CONFIDENTIAL Bradley D. Edson President & Chief Executive Officer NutraCea
Exhibit
1.1
October 16, 2008
CONFIDENTIAL
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
President
& Chief Executive Officer
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
Phoenix,
AZ 85018
Dear
▇▇▇▇:
This
letter (the “Agreement”)
constitutes the agreement between ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC (“▇▇▇▇▇▇” or the “Placement Agent”) and
Nutracea (the “Company”), that
▇▇▇▇▇▇ shall serve as the exclusive placement agent for the Company, on a
“reasonable best efforts” basis, in connection with the proposed placement (the
“Placement”) of
registered securities (the “Securities”) of the
Company, consisting of shares (“Shares”) of the
Company’s Series D Convertible Preferred Stock (“Preferred Stock”),
Series A Warrants to purchase shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”),
Series B Warrants to purchase Preferred Stock (“Series B Warrants”)
and Series C Warrants to purchase Common Stock. The terms of such
Placement and the Securities shall be mutually agreed upon by the Company and
the purchasers in the Placement (each, a “Purchaser” and
collectively, the “Purchasers”) and
nothing herein constitutes that ▇▇▇▇▇▇ would have the power or authority to bind
the Company or any Purchaser or an obligation for the Company to issue any
Securities or complete the Placement. The date of the closing of the
Placement shall be referred to herein as the “Closing Date.” This
Agreement and the documents executed and delivered by the Company and the
Purchasers in connection with the Placement shall be collectively referred to
herein as the “Transaction Documents.” The
date of the closing of the Placement shall be referred to herein as the “Closing
Date.” The Company expressly acknowledges and agrees that
▇▇▇▇▇▇’▇ obligations hereunder are on a reasonable best efforts basis only and
that the execution of this Agreement does not constitute a commitment by ▇▇▇▇▇▇
to purchase the Securities and does not ensure the successful placement of the
Securities or any portion thereof or the success of ▇▇▇▇▇▇ with respect to
securing any other financing on behalf of the Company.
SECTION 1. COMPENSATION AND OTHER
FEES.
As
compensation for the services provided by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, the Company agrees
to pay to ▇▇▇▇▇▇:
(A)
The fees set forth below with respect to the Placement:
1. A
cash fee payable immediately upon the closing of the Placement and equal to 6%
of theaggregate cash gross proceeds raised in the Placement on the Closing Date,
plus a cash fee payable within five days after each exercise of any Class B
Warrants equal to 6% of the aggregate cash gross proceeds paid by the holder in
making such exercise of a Class B Warrant.
▇▇
▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ , ▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ , ▇▇ ▇▇▇▇▇ Tel: ▇▇▇ ▇▇▇ ▇▇▇▇ Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇.▇▇▇▇.▇▇▇
Member: FINRA , SIPC
2.
Warrants to purchase that number of shares of Common Stock equal to 6% of number
of shares of Common Stock underlying the Preferred Stock that are issuable upon
conversion of the Preferred Stock (including Preferred Stock issued after
exercise of the Series B Warrants) on the date the Preferred Stock is issued
(or, with respect to Preferred Stock that is issued upon exercise of the Series
B Warrants, within five days after the time all the Series B Warrants may no
longer be exercised). Such warrants shall be in the form attached
hereto as Addendum B and will have a per share exercise price equal to 125% of
the lowest offering price (which shall be the exercise price of the Series A
Warrants issued to the Purchasers) shall not have antidilution protections and
shall not be transferable for six months from the date of the Placement except
as permitted by NASD Rule 2710. Further, the number of Shares
underlying the warrants shall be reduced if necessary to comply with Financial
Industry Regulatory Authority (“FINRA”) rules or regulations.
(B)
The Company also agrees to reimburse ▇▇▇▇▇▇’▇ expenses (with supporting
invoices/receipts) in an amount equal to 0.8% of gross offering proceeds, up to
a maximum of $20,000. Such reimbursement shall be payable immediately upon (but
only in the event of) the closing of the Placement.
SECTION 2. REGISTRATION
STATEMENT.
The
Company represents and warrants to, and agrees with, the Placement Agent
that:
(A)
The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (Registration File No. 333-148929) under the Securities
Act of 1933, as amended (the “Securities Act”), which became effective on April
8, 2008. At the time of such filing, the Company met the requirements
of Form S-3 under the Securities Act. Such registration statement
meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act
and complies with said Rule. The Company will file with the Commission pursuant
to Rule 424(b) under the Securities Act, and the rules and regulations (the
“Rules and Regulations”) of the Commission promulgated thereunder, a supplement
to the form of prospectus included in such registration statement relating to
the placement of the Shares and the plan of distribution thereof and has advised
the Placement Agent of all further information (financial and other) with
respect to the Company required to be set forth therein. Such registration
statement, including the exhibits thereto, as amended at the date of this
Agreement, is hereinafter called the “Registration Statement”; such prospectus
in the form in which it appears in the Registration Statement is hereinafter
called the “Base Prospectus”; and the supplemented form of prospectus, in the
form in which it will be filed with the Commission pursuant to Rule 424(b)
(including the Base Prospectus as so supplemented) is hereinafter called the
“Prospectus Supplement.” Any reference in this Agreement to the Registration
Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to
refer to and include the documents incorporated by reference therein (the
“Incorporated Documents”) pursuant to Item 12 of Form S-3 which were filed under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or
before the date of this Agreement, or the issue date of the Base Prospectus or
the Prospectus Supplement, as the case may be; and any reference in this
Agreement to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the date of this Agreement, or the issue date of the Base Prospectus
or the Prospectus Supplement, as the case may be, deemed to be incorporated
therein by reference. All references in this Agreement to financial statements
and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop
order suspending the effectiveness of the Registration Statement or the use of
the Base Prospectus or the Prospectus Supplement has been issued, and no
proceeding for any such purpose is pending or has been initiated or, to the
Company's knowledge, is threatened by the Commission. For purposes of this
Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under
the Securities Act and the “Time of Sale Prospectus” means the preliminary
prospectus, if any, together with the free writing prospectuses, if any, used in
connection with the Placement, including any documents incorporated by reference
therein.
(B)
The Registration Statement (and any further documents to be filed with the
Commission) contains all exhibits and schedules as required by the Securities
Act. Each of the Registration Statement and any post-effective amendment
thereto, at the time it became effective, complied in all material respects with
the Securities Act and the Exchange Act and the applicable Rules and Regulations
and did not and, as amended or supplemented, if applicable, will not, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, each as of its respective date, comply in all material
respects with the Securities Act and the Exchange Act and the applicable Rules
and Regulations. Each of the Base Prospectus, the Time of Sale Prospectus, if
any, and the Prospectus Supplement, as amended or supplemented, did not and will
not contain as of the date thereof 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. The
Incorporated Documents, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and the applicable
Rules and Regulations, and none of such documents, when they were filed with the
Commission, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein (with respect to
Incorporated Documents incorporated by reference in the Base Prospectus or
Prospectus Supplement), in light of the circumstances under which they were made
not misleading; and any further documents so filed and incorporated by reference
in the Base Prospectus, the Time of Sale Prospectus, if any, or Prospectus
Supplement, when such documents are filed with the Commission, will conform in
all material respects to the requirements of the Exchange Act and the applicable
Rules and Regulations, as applicable, and will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No post-effective amendment to the Registration Statement
reflecting any facts or events arising after the date thereof which represent,
individually or in the aggregate, a fundamental change in the information set
forth therein is required to be filed with the Commission. There are
no documents required to be filed with the Commission in connection with the
transaction contemplated hereby that (a) have not been filed as required
pursuant to the Securities Act or (b) will not be filed within the requisite
time period. There are no contracts or other documents required to be described
in the Base Prospectus, the Time of Sale Prospectus, if any, or Prospectus
Supplement, or to be filed as exhibits or schedules to the Registration
Statement, which have not been described or filed as required.
(C)
The Company has delivered, or will as promptly as practicable deliver, to the
Placement Agent complete conformed copies of the Registration Statement and of
each consent and certificate of experts, as applicable, filed as a part thereof,
and conformed copies of the Registration Statement (without exhibits), the Base
Prospectus, the Time of Sale Prospectus, if any, and the Prospectus Supplement,
as amended or supplemented, in such quantities and at such places as the
Placement Agent reasonably requests. Neither the Company nor any of
its directors and officers has distributed and none of them will distribute,
prior to the Closing Date, any offering material in connection with the offering
and sale of the Shares other than the Base Prospectus, the Time of Sale
Prospectus, if any, the Prospectus Supplement, the Registration Statement,
copies of the documents incorporated by reference therein and any other
materials permitted by the Securities Act.
SECTION
3. REPRESENTATIONS AND
WARRANTIES. Except as set forth under the corresponding section of the
Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof,
the Company hereby makes the representations and warranties set forth below to
the Placement Agent.
(A)
Organization and
Qualification. All of the direct and indirect subsidiaries
(individually, a “Subsidiary”) of the
Company are set forth on Schedule 3(A). The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any “Liens” (which for
purposes of this Agreement shall mean a lien, charge, security interest,
encumbrance, right of first refusal, preemptive right or other restriction), and
all the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities. The Company
and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. Neither the Company nor
any Subsidiary is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in (i) a
material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse
Effect”) and no “Proceeding” (which
for purposes of this Agreement shall mean any action, claim, suit, investigation
or proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened) has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
(B)
Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, its board of directors or its stockholders in connection therewith
other than in connection with the “Required Approvals”
(as defined in subsection 3(D) below). Each Transaction Document has
been (or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
(C)
No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Securities
and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.
(D)
Filings, Consents and
Approvals. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other “Person” (defined as
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind,
including, without limitation, any Trading Market) in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than such filings as are required to be made under applicable Federal and
state securities laws (collectively, the “Required Approvals”),
which will have been made prior to closing, including, without limitation, Blue
Sky approvals from New York, California and Illinois.
(E)
Issuance of the
Securities; Registration. The Securities are duly authorized
and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The Company has
reserved from its duly authorized capital stock the maximum number of shares of
Common Stock issuable pursuant to the Transaction Documents. The
issuance by the Company of the Securities has been registered under the
Securities Act and all of the Securities are freely transferable and tradable by
the Purchasers without restriction (other than any restrictions arising solely
from an act or omission of a Purchaser). The Securities are being
issued pursuant to the Registration Statement and the issuance of the Securities
has been registered by the Company under the Securities Act. The
Registration Statement is effective and available for the issuance of the
Securities thereunder and the Company has not received any notice that the
Commission has issued or intends to issue a stop-order with respect to the
Registration Statement or that the Commission otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or intends or has threatened in writing to do so. The
"Plan of Distribution" section under the Registration Statement permits the
issuance and sale of the Securities hereunder. Upon receipt of the
Securities, the Purchasers will have good and marketable title to such
Securities and the Securities will be freely tradable on the “Trading Market”
(which, for purposes of this Agreement shall mean means the following markets or
exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the Nasdaq Capital Market, the American Stock Exchange, the New
York Stock Exchange, the Nasdaq National Market or the OTC Bulletin
Board).
(F)
Capitalization. The
capitalization of the Company is as set forth on Schedule 3(F). The
Company has not issued any capital stock since its most recently filed periodic
report under the Exchange Act, other than pursuant to the exercise of employee
stock options under the Company’s stock option plans, the issuance of shares of
Common Stock to employees pursuant to the Company’s employee stock purchase plan
and pursuant to the conversion or exercise of securities exercisable,
exchangeable or convertible into Common Stock (“Common Stock
Equivalents”). No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents. Except as
a result of the purchase and sale of the Securities, there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents. The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. All of the outstanding shares of
capital stock of the Company are validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the
Securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.
(G)
SEC Reports; Financial
Statements. The Company has complied in all material respects
with requirements to file all reports, schedules, forms, statements and other
documents required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being collectively
referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(H)
Material Changes;
Undisclosed Events, Liabilities or Developments. Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in the SEC Reports, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or “Affiliate” (defined
as any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Securities Act), except
pursuant to existing Company stock option plans. The Company does not
have pending before the Commission any request for confidential treatment of
information. Except for the issuance of the Securities contemplated
by this Agreement or as set forth on Schedule 3(H), no event, liability or
development has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made that has not
been publicly disclosed 1 Trading Day prior to the date that this representation
is made.
(I)
Litigation. There
is no action, suit, inquiry, notice of violation, Proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the
Company, and neither the Company or any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. No executive
officer, to the knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(J)
Labor
Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company which could reasonably be expected to result in a Material Adverse
Effect.
(K)
Compliance. Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could not
have a Material Adverse Effect.
(L)
Regulatory
Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not have or reasonably be expected to result in a
Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.
(M)
Title to
Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiaries and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and the Subsidiaries are
in compliance.
(N)
Patents and
Trademarks. The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other similar intellectual property rights necessary or material
for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have a Material Adverse Effect
(collectively, the “Intellectual Property
Rights”). Neither the Company nor any Subsidiary has received
a notice (written or otherwise) that the Intellectual Property Rights used by
the Company or any Subsidiary violates or infringes upon the rights of any
Person. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights of others. The
Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(O)
Insurance. The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage at least equal to the aggregate subscription amount under the
Transaction Documents. To the best knowledge of the Company, such
insurance contracts and policies are accurate and complete. Neither
the Company nor any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.
(P)
Transactions With
Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, other than
(i) for payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) for other
employee benefits, including stock option agreements under any stock option plan
of the Company.
(Q)
▇▇▇▇▇▇▇▇-▇▇▇▇▇. The
Company is in material compliance with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002 which are applicable to it as of the date hereof and of the closing date
of the Placement.
(R)
Certain
Fees. Except as otherwise provided in this Agreement, no
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Purchasers shall have
no obligation with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the Transaction
Documents.
(S)
Trading Market
Rules. The issuance and sale of the Securities hereunder does
not contravene the rules and regulations of the Trading Market.
(T)
Investment
Company. The Company is not, and is not an Affiliate of, and immediately
after receipt of payment for the Securities, will not be or be an Affiliate of,
an “investment company” within the meaning of the Investment Company Act of
1940, as amended. The Company shall conduct its business in a manner
so that it will not become subject to the Investment Company Act.
(U)
Registration
Rights. No Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the
Company.
(V)
Listing and
Maintenance Requirements. The Company’s Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. The Company has not,
in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.
(W)
Application of
Takeover Protections. The Company and its Board of Directors
have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Company’s Certificate of Incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to
the Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the
Securities and the Purchasers’ ownership of the Securities.
(X)
Solvency. Based
on the financial condition of the Company as of the Closing Date after giving
effect to the receipt by the Company of the proceeds from the sale of the
Securities hereunder, (i) the Company’s fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts are
required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its
debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year
from the Closing Date. The SEC Reports set forth as of the dates
thereof all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement, “Indebtedness” shall
mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.
(Y)
Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any
Subsidiary.
(Z)
Foreign Corrupt
Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.
(AA)
Accountants. The
Company’s accountants are set forth on Schedule 3(AA) of the Disclosure
Schedule. To the knowledge of the Company, such accountants, who the
Company expects will express their opinion with respect to the financial
statements to be included in the Company’s next Annual Report on Form 10-K, are
a registered public accounting firm as required by the Securities
Act.
(BB)
Regulation M
Compliance. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities (other than for the placement
agent’s placement of the Securities), or (iii) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(CC)
Approvals. The
issuance and listing on the OTCBB of the Shares requires no further approvals,
including but not limited to, the approval of shareholders.
(DD)
FINRA
Affiliations. There are no affiliations with any FINRA member
firm among the Company’s officers, directors or, to the knowledge of the
Company, any five percent (5%) or greater stockholder of the Company, except as
set forth in the Base Prospectus.
SECTION 4. INDEMNIFICATION. The
Company agrees to the indemnification and other agreements set forth in the
Indemnification Provisions (the “Indemnification”)
attached hereto as Addendum A, the provisions of which are incorporated herein
by reference and shall survive the termination or expiration of this
Agreement.
SECTION 5. ENGAGEMENT
TERM. ▇▇▇▇▇▇’▇ engagement hereunder will be for the period of
180 days. The engagement may be terminated by either the Company or ▇▇▇▇▇▇ at
any time upon 10 days’ written notice. Notwithstanding anything to the contrary
contained herein, the provisions concerning confidentiality, indemnification,
contribution and the Company’s obligations to pay fees and reimburse expenses
contained herein and the Company’s obligations contained in the Indemnification
Provisions will survive any expiration or termination of this
Agreement. ▇▇▇▇▇▇ agrees not to use any confidential information
concerning the Company provided to them by the Company for any purposes other
than those contemplated under this Agreement.
SECTION 6. ▇▇▇▇▇▇
INFORMATION. The Company agrees that any information or advice
rendered by ▇▇▇▇▇▇ in connection with this engagement is for the confidential
use of the Company only in their evaluation of the Placement and, except as
otherwise required by law, the Company will not disclose or otherwise refer to
the advice or information in any manner without ▇▇▇▇▇▇’▇ prior written
consent.
SECTION 7. NO FIDUCIARY
RELATIONSHIP. This Agreement does not create, and shall not be
construed as creating rights enforceable by any person or entity not a party
hereto, except those entitled hereto by virtue of the Indemnification Provisions
hereof. The Company acknowledges and agrees that ▇▇▇▇▇▇ is not and
shall not be construed as a fiduciary of the Company and shall have no duties or
liabilities to the equity holders or the creditors of the Company or any other
person by virtue of this Agreement or the retention of ▇▇▇▇▇▇ hereunder, all of
which are hereby expressly waived.
SECTION 8. CLOSING. The
obligations of the Placement Agent and the Purchasers, and the closing of the
sale of the Securities hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties on the part of the
Company and its Subsidiaries contained herein, to the accuracy of the statements
of the Company and its Subsidiaries made in any certificates pursuant to the
provisions hereof, to the performance by the Company and its Subsidiaries of
their obligations hereunder, and to each of the following additional terms and
conditions:
(A)
No stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been initiated
or threatened by the Commission, and any request for additional information on
the part of the Commission (to be included in the Registration Statement, the
Base Prospectus or the Prospectus Supplement or otherwise) shall have been
complied with to the reasonable satisfaction of the Placement
Agent. Any filings required to be made by the Company in shall have
been timely filed with the Commission.
(B)
The Placement Agent shall not have discovered and disclosed to the Company on or
prior to the Closing Date that the Registration Statement, the Base Prospectus
or the Prospectus Supplement or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the Placement
Agent, is material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(C)
All corporate proceedings and other legal matters incident to the authorization,
form, execution, delivery and validity of each of this Agreement, the
Securities, the Registration Statement, the Base Prospectus and the Prospectus
Supplement and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(D)
The Placement Agent shall have received from outside counsel to the Company such
counsel’s written opinion, addressed to the Placement Agent and the Purchasers
dated as of the Closing Date, in form and substance reasonably satisfactory to
the Placement Agent.
(E)
Neither the Company nor any of its Subsidiaries shall have sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Base Prospectus, any loss or interference with its business
from fire, explosion, flood, terrorist act or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth in or contemplated by the Base
Prospectus and (ii) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its Subsidiaries or any
change, or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position, stockholders’ equity,
results of operations or prospects of the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Placement Agent, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement.
(F)
The Common Stock is registered under the Exchange Act and, as of the Closing
Date, the Shares shall be listed and admitted and authorized for trading on the
(OTCBB), and satisfactory evidence of such actions shall have been provided to
the Placement Agent. The Company shall have taken no action designed
to, or likely to have the effect of terminating the registration of the Common
Stock under the Exchange Act or delisting or suspending from trading the Common
Stock from the OTCBB), nor has the Company received any information suggesting
that the Commission or the (OTCBB) is contemplating terminating such
registration or listing.
(G)
Subsequent to the execution and delivery of this Agreement, there shall not have
occurred any of the following: (i) trading in securities generally on the New
York Stock Exchange, the Nasdaq National Market or the American Stock Exchange
or in the OTCBB, or trading in any securities of the Company on any exchange or
on the OTCBB, shall have been suspended or minimum or maximum prices or maximum
ranges for prices shall have been established on any such exchange or such
market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by federal or state authorities or a material disruption has
occurred in commercial banking or securities settlement or clearance services in
the United States, (iii) the United States shall have become engaged in
hostilities in which it is not currently engaged, the subject of an act of
terrorism, there shall have been an escalation in hostilities involving the
United States, or there shall have been a declaration of a national emergency or
war by the United States, or (iv) there shall have occurred any other calamity
or crisis or any change in general economic, political or financial conditions
in the United States or elsewhere, if the effect of any such event in clause
(iii) or (iv) makes it, in the sole judgment of the Placement Agent,
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Base Prospectus
and the Prospectus Supplement.
(H)
No action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any governmental agency or body which
would, as of the Closing Date, prevent the issuance or sale of the Securities or
materially and adversely affect or potentially and adversely affect the business
or operations of the Company; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale
of the Securities or materially and adversely affect or potentially and
adversely affect the business or operations of the Company.
(I)
The Company shall have prepared and filed with the Commission a Current Report
on Form 8-K with respect to the Placement, including as an exhibit thereto this
Agreement.
(J)
The Company shall have entered into subscription agreements with each of the
Purchasers and such agreements shall be in full force and effect and shall
contain representations and warranties of the Company as agreed between the
Company and the Purchasers.
(K)
FINRA shall have raised no objection to the fairness and reasonableness of the
terms and arrangements of this Agreement. In addition, the Company
shall, if requested by the Placement Agent, make or authorize Placement Agent’s
counsel to make on the Company’s behalf, an Issuer Filing with the FINRA
Corporate Financing Department pursuant to FINRA Rule 2710 with respect to the
Registration Statement and pay all filing fees required in connection
therewith.
(L)
Prior to the Closing Date, the Company shall have furnished to the Placement
Agent such further information, certificates and documents as the Placement
Agent may reasonably request.
All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agent.
SECTION
9. GOVERNING
LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed entirely in such State. This Agreement may not be
assigned by either party without the prior written consent of the other
party. This Agreement shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and permitted assigns.
Any right to trial by jury with respect to any dispute arising under this
Agreement or any transaction or conduct in connection herewith is
waived. Any dispute arising under this Agreement may be brought into
the courts of the State of New York or into the Federal Court located in New
York, New York and, by execution and delivery of this Agreement, the Company
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of aforesaid courts. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by delivering a copy
thereof via overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. If either party shall
commence an action or proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
SECTION
10. ENTIRE
AGREEMENT/MISC. This Agreement (including the attached
Indemnification Provisions) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. If any
provision of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other respect
or any other provision of this Agreement, which will remain in full force and
effect. This Agreement may not be amended or otherwise modified or
waived except by an instrument in writing signed by both ▇▇▇▇▇▇ and the
Company. The representations, warranties, agreements and covenants
contained herein shall survive the closing of the Placement and delivery and/or
exercise of the Securities, as applicable. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or a .pdf format file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.
SECTION 11. NOTICES. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified on
the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a
business day, (b) the next business day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number on
the signature pages attached hereto on a day that is not a business day or later
than 6:30 p.m. (New York City time) on any business day, (c) the business day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.
Please
confirm that the foregoing correctly sets forth our agreement by signing and
returning to ▇▇▇▇▇▇ the enclosed copy of this Agreement.
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Very
truly yours,
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▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
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By:
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Name:
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Title:
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Address for notice:
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▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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New
York, NY, 10020
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Fax
(▇▇▇)
▇▇▇-▇▇▇▇
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Accepted
and Agreed to as of the date
first written above:
By: ______________________________
Name:
Title:
Address for
notice:
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇.,
▇▇▇▇▇ ▇▇▇
Phoenix,
AZ 85018
Attention:
Chief Executive Officer
Attention: General
Counsel
ADDENDUM
A
INDEMNIFICATION
PROVISIONS
In connection with the engagement of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC (“▇▇▇▇▇▇”) by
▇▇▇▇▇▇▇▇ (the “Company”) pursuant
to a letter agreement dated September 25, 2008 between the Company and ▇▇▇▇▇▇,
as it may be amended from time to time in writing (the “Agreement”), the
Company hereby agrees as follows:
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1.
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To
the extent permitted by law, the Company will indemnify ▇▇▇▇▇▇ and its
affiliates, stockholders, directors, officers, employees and controlling
persons (within the meaning of Section 15 of the Securities Act of 1933,
as amended, or Section 20 of the Securities Exchange Act of 1934) against
all losses, claims, damages, expenses and liabilities, as the same are
incurred (including the reasonable fees and expenses of counsel), relating
to or arising out of its activities hereunder or pursuant to the
Agreement, except to the extent that any losses, claims, damages, expenses
or liabilities (or actions in respect thereof) are found in a final
judgment (not subject to appeal) by a court of law to have resulted
primarily and directly from ▇▇▇▇▇▇’▇ willful misconduct or gross
negligence in performing the services described
herein.
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2.
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Promptly
after receipt by ▇▇▇▇▇▇ of notice of any claim or the commencement of any
action or proceeding with respect to which ▇▇▇▇▇▇ is entitled to indemnity
hereunder, ▇▇▇▇▇▇ will notify the Company in writing of such claim or of
the commencement of such action or proceeding, and the Company will assume
the defense of such action or proceeding and will employ counsel
reasonably satisfactory to ▇▇▇▇▇▇ and will pay the fees and expenses of
such counsel. Notwithstanding the preceding sentence, ▇▇▇▇▇▇
will be entitled to employ counsel separate from counsel for the Company
and from any other party in such action if counsel for
▇▇▇▇▇▇ reasonably determines that it would be inappropriate
under the applicable rules of professional responsibility for the same
counsel to represent both the Company and ▇▇▇▇▇▇. In such
event, the reasonable fees and disbursements of no more than one such
separate counsel will be paid by the Company. The Company will
have the exclusive right to settle the claim or proceeding provided that
the Company will not settle any such claim, action or proceeding without
the prior written consent of ▇▇▇▇▇▇, which will not be unreasonably
withheld.
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3.
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The
Company agrees to notify ▇▇▇▇▇▇ promptly of the assertion against it or
any other person of any claim or the commencement of any action or
proceeding relating to a transaction contemplated by the
Agreement.
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If for
any reason the foregoing indemnity is unavailable to ▇▇▇▇▇▇ or insufficient to
hold ▇▇▇▇▇▇ harmless, then the Company shall contribute to the amount paid or
payable by ▇▇▇▇▇▇ as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits
received by the Company on the one hand and ▇▇▇▇▇▇ on the other, but also the
relative fault of the Company on the one hand and ▇▇▇▇▇▇ on the other that
resulted in such losses, claims, damages or liabilities, as well as any relevant
equitable considerations. The amounts paid or payable by a party in
respect of losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees and expenses incurred in defending any
litigation, proceeding or other action or claim. Notwithstanding the
provisions hereof, ▇▇▇▇▇▇’▇ share of the liability hereunder shall not be in
excess of the amount of fees actually received, or to be received, by ▇▇▇▇▇▇
under the Agreement (excluding any amounts received as reimbursement of expenses
incurred by ▇▇▇▇▇▇).
5. These Indemnification Provisions
shall remain in full force and effect whether or not the transaction
contemplated by the Agreement is completed and shall survive the termination of
the Agreement, and shall be in addition to any liability that the Company might
otherwise have to any indemnified party under the Agreement or
otherwise.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
By:
______________________
Name:
Title:
Accepted
and Agreed to as of
the date
first written above:
By:
______________________
Name:
Title: