Exhibit 1.1.2
PLACEMENT AGENT AGREEMENT
THIS PLACEMENT AGENT AGREEMENT (the "Agreement") is entered into as of
April 30, 2004 by and between Rush Financial Technologies, Inc., a Texas
corporation (the "Company"), and RushTrade Securities, Inc. (the "Placement
Agent").
The Company proposes to offer and sell exclusively up to 10 million
shares, plus the Over-Allotment, (the "Offering") of its common stock, $0.01 par
value per share (the "Securities") in a registered offering on Form SB-2 under
the Securities Act of 1933, as amended (the "Act"). All Securities are offered
subject to the right of the Company to reject any subscription for Securities in
whole or in part for any reason whatsoever or to sell to any prospective
investor less than the number of Securities subscribed for by such prospective
investor and subject to certain other conditions.
The Company has determined to use the services of the Placement Agent
to solicit subscriptions for the Securities in the Offering on a "best efforts"
basis as set forth in Section 3 (b), for as long as the Offering continues or
until the time period set forth in Section 4(b) expires, whichever first occurs.
The Placement Agent hereby agrees to act in such capacity and to use its best
efforts to find purchasers for the Securities in accordance with the terms and
conditions of this Agreement. Placement Agent may engage other duly licensed
agents to perform some or all of the Placement Agent's duties hereunder
("Placement Agent Syndicate Members"). In such event, all arrangements as to
compensation of other such Placement Agent Syndicate Members shall be determined
by Placement Agent and shall be chargeable against the compensation due to
Placement Agent from the Company. The Company shall be advised of and shall have
the right to approve any other Placement Agent Syndicate Members.
As promptly as practicable following the execution of this Agreement by
the parties hereto, the Company shall prepare a Registration Statement on Form
SB-2, with subscription documents attached as an exhibit thereto (the
"Subscription Documents") for use in conjunction with the offer and sale of the
Securities. Investors who subscribe for the Securities (the "Subscribers") will
be required to complete the Subscription Documents and execute the Subscription
Agreement. Such Form SB-2 (as either may be supplemented or amended from
time-to-time) together with the Subscription Documents is herein called the
"Offering Memorandum".
1. Representations and Warranties of the Company. The Company
represents and warrants to, and covenants and agrees with, the Placement Agent,
as of the date hereof, that:
(a) The Company is a Corporation duly organized, validly
existing and in good standing under the laws of Delaware, and has the
power and authority to carry on its business as conducted or proposed
to be conducted by it and to hold title to its property, which business
and property will be described in the Offering Memorandum. The Company
has the corporate power and authority to execute and deliver this
Agreement, to conduct such business and to perform its obligations
hereunder and consummate the transactions contemplated by each
Subscription Document tendered by a Subscriber that is accepted by the
Company.
(b) The Offering Memorandum will not include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(c) Except as will be disclosed in the Offering
Memorandum, there are no actions, suits, proceedings or investigations
pending or, to the best of the Company's knowledge, threatened against
or affecting the Company.
(d) Except as will be disclosed in the Offering
Memorandum, all requisite authorizations, approvals or orders from any
court, governmental or regulatory official or body necessary to permit
the Company to conduct its business as will be described in the
Offering Memorandum will have been obtained or are in the process of
being applied for prior to the Closing Date (as defined in Section 4
below). All requisite authorizations, approvals or orders from any
court or any governmental or regulatory official or body necessary for
the consummation by the Company of the transactions contemplated by
this Agreement will have been obtained or are in the process of being
applied for prior to the Closing Date (as defined in Section 4 below).
(e) This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the valid and
binding agreement of the Company, enforceable in accordance with its
terms, except that (i) such enforcement may be subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
creditors' rights generally and general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law) and (ii) the indemnification provisions of this
Agreement may be held to violate public policy (under either federal or
state law) in the context of the offer or sale of securities.
(f) The Company's execution and delivery of this
Agreement, the fulfillment of the terms set forth herein and the
consummation of the transactions contemplated herein will not conflict
with or constitute a breach of, or default under (i) the Company's
articles of incorporation or by-laws, (ii) any material agreement,
indenture or instrument by which the Company is bound, or (iii) any
law, administrative regulation or court decree.
(g) It is the Company's present intention to utilize the
proceeds from the sale of the Securities substantially in the manner as
will be set forth in the Offering Memorandum. Further, the Company has
no present intention to make any material changes in its business as it
will be described in the Offering Memorandum.
(h) On the date hereof, and at the Closing Date (as
defined in Section 4 below), the Company is not or will not be an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(i) Any written or oral information provided to
prospective purchasers of Securities by authorized representatives of
the Company other than the Placement Agent ("Authorized Persons") will
not contain any untrue statement of a material fact or, when taken
together with the information set forth in the Offering Memorandum,
omit to state a 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.
(j) The sale of the Securities has been duly and validly
authorized by the Company. There are no outstanding options, warrants
or other rights to purchase or otherwise acquire any Securities of the
Company or any security convertible into such Securities, except as
will be described in the Offering Memorandum.
(k) The Company agrees to indemnify the Placement Agent
with respect to any claim for finder's fees made by persons other than
the Placement Agent in connection with the Offering. No director or
principal shareholder of the Company is a member of a broker-dealer
registered with the National Association of Securities Dealers, Inc.
(the "NASD") or an employee or associated member of a broker-dealer
registered with the NASD.
(l) Any financial statements and related notes that may
be included in the Offering Memorandum will fairly represent the
financial position and results of the operations of the Company at the
dates and for the periods to which they relate. Said financial
statements and related notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved and comply with the requirements of the
Securities Act of 1933, as amended, and any financial information to be
set forth in the Offering Memorandum will fairly present the financial
condition of the Company and will have been prepared on a basis
consistent with such financial statements or the books of the Company.
(m) Subsequent to the respective dates of which
information is given in the Offering Memorandum and prior to the
closing date of the Offering; (i) the Company will not incur or will
not have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, not in the
ordinary course of business; (ii) the Company will not have paid or
declared any dividends or other distributions on its capital stock; and
(iii) there will not be and not have been any material change in the
capital stock or outstanding indebtedness of the Company, or any
material adverse change or development involving a prospective material
adverse change in or affecting the business, business prospects,
financial condition, or results of operations, present or prospective,
or the Company.
(n) The Company has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued
all taxes due thereon. The Company has no knowledge of any tax
proceeding or action pending or threatened against the Company which
might materially adversely affect the business, business prospects,
financial condition or results of operation, present or prospective, of
the Company or the respective businesses or properties of the Company,
other than as described in the Offering Memorandum.
2. Representations and Warranties of the Placement Agent. The
Placement Agent hereby represents and warrants to, and covenants and agrees
with, the Company, as of the date hereof, that:
(a) The Placement Agent is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, with the corporate power and authority to conduct its
business, to execute and deliver this Agreement, and to perform the
obligations contemplated herein. The Placement Agent is an "accredited
investor," as such term is defined in Regulation D promulgated under
the Act.
(b) This Agreement has been duly and validly authorized,
executed and delivered by the Placement Agent and constitutes the
valid, binding and enforceable agreement of the Placement Agent, except
to the extent that (i) such enforcement may be subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting the rights
of creditors generally and general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law), and (ii) the indemnification provisions of this Agreement may be
held to violate public policy (under either federal or state law) in
the context of the offer or sale of securities.
(c) The Placement Agent's execution and delivery of this
Agreement, and the performance of its obligations hereunder, will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, its articles of organization or
operating agreement, any agreement or instrument to which it is a party
or by which it is bound, or any judgment, decree, order or, to its
knowledge, any statute, rule or regulation applicable to Placement
Agent.
(d) As of the date of the Offering Memorandum, the
information contained in the Offering Memorandum relating to the
Placement Agent, if any, will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(e) The Placement Agent is (i) a broker-dealer duly
registered pursuant to the provisions of the Exchange Act; (ii) a
member in good standing of the NASD; and (iii) duly registered as a
broker-dealer under the applicable statutes and regulations of each
state in which the Securities will be offered and sold, except such
states in which the Placement Agent is exempt from registration or such
registration is not otherwise required.
(f) Except as will be disclosed in the Offering
Memorandum, there are no actions, suits, proceedings or investigations
pending or, to the best of the Placement Agent's knowledge, threatened
against or affecting the Placement Agent.
(g) All requisite authorizations, approvals or orders
from any court or any governmental or regulatory official or body
necessary for the consummation by the Placement Agent of the
transactions contemplated by this Agreement will have been obtained or
are in the process of being applied for prior to the Closing Date (as
defined in Section 4 below).
(h) Any written or oral information provided to
prospective purchasers of Securities by authorized representatives of
the Placement Agent or Placement Agent Syndicate Members will not
contain any untrue statement of a material fact or, when taken together
with the information set forth in the Offering Memorandum, omit to
state a 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.
3. Sale of the Securities by the Placement Agent. The Company and
the Placement Agent hereby agree as follows:
(a) To the extent required under the Act and applicable
state Blue Sky laws:
(i) The Offering will be made within the United
States exclusively to accredited investors in reliance upon
the exemption from registration under section 4(2) of the Act
and the provisions of Regulation D, and as permitted in the
jurisdictions in which the Securities are to be offered.
(ii) The Placement Agent and the Company shall
make reasonable inquiry to determine whether an accredited
investor is purchasing for its own account or if it is
purchasing for the account of others.
(iii) In the case of any purchaser acting on
behalf of one or more third parties, the Placement Agent and
the Company shall make reasonable inquiry to determine that
each such third party is an accredited investor.
(b) The Company hereby appoints the Placement Agent as
its exclusive selling agent to solicit prospective purchasers of the
Securities and as such to effect sales of the Securities, on a best
efforts basis, under the terms and conditions of this Agreement. The
Company may terminate the Placement Agent's agency hereunder
immediately upon written notice to the Placement Agent in the event of
the Placement Agent's failure to perform its obligations hereunder in
any material respect, upon the Placement Agent's material breach of any
of its representations and warranties contained herein or upon the
Placement Agent's gross negligence or willful misconduct. Subject to
the terms and conditions and upon the basis of the representations and
warranties herein set forth, the Placement Agent accepts such
appointment and agrees to use its best efforts to find prospective
purchasers for the Securities in accordance with the terms and
conditions of this Agreement. Either party may terminate the Agreement
upon thirty (30) days written notice to the other party.
(c) Each person desiring to purchase Securities will be
required to complete and execute the Subscription Documents. Each
Subscriber will deliver payment by wire transfer or by check payable to
the order of the Company or the appointed "Escrow Agent," in the amount
of the aggregate purchase price of the Securities subscribed for. Each
Subscriber will return to the Placement Agent or the Company such
Subscription Documents together with such a check (or wire transfer)
and any other documents that may be required under state securities
laws or by the Company. Neither the Placement Agent nor any investment
advisor is permitted to sign any Subscription Documents for any
Investor.
(d) Upon receipt of a Subscriber's Subscription
Documents, the Company will determine promptly whether it wishes to
accept the proposed purchaser as a holder of Securities in the Company,
it being understood that the Company reserves the right to reject the
tender of any Subscription Document before the end of the second
business day following the Company's receipt of the Subscription
Document; provided, however, the Company may subsequently reject the
tender of any Subscription Documents in the event that at least
1,000,000 shares have not been subscribed by the end of the Minimum
Offering Period (as hereinafter defined). Should the Company determine
to reject the tender, it will promptly notify the Placement Agent of
such determination. The Placement Agent will notify the Subscriber of
such determination, and the Company will issue and mail (or wire
transfer) (or cause the appointed Escrow Agent to issue and mail (or
wire transfer)) to the Subscriber, a check in an amount equal to the
tendered purchase price of the Securities.
(e) Placement Agent is a wholly owned subsidiary of the
Company, and X.X. Xxxxx, Xx. is a member of the Board of Directors of
both Placement Agent and the Company. Such affiliation between the
Company and Placement Agent is a conflict of interest under Rule
2720(b)(7) of the Conduct Rules of the NASD. Accordingly, Placement
Agent will not participate in determining the initial public offering
price for the common stock. Instead, in accordance with Rule 2720(c),
Invest Linc Securities, LLC will assume the responsibilities of acting
as the qualified independent underwriter in pricing the Offering and
conducting due diligence. In addition, Placement Agent will not act as
a market maker for the common stock following the offering, and will be
limited to participation in secondary market transactions exempt under
Section 4(4) of the Securities Act of 1933. The initial public offering
price of the shares offered will be no higher than the price
recommended by Invest Linc Securities, LLC.
4. Closing Dates.
(a) The Company will hold the closing of this Offering
(the "First Closing") at any time in its discretion on or before sixty
(60) days after the Effective Date and upon receipt of at least
1,000,000 shares subscribed in accordance with Section 3 above.
Thereafter, the Offering will be sold until the Final Closing, which
will occur on the earlier of sixty (60) days after the First Closing or
the sale of the maximum placement, as described in the following
paragraph (the "Final Closing"). The First Closing, Final Closing and
any additional closing in connection with the Over-Allotment are each
referred to as a "Closing."
(b) The time limit for the minimum placement of 1,000,000
shares shall be sixty (60) days after the Effective Date (the "Minimum
Offering Period"). If the minimum has not been reached within the
Minimum Offering Period either party may terminate this Agreement by
written notice to the other party. Upon completion of the minimum
placement within the Minimum Offering Period, Placement Agent shall
have up to the date of the Final Closing in which to complete the
maximum placement, which shall be 10,000,000 shares, subject to the
Over-Allotment (defined below). If by mutual consent, any of the above
time periods may be extended or shortened; provided, however, that no
extension of the Minimum Offering Period may be made without the
written consent of all Subscribers who have then executed Subscription
Documents and tendered the purchase price for such securities.
(c) If the maximum placement of 10,000,000 shares is
reached by the Final Closing, then the Company agrees that it will, for
a period of up to 30 days, sell up to an additional 1,000,000 shares to
investors previously contacted by the Placement Agent (the
"Over-Allotment").
(d) Included in the Over-Allotment if requested by the
Company will be the shares of one or more selling shareholders.
5. Compensation.
For the services of the Placement Agent in soliciting and obtaining
purchasers of the Securities, the Company agrees to pay the Placement Agent
Selling Dealers commissions equal to the amount paid to others participating in
the offering (the "Selling Commission"), payable at each particular Closing.
6. Term.
The term of this Agreement shall be six months from the execution
hereof, unless extended by the mutual agreement of the parties.
7. Further Agreements of the Company.
(a) The Company covenants and agrees that it will pay or
cause to be paid (i) all of the Placement Agent's pre-approved expenses
associated with the soliciting and obtaining of purchasers of the
Securities including travel expenses in connection with investor
presentations, (ii) all expenses and fees in connection with the
preparation, printing, filing, delivery and shipping of the Offering
Memorandum (and all other exhibits to the Offering Memorandum and any
amendments or supplements thereto, but not including the preparation or
negotiation of this Agreement); (iii) filing fees required in
connection for offering and sale by the Placement Agent under the
securities or Blue Sky laws of the states and other jurisdictions where
necessary; and (iv) all reasonable fees and expenses of Placement
Agent's counsel for its review of the Offering Memorandum and work
related thereto, not to exceed $10,000 without prior approval by the
Company.
(b) If at any time when an Offering Memorandum relating
to the Securities is required to be delivered under the Act, any event
will have occurred as a result of which, in the opinion of counsel for
the Company or the Placement Agent, the Offering Memorandum includes an
untrue statement of a material fact or omits to state a 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, or if it is necessary at any time to amend the Offering
Memorandum to comply with the Act, the Company promptly will prepare an
appropriate supplement or amendment thereto, and will deliver to the
Placement Agent such number of copies thereof as the Placement Agent
may reasonably request.
(c) To the extent required under the Act and applicable
state Blue Sky laws:
(i) The Company shall exercise reasonable care
to assure the Subscribers are not underwriters within the
meaning of Section 2(11) of the Act, shall take all actions
required by state securities laws, and setting forth or
referring to the restrictions on transferability and sale of
the Securities.
(ii) The Company will duly and timely file (i)
with the Commission all required reports, with respect to the
sale of the Securities and (ii) all reports required to be
filed under applicable state securities laws and regulations
and by the regulatory agencies charged with enforcement
thereof.
(d) The Company shall make available to each offeree and
any individual advising such offeree the opportunity to ask questions
and receive answers concerning the Company and the terms and conditions
of the Offering, and to obtain any additional information, to the
extent that such information is in the possession of the Company or can
be acquired by any of it without unreasonable effort or expense,
necessary to verify the accuracy of the information contained in the
Offering Memorandum.
(e) The Company will notify the Placement Agent
immediately upon receipt thereof and confirm the notice in writing of
the issuance by the Commission or any state securities administrator of
any stop order suspending the effectiveness of any qualification of the
Securities for sale or enjoining the sale of the Securities or of the
initiation of any proceeding for that purpose. The Company will make
every reasonable effort to prevent the issuance of any stop order and,
if any stop order shall be issued, to obtain the lifting of the stop
order at the earliest possible time.
(f) The Company, at Company expense, shall establish an
escrow account which fulfills Agent's obligations as promulgated under
Rule 15(c)2-4 of the Securities Exchange Act of 1934, as amended. Such
escrow account may be established at a mutually acceptable national
bank or as such other place as may be agreed upon.
(g) After the execution of this Agreement and upon the
commencement of the Placement Agent conducting further due diligence on
the Company and the Offering, the Company agrees to execute the Due
Diligence Certificate attached hereto to as Exhibit "A".
(h) The Company agrees to furnish, at Company's sole
expense, to Placement Agent throughout the life of the Placement Agent
Warrants the following documentation:
(i) all filings with state and federal
securities regulatory bodies, including without limitation all
documents filed with any office of the United States
Securities and Exchange Commission, any exchange upon which
the Company's securities are listed in any state and copies of
all other documents, reports and information furnished by the
Company to its shareholders; and
(ii) copies of monthly transfer sheets.
The furnishing of such reports shall not be characterized as additional
compensation.
8. Further Agreements of the Placement Agent.
(a) The Placement Agent agrees (on behalf of itself and
the other Placement Agent Syndicate Members) that it will accept
subscriptions only from investors who have received a copy of the
Offering Memorandum, who have fully completed and executed the
appropriate Subscription Documents. The Placement Agent agrees (on
behalf of itself and the other Placement Agent Syndicate Members) not
to publish, circulate or use any other advertisement or solicitation
material without the prior written approval of the Company or otherwise
conduct the offering in a manner which would be deemed to be a public
offering where this would violate any federal or state securities laws
applicable to the Offering.
(b) The Placement Agent agrees (on behalf of itself and
the other Placement Agent Syndicate Members) to solicit Subscribers
only in the states and other jurisdictions that such solicitation can
be made in accordance with any limitations described therein and in the
states and jurisdictions in which the Placement Agent (or any Placement
Agent Syndicate Members) is licensed or qualified to make offers and
sales of the Securities. The Placement Agent agrees (on behalf of
itself and the other Placement Agent Syndicate Members) not to make
offers and sales to residents of foreign countries.
(c) The Placement Agent (on behalf of itself and the
other Placement Agent Syndicate Members) agrees to keep confidential
and not provide any information to prospective purchasers of Securities
or other persons not contained in the Offering Memorandum or publicly
disclosed and available.
9. Indemnification.
(a) The Company agrees to indemnify and hold harmless
Placement Agent and each person who controls Placement Agent within the
meaning of the Act (collectively, the "Placement Agent Indemnified
Parties") against any losses, claims, damages or liabilities, joint or
several (including, without limitation, any legal or other expenses
reasonably incurred by such Placement Agent Indemnified Party in
connection with investigating or defending any such claim, liability or
action), to which such Placement Agent Indemnified Party may become
subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of
a material fact contained (A) in the Offering Memorandum or any
amendment or supplement thereof or thereto, as applicable, or (B) in
any Blue Sky application or other document executed by the Company
specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in
order to qualify any or all of the Securities under the securities laws
thereof (any such application, document or information being
hereinafter called a "Blue Sky Application"); (ii) the omission or
alleged omission to state in the Offering Memorandum or any amendment
or supplement thereof or thereto, as applicable, or in any Blue Sky
Application, a 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; or (iii) any misrepresentation,
breach of warranty or nonfulfillment of any agreement or covenant on
the part of the Company under this Agreement, or from any
misrepresentation in or omission from any certificate, agreement,
schedule, statement, document or instrument furnished to the Placement
Agent pursuant hereto; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage
or liability (x) arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to
the Company by the Placement Agent specifically for use with reference
to the Placement Agent in the preparation of the Offering Memorandum or
any such Blue Sky Application or any such amendments or supplements
thereto or (y) is primarily the result of the Placement Agent's willful
misconduct or gross negligence. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) The Placement Agent agrees to indemnify and hold
harmless the Company and each of its directors, officers, employees,
agents and representatives (collectively, the "Company Indemnified
Parties") against any losses, claims, damages or liabilities, joint or
several (including, without limitation, any legal or other expenses
reasonably incurred by such Company Indemnified Party in connection
with investigating or defending any such claim, liability or action),
to which such Company Indemnified Party may become subject under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained based upon written information supplied by the Placement
Agent regarding the Placement Agent (A) in the Offering Memorandum or
any amendment or supplement thereof or thereto, as applicable,
regarding the Placement Agent or (B) in any Blue Sky Application; (ii)
the omission or alleged omission to state in the Offering Memorandum or
any amendment or supplement thereof or thereto, as applicable, or in
any Blue Sky Application, a material fact regarding the Placement Agent
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; or (iii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of the
Placement Agent under this Agreement, or from any misrepresentation in
or omission from any certificate, agreement, schedule, statement,
document or instrument furnished to the Company pursuant hereto.
(c) Promptly after receipt by an indemnified party under
this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 9, notify in writing
the indemnifying party of the commencement thereof; and the omission so
to notify the indemnifying Party will relieve it from any liability
under this Section 9 as to the particular item for which
indemnification is then being sought, but not from any other liability
that it may have to any indemnified party. The indemnifying party
shall, upon the request of the indemnified party, retain counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate
in such proceedings and shall pay as incurred the reasonable fees and
expenses of such counsel related to such proceeding. In no event shall
the indemnifying party be liable for the fees and expenses of more than
one counsel for all indemnified parties 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
circumstances (other than such local counsel as may be employed by
counsel to the indemnified parties to render legal advice with respect
to the laws of, or legal services in, states or jurisdictions other
than those states and jurisdictions in which counsel to the indemnified
parties is admitted to practice law.) In any such proceeding, any
indemnified party shall cooperate in the defense and shall have the
right to retain its own counsel at its own expense. In case any such
action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and, to the extent that it may
wish, jointly with any other indemnifying party, similarly notified, to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof. In the event that the indemnified party
assumes the defense of such action or proceeding, the indemnified party
will keep the indemnifying party reasonably informed of the progress of
any defense, compromise or settlement and will cooperate and consult
with the indemnifying party and its counsel in connection therewith. No
indemnifying party will enter into any comprise or settlement of any
claim or action without the consent of the indemnified party. Likewise,
No indemnified party will enter into any comprise or settlement of any
claim or action without the consent of the indemnifying party.
10. Effective Date. Upon the execution and delivery of this
Agreement by all of the parties hereto, this Agreement will become effective
upon the date specified on the signature page hereto. The Offering shall become
effective at such time as the Company informs the Placement Agent that the
Offering has been approved by the Company's Board of Directors and indicating
that the Offering Memorandum is released for distribution.
11. Survival of Indemnities, Warranties and Representations. The
respective indemnity agreements of the Company and Placement Agent contained in
Section 9 hereof, and the representations and warranties of the Company and
Placement Agent set forth herein, will remain operative and in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Company or Placement Agent, or any
controlling person referred to in Section 9, and will survive the delivery of
and payment for the Securities, and any successor of the Placement Agent or the
Company or of any such controlling person or any legal representative of any
such controlling person, as the case may be, will be entitled to the benefit of
the respective indemnity agreements.
12. Credit. Upon Closing of any Offering, Placement Agent may, at
its own expense, place announcements in financial and other newspapers and
periodicals (such as customary "tombstone" advertisement) describing its
services in connection therewith. Notwithstanding, Placement Agent is hereby
authorized to include the Company on its publicly disclosed list of clients.
13. Notices. Except as is otherwise provided in this Agreement,
(a) whenever notice is required by the Provisions of this Agreement or otherwise
to be given to the Company, such notice will be in writing addressed to the
Company at 00000 Xxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 Attention: X. X.
Xxxxx, Xx.; and (b) whenever notice is required by the provisions of this
Agreement or otherwise to be given to Placement Agent, such notice will be in
writing addressed to the Placement Agent at 000 X. Xxxxxxxx Xx., Xxx. 000,
Xxxxxxx, XX 00000, Attention: XxXxx X. Paris, II. Any notice referred to herein
may be given in writing or by telecopy or telephone and if by telecopy or
telephone will be immediately confirmed in writing. Notice (unless actual) will
be effective upon mailing or telecopy transmission, as the case may be.
14. Persons Entitled to Benefit of Agreement. This Agreement is
made solely for the benefit of Placement Agent, the Company and the controlling
persons referred to in Section 9 hereof, and their respective successors and
assigns, and no other person will acquire or have any right by virtue or this
Agreement, and the term "successors and assigns," as used in this Agreement,
will not include any Purchaser.
15. Dispute Resolution. (a) If a dispute arises out of or relates
to this Agreement, the parties agree first to try in good faith to settle the
dispute by mediation before resorting to arbitration or litigation. The parties
agree that the mediator shall be chosen no later than thirty (30) days after the
submission of a claim by either party, and that the mediation process shall be
concluded no later than thirty (30) days after selection of the mediator. If the
parties cannot agree on the selection of a mediator, one shall be selected by
the American Arbitration Association ("AAA"). The fees and expenses of the
mediator shall be borne equally by the parties. (b) If the controversy is not
resolved through mediation pursuant to Paragraph (a) above, the parties agree
that any controversy or claim arising out of or relating to this Agreement shall
be determined by binding arbitration. This transaction involves commerce, and
the arbitration is subject to and shall be conducted by a single arbitrator in
accordance with the United States Arbitration Act notwithstanding any choice of
law provision in this Agreement, and under the Commercial Arbitration Rules of
the AAA. The arbitrator shall have authority to award damages and grant other
relief he deems appropriate. The arbitrator shall give effect to statues of
limitation in determining any claim. Any controversy concerning whether an issue
is arbitrable, shall be determined by the arbitrator. Judgment upon the
arbitration award may be entered in any court having jurisdiction. The fees and
expenses of the arbitrator and AAA shall be borne equally by the parties. Any
mediation or arbitration under this Section 15 shall be held in Texas.
16. Governing Law. This Agreement is to be governed by and
construed in accordance with the laws of the State of Illinois, without regard
to principles of conflicts of law.
17. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
18. Entire Agreement. This Agreement, including all exhibits and
schedules, sets forth the entire agreement of the Placement Agent and the
Company with respect to the subject matter hereof and terminates and supersedes
all prior agreements and understandings between or among the Placement Agent and
the Company with respect to the subject matter hereof.
19. Headings. The descriptive headings in this Agreement have been
inserted for convenience only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement
effective as of the as of the date first set forth above.
Rush Financial Technologies, Inc.
By: /s/ X.X. Xxxxx, Xx.
-------------------------------------
X.X. Xxxxx, Xx., President & CEO
RUSHTRADE SECURITIES, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, President
