EXHIBIT 10.29
DCI USA, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: December 13, 2004
Newbridge Securities Corporation
0000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned, DCI USA, Inc., a Delaware corporation (the
"Company"), hereby agrees with Newbridge Securities Corporation
(the "Placement Agent") and Cornell Capital Partners, LP, a
Delaware Limited Partnership (the "Investor"), as follows:
1. Offering. The Company hereby engages the Placement
Agent to act as its exclusive placement agent in connection with
the Standby Equity Distribution Agreement of even date
herewith (the "Standby Equity Distribution Agreement"), pursuant
to which the Company shall issue and sell to the Investor, from
time to time, and the Investor shall purchase from the Company
(the "Offering") up to Five Million Dollars ($5,000,000) of the
Company's common stock (the "Commitment Amount"), par value
$0.001 per share (the "Common Stock"), at price per share equal
to the Purchase Price, as that term is defined in the Standby
Equity Distribution Agreement. The Placement Agent services
shall consist of reviewing the terms of the Standby Equity
Distribution Agreement and advising the Company with respect to
those terms.
All capitalized terms used herein and not otherwise defined
herein shall have the same meaning ascribed to them as in the
Standby Equity Distribution Agreement. The Investor will be
granted certain registration rights with respect to the Common
Stock as more fully set forth in the Registration Rights
Agreement of even date herewith between the Company and the
Investor (the "Registration Rights Agreement"). All applicable
SEC documents accessible to the general public and the documents
to be executed and delivered in connection with the Offering,
including, but not limited to, this Agreement, the Standby Equity
Distribution Agreement, the Registration Rights Agreement, and
the Escrow Agreement of even date herewith (the "Escrow
Agreement"), are referred to sometimes hereinafter collectively
as the "Offering Materials." The Company's Common Stock
purchased by the Investor hereunder or to be issued in connection
with the conversion of any debentures are sometimes referred to
hereinafter as the "Securities." The Placement Agent shall not
be obligated to sell any Securities.
2. Compensation.
A. For its services hereunder, the Company shall pay
to the Placement Agent a fee of Ten Thousand Dollars ($10,000),
payable by the issuance of shares of the Company's Common
Stock (the "Placement Agent's Shares"), which shall be determined
by dividing $10,000 by the Volume Weighted Average Price of the
Company's Common Stock on the first (1st) trading day of the
Company's Common Stock after the date hereof. The Placement
Agent shall be entitled to "piggy-back" registration rights,
which shall be triggered upon registration of any shares of
Common Stock by the Investor with respect to the Placement
Agent's Shares pursuant to the Registration Rights Agreement.
3. Representations, Warranties and Covenants of the
Placement Agent.
A. The Placement Agent represents, warrants and
covenants as follows:
(i) The Placement Agent has the necessary power
to enter into this Agreement and to consummate the transactions
contemplated hereby.
(ii) The execution and delivery by the
Placement Agent of this Agreement and the consummation of the
transactions contemplated herein will not result in any violation
of, or be in conflict with, or constitute a default under, any
agreement or instrument to which the Placement Agent is a party
or by which the Placement Agent or its properties are bound, or
any judgment, decree, order or, to the Placement Agent's
knowledge, any statute, rule or regulation applicable to the
Placement Agent. This Agreement when executed and delivered by
the Placement Agent, will constitute the legal, valid and binding
obligations of the Placement Agent, enforceable in accordance
with their respective terms, except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time
to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to
general principles of equity, or (c) the indemnification
provisions hereof or thereof may be held to be in violation of
public policy.
(iii) Upon receipt and execution of this
Agreement, the Placement Agent will promptly forward copies of
this Agreement to the Company or its counsel and the Investor or
its counsel.
(iv) The Placement Agent will not
intentionally take any action that it reasonably believes would
cause the Offering to violate the provisions of the Securities
Act of 1933, as amended (the "1933 Act"), the Securities Exchange
Act of 1934 (the "1934 Act"), the respective rules and
regulations promulgated thereunder (the "Rules and Regulations")
or applicable "Blue Sky" laws of any state or jurisdiction.
(v) The Placement Agent is a member of the
National Association of Securities Dealers, Inc., and is a broker-
dealer registered as such under the 1934 Act and under the
securities laws of the states in which the Securities will be
offered or sold by the Placement Agent unless an exemption for
such state registration is available to the Placement Agent. The
Placement Agent is in material compliance with the rules and
regulations applicable to the Placement Agent generally and
applicable to the Placement Agent's participation in the
Offering.
4. Representations and Warranties of the Company.
A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of
each of this Agreement, the Standby Equity Distribution
Agreement, the Escrow Agreement, and the Registration Rights
Agreement has been or will be duly and validly authorized by the
Company and is, or with respect to this Agreement, the Standby
Equity Distribution Agreement, the Escrow Agreement, and the
Registration Rights Agreement will be, a valid and binding
agreement of the Company, enforceable in accordance with its
respective terms, except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time
to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to
general principles of equity or (c) the indemnification
provisions hereof or thereof may be held to be in violation of
public policy. The Securities to be issued pursuant to the
transactions contemplated by this Agreement and the Standby
Equity Distribution Agreement have been duly authorized and, when
issued and paid for in accordance with this Agreement, the
Standby Equity Distribution Agreement and the
certificates/instruments representing such Securities, will be
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that
(1) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time
to time in effect and affecting the rights of creditors
generally, and (2) the enforceability thereof is subject to
general principles of equity. All corporate action required to
be taken for the authorization, issuance and sale of the
Securities has been duly and validly taken by the Company.
(ii) The Company has a duly authorized, issued and
outstanding capitalization as set forth herein and in the Standby
Equity Distribution Agreement. The Company is not a party to or
bound by any instrument, agreement or other arrangement providing
for it to issue any capital stock, rights, warrants, options or
other securities, except for this Agreement, the agreements
described herein and as described in the Standby Equity
Distribution Agreement and the agreements described therein. All
issued and outstanding securities of the Company have been duly
authorized and validly issued and are fully paid and non-
assessable; the holders thereof have no rights of rescission or
preemptive rights with respect thereto and are not subject to
personal liability solely by reason of being security holders;
and none of such securities were issued in violation of the
preemptive rights of any holders of any security of the Company.
As of the date hereof, the authorized capital stock of the
Company consists of 101,000,000 shares of stock, of which
100,000,000 shares are designated as Common Stock, of which
35,000,000 shares are outstanding, and 1,000,000 shares, which
are designated as preferred shares, of which 200,000 are
designated as Series A Preferred..
(iii) The Common Stock to be issued in
accordance with this Agreement and the Standby Equity
Distribution Agreement have been duly authorized and, when issued
and paid for in accordance with this Agreement, the Standby
Equity Distribution Agreement and the certificates/instruments
representing such Common Stock will be validly issued, fully-paid
and non-assessable; the holders thereof will not be subject to
personal liability solely by reason of being such holders; such
Securities are not and will not be subject to the preemptive
rights of any holder of any security of the Company.
(iv) The Company has good and marketable
title to, or valid and enforceable leasehold estates in, all
items of real and personal property necessary to conduct its
business (including, without limitation, any real or personal
property stated in the Offering Materials to be owned or leased
by the Company), free and clear of all liens, encumbrances,
claims, security interests and defects of any material nature
whatsoever, other than those set forth in the Offering Materials
and liens for taxes not yet due and payable.
(v) There is no litigation or governmental
proceeding pending or, to the best of the Company's knowledge,
threatened against, or involving the properties or business of
the Company, except as set forth in the Offering Materials.
(vi) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws
of the State of Delaware. Except as set forth in the Offering
Materials, the Company does not own or control, directly or
indirectly, an interest in any other corporation, partnership,
trust, joint venture or other business entity. The Company is
duly qualified or licensed and in good standing as a foreign
corporation in each jurisdiction in which the character of its
operations requires such qualification or licensing and where
failure to so qualify would have a material adverse effect on the
Company. The Company has all requisite corporate power and
authority, and all material and necessary authorizations,
approvals, orders, licenses, certificates and permits of and from
all governmental regulatory officials and bodies (domestic and
foreign) to conduct its businesses (and proposed business) as
described in the Offering Materials. Any disclosures in the
Offering Materials concerning the effects of foreign, federal,
state and local regulation on the Company's businesses as
currently conducted and as contemplated are correct in all
material respects and do not omit to state a material fact. The
Company has all corporate power and authority to enter into this
Agreement, the Standby Equity Distribution Agreement, the
Registration Rights Agreement, and the Escrow Agreement, to carry
out the provisions and conditions hereof and thereof, and all
consents, authorizations, approvals and orders required in
connection herewith and therewith have been obtained. No
consent, authorization or order of, and no filing with, any
court, government agency or other body is required by the Company
for the issuance of the Securities or execution and delivery of
the Offering Materials except for applicable federal and state
securities laws. The Company, since its inception, has not
incurred any liability arising under or as a result of the
application of any of the provisions of the 1933 Act, the 1934
Act or the Rules and Regulations.
(vii) There has been no material adverse
change in the condition or prospects of the Company, financial or
otherwise, from the latest dates as of which such condition or
prospects, respectively, are set forth in the Offering Materials,
and the outstanding debt, the property and the business of the
Company conform in all material respects to the descriptions
thereof contained in the Offering Materials.
(viii) Except as set forth in the Offering
Materials, the Company is not in breach of, or in default under,
any term or provision of any material indenture, mortgage, deed
of trust, lease, note, loan or Standby Equity Distribution
Agreement or any other material agreement or instrument
evidencing an obligation for borrowed money, or any other
material agreement or instrument to which it is a party or by
which it or any of its properties may be bound or affected. The
Company is not in violation of any provision of its charter or by-
laws or in violation of any franchise, license, permit, judgment,
decree or order, or in violation of any material statute, rule or
regulation. Neither the execution and delivery of the Offering
Materials nor the issuance and sale or delivery of the
Securities, nor the consummation of any of the transactions
contemplated in the Offering Materials nor the compliance by the
Company with the terms and provisions hereof or thereof, has
conflicted with or will conflict with, or has resulted in or will
result in a breach of, any of the terms and provisions of, or has
constituted or will constitute a default under, or has resulted
in or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
or pursuant to the terms of any indenture, mortgage, deed of
trust, note, loan or any other agreement or instrument evidencing
an obligation for borrowed money, or any other agreement or
instrument to which the Company may be bound or to which any of
the property or assets of the Company is subject except (a) where
such default, lien, charge or encumbrance would not have a
material adverse effect on the Company and (b) as described in
the Offering Materials; nor will such action result in any
violation of the provisions of the charter or the by-laws of the
Company or, assuming the due performance by the Placement Agent
of its obligations hereunder, any material statute or any
material order, rule or regulation applicable to the Company of
any court or of any foreign, federal, state or other regulatory
authority or other government body having jurisdiction over the
Company.
(ix) Subsequent to the dates as of which
information is given in the Offering Materials, and except as may
otherwise be indicated or contemplated herein or therein and the
securities offered pursuant to the Securities Purchase Agreement
the Company has not (a) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed
money, or (b) entered into any transaction other than in the
ordinary course of business, or (c) declared or paid any dividend
or made any other distribution on or in respect of its capital
stock. Except as described in the Offering Materials, the
Company has no outstanding obligations to any officer or director
of the Company.
(x) There are no claims for services in the
nature of a finder's or origination fee with respect to the sale
of the Common Stock or any other arrangements, agreements or
understandings that may affect the Placement Agent's
compensation, as determined by the National Association of
Securities Dealers, Inc.
(xi) The Company owns or possesses, free and
clear of all liens or encumbrances and rights thereto or therein
by third parties, the requisite licenses or other rights to use
all trademarks, service marks, copyrights, service names, trade
names, patents, patent applications and licenses necessary to
conduct its business (including, without limitation, any such
licenses or rights described in the Offering Materials as being
owned or possessed by the Company) and, except as set forth in
the Offering Materials, there is no claim or action by any person
pertaining to, or proceeding, pending or threatened, which
challenges the exclusive rights of the Company with respect to
any trademarks, service marks, copyrights, service names, trade
names, patents, patent applications and licenses used in the
conduct of the Company's businesses (including, without
limitation, any such licenses or rights described in the Offering
Materials as being owned or possessed by the Company) except any
claim or action that would not have a material adverse effect on
the Company; the Company's current products, services or
processes do not infringe or will not infringe on the patents
currently held by any third party.
(xii) Except as described in the Offering
Materials, the Company is not under any obligation to pay
royalties or fees of any kind whatsoever to any third party with
respect to any trademarks, service marks, copyrights, service
names, trade names, patents, patent applications, licenses or
technology it has developed, uses, employs or intends to use or
employ, other than to their respective licensors.
(xiii) Subject to the performance by the
Placement Agent of its obligations hereunder, the offer and sale
of the Securities complies, and will continue to comply, in all
material respects with the requirements of Rule 506 of Regulation
D promulgated by the SEC pursuant to the 1933 Act and any other
applicable federal and state laws, rules, regulations and
executive orders. Neither the Offering Materials nor any
amendment or supplement thereto nor any documents prepared by the
Company in connection with the Offering will contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading. All statements of material facts in the
Offering Materials are true and correct as of the date of the
Offering Materials.
(xiv) All material taxes which are due and
payable from the Company have been paid in full or adequate
provision has been made for such taxes on the books of the
Company, except for those taxes disputed in good faith by the
Company.
(xv) None of the Company nor any of its officers,
directors, employees or agents, nor any other person acting on
behalf of the Company, has, directly or indirectly, given or
agreed to give any money, gift or similar benefit (other than
legal price concessions to customers in the ordinary course of
business) to any customer, supplier, employee or agent of a
customer or supplier, or official or employee of any governmental
agency or instrumentality of any government (domestic or foreign)
or any political party or candidate for office (domestic or
foreign) or other person who is or may be in a position to help
or hinder the business of the Company (or assist it in connection
with any actual or proposed transaction) which (A) might subject
the Company to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, or (B) if not given in the
past, might have had a materially adverse effect on the assets,
business or operations of the Company as reflected in any of the
financial statements contained in the Offering Materials, or (C)
if not continued in the future, might adversely affect the
assets, business, operations or prospects of the Company in the
future.
5. Representations, Warranties and Covenants of the
Investor.
A. The Investor represents, warrants and covenants as
follows:
(i) The Investor has the necessary power to enter
into this Agreement and to consummate the transactions
contemplated hereby.
(ii) The execution and delivery by the Investor of
this Agreement and the consummation of the transactions
contemplated herein will not result in any violation of, or be in
conflict with, or constitute a default under, any agreement or
instrument to which the Investor is a party or by which the
Investor or its properties are bound, or any judgment, decree,
order or, to the Investor's knowledge, any statute, rule or
regulation applicable to the Investor. This Agreement when
executed and delivered by the Investor, will constitute the
legal, valid and binding obligations of the Investor, enforceable
in accordance with their respective terms, except to the extent
that (a) the enforceability hereof or thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws from time to time in effect and affecting the rights of
creditors generally, (b) the enforceability hereof or thereof is
subject to general principles of equity, or (c) the
indemnification provisions hereof or thereof may be held to be in
violation of public policy.
(iii) The Investor will promptly, upon request
by the Placement Agent, forward copies of any and all due
diligence questionnaires compiled by the Investor to the
Placement Agent.
(iv) The Investor is an Accredited Investor
(as defined under the 1933 Act).
(v) The Investor is acquiring the Securities for
the Inventor's own account as principal, not as a nominee or
agent, for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof in whole
or in part and no other person has a direct or indirect
beneficial interest in such Securities. Further, the Investor
does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the
Securities.
(vi) The Investor acknowledges the Investor's
understanding that the offering and sale of the Securities is
intended to be exempt from registration under the 1933 Act by
virtue of Section 3(b) of the 1933 Act and the provisions of
Regulation D promulgated thereunder ("Regulation D"). In
furtherance thereof, the Investor represents and warrants as
follows:
(a) The Investor has the financial ability
to bear the economic risk of the Investor's investment, has
adequate means for providing for the Inventor's current needs and
personal contingencies and has no need for liquidity with respect
to the Investor's investment in the Company; and
(b) The Investor has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of the prospective investment.
The Inventor also represents it has not been organized for the
purpose of acquiring the Securities.
(vii) The Investor has been given the
opportunity for a reasonable time prior to the date hereof to ask
questions of, and receive answers from, the Company or its
representatives concerning the terms and conditions of the
Offering, and other matters pertaining to this investment, and
has been given the opportunity for a reasonable time prior to the
date hereof to obtain such additional information in connection
with the Company in order for the Investor to evaluate the merits
and risks of purchase of the Securities, to the extent the
Company possesses such information or can acquire it without
unreasonable effort or expense. The Investor is not relying on
the Placement Agent or any of its affiliates with respect to the
accuracy or completeness of the Offering Materials or for any
economic considerations involved in this investment.
(viii) No General Solicitation. Neither the
Investor, nor any person acting on its behalf, has engaged in any
form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection
with the offer or sale of the shares of Common Stock offered
hereby.
6. Certain Covenants and Agreements of the Company.
The Company covenants and agrees at its expense and without
any expense to the Placement Agent as follows:
A. To advise the Placement Agent and the Investor of
any material adverse change in the Company's financial condition,
prospects or business or of any development materially affecting
the Company or rendering untrue or misleading any material
statement in the Offering Materials occurring at any time as soon
as the Company is either informed or becomes aware thereof.
B. To use its commercially reasonable efforts to
cause the Common Stock issuable in connection with the Standby
Equity Distribution Agreement to be qualified or registered for
sale on terms consistent with those stated in the Registration
Rights Agreement and under the securities laws of such
jurisdictions as the Placement Agent and the Investor shall
reasonably request. Qualification, registration and exemption
charges and fees shall be at the sole cost and expense of the
Company.
C. To comply with the terms of the Offering
Materials.
D. To ensure that any transactions between or among
the Company, or any of its officers, directors and affiliates be
on terms and conditions that are no less favorable to the
Company, than the terms and conditions that would be available in
an "arm's length" transaction with an independent third party.
7. Indemnification and Limitation of Liability.
A. The Company hereby agrees that it will indemnify
and hold the Placement Agent and each officer, director,
shareholder, employee or representative of the Placement Agent
and each person controlling, controlled by or under common
control with the Placement Agent within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act or the SEC's Rules
and Regulations promulgated thereunder (the "Rules and
Regulations"), harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses
and disbursements incurred in connection with investigating,
preparing to defend or defending any action, suit or proceeding,
including any inquiry or investigation, commenced or threatened,
or any claim whatsoever or in appearing or preparing for
appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such
as a deposition) to which the Placement Agent or such indemnified
person of the Placement Agent may become subject under the 1933
Act, the 1934 Act, the Rules and Regulations, or any other
federal or state law or regulation, common law or otherwise,
arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in (a) Section 4 of
this Agreement, (b) the Offering Materials (except those written
statements relating to the Placement Agent given by the Placement
Agent for inclusion therein), (c) any application or other
document or written communication executed by the Company or
based upon written information furnished by the Company filed in
any jurisdiction in order to qualify the Common Stock under the
securities laws thereof, or any state securities commission or
agency; (ii) the omission or alleged omission from documents
described in clauses (a), (b) or (c) above of a material fact
required to be stated therein or necessary to make the statements
therein not misleading; or (iii) the breach of any
representation, warranty, covenant or agreement made by the
Company in this Agreement. The Company further agrees that upon
demand by an indemnified person, at any time or from time to
time, it will promptly reimburse such indemnified person for any
loss, claim, damage, liability, cost or expense actually and
reasonably paid by the indemnified person as to which the Company
has indemnified such person pursuant hereto.
B. The Placement Agent hereby agrees that it will
indemnify and hold the Company and each officer, director,
shareholder, employee or representative of the Company, and each
person controlling, controlled by or under common control with
the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act or the Rules and Regulations, harmless
from and against any and all loss, claim, damage, liability, cost
or expense whatsoever (including, but not limited to, any and all
reasonable legal fees and other expenses and disbursements
incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry
or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a
witness in any action, suit or proceeding, including any inquiry,
investigation or pretrial proceeding such as a deposition) to
which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and
Regulations, or any other federal or state law or regulation,
common law or otherwise, arising out of or based upon (i) the
material breach of any representation, warranty, covenant or
agreement made by the Placement Agent in this Agreement, or (ii)
any false or misleading information provided to the Company in
writing by one of the Placement Agent's indemnified persons
specifically for inclusion in the Offering Materials.
C. The Investor hereby agrees that it will indemnify
and hold the Placement Agent and each officer, director,
shareholder, employee or representative of the Placement Agent,
and each person controlling, controlled by or under common
control with the Placement Agent within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act or the Rules and
Regulations, harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses
and disbursements incurred in connection with investigating,
preparing to defend or defending any action, suit or proceeding,
including any inquiry or investigation, commenced or threatened,
or any claim whatsoever or in appearing or preparing for
appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such
as a deposition) to which the Placement Agent or such indemnified
person of the Placement Agent may become subject under the 1933
Act, the 1934 Act, the Rules and Regulations, or any other
federal or state law or regulation, common law or otherwise,
arising out of or based upon (i) the conduct of the Investor or
its officers, employees or representatives in its acting as the
Investor for the Offering, (ii) the material breach of any
representation, warranty, covenant or agreement made by the
Investor in the Offering Materials, or (iii) any false or
misleading information provided to the Placement Agent by one of
the Investor's indemnified persons.
D. The Placement Agent hereby agrees that it will
indemnify and hold the Investor and each officer, director,
shareholder, employee or representative of the Investor, and each
person controlling, controlled by or under common control with
the Investor within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act or the Rules and Regulations, harmless
from and against any and all loss, claim, damage, liability, cost
or expense whatsoever (including, but not limited to, any and all
reasonable legal fees and other expenses and disbursements
incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry
or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a
witness in any action, suit or proceeding, including any inquiry,
investigation or pretrial proceeding such as a deposition) to
which the Investor or such indemnified person of the Investor may
become subject under the 1933 Act, the 1934 Act, the Rules and
Regulations, or any other federal or state law or regulation,
common law or otherwise, arising out of or based upon the
material breach of any representation, warranty, covenant or
agreement made by the Placement Agent in this Agreement.
E. Promptly after receipt by an indemnified party of
notice of commencement of any action covered by Section 7(A),
(B), (C) or (D), the party to be indemnified shall, within five
(5) business days, notify the indemnifying party of the
commencement thereof; the omission by one (1) indemnified party
to so notify the indemnifying party shall not relieve the
indemnifying party of its obligation to indemnify any other
indemnified party that has given such notice and shall not
relieve the indemnifying party of any liability outside of this
indemnification if not materially prejudiced thereby. In the
event that any action is brought against the indemnified party,
the indemnifying party will be entitled to participate therein
and, to the extent it may desire, to assume and control the
defense thereof with counsel chosen by it which is reasonably
acceptable to the indemnified party. After notice from the
indemnifying party to such indemnified party of its election to
so assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under such Section 7(A), (B),
(C), or (D) for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof,
but the indemnified party may, at its own expense, participate in
such defense by counsel chosen by it, without, however, impairing
the indemnifying party's control of the defense. Subject to the
proviso of this sentence and notwithstanding any other statement
to the contrary contained herein, the indemnified party or
parties shall have the right to choose its or their own counsel
and control the defense of any action, all at the expense of the
indemnifying party if (i) the employment of such counsel shall
have been authorized in writing by the indemnifying party in
connection with the defense of such action at the expense of the
indemnifying party, or (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to such indemnified
party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them
which are different from or additional to those available to one
or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses of one
additional counsel shall be borne by the indemnifying party;
provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstance, be liable for
the reasonable fees and expenses of more than one separate firm
of attorneys at any time for all such indemnified parties. No
settlement of any action or proceeding against an indemnified
party shall be made without the consent of the indemnifying
party.
F. In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in Section 7(A) or 7(B) is due in accordance with
its terms but is for any reason held by a court to be unavailable
on grounds of policy or otherwise, the Company and the Placement
Agent shall contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably
incurred in connection with the investigation or defense of same)
which the other may incur in such proportion so that the
Placement Agent shall be responsible for such percent of the
aggregate of such losses, claims, damages and liabilities as
shall equal the percentage of the gross proceeds paid to the
Placement Agent and the Company shall be responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933
Act shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of
this Section 7(F), any person controlling, controlled by or under
common control with the Placement Agent, or any partner,
director, officer, employee, representative or any agent of any
thereof, shall have the same rights to contribution as the
Placement Agent and each person controlling, controlled by or
under common control with the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
officer of the Company and each director of the Company shall
have the same rights to contribution as the Company. Any party
entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made
against the other party under this Section 7(D), notify such
party from whom contribution may be sought, but the omission to
so notify such party shall not relieve the party from whom
contribution may be sought from any obligation they may have
hereunder or otherwise if the party from whom contribution may be
sought is not materially prejudiced thereby.
G. The indemnity and contribution agreements
contained in this Section 7 shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of any indemnified person or any termination of this
Agreement.
H. The Company hereby waives, to the fullest extent
permitted by law, any right to or claim of any punitive,
exemplary, incidental, indirect, special, consequential or other
damages (including, without limitation, loss of profits) against
the Placement Agent and each officer, director, shareholder,
employee or representative of the placement agent and each person
controlling, controlled by or under common control with the
Placement Agent within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act or the Rules and Regulations
arising out of any cause whatsoever (whether such cause be based
in contract, negligence, strict liability, other tort or
otherwise). Notwithstanding anything to the contrary contained
herein, the aggregate liability of the Placement Agent and each
officer, director, shareholder, employee or representative of the
Placement Agent and each person controlling, controlled by or
under common control with the Placement Agent within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act or
the Rules and Regulations shall not exceed the compensation
received by the Placement Agent pursuant to Section 2 hereof.
This limitation of liability shall apply regardless of the cause
of action, whether contract, tort (including, without limitation,
negligence) or breach of statute or any other legal or equitable
obligation.
8. Payment of Expenses.
The Company hereby agrees to bear all of the expenses in
connection with the Offering, including, but not limited to the
following: filing fees, printing and duplicating costs,
advertisements, postage and mailing expenses with respect to the
transmission of Offering Materials, registrar and transfer agent
fees, escrow agent fees and expenses, fees of the Company's
counsel and accountants, issue and transfer taxes, if any.
9. Conditions of Closing.
The Closing shall be held at the offices of the Investor or
its counsel. The obligations of the Placement Agent hereunder
shall be subject to the continuing accuracy of the
representations and warranties of the Company and the Investor
herein as of the date hereof and as of the Date of Closing (the
"Closing Date") with respect to the Company or the Investor, as
the case may be, as if it had been made on and as of such Closing
Date; the accuracy on and as of the Closing Date of the
statements of the officers of the Company made pursuant to the
provisions hereof; and the performance by the Company and the
Investor on and as of the Closing Date of its covenants and
obligations hereunder and to the following further conditions:
A. Upon the effectiveness of a registration statement
covering the Standby Equity Distribution Agreement, the Investor
and the Placement Agent shall receive the opinion of Counsel to
the Company, dated as of the date thereof, which opinion shall be
in form and substance reasonably satisfactory to the Investor,
their counsel and the Placement Agent.
B. At or prior to the Closing, the Investor and the
Placement Agent shall have been furnished such documents,
certificates and opinions as it may reasonably require for the
purpose of enabling them to review or pass upon the matters
referred to in this Agreement and the Offering Materials, or in
order to evidence the accuracy, completeness or satisfaction of
any of the representations, warranties or conditions herein
contained.
C. At and prior to the Closing, (i) there shall have
been no material adverse change nor development involving a
prospective change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the
latest dates as of which such condition is set forth in the
Offering Materials; (ii) there shall have been no transaction,
not in the ordinary course of business, except for the
transactions pursuant to the Securities Purchase Agreement
entered into by the Company on the date hereof which has not been
disclosed in the Offering Materials or to the Placement Agent in
writing; (iii) except as set forth in the Offering Materials, the
Company shall not be in default under any provision of any
instrument relating to any outstanding indebtedness for which a
waiver or extension has not been otherwise received; (iv) except
as set forth in the Offering Materials, the Company shall not
have issued any securities (other than those to be issued as
provided in the Offering Materials) or declared or paid any
dividend or made any distribution of its capital stock of any
class and there shall not have been any change in the
indebtedness (long or short term) or liabilities or obligations
of the Company (contingent or otherwise) and trade payable debt;
(v) no material amount of the assets of the Company shall have
been pledged or mortgaged, except as indicated in the Offering
Materials; and (v) no action, suit or proceeding, at law or in
equity, against the Company or affecting any of its properties or
businesses shall be pending or threatened before or by any court
or federal or state commission, board or other administrative
agency, domestic or foreign, wherein an unfavorable decision,
ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the
Company, except as set forth in the Offering Materials.
D. If requested at Closing the Investor and the
Placement Agent shall receive a certificate of the Company signed
by an executive officer and chief financial officer, dated as of
the applicable Closing, to the effect that the conditions set
forth in subparagraph (C) above have been satisfied and that, as
of the applicable closing, the representations and warranties of
the Company set forth herein are true and correct.
E. The Placement Agent shall have no obligation to
insure that (x) any check, note, draft or other means of payment
for the Common Stock will be honored, paid or enforceable against
the Investor in accordance with its terms, or (y) subject to the
performance of the Placement Agent's obligations and the accuracy
of the Placement Agent's representations and warranties
hereunder, (1) the Offering is exempt from the registration
requirements of the 1933 Act or any applicable state "Blue Sky"
law or (2) the Investor is an Accredited Investor.
10. Termination.
This Agreement shall be co-terminus with, and terminate upon
the same terms and conditions as those set forth in, the Standby
Equity Distribution Agreement. The rights of the Investor and
the obligations of the Company under the Registration Rights
Agreement, and the rights of the Placement Agent and the
obligations of the Company shall survive the termination of this
Agreement unabridged.
11. Miscellaneous.
A. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but all which shall be deemed to be one and the same instrument.
B. Any notice required or permitted to be given
hereunder shall be given in writing and shall be deemed effective
when deposited in the United States mail, postage prepaid, or
when received if personally delivered or faxed (upon confirmation
of receipt received by the sending party), addressed as follows
to such other address of which written notice is given to the
others):
If to Placement Agent, Newbridge Securities Corporation
to:
0000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to: DCI USA, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx Xxxxx & Associates
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investor: Cornell Capital Partners, LP
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to: Cornell Capital Partners, LP
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. This Agreement shall be governed by and construed
in all respects under the laws of the State of New Jersey,
without reference to its conflict of laws rules or principles.
Any suit, action, proceeding or litigation arising out of or
relating to this Agreement shall be brought and prosecuted
exclusively in such federal or state court or courts located in
Xxxxxx County, New Jersey. The parties hereby irrevocably and
unconditionally consent to the jurisdiction and venue of the
Superior Court of New Jersey, sitting in Xxxxxx County, New
Jersey, and the United States District Court of New Jersey,
sitting in Newark, New Jersey, and to service of process by
registered or certified mail, return receipt requested, or by any
other manner provided by applicable law, and hereby irrevocably
and unconditionally waive any right to claim that any suit,
action, proceeding or litigation so commenced has been commenced
in an inconvenient forum.
D. This Agreement and the other agreements referenced
herein contain the entire understanding between the parties
hereto and may not be modified or amended except by a writing
duly signed by the party against whom enforcement of the
modification or amendment is sought.
E. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
COMPANY:
DCI USA, INC.
By: /s/ Xxxxx Xxxxxxxxxx
Name: Xxxxx Xxxxxxxxxx
Title: Chairman
PLACEMENT AGENT:
NEWBRIDGE SECURITIES CORPORATION
By:
Name: Xxx X. Xxxxx
Title: President
INVESTOR:
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Portfolio Manager
