(1) UNDERWRITING AGREEMENT--PLACEMENT AGENCY AGREEMENT
NET/TECH INTERNATIONAL, INC.
Private Placement of Shares of
Common Stock
PLACEMENT AGENCY AGREEMENT
Dated as of May 2, 2000
First Montauk Securities Corp.
Parkway 109 Office Center
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Gentlemen:
Net/Tech International, Inc. (the "Company") proposes to offer for sale
(the "Offering") in a private offering pursuant to Section (2) of the Securities
Act of 1933, as amended (the "Act"), and or Regulation D promulgated hereunder,
an aggregate of 3,000,000 shares (the "Shares") of Common Stock, $.01 par value
per share ("Common Stock"). The private offering is being made on a "best
efforts - all or none" basis as to 2,000,000 Shares (the "Minimum Offering") and
on a "best efforts" basis as to an additional 1,000,000 Shares (the "Maximum
Offering"). Unless the Minimum Offering is sold, no Shares of Common Stock will
be sold and all subscriptions will be returned to the subscribers without
interest or deductions. This agreement shall confirm our agreement retaining
First Montauk Securities Corp. as our exclusive placement agent (the "Placement
Agent") in connection with the offer and sale of the Shares.
l. Appointment of Placement Agent.
On the basis of the representations and warranties contained herein, and
subject to the terms and conditions set forth herein, the Company hereby
appoints First Montauk Securities Corp. as its Placement Agent and grants First
Montauk Securities Corp. the exclusive right to offer, as its agent, the Shares
pursuant to the terms of this Agreement. On the basis of such representations
and warranties, and subject to such conditions, you hereby accept such
appointment and agree to use your reasonable best efforts to secure
subscriptions to purchase up to 3,000,000 Shares.
2. Terms of the Offering
(a) The Offering shall consist of up to 3,000,000 Shares of the
Company at a purchase price equal to $2.50 per share The Offering is being made
on a "best efforts - all or none" basis as to 2,000,000 Shares (as previously
defined, the "Minimum Offering") and on a "best efforts" basis as to an
additional 1,000,000 Shares (as previously defined, "Maximum
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Offering"). Unless the Minimum Offering is sold, no Shares will be sold and all
subscriptions will be returned to subscribers without interest or deductions.
(b) The Company shall prepare and deliver to the Placement Agent
copies of a Confidential Offering Memorandum ("Offering Memorandum"), relating
to, among other things, the Company, the Shares and the terms of the sale of the
Shares. The Offering Memorandum, including all exhibits and appendices thereto
and documents delivered therewith, are referred to herein as the "Offering
Documents" and shall include any supplements or amendments in accordance with
this Agreement.
(c) The Offering shall commence on or the date hereof, and shall
expire at 5:00 p.m., New York time, on May 31, 2000 and may be extended for an
additional 60 days upon mutual consent of the Company and the Placement Agent.
Such period, as same may be so extended, shall hereinafter be referred to as the
"Offering Period."
(d) Each prospective investor ("Prospective Investor") who desires to
purchase Shares shall deliver to the Placement Agent a subscription agreement
and an investor questionnaire (the "Subscription Document"), and immediately
available funds in the amount necessary to purchase the number of Shares such
Prospective Investor desires to purchase. The Placement Agent shall not have any
obligation to independently verify the accuracy or completeness of any
information contained in any Subscription Document or the authenticity,
sufficiency, or validity of any check delivered by any Prospective Investor in
payment for Shares.
(e) The Placement Agent shall establish an Escrow Account (the "Escrow
Account") with an independent bank (the "Escrow Agent"). The Placement Agent
shall deliver each check received from a Prospective Investor to the Escrow
Agent for deposit in the Escrow Account in accordance with applicable rules of
the National Association of Securities Dealers, Inc. ("NASD") and shall deliver
the executed copies of the Subscription Documents received from such Prospective
Investor to the Company. The Company shall notify the Placement Agent promptly
of the acceptance or rejection or any subscription.
(f) If subscriptions for the Minimum Offering are not received from
Prospective Investors prior to the expiration of the Offering Period and
accepted by the Company, the Offering shall be canceled, all funds received and
held in the Escrow Account shall be refunded in full without interest or
deduction and this Agreement and the agency created hereby shall be terminated
without any further obligation on the part of either party, except as provided
in Sections 8, 10 and 11 hereof.
(g) You may engage other persons selected by you to assist you in the
Offering (each such broker/dealers being hereinafter referred to as a "Selling
Group Member") and you may allow such Selling Group Member such part of the
compensation and payment of expenses payable to you under Section 5 hereof as
you shall determine. Any such Selling Group Member shall be a member firm in
good standing as a broker-dealer under the rules of the NASD. Each Selling Group
Member shall be required to agree in writing to comply with the provisions of
this Section 2. The Company hereby agrees to make such representations and
warranties to,
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and covenants and agreements with, any Selling Group Member (including an
agreement to indemnify such Selling Group Member on terms substantially similar
to Section __ hereof) as provided herein.
3. Interim Closings/Final Closing
(a) Subject to the conditions set forth in Section __ hereof, if
subscriptions for the Minimum Offering have been received in escrow prior to the
expiration of the Offering Period and accepted by the Company, a closing under
this Agreement (the "Initial Closing") shall be held at the offices of the
Placement Agent, or such other place as the parties may agree, as soon as
practicable (but not later than five (5) business days) following the date upon
which the Placement Agent and the Company confirm in writing to each other that
subscriptions for the Minimum Offering have been accepted or at such other
place, time, or date as the Company and you shall agree upon. The date upon
which the Initial Closing is held shall hereinafter be referred to as the
"Initial Closing Date."
(b) At any time prior to the expiration of the Offering Period
following the Initial Closing and after receipt in escrow and acceptance by the
Company of subscriptions for the sale of additional Shares in increments of
$500,000 ("Interim Closing Amount") up to the Maximum Offering, one or more
closings (each an "Interim Closing") shall take place in the manner herein set
forth with respect to the Initial Closing. In the event that the Offering Period
expires prior to receipt in escrow and acceptance by the Company of an Interim
Closing Amount, a final closing shall be held at such time regardless of the
amount then held in escrow. The final Interim Closing to be held in accordance
herewith shall be deemed the "Final Closing" and the date thereof shall be the
"Final Closing Date". References herein to a "Closing" shall mean the Initial
Closing, any Interim Closing or the Final Closing, as the context requires, and
the date thereof shall be referred to as a "Closing Date."
4. Representations and Warranties of the Placement Agent
The Placement Agent represents and warrants to the Company as follows:
(a) The Placement Agent is duly incorporated and validly existing and
in good standing under the laws of its state of incorporation.
(b) The Placement Agent is, and at the time of each Closing will be, a
member in good standing of the NASD.
(c) Sales of Shares by the Placement Agent will only be made in such
jurisdictions in which the Placement Agent or a Selling Group Member is a
registered broker-dealer or where an applicable exemption from such registration
exists.
(d) Offers and sales of Shares by the Placement Agent will be made
only in accordance with this Placement Agreement and in compliance with the
provisions of Rule 506 of Regulation D (it being understood and agreed that the
Placement Agent shall be entitled to rely upon the information and statements
provided by the Prospective Investor in the
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Subscription Documents), and the Placement Agent will furnish to each investor a
copy of the Documents prior to accepting any subscription for the Shares.
5. Compensation.
(a) If subscriptions for the Minimum Offering are received in escrow
prior to the expiration of the Offering Period and accepted by the Company, you
shall be entitled, on each Closing Date, as compensation for your services as
Placement Agent under this Agreement, to selling Commissions equal to 8% of the
gross proceeds received by the Company from the sale of the Shares effected at
each Closing and 2% of the gross proceeds from the sale of the Shares effected
at each Closing in payment for a non-accountable expense allowance. The
Placement Agent acknowledges receipt of payment of $20,000 from the Company with
respect to the non-accountable expense allowance. Such amounts may be deducted
by you out of the funds received from the sale of the Shares and deposited in
the Escrow Account, on each Closing Date.
(b) In addition to the compensation payable to the Placement Agent set
forth in clause (a) above, the Company shall issue the Placement Agent at each
Closing Date, for nominal consideration, Common Stock Purchase Warrants
("Placement Agent Warrants") to purchase up to 10% of the shares sold. The form
of Placement Agent Warrant shall be in the form of Exhibit A.
6. Representations and Warranties of the Company
(a) The Company represents and warrants to, and agrees with, the
Placement Agent that:
(i) Assuming the accuracy of the representations and warranties
of the Prospective Investors set forth in the Subscription Document and the
representations and warranties of the Placement Agent set forth herein, the
Offering Documents (a) contain, and at all times during the period from the date
hereof to and including each Closing Date, will contain all information required
to be contained therein, if any, pursuant to Rules 502 and 506 of Regulation D
and all applicable federal and/or state securities and "blue sky" laws, and (b)
do not, and during such period will not, 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 made
therein not misleading. Each contract, agreement, instrument, lease, license, or
other document required to be described in the Documents shall be, and have
been, accurately described therein.
(ii) No Offering Documents or information (it being understood
that neither the Company nor any of its officers or directors or employees shall
provide any information to any Prospective Investor which is not contained in
the Offering Documents) provided by the Company to Prospective Investors
pursuant to Section 7(f) hereof shall 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 circumstances made therein
not misleading.
(iii) Except as described in Schedule 6(a)(ii) annexed hereto,
the Company has not, directly or indirectly, solicited any offer to buy or
offered to sell any Shares
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or any other securities of the Company during the twelve-month period ending on
the date hereof except as may be properly described in the Offering Documents,
and has no present intention to solicit any offer to buy or to offer to sell and
Shares, any Common Stock or any other securities of the Company other than
pursuant to this Agreement.
(iv) The Company is, and at all times during the period from the
date hereof to and including each Closing Date will be, a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, with full corporate power and authority, and has obtained all
necessary consents, authorizations, approvals, orders, licenses, certificates,
and permits and declarations of and from, and has made filings with, all
federal, state and local authorities, to own, lease, license, and use its
properties and assets and to conduct its business as presently conducted as
described in the Offering Documents and/or in any such case where the failure to
have any of the foregoing would not have a material adverse effect on the
Company's presently conducted business. As of the date hereof, the Company is,
and at all times during the period from the date hereof to and including each
Closing Date, duly qualified to do business and is in good standing in every
jurisdiction in which its ownership, leasing, licensing, or use of property and
assets or the conduct of its business makes such qualification necessary except
where the failure to be so qualified would not have a material adverse effect on
the Company's business.
(v) The Company has, as of the date hereof, and shall have at
each Closing (except as effected by the transactions contemplated hereby) an
authorized capitalization consisting of: (i) 500,000 shares of Preferred Stock,
par value $.01 per share, of which no shares have been designated or are issued
and outstanding; (ii) 100,000,000 shares of Common Stock, par value $.01 per
share, of which 1,122,327 shares are issued and outstanding. Each issued and
outstanding share of Common Stock is duly authorized, validly issued, fully
paid, and non-assessable, without any personal liability attaching to the
ownership thereof solely by being such a holder, and has not been issued and is
not owned or held in violation of any preemptive rights of stockholders. There
is no commitment, plan, or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance of, any share of capital stock
of the Company or any security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for capital stock of the
Company other than as described in the Offering Memorandum. There is outstanding
no security or other instrument which by its terms is convertible into or
exchangeable for any class of capital stock of the Company, except as may be
properly described in the Offering Documents or in a schedule hereto.
(vi) The audited and/or unaudited financial statements (the
"Financial Statements") of the Company included in the Documents fairly present
in accordance with generally accepted accounting principles the financial
position, the results of operations, and the other information with respect to
the Company purported to be shown therein at the respective dates and for the
respective periods to which they apply. The Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, are correct and complete,
and are in accordance with the books and records of the Company. There has at no
time been a material adverse change in the financial condition, results of
operations, business, properties, assets, liabilities, or future prospects of
the Company from the latest information set forth in the Documents, except as
may
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be properly described in the Documents as having occurred or as may occur and
except for continued deterioration in the Company's cash position and total
assets and continued losses from operations.
(vii) As of the date hereof there is no, and as of each Closing
Date shall not be any, litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending or to the Company's
knowledge threatened, with respect to the Company, or its respective operations,
businesses, properties, or assets, except as properly described in the Documents
or such as individually or in the aggregate do not now have and will not in the
future have a material adverse effect upon the operations, business, properties,
or assets of the Company. The Company is not, nor as of each Closing Date shall
be, in violation of, or in default with respect to, any law, rule, regulation,
order, judgment, or decree, except as properly described in the Documents or
such as individually or in the aggregate do not have and will not in the future
have a material adverse effect upon the operations, business, properties, or
assets of the Company; nor is the Company required to take any action in order
to avoid any such violation or default.
(viii) As of the date hereof, the Company has, and at all times
during the period from the date hereof to and including the Final Closing Date,
shall have, good and marketable title in fee simple absolute to all real
properties and good title to all other properties and assets which the Documents
indicate are owned by it, free and clear of all liens other than liens for taxes
not yet due and payable, charges, pledges, mortgages, security interests, and
encumbrances, except as may be properly described in the Documents or such as in
the aggregate do not now have and will not in the future have a material adverse
effect (individually or in aggregate) upon the financial condition, results of
operations, business, properties, or assets of the Company.
(ix) As of the date hereof, the Company is not, and at all times
during the period from the date hereof to and including the Final Closing Date,
shall be, in violation or breach of, or in default with respect to complying
with any material provision of any material contract, agreement, instrument,
lease, license, arrangement, other than any such violation or breach which would
not have, individually or in the aggregate, a material adverse effect on the
Company's business, and each such contract, agreement, instrument, lease,
license, arrangement, and under-standing is in full force and effect and is the
legal, valid, and binding obligation of the parties thereto enforceable as to
them in accordance with its terms. The Company enjoys peaceful and undisturbed
possession under all leases and licenses under which it is operating as of the
date hereof. As of the date hereof, the Company is not a party to or bound by
any contract, agreement, instrument, lease, license, arrangement, or
understanding, or subject to any charter or other restriction, which has had or
may in the future have a material adverse effect on the financial condition,
results of operations, business, properties, assets, liabilities, or future
prospects of the Company. The Company is not in violation or breach of, or in
default with respect to, any term of its Certificate of Incorporation or
By-Laws, as amended to date.
(x) There is no right under any patent, patent application,
trademark, trademark application, trade name, service ▇▇▇▇, copyright,
franchise, or other intangible property or asset (all of the foregoing being
herein called "Intangibles") necessary to
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the business of the Company as presently conducted, except as disclosed in the
Documents. To the knowledge of the Company, there is no Intangible of others
which has had or may in the future have a materially adverse effect on the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of the Company.
(xi) To its best knowledge, the Company has not infringed, is
infringing, or has received notice of infringement with respect to asserted
Intangibles of others. To the best knowledge of the Company, none of the
patents, patent applications, trademarks, service marks, trade names and
copyrights, and licenses and rights to the foregoing presently owned or held by
the Company, materially infringe upon any like right of any other person or
entity. The Company (i) owns or has the right to use, free and clear of all
liens, charges, claims, encumbrances, pledges, security interests, defects or
other restrictions of any kind whatsoever, sufficient patents, trademarks,
service marks, trade names, copyrights, licenses and right with respect to the
foregoing, to conduct its business as presently conducted except as set forth in
the Disclosure Statement, and (ii) except as set forth in the Documents, is not
obligated or under any liability whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any patent, trademark, service ▇▇▇▇, trade name, copyright, know-how, technology
or other intangible asset, with respect to the use thereof or in connection with
the conduct of its business as now conducted or otherwise. The Company has
direct ownership of title to all its intellectual property (including all United
States and foreign patent applications and patents), other proprietary rights,
confidential information and know-how; owns all the rights to its Intangibles as
are currently used in or have potential for use in its business.
(xii) The Company has all requisite corporate power and authority
to execute, deliver, and perform this Agreement and to consummate the
transactions contemplated hereby. All necessary corporate proceedings of the
Company have been duly taken to authorize the execution, delivery, and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly authorized,
executed, and delivered by the Company, is a legal, valid, and binding
obligation of the Company, and is enforceable as to the Company in accordance
with its terms. Assuming the accuracy of the representations and warranties of
the Prospective Investors set forth in the Subscription Agreements and Purchaser
Questionnaires and the representations and warranties of the Placement Agent set
forth herein, no consent, authorization, approval, order, license, certificate,
or permit of or from, or registration, qualification, declaration, or filing
with, any federal, state, local, foreign, or other governmental authority or any
court or other tribunal is required by the Company for the execution, delivery,
or performance by the Company of this Agreement, the consummation of the
transactions contemplated hereby and thereby, except the filing of a Notice of
Sales of Securities on Form D pursuant to Regulation D, and such consents,
authorizations, approvals, registrations, and qualifications as may be required
under all applicable federal and/or securities or "blue sky" laws in connection
with the issuance, sale, and delivery of the Shares pursuant to this Agreement.
No consent of any party to any material contract, agreement, instrument, lease,
license, arrangement, or understanding to which the Company is a party, or to
which any of its properties or assets are subject, is required for the
execution, delivery, or performance of this Agreement, and the consummation of
the transactions contemplated hereby and thereby, and such execution, delivery
and performance will not violate, result in a breach of, conflict with, or (with
or without the giving of notice or the passage of time
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or both) entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, arrangement, or understanding,
violate or result in a breach of any term of the certificate of incorporation or
by-laws of the Company, or assuming the accuracy of the representations and
warranties of the Prospective Investors set forth in the Subscription Agreements
and Investor Questionnaires and the representations and warranties of the
Placement Agent set forth herein, violate, result in a breach of, or conflict
with any law, rule, regulation, order, judgment, or decree binding on the
Company or to which any of its operations, businesses, properties, or assets are
subject.
(xiii) The Shares, Common Stock and Preferred Stock shall conform
to all statements relating thereto as contained in the Documents. The Shares,
when issued and delivered to the Prospective Investor pursuant to the terms of
this Agreement shall be duly authorized, validly issued, fully paid and
nonassessable, without any personal liability attaching to the ownership thereof
solely by being such holder and shall not have been issued in violation of any
preemptive rights of stockholders.
(xiv) Except and to the extent described in Schedule b(xiv)
annexed hereto: (i) no holders of any securities of the Company or of any
options, warrants or other convertible or exchangeable securities of the Company
have the right to include any securities issued by the Company on any
registration statement to be filed by the Company or to require the Company to
file a registration statement under the Securities Act of 1933, as amended, and
(ii) no person or entity holds any anti-dilution rights with respect to any
securities of the Company.
(xv) During the period commencing on the date hereof and ending
on the Final Closing Date, the Company shall not, without prior notice to and
consent of the Placement Agent (other than the transactions contemplated in the
Plan and Agreement of Merger and Exchange of Stock dated as of December 17, 1999
entered into between, among others, the Company and Results Oriented Integration
Corporation): (A) issue any equity or debt securities or incur any liability or
obligation, primary or contingent, for borrowed money; (B) enter into any
transaction not in the ordinary course of business; or (C) declare or pay any
dividend on its capital stock.
(xvi) Neither the Company nor any of its officers, directors, or
affiliates, has engaged or will engage, directly or indirectly, in any act or
activity that may jeopardize the status of the offering and sale of the Shares
as an exempt transaction under the Act or under all applicable federal and/or
state securities or "blue sky" laws of any jurisdiction in which the Shares may
be offered or sold.
(xvii) The (A) transactions contemplated by the Plan and
Agreement of Merger and Exchange of Stock dated as of December 17, 1999 between,
among others, the Company and Results Oriented Integration Corporation; (B)
reverse split of the Company's Common Stock as described in the Company's Proxy
Statement for its meeting of shareholders held on March 20, 2000; (C) change of
the Company's name to Return On Investment Corporation, have been duly
authorized and approved by the Company's
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shareholders; and (D) terms of this Offering have been duly authorized and
approved by the Company's shareholders.
7. Covenants of the Company
The Company covenants that it will:
(a) Notify you immediately, and confirm such notice in writing, (i)
when any event shall have occurred during the period commencing on the date
hereof and ending on the Final Closing Date, as a result of which the Documents
would include 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, and (ii) of the receipt of any notification with respect to the
modification, rescission, withdrawal, or suspension of the qualification or
registration of the Shares, or of an exemption from such registration or
qualification, in any jurisdiction. The Company will use its best efforts to
prevent the issuance of any such modification, rescission, withdrawal, or
suspension and if you so request, to obtain the lifting thereof as promptly as
possible.
(b) Not make any supplement or amendment to the Documents unless such
supplement or amendment complies with the requirements of the Act and Regulation
D and the applicable federal and/or state securities and "blue sky" laws and
unless you shall have approved of such supplement or amendment in writing. If,
at any time during the period commencing on the date hereof and ending on the
Final Closing Date, any event shall have occurred as a result of which the
Documents contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or if, in the opinion of counsel to the Company or
counsel to the Placement Agent, it is necessary at any time to supplement or
amend the Documents to comply with the Act, Regulation D, or any applicable
securities or "blue sky" laws, the Company will promptly prepare an appropriate
supplement or amendment (in form and substance satisfactory to you) which will
correct such statement or omission or which will effect such compliance.
(c) Deliver without charge to the Placement Agent such number of
copies of the Documents and any supplement or amendment thereto as may
reasonably be requested by the Placement Agent.
(d) Not, directly or indirectly, solicit any offer to buy from, or
offer to sell to any person any Shares, except through the Placement Agent.
(e) Use its best efforts to qualify or register the Shares for
offering and sale under, or establish an exemption from such qualification or
registration under, the securities or "blue sky" laws of such jurisdictions as
you may reasonably request; provided, however, that the Company will not be
obligated to qualify to do business as a dealer in securities in any
jurisdiction in which it is not so qualified. The Company will not consummate
any sale of Shares in any jurisdiction or in any manner in which such sale may
not be lawfully made; in this regard the Company shall be entitled to rely on
the Placement Agent's representations herein, and
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the representations of Prospective Investors in the Subscription Agreement and
Purchaser Questionnaire and on the Blue Sky qualifications affected by the
Placement Agent's counsel.
(f) At all times during the period commencing on the date hereof and
ending on the Final Closing Date, provide to each Prospective Investor or his
Purchaser Representative (as defined in Regulation D), if any, on request, such
information (in addition to that contained in the Documents) concerning the
Offering, the Company and any other relevant matters, as it possesses or can
acquire without unreasonable effort or expense, and to extend to each
Prospective Investor or his Purchaser Representative, if any, the opportunity to
ask questions of, and receive answers from, ▇▇▇▇▇ ▇▇▇▇▇, President of the
Company concerning the terms and conditions of the Offering and the business of
the Company and to obtain any other additional information, to the extent it
possesses the same or can acquire it without reasonable effort or expense, as
such Prospective Investor or Purchaser Representative may consider necessary in
making an informed investment decision or in order to verify the accuracy of the
information furnished to such Prospective Investor or Purchaser Representative,
as the case may be.
(g) Provide to each Prospective Investor or his Purchase
Representative any information required to be delivered by Rule 502(b) of
Regulation D.
(h) Disclose to each Prospective Investor, in writing, any material
relationship between such Prospective Investor's Purchaser Representative, if
any, or its affiliates, on the one hand, and the Company or its affiliates, on
the other hand, which, to the knowledge of the Company, then exists or is
understood to be contemplated or has existed at any time during the previous two
years and any compensation received or to be received as a result of such
relationship.
(i) Before accepting any subscription to purchase Shares from, or
making any sale to, any Prospective Investor, have reasonable grounds to believe
and will believe (after making reasonable inquiry pursuant to the Subscription
Documents) that (A) such Prospective Investor meets the suitability requirements
for investing in the Shares set forth in the Documents, and (B) such Prospective
Investor is an accredited investor (as defined in Regulation D).
(j) Notify you promptly of the acceptance or rejection of any
subscription. The Company shall not (i) accept subscriptions from, or make sales
of Shares to, any Prospective Investors who are not, to the Company's knowledge,
accredited investors, or (ii) unreasonably reject any subscription for Shares.
(k) Cooperate with the Placement Agent's counsel to file a Notice of
Sales of Securities on Form D with the Securities and Exchange Commission (the
"Commission") no later than 15 days after the first sale of the Shares. The
Company shall file promptly such amendments to such Notice on Form D as shall
become necessary and, as requested by you, shall also comply with any filing
requirement imposed by the laws of any state or jurisdiction in which offers and
sales are made. The Company shall furnish you with copies of all such filings.
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(l) Not, directly or indirectly, engage in any act or activity which
may jeopardize the status of the offering and sale of the Shares as exempt
transactions under the Act or under the securities or "blue sky" laws of any
jurisdiction in which the Offering maybe made. Without limiting the generality
of the foregoing, and notwithstanding anything contained herein to the contrary,
the Company shall not, directly or indirectly, engage in any offering of
securities which, if integrated with the Offering in the manner prescribed by
Rule 502(a) of Regulation D and applicable releases of the Commission, may
jeopardize the status of the offering and sale of the Shares as exempt
transactions under Regulation D.
(m) Apply the net proceeds from the sale of the Shares as set forth in
the Offering Documents.
(n) Not, during the period commencing on the date hereof and ending on
the Final Closing Date, issue any press release or other communication, or hold
any press conference with respect to the Company, its financial condition,
results of operations, business, properties, assets, or liabilities, or the
Offering, without your prior written consent, except as may be required by
applicable securities laws in the opinion of counsel to the Company.
8. Payment of Expenses
The Company hereby agrees to pay all fees, charges, and expenses
incident to the performance by the Company of its obligations hereunder,
including, without limitation, all fees, charges, and expenses in connection
with: (i) the preparation, printing, filing, distribution, and mailing of the
Documents, the Subscription Agreement, the Investor Questionnaire, and all other
documents relating to the offering, purchase, sale, and delivery of the Shares,
and any supplements or amendments thereto, including the cost of all copies
thereof; (ii) the preparation and reproduction of this Agreement and the
Placement Agent Warrant; (iii) the issuance, sale, transfer, and delivery of the
Shares, including any transfer or other taxes payable thereon and the fees of
any transfer agent or registrar; (iv) the registration or qualification of the
Shares or the securing of an exemption therefrom under state or foreign "blue
sky" or securities laws, including without limitation, filing fees payable in
the jurisdictions in which such registration or qualification or exemption
therefrom is sought, disbursements in connection therewith; (v) the fees of
counsel for the Placement Agent in connection therewith in an amount equal to
$30,000, of which $10,000 has been previously paid and the remainder shall be
paid at the Initial Closing; (vi) filing fees payable to the SEC, if any; and
(vii) the retention of the Escrow Agent, including the fees and expenses of the
Escrow Agent for serving as such and the fees and expenses of its counsel, if
any.
9. Conditions of Placement Agent's Obligations
The obligations of the Placement Agent pursuant to this Agreement
shall be subject, in its discretion, to the continuing accuracy of the
representations and warranties of the Company contained herein and in each
certificate and document contemplated under this Agreement to be delivered to
the Placement Agent, as of the date hereof and as of each Closing Date, with
respect to the performance by the Company of its obligations hereunder, and to
the following conditions:
19
(a) At each Closing, the Placement Agent shall have received the
favorable opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, counsel for the Company, dated each
Closing Date, addressed to the Placement Agent, and in form and scope
satisfactory to counsel for the Placement Agent, substantially to the effect
that:
(i) the Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease, license, and use its
properties and assets and to conduct its business in the manner described in the
Documents and is duly qualified to do business and is in good standing as a
foreign corporation in every jurisdiction in which its ownership, leasing,
licensing, or use of property and assets or the conduct of its business makes
such qualification necessary (except where the failure to so qualify would not
have a material adverse effect upon the Company or its business);
(ii) the Company has, as of the date hereof, an authorized, and,
to such counsel's knowledge, outstanding capitalization as set forth in the
Offering Documents. Each issued and outstanding share of Common Stock is validly
authorized, validly issued, fully paid, and nonassessable, with no personal
liability attaching to the ownership thereof solely by being such a holder to
such counsel's knowledge or as set forth on a schedule hereto has not been
issued and is not owned or held in violation of any preemptive right of
stockholders. To the best knowledge of such counsel, there is no commitment,
plan, or arrangement to issue, and no outstanding option, warrant, or other
right calling for the issuance of, any share of capital stock of the Company or
any security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for capital stock of the Company, except as may
be properly described in the Offering Documents in this Agreement or in a
schedule hereto. To the best knowledge of such counsel, there is outstanding no
security or other instrument which by its terms is convertible into or
exchangeable for capital stock of the Company, except as may be properly
described in the Offering Documents or in a schedule hereto;
(iii) to the best knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other proceeding (formal or
informal), or investigation pending or threatened with respect to the Company or
any of its operations, businesses, properties, or assets except as may be
properly described in the Offering Documents, in this Agreement or in a schedule
hereto or such as individually or in the aggregate do not now have and will not
in the future have a material adverse effect upon the operations, business,
properties, or assets of the Company or which could materially adversely affect
the transactions or other acts contemplated by this Agreement or the validity or
enforceability of this Agreement;
(iv) to the best knowledge of such counsel, the Company is not in
violation or breach of, or in default with respect to, complying with any
provision of any contract, agreement, instrument, lease, license, arrangement,
or understanding known to such counsel and which is material to the business of
the Company;
(v) the Company has all requisite corporate power and authority
to execute, deliver, and perform this Agreement, and to consummate the
transactions contemplated hereby. All necessary corporate proceedings of the
Company have been taken to authorize the
20
execution, delivery, and performance by the Company of this Agreement, and the
consummation of the transactions contemplated hereby. This Agreement has been
duly authorized, executed, and delivered by the Company, is the legal, valid,
and binding obligation of the Company, and is enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application now or hereafter in effect relating to or affecting the
enforcement of creditors' right generally and the application of general
equitable principles in any action, legal or equitable and then except, as to
those provisions relating to indemnity or contribution, such opinion shall be
limited as effected by any Federal or state securities laws regarding indemnity
and/or contribution;
(vi) the Shares conforms to all statements relating thereto
contained in the Offering Documents. The Shares, shall be validly authorized,
validly issued, fully paid, and nonassessable, with no personal liability
attaching to the ownership thereof and to such counsel's knowledge or as set
forth in a schedule annexed hereto shall not have been issued in violation of
any preemptive rights of stockholders;
(vii) assuming the accuracy of the representations and warranties
of the Proposed Investors set forth in the Subscription Agreements and Investor
Questionnaires and the representations and warranties of the Placement Agent set
forth herein, the Offering Documents (except that no opinion need be expressed
as to the financial statements, related schedules, or other financial data
contained therein) comply as to form in all material respects with requirements
of the Act and the regulations thereunder. To the best knowledge of such
counsel, any contract, agreement, instrument, lease, license, or document
described in the Offering Documents has been accurately described therein;
(viii) to the best knowledge of such counsel, no modification,
rescission, suspension, or withdrawal of registration or qualification of the
Shares, or of an exemption from such registration or qualification, has been
issued and no proceedings for that purpose have been instituted or threatened;
(ix) such counsel's opinion shall also include a statement to the
effect that it has participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Placement Agent at which
the contents of the Disclosure Statement were discussed and, although such
counsel is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Disclosure
Statement, on the basis of the foregoing (relying as to materiality to a large
extent upon the opinions of officers and other representatives of the Company),
nothing has come to such counsel's attention that causes it to believe that the
Disclosure Statement as supplemented or amended at all times up to and including
the date of such opinion, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of circumstances under which they were
made, not misleading (it being understood that such counsel expresses no opinion
or belief with respect to the financial information or statistical data included
in the Offering Documents);
21
(x) assuming that (i) a proper Form D is filed in accordance with
Rule 503 of Regulation D, (ii) that the offer and the sale of the Shares by the
Placement Agent was made in compliance with Rule 506 of Regulation D and that
the Placement Agent's representations and warranties set forth herein are true
and correct, and (iii) that the representations of the Prospective Investors in
the Subscription Agreements and Investors Questionnaire signed by them are true
and correct (which facts will not be independently verified by such counsel),
the sale of Shares in the Offering is exempt from registration under the
Securities Act of 1933 and is in compliance with Regulation D;
(xi) neither the execution and delivery of this Agreement, the
certificates representing the Shares, nor compliance with the terms hereof or
thereof will (i) conflict with, result in a breach of, or constitute a default
under the Articles or Certificate of Incorporation or By-Laws of the Company,
or, to the best of such counsel's knowledge, any material contract, instrument,
agreement or document to which the Company is a party, or by which the assets or
properties of the Company are bound; or (ii) to the best knowledge of such
counsel, have any material adverse effect on any permit, certification,
registration, approval, consent, license or franchise (other than Excluded Laws)
necessary for the Company to own or lease and operate any of its properties and
to conduct its business or the ability of the Company to make use thereof as
described in the Offering Documents;
(xii) to the best of such counsel's knowledge, there are no
material licenses, permits, certificates, registrations, approvals or consents
of any governmental agency, commission, board, instrumentality or department
that are required to be obtained by the Company in order to conduct its business
as conducted at the date hereof which have not been so obtained and the failure
to so obtain which would have a material adverse effect on the Company's
business;
(xiii) to the best of such counsel's knowledge and except as
disclosed in the Offering Documents, the issuance of the Shares in the Offering
will not give any holder of any of the Company's outstanding options, warrants
or other convertible securities or rights to purchase shares of the Company's
Common Stock or Preferred Stock, the right to purchase any additional shares of
Common Stock and/or the right to purchase shares at a reduced price.
In rendering such opinion, counsel for the Company may rely (A)
as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company; and (B) to the extent they deem proper,
upon written statements or certificates of officers of departments of various
jurisdictions having custody of Offering Documents respecting the corporate
existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to counsel for the Placement
Agent.
(b) On or prior to the Initial Closing Date the Placement Agent shall
have been furnished such information, Offering Documents, certificates, and
opinions as it may reasonably require for the purpose of enabling it to review
the matters referred to in Section 8(a), and in order to evidence the accuracy,
completeness, or satisfaction of any
22
of the representations, warranties, covenants, agreements, or conditions herein
contained, or as it may otherwise reasonably request.
(c) At each Closing, the Placement Agent shall have received a
certificate of the chief executive officer and of the chief financial officer of
the Company, dated the applicable Closing Date to the effect that, as of the
date of this Agreement and as of the applicable Closing Date: (i) the
representations and warranties of the Company contained herein were and are
accurate, and that as of the Closing Date the obligations to be performed by the
Company hereunder on or prior thereto have been fully performed and (ii) such
other matters as may be reasonably requested by the Placement Agent.
(d) All proceedings taken in connection with the issuance, sale, and
delivery of the Shares shall be reasonably satisfactory in form and substance to
the Placement Agent and its counsel.
(e) the acquisition of Results Oriented Integration Corporation shall
simultaneously have been completed with the Initial Closing in accordance with
the terms and conditions of the Plan and Agreement of Merger and Exchange of
Stock dated as of December 17, 1999 and the 6 for 1 reverse stock split shall
have been completed.
(f) There shall not have occurred after the date hereof, at any time
prior to each Closing: (A) any domestic or international event, act, or
occurrence which has materially disrupted, or in your opinion will in the
immediate future materially disrupt the securities markets; (B) a general
suspension of, or a general limitation on prices for, trading in securities on
the Nasdaq SmallCap Market or the over-the-counter market; (C) any banking
moratorium declared by a state or federal authority; (D) any material
interruption in the mail service or other means of communication within the
United States; (E) any material adverse change in the business, properties,
assets, results of operations, or financial condition of the Company; or (F) any
change in the market for securities in general or in political, financial, or
economic conditions which, in your judgment, makes it inadvisable to proceed
with the offering, sale, and delivery of the Shares.
Any certificate or other document signed by any officer of the Company
and delivered to you or to your counsel at a Closing shall be deemed a
representation and warranty by the Company hereunder as to the statements made
therein. If any condition to your obligations hereunder has not been fulfilled
as and when required to be so fulfilled, you may terminate this Agreement or, if
you so elect, in writing waive any such conditions which have not been fulfilled
or extend the time for their fulfillment. In the event that you elect to
terminate this Agreement, you shall notify the Company of such election in
writing. Upon such termination, neither party shall have any further liability
or obligation to the other except as provided in Section 11 hereof.
10. Solicitation Prohibition
The Company agrees that, for a period of three (3) years from date of
the Final Closing, it shall not solicit any offer to buy from or offer to sell
to any person introduced to
23
the Company by the Placement Agent in connection with the Offering, directly or
indirectly, any securities of the Company or of any other entity, or provide the
name of any such person to any other securities broker or dealer or selling
agent. In the event that the Company or any of its affiliates, directly or
indirectly, solicits, offers to buy from or offers to sell to any such person
any such securities, or provides the name of any such person to any other
securities broker or dealer or selling agent, and such person purchases such
securities or purchases securities from any other securities broker or dealer or
selling agent, the Company shall pay to the Placement Agent an amount equal to
10% of the aggregate purchase price of the securities so purchased by such
person.
11. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Placement
Agent, its officers, directors, partners, employees, agents, and counsel, and
each person, if any, who controls the Placement Agent within the meaning of
Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), against any and all loss, liability, claim,
damage, and expense whatsoever (which shall include, for all purposes of this
Section 11, but not be limited to, attorneys' fees and any and all expense
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation) as and when incurred
arising out of, based upon, or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained in the Offering Documents
or in any document delivered or written statement made pursuant to Section 6(f),
or (B) in any application or other document or communication (it being
understood that neither the Company nor any officer, director or employee shall
provide any information to any Prospective Investor which is not contained in
the Offering Documents) (in this Section 11 collectively called an
"application") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify the Shares under the "blue sky" or securities
laws thereof or in order to secure an exemption from such registration or
qualification or filed with the Commission; or any omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company as stated in Section 11(b) with respect to the Placement Agent expressly
for inclusion in the Offering Documents or in any application, as the case may
be; or (ii) any breach of any representation, warranty, covenant, or agreement
of the Company contained in this Agreement. The foregoing agreement to indemnify
shall be in addition to any liability the Company may otherwise have, including
liabilities arising under this Agreement.
If any action is brought against the Placement Agent or any of its
officers, directors, partners, employees, agent, or counsel, or any controlling
persons of the Placement Agent (an "indemnified party"), in respect of which
indemnify may be sought against the Company pursuant to the foregoing paragraph,
such indemnified party or parties shall promptly notify the Company (the
"indemnifying party") in writing of the institution of such action (but the
failure so to notify shall not relieve the indemnifying party from any liability
it may have other than pursuant to this Section 11(a)) and the indemnifying
party shall promptly assume the defense of such action, including the employment
of counsel (reasonably satisfactory to such
24
indemnified party or parties) and payment of expenses. Such indemnified party
shall have the right to employ its own counsel in any such case, but the fees
and expense of such counsel shall be at the expense of such indemnified party
unless the employment of such counsel shall have been authorized in writing by
the indemnifying party in connection with the defense of such action or the
indemnifying party shall not have promptly employed counsel satisfactory to such
indemnified party or parties to have charge of the defense of such action or
such indemnified party or parties shall have reasonably concluded that there may
be one or more legal defenses available to it or them or to other indemnified
parties which are different from or additional to those available to one or more
of the indemnifying parties, in any of which events such fees and expenses of
one such counsel shall be borne by the indemnifying party and the indemnifying
party shall not have the right to direct the defense of such action on behalf of
the indemnified party or parties. Anything in this paragraph to the contrary
notwithstanding, the indemnifying party shall not be liable for any settlement
of any such claim or action effected without its written consent. The Company
agrees promptly to notify the Placement Agent of the commencement of any
litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of the Shares, the Offering Documents, or
any application.
(b) The Placement Agent agrees to indemnify and hold harmless the
Company, its officers, directors, employees, agents, and counsel, and each other
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Placement Agent in Section 11(a), with respect
to any and all loss, liability, claim, damage, and expense whatsoever (which
shall include, for all purposes of this Section 1, but not be limited to,
attorneys' fees and any and all expense whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever and any and all amounts paid in settlement of any claim or
litigation) as and when incurred arising out of, based upon, or in connection
with (i) statements or omissions, if any, made in the Offering Documents in
reliance upon and in conformity with written information furnished to the
Company as stated in this Section 11(b) with respect to the Placement Agent
expressly for inclusion in the Offering Documents, and (ii) the failure of the
Placement Agent to comply with the provisions of Section 2(c) hereof or with the
"blue sky" or securities laws of the jurisdictions in which the Placement Agent
solicits offers to buy or offers to sell any Shares or any breach of any
representation, warranty, covenant or agreement of the Placement Agent contained
in this Agreement. The foregoing agreement to indemnify shall be in addition to
any liability the Placement Agent may otherwise have, including liabilities
arising under this Agreement. If any action shall be brought against the Company
or any other person so indemnified based on the Offering Documents and in
respect of which indemnity may be sought against the Placement Agent pursuant to
this Section 11(b), the Placement Agent shall have the rights and duties given
to the indemnifying party, and the Company and each other person so indemnified
shall have the rights and duties given to the indemnified parties, by the
provisions of Section 11(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 11(a) or
11(b) but it is found in a final judicial determination, not subject to further
appeal, that such indemnification may not be enforced in such case, even though
this Agreement expressly provides for indemnification in such case, or (ii) any
indemnified or indemnifying party seeks contribution under the Act, the
25
Exchange Act, or otherwise, then the Company (including for this purpose any
contribution made by or on behalf of any officer, director, employee, agent, or
counsel of the Company, or any controlling person of the Company), on the one
hand, and the Placement Agent (including for this purpose any contribution by or
on behalf of an indemnified party), on the other hand, shall contribute to the
losses, liabilities, claims, damages, and expenses whatsoever to which any of
them may be subject, in such proportions as are appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Placement
Agent, on the other hand; provided, however, that if applicable law does not
permit such allocation, then other relevant equitable considerations such as the
relative fault of the Company and the Placement Agent in connection with the
facts which resulted in such losses, liabilities, claims, damages, and expenses
shall also be considered. The relative benefits received by the Company, on the
one hand, and the Placement Agent, on the other hand, shall be deemed to be in
the same proportion as (x) the total proceeds from the Offering (net of
compensation payable to the Placement Agent pursuant to Section 5(a) hereof but
before deducting expenses) received by the Company, and (y) the compensation
received by the Placement Agent pursuant to Section 5(a) hereof.
The relative fault, in the case of an untrue statement, alleged untrue
statement, omission, or alleged omission, shall be determined by, among other
things, whether such statement, alleged statement, omission, or alleged omission
relates to information supplied by the Company or by the Placement Agent, and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement, alleged statement, omission, or alleged
omission. The Company and the Placement Agent agree that it would be unjust and
inequitable if the respective obligations of the Company and the Placement Agent
for contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages, and expenses or by any other
method of allocation that does not reflect the equitable considerations referred
to in this Section 11(c). In no case shall the Placement Agent by responsible
for a portion of the contribution obligation in excess of the compensation
received by it pursuant to Section 11(a) hereof. No person guilty of a
fraudulent misrepresentation shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. For purposes of this
Section l9(c), each person, if any, who controls the Placement Agent within the
meaning of Section l5 of the Act or Section 20(a) of the Exchange Act and each
officer, director, partners, employee, agent, and counsel of the Placement
Agent, shall have the same rights to contribution as the Placement Agent, and
each person, if any, who controls the Company within the meaning of Section l5
of the Act or Section 20(a) of the Exchange Act and each officer, director,
employee, agent, and counsel of the Company, shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 11(c). Anything in this Section 11(c) to the contrary notwithstanding,
no party shall be liable for contribution with respect to the settlement of any
claim or action effected without its written consent. This Section 11(c) is
intended to supersede any right to contribution under the Act, the Exchange Act,
or otherwise.
12. Representations and Agreements to Survive Delivery.
All representations, warranties, covenants, and agreements contained
in this Agreement shall be deemed to be representations, warranties, covenants,
and agreements at the Closing Date and, such representations, warranties,
covenants, and agreements, including the
26
indemnification and contribution agreements contained in Section 11, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Placement Agent or any indemnified person, or by or
on behalf of the Company or any person or entity which is entitled to be
indemnified under Section l7(b), and shall survive termination of this Agreement
or the issuance, sale, and delivery of the Shares. In addition, notwithstanding
any election hereunder or any termination of this Agreement, and whether or not
the terms of this Agreement are otherwise carried out, the provisions of
Sections 5, 8 and 11 shall survive termination of this Agreement and shall not
be affected in any way by such election or termination or failure to carry out
the terms of this Agreement or any part thereof.
13. Termination.
This Agreement may not be terminated by the Company unless no Shares
are sold pursuant to the Offering within 120 days of the completion of the
Offering Documents, the Company may terminate the agency created hereby upon ten
(10) days' prior written notice to Placement Agent. The Placement Agent may
terminate the agency created hereby for any reason upon 30 days' prior written
notice to the Company. In either case, neither party shall have any liability or
continuing obligation to the other except that, regardless of which party elects
to terminate, (i) the Company agrees to reimburse the Placement Agent for, or
otherwise pay and bear, the expenses and fees to be paid and borne by the
Company as provided for in Paragraph __ above and to reimburse the Placement
Agent for the full amount of its actual out-of-pocket expenses (which shall
include, without limitation, the fees and disbursements of FMSC's counsel,
travel and lodging expenses, mailing, printing and reproduction expenses, and
any expenses incurred by FMSC in conducting its due diligence) up to a maximum
of $30,000 less amounts previously paid to FMSC in reimbursement for such
expenses and the advance against the non-accountable expense allowance delivered
upon the execution of this Agreement, and the provisions of the Indemnification
Agreement shall remain in full force and effect.
14. Notices
All communications hereunder, except as may be otherwise specifically
provided herein, shall be in writing and, if sent to the Placement Agent, shall
be mailed, delivered, or telexed or telegraphed and confirmed by letter, to
First Montauk Securities Corp., Parkway 109 Office Center, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,Esq. with a copy to
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.; or if sent to the Company, shall be mailed,
delivered or telexed or telegraphed and confirmed by letter, to Net/tech
International, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ with a
copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq. ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
All notices hereunder shall be effective upon receipt by the party to which it
is addressed.
15. Parties
This Agreement shall inure solely to the benefit of, and shall be
binding upon, the Placement Agent and the Company and the persons and entities
referred to in Section l0 who are entitled to indemnification or contribution,
and their respective successors, legal representatives, and assigns (which shall
not include any purchaser, as such, of Shares), and no
27
other person shall have or be construed to have any legal or equitable right
remedy, or claim under or in respect of or by virtue of this Agreement or any
provision herein contained.
16. Governing Law; Submission to Jurisdiction
This Agreement shall be construed in accordance with the laws of the
State of New Jersey, without giving effect to conflict of laws.
The parties hereby agree that any legal suit, action or proceeding
arising out of or relating to this Agreement shall be instituted exclusively in
any appropriate New Jersey Supreme Court, County of Monmouth, or in the United
States District Court for the New Jersey District, (b) waives any objection
which the Company may have now or hereafter to the venue of any such suit,
action or proceeding, and (c) irrevocably consents to the jurisdiction of the
appropriate court of the State of New Jersey and the United States District
Court for the New Jersey District in any such suit, action or procedure. Each of
the Company and the Placement Agent further agrees to accept and acknowledge
service of any and all process which may be served in any suit, action or
proceeding in the aforementioned courts, and agrees that service of process upon
the them mailed by certified mail to its address shall be deemed in every
respect effective service of process upon the company in any such suit, action
or proceeding. In the event of litigation between the parties arising hereunder,
the prevailing party shall be entitled to costs and reasonable attorney's fees.
(remainder of page intentionally left blank)
28
17. Counterparts
This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
If the foregoing correctly sets forth the understanding between us,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement among us.
Very truly yours,
NET/TECH INTERNATIONAL, INC.
By: /s/▇▇▇▇▇ ▇▇▇▇▇
Title: President
Accepted as of the date first above written:
FIRST MONTAUK SECURITIES CORP.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
