such
non-defaulting Underwriter's Underwriting Obligation bears to the Underwriting
Obligations of all non-defaulting Underwriters. Nothing therein shall relieve a
defaulting Underwriter from liability for its default.
16. Capital Requirements. We confirm that the incurrence by us of
our obligations under this Agreement and under the Underwriting Agreement will
not place us in violation of the net capital requirements of Rule 15c3-1 under
the 1934 Act or of any applicable rules relating to capital requirements of any
securities exchange to which we are subject.
17. Undertaking to Mail Prospectuses. We represent to you that we
have taken all action on our part required to have been taken to satisfy the
policy set forth in Release No. 4968 of the Commission under the 1933 Act,
including the distribution in the manner and at or prior to the time set forth
in such Release, of copies of the Preliminary Prospectus relating to the Shares
(or, if you have so requested, copies of any revised Preliminary Prospectus) to
all persons to whom we expect to mail confirmation of sale. As contemplated by
Rule 15c2-8 under the 1934 Act, you agree to mail a copy of the Prospectus
mentioned in the Underwriting Agreement to any person making a written request
therefor during the period referred to in said Rule, the mailing to be made to
the address given in the request. We confirm that we have delivered all
Preliminary Prospectuses and revised Preliminary Prospectuses, if any, required
to be delivered under the provisions of Rule 15c2-8 and agree to deliver all
Prospectuses required to be delivered thereunder. We acknowledge that the copies
of the Preliminary Prospectus furnished to us have been distributed to dealers
who have been notified of the foregoing requirements pertaining to the delivery
of Preliminary Prospectuses and Prospectuses. You have heretofore delivered to
us such number of copies of Preliminary Prospectuses as have been reasonably
requested by us, receipt of which is hereby acknowledged, and will deliver such
number of copies of Prospectuses as will be reasonably requested by us.
18. Miscellaneous.
18.1. Any notice hereunder from you to us or from us to you
shall be deemed to have been duly given if sent by registered mail, telegram or
teletype, to us at our address as set forth in our Underwriters' Questionnaire
previously delivered to you, or to you
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c/o X.X. XxXxx Securities, Inc. at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx, 00000, fax no. (000) 000-0000.
18.2. We understand that you are a member in good standing of
the NASD. We hereby confirm that we are actually engaged in the investment
banking or securities business and are either (a) a member in good standing of
the NASD or (b) a dealer with its principal place of business located outside
the United States, its territories and its possessions and not registered as a
broker or dealer under the 1934 Act who agrees not to make any sales within the
United States, its territories or its possessions or to persons who are
nationals thereof or residents therein (except that we may participate in sales
to Selected Dealers and others under Section 3 of this Agreement). We hereby
agree to comply with the provisions of Section 24 of Article III of the Rules of
Fair Practice of the NASD, and, if we are a foreign dealer and not a member of
the NASD, we also hereby agree to comply with the NASD's interpretation with
respect to free-riding and withholding and to comply, as though we were a member
of the NASD, with the provisions of Sections 8, 24 and 36 of Article III of such
Rules of Fair Practice, and to comply with Section 25 of Article III thereof as
that Section applies to a non-member foreign dealer. In connection with sales
and offers to sell Shares made by us outside the United States, its territories
and possessions (i) we will either furnish to each person to whom any such sale
or offer is made a copy of the then current Preliminary Prospectus or the
Prospectus, as the case may be, or inform such person that such Preliminary
Prospectus or Prospectus will be available upon request, and (ii) we will
furnish to each person to whom any such sale or offer is made such prospectus,
advertisement or other offering document containing information relating to the
Shares or the Company as may be required under the law of the jurisdiction in
which such sale or offer is made. Any prospectus, advertisement or other
offering document furnished by us to any person in accordance with the preceding
sentence and any such additional offering material as we may furnish to any
person (x) shall comply in all respects with the law of the jurisdiction in
which it is so furnished, (y) shall be prepared and so furnished at our sole
risk and expense and (z) shall not contain information relating to the Shares or
the Company which is inconsistent in any respect with the information contained
in the then current Preliminary Prospectus or in the Prospectus, as the case may
be.
18.3. This instrument may be signed by or on behalf of the
Underwriters in one or more counterparts each of which shall constitute an
original and all of which together shall constitute one and the same agreement
among all the Underwriters and shall become effective at such time as all the
Underwriters shall have signed or have had signed on their behalf such
counterparts and you shall have confirmed all such counterparts. You may confirm
such counterparts by facsimile signature.
18.4. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without giving effect to the
choice of law or conflicts of laws principles thereof.
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Please confirm that the foregoing correctly states the
understanding between us by signing and returning to us a counterpart hereof.
Very truly yours,
-------------------------------------------
As Attorney-in-Fact for each of the several
Underwriters named in Schedule 1 to the
Underwriting Agreement
Confirmed as of the date
first above written:
X.X. XxXxx Securities, Inc.
South Coast Financial Securities, Inc.
By: X.X. XxXxx Securities, Inc.
By:
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Xxxxxxx X. XxXxx, President
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