STARTECH ENVIRONMENTAL CORPORATION PLACEMENT AGENT AGREEMENT
Exhibit
10.5
STARTECH
ENVIRONMENTAL CORPORATION
Dated
as
of: April
11,
2007
Newbridge
Securities Corporation
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned, Startech Environmental Corporation, a Colorado corporation
(the
“Company”),
hereby agrees with
Newbridge Securities Corporation (the “Placement
Agent”)
as
follows:
1. Offering.
The
Company hereby engages the Placement Agent to act as its exclusive placement
agent in connection with the Standby Equity Distribution Agreement dated
the
date hereof between the Company and Cornell Capital Partners, LP (the
“Investor”)
(the
“Standby
Equity Distribution Agreement”),
pursuant to which the Company shall issue and sell to the Investor, from
time to
time, and the Investor shall purchase from the Company (the “Offering”)
up to
Ten Million Dollars ($10,000,000) (the “Commitment
Amount”)
of the
Company’s common stock, no par value (the “Common
Stock”),
at
price per share equal to the Purchase Price, as that term is defined in
the
Standby Equity Distribution Agreement. The
Placement Agent services
shall
consist of reviewing
the
terms
of
the
Standby Equity Distribution Agreement and advising
the
Company with
respect to those
terms.
All
capitalized terms used herein and not otherwise defined herein shall have
the
same meaning ascribed to them as in the Standby Equity Distribution Agreement.
The Investor will be granted certain registration rights with respect to
the
Common Stock as more fully set forth in the Registration Rights Agreement
between the Company and the Investor dated the date hereof (the “Registration
Rights Agreement”).
The
documents to be executed and delivered in connection with the Offering,
including, but not limited, to the
Company’s latest Quarterly Report on Form 10-Q as filed with the United States
Securities and Exchange Commission, this
Agreement, the Standby Equity Distribution Agreement, and the Registration
Rights Agreement are referred to sometimes hereinafter collectively as
the
“Offering
Materials.”
The
Company’s Common Stock
purchased by the Investor under
the
Standby Equity Distribution Agreement is sometimes referred to hereinafter
as
the “Securities.”
The
Placement Agent shall not be obligated to sell any Securities.
2. Compensation.
A. Upon
the
execution of this Agreement, the Company shall pay the Placement Agent
or its
designee a fee of $5,000.
1
3.
Representations, Warranties and Covenants of the Placement
Agent.
A. The
Placement Agent represents, warrants and covenants as follows:
(i) The
Placement Agent has the necessary power to enter into this Agreement and
to
consummate the transactions contemplated hereby.
(ii) The
execution and delivery by the Placement Agent of this Agreement and the
consummation of the transactions contemplated herein will not result in
any
violation of, or be in conflict with, or constitute a default under, any
agreement or instrument to which the Placement Agent is a party or by which
the
Placement Agent or its properties are bound, or any judgment, decree, order
or,
to the Placement Agent’s knowledge, any statute, rule or regulation applicable
to the Placement Agent. This Agreement when executed and delivered by the
Placement Agent, will constitute the legal, valid and binding obligations
of the
Placement Agent, enforceable in accordance with their respective terms,
except
to the extent that (a) the enforceability hereof or thereof may be limited
by
bankruptcy, insolvency, reorganization, moratorium or similar laws from
time to
time in effect and affecting the rights of creditors generally, (b) the
enforceability hereof or thereof is subject to general principles of equity,
or
(c) the indemnification provisions hereof or thereof may be held to be in
violation of public policy.
(iii) Upon
receipt and execution of this Agreement, the Placement Agent will promptly
forward copies of this Agreement to the Company or its counsel and the
Investor
or its counsel.
(iv) The
Placement Agent will not take any action that it reasonably believes would
cause
the Offering to violate the provisions of the Securities Act of 1933, as
amended
(the “1933
Act”),
the
Securities Exchange Act of 1934 (the “1934
Act”),
the
respective rules and regulations promulgated thereunder
(the
“Rules
and Regulations”)
or
applicable “Blue Sky” laws of any state or jurisdiction.
(v) The
Placement Agent is a member in good standing of the National Association
of
Securities Dealers, Inc., and is a broker-dealer registered as such under
the
1934 Act and under the securities laws of the states in which the Securities
will be offered or sold by the Placement Agent unless an exemption for
such
state registration is available to the Placement Agent. The Placement Agent
is
in material
compliance
with the
rules
and regulations applicable to the Placement Agent generally and applicable
to
the Placement Agent’s participation in the Offering.
4. Representations
and Warranties of the Company.
A. The
Company represents and warrants as follows:
(i) The
execution, delivery and performance of each of this Agreement, the Standby
Equity Distribution Agreement, and the Registration Rights Agreement has
been or
will be duly and validly authorized by the Company and is, or with respect
to
this Agreement, the Standby Equity Distribution Agreement, and the Registration
Rights Agreement will be, a valid and binding agreement of the Company,
enforceable in accordance with its
2
respective
terms, except to the extent that (a) the enforceability hereof or thereof
may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws
from time to time in effect and affecting the rights of creditors generally,
(b)
the enforceability hereof or thereof is subject to general principles of
equity
or (c) the indemnification provisions hereof or thereof may be held to be
in violation of public policy. The Securities to be issued pursuant to
the
transactions contemplated by this Agreement and the Standby Equity Distribution
Agreement have been duly authorized and, when issued and paid for in accordance
with this Agreement and the Standby Equity Distribution Agreement will
be valid
and binding obligations of the Company, enforceable in accordance with
their
respective terms, except to the extent that (1) the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar
laws from time to time in effect and affecting the rights of creditors
generally, and (2) the enforceability thereof is subject to general principles
of equity. All corporate action required to be taken for the authorization,
issuance and sale of the Securities has been duly and validly taken by
the
Company.
(ii) The
Company has a duly authorized, issued and outstanding capitalization as
set
forth herein and in the Standby Equity Distribution Agreement. The Company
is
not a party to or bound by any instrument, agreement or other arrangement
providing for it to issue any capital stock, rights, warrants, options
or other
securities, except for this Agreement, the agreements described herein
and as
described in the Standby Equity Distribution Agreement and the agreements
described therein.
All
issued and outstanding securities of the Company, have been duly authorized
and
validly issued and are fully paid and non-assessable; the holders thereof
have
no rights of rescission or preemptive rights with respect thereto and are
not
subject to personal liability solely by reason of being security holders;
and
none of such securities were issued in violation of the preemptive rights
of any
holders of any security of the Company.
(iii) The
Company is duly organized and validly exists as a corporation in good standing
under the laws of the State of Colorado. Except as set forth in the Offering
Materials, the Company does not own or control, directly or indirectly,
an
interest in any other corporation, partnership, trust, joint venture or
other
business entity. The Company is duly qualified or licensed and in good
standing
as a foreign corporation in each jurisdiction in which the character of
its
operations requires such qualification or licensing and where failure to
so
qualify would have a Material Adverse Effect (as defined in the Standby
Equity
Distribution Agreement). The Company has all corporate power and authority
to
enter into this Agreement, the Standby Equity Distribution Agreement, the
Registration Rights Agreement, and to carry out the provisions and conditions
hereof and thereof, and all material consents, authorizations, approvals
and
orders required in connection herewith and therewith have been obtained
(except
as
specifically contemplated by this Agreement or the Standby Equity Distribution
Agreement and as required under the 1933 Act and any applicable state securities
laws).
No
consent, authorization or order of, and no filing with, any court, government
agency or other body is required by the Company for the issuance of the
Securities or execution and delivery of the Offering Materials except as
may be
required under applicable federal and state securities laws.
(iv) The
Company has not suffered any Material Adverse Effect since October 31,
2006, and
the outstanding debt, the property and the business of the Company conform
in
all material respects to the descriptions thereof contained in the Offering
Materials.
3
(v) Except
as
set forth in the Offering Materials,
the
Company is not in breach of, or in default under, any term or provision
of any
material indenture, mortgage, deed of trust, lease, note, loan or any other
material agreement or instrument evidencing an obligation for borrowed
money, or
any other material agreement or instrument to which it is a party or by
which it
or any of its properties may be bound or affected. The Company is not in
violation of any provision of its charter or by-laws or in violation of
any
material franchise, license, permit, judgment, decree or order, or in violation
of any material statute, rule or regulation. Neither the execution and
delivery
of this Agreement, the Standby Equity Distribution Agreement or the Registration
Rights Agreement nor the issuance and sale or delivery of the Securities,
nor
the consummation of any of the transactions contemplated in the Offering
Materials nor the compliance by the Company with the terms and provisions
hereof
or thereof, has conflicted with or will conflict with, or has resulted
in or
will result in a breach of, any of the terms and provisions of, or has
constituted or will constitute a default under, or has resulted in or will
result in the creation or imposition of any lien, charge or encumbrance
upon any
property or assets of the Company or pursuant to the terms of any material
indenture, mortgage, deed of trust, note, loan or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company may be bound or to which any
of the
property or assets of the Company is subject except (a) where such default,
lien, charge or encumbrance would not have a Material Adverse Effect and
(b) as
disclosed in the Offering Materials; nor will such action result in any
violation of the provisions of the charter or the by-laws of the Company
or,
assuming the due performance by the Placement Agent of its obligations
hereunder, any material statute or any material order, rule or regulation
applicable to the Company of any court or of any foreign, federal, state
or
other regulatory authority or other government body having jurisdiction
over the
Company.
(vi) Subsequent
to the dates as of which information is given in the Offering Materials,
and
except as may otherwise be indicated or contemplated herein or therein
or in the
Standby Equity Distribution Agreement, the Company has not (a) issued any
securities or incurred any liability or obligation, direct or contingent,
for
borrowed money, or (b) entered into any transaction other than in the ordinary
course of business, or (c) declared or paid any dividend or made any other
distribution on or in respect of its capital stock. Except as described
in the
Offering Materials, the Company has no outstanding obligations to any officer
or
director of the Company other than normal payables in connection with services
provided recently.
(vii) There
are
no claims for services in the nature of a finder’s or origination fee with
respect to the sale of the Common Stock or any other arrangements, agreements
or
understandings that may affect the Placement Agent's compensation, as determined
by the National Association of Securities Dealers, Inc.
(viii) Subject
to the performance by the Placement Agent of its obligations
hereunder
the
offer and sale of the Securities complies
in all
material respects with the requirements of Rule 506 of Regulation D promulgated
by the SEC pursuant to the 1933 Act and any other applicable federal and
state
laws, rules, regulations and executive orders. Neither the Offering Materials
nor any amendment or supplement thereto nor any documents prepared by the
Company in connection with the Offering will contain any untrue statement
of a
material fact or omit to state any material fact required to be stated
therein
or necessary to make the
4
statements
therein, in light of the circumstances under which they were made, not
misleading. All statements of material facts in the Offering Materials
are true
and correct as of the date of the Offering Materials.
5. Intentionally
omitted.
6. Indemnification
and
Limitation of Liability.
A. The
Company hereby agrees that it will indemnify and hold the Placement Agent
and
each officer, director, shareholder, employee or representative of the
Placement
Agent and each person controlling, controlled by or under common control
with
the Placement Agent within the meaning of Section 15 of the 1933 Act or
Section
20 of the 1934 Act or the SEC’s Rules and Regulations promulgated thereunder
(the “Rules
and Regulations”),
harmless from and against any and all loss, claim, damage, liability, cost
or
expense whatsoever (including, but not limited to, any and all reasonable
legal
fees and other expenses and disbursements incurred in connection with
investigating, preparing to defend or defending any action, suit or proceeding,
including any inquiry or investigation, commenced or threatened, or any
claim
whatsoever or in appearing or preparing for appearance as a witness in
any
action, suit or proceeding, including any inquiry, investigation or pretrial
proceeding such as a deposition) to which the Placement Agent or such
indemnified person of the Placement Agent may become subject under the
1933 Act,
the 1934 Act, the Rules and Regulations, or any other federal or state
law or
regulation, common law or otherwise, arising out of or based upon (i) any
untrue
statement or alleged untrue statement of a material fact contained in (a)
Section 4 of this Agreement, (b) the Offering Materials (except those written
statements relating to the Placement Agent given by the
Placement Agent
for
inclusion therein), (c) any application or other document or written
communication executed by the Company or based upon written information
furnished by the Company filed in any jurisdiction in order to qualify
the
Common Stock under the securities laws thereof, or any state securities
commission or agency; (ii) the omission or alleged omission from documents
described in clauses (a), (b) or (c) above of a material fact required
to be
stated therein or necessary to make the statements therein not misleading;
or
(iii) the breach of any representation, warranty, covenant or agreement
made by
the Company in this Agreement. The Company further agrees that upon demand
by an
indemnified person, at any time or from time to time, it will promptly
reimburse
such indemnified person for any loss, claim, damage, liability, cost or
expense
actually and reasonably paid by the indemnified person as to which the
Company
has indemnified such person pursuant hereto. Notwithstanding the foregoing
provisions of this Paragraph 7(A), any such payment or reimbursement by
the
Company of fees, expenses or disbursements incurred by an indemnified person
in
any proceeding in which a final judgment by a court of competent jurisdiction
(after all appeals or the expiration of time to appeal) is entered against
the
Placement Agent or such indemnified person based upon specific finding
of fact
that the Placement Agent or such indemnified person’s gross negligence or
willful misfeasance will be promptly repaid to the Company.
B. The
Placement Agent hereby agrees that it will indemnify and hold the Company
and
each officer, director, shareholder, employee or representative of the
Company,
and each person controlling, controlled by or under common control with
the
Company within the meaning of Section 15 of the 1933 Act or Section 20
of the
1934 Act or the Rules and Regulations, harmless from and against any and
all
loss, claim, damage, liability, cost or expense
5
whatsoever
(including, but not limited to, any and all reasonable legal fees and other
expenses and disbursements incurred in connection with investigating, preparing
to defend or defending any action, suit or proceeding, including any inquiry
or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company
may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
or
any other federal or state law or regulation, common law or otherwise,
arising
out of or based upon (i) the material
breach of any representation, warranty, covenant or agreement made by the
Placement Agent in this Agreement, or (ii)
any
false or misleading information provided to the Company in
writing by
one of
the Placement Agent’s indemnified persons
specifically for inclusion in the Offering Materials.
C. Promptly
after receipt by an indemnified party of notice of commencement of any
action
covered by Section 7(A) or (B), the party to be indemnified shall, within
five
(5) business days, notify the indemnifying party of the commencement thereof;
the omission by one (1) indemnified party to so notify the indemnifying
party shall not relieve the indemnifying party of its obligation to indemnify
any other indemnified party that has given such notice and shall not relieve
the
indemnifying party of any liability outside of this indemnification if
not
materially prejudiced thereby. In the event that any action is brought
against
the indemnified party, the indemnifying party will be entitled to participate
therein and, to the extent it may desire, to assume and control the defense
thereof with counsel chosen by it which is reasonably acceptable to the
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof, the indemnifying
party
will not be liable to such indemnified party under such Section 7(A) or
(B), for
any legal or other expenses subsequently incurred by such indemnified party
in
connection with the defense thereof, but the indemnified party may, at
its own
expense, participate in such defense by counsel chosen by it, without,
however,
impairing the indemnifying party’s control of the defense. Subject to the
proviso of this sentence and notwithstanding any other statement to the
contrary
contained herein, the indemnified party or parties shall have the right
to
choose its or their own counsel and control the defense of any action,
all at
the expense of the indemnifying party if (i) the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such action at the expense of the indemnifying party,
or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense of
such
action within a reasonable time after notice of commencement of the action,
or
(iii) such indemnified party or parties shall have reasonably concluded
that
there may be defenses available to it or them which are different from
or
additional to those available to one or all of the indemnifying parties
(in
which case the indemnifying parties shall not have the right to direct
the
defense of such action on behalf of the indemnified party or parties),
in any of
which events such fees and expenses of one additional counsel shall be
borne by
the indemnifying party; provided, however, that the indemnifying party
shall
not, in connection with any one action or separate but substantially similar
or
related actions in the same jurisdiction arising out of the same general
allegations or circumstance, be liable for the reasonable fees and expenses
of
more than one separate firm of attorneys at any time for all such indemnified
parties. No settlement of any action or proceeding against an indemnified
party
shall be made without the consent of the indemnifying party.
6
D.
In
order to provide for just and equitable contribution in circumstances in
which
the indemnification provided for in Section 7(A) or 7(B) is due in accordance
with its terms but is for any reason held by a court to be unavailable
on
grounds of policy or otherwise, the Company and the Placement Agent shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that
the
Placement Agent shall be responsible for such percent of the aggregate
of such
losses, claims, damages and liabilities as shall equal the percentage of
the
gross proceeds paid to the Placement Agent and the Company shall be responsible
for the balance; provided, however, that no person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act shall
be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7(D), any person controlling,
controlled by or under common control with the Placement Agent, or any
partner,
director, officer, employee, representative or any agent of any thereof,
shall
have the same rights to contribution as the Placement Agent and each person
controlling, controlled by or under common control with the Company within
the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and
each
officer of the Company and each director of the Company shall have the
same
rights to contribution as the Company. Any party entitled to contribution
will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution
may
be made against the other party under this Section 7(D), notify such party
from
whom contribution may be sought, but the omission to so notify such party
shall
not relieve the party from whom contribution may be sought from any obligation
they may have hereunder or otherwise if the party from whom contribution
may be
sought is not materially prejudiced thereby.
E. The
indemnity and contribution agreements contained in this Section 7 shall
remain
operative and in full force and effect regardless of any investigation
made by
or on behalf of any indemnified person or any termination of this
Agreement.
F. The
Company hereby waives, to the fullest extent permitted by law, any right
to or
claim of any punitive, exemplary, incidental, indirect, special, consequential
or other damages (including, without limitation, loss of profits) against
the
Placement Agent and each officer, director, shareholder, employee or
representative of the placement agent and each person controlling, controlled
by
or under common control with the Placement Agent within the meaning of
Section
15 of the 1933 Act or Section 20 of the 1934 Act or the Rules and Regulations
arising out of any cause whatsoever (whether such cause be based in contract,
negligence, strict liability, other tort or otherwise). Notwithstanding
anything
to the contrary contained herein, the aggregate liability of the Placement
Agent
and each officer, director, shareholder, employee or representative of
the
Placement Agent and each person controlling, controlled by or under common
control with the Placement Agent within the meaning of Section 15 of the
1933
Act or Section 20 of the 1934 Act or the Rules and Regulations shall not
exceed
the compensation received by the Placement Agent pursuant to Section 2
hereof.
This limitation of liability shall apply regardless of the cause of action,
whether contract, tort (including, without limitation, negligence) or breach
of
statute or any other legal or equitable obligation.
7
7. Payment
of Expenses.
The
Company hereby agrees to bear all of the expenses in connection with the
Offering, including, but not limited to the following: filing fees, printing
and
duplicating costs, advertisements, postage and mailing expenses with respect
to
the transmission of Offering Materials, registrar and transfer agent fees,
fees
of the Company’s counsel and accountants, and issue and transfer taxes, if any.
8. Termination.
This
Agreement shall be co-terminus with, and terminate upon the same terms
and
conditions as those set forth in the Standby Equity Distribution Agreement.
9. Miscellaneous.
A. This
Agreement may be executed in any number of counterparts, each of which
shall be
deemed to be an original, but all which shall be deemed to be one and the
same
instrument.
B. Any
notice required or permitted to be given hereunder shall be given in writing
and
shall be deemed effective when deposited in the United States mail, postage
prepaid, or when received if personally delivered or faxed (upon confirmation
of
receipt received by the sending party), addressed as follows
to such
other address of which written notice is given to the others):
|
If
to Placement Agent, to:
|
Newbridge
Securities Corporation
|
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
|
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
|
|
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
If
to the Company, to:
|
Startech
Environmental Corporation
|
|
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇
|
|
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
|
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
With
a copy to:
|
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
|
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
|
Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Esq.
|
|
|
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
C. This
Agreement shall be governed by and construed in all respects under the
laws of
the State of New Jersey, without reference to its conflict of laws rules
or
principles.
8
Any
suit,
action, proceeding or litigation arising out of or relating to this Agreement
shall be brought and prosecuted in such federal or state court or courts
located
within the State of New Jersey as provided by law. The parties hereby
irrevocably and unconditionally consent to the jurisdiction of each such
court
or courts located within the State of New Jersey and to service of process
by
registered or certified mail, return receipt requested, or by any other
manner
provided by applicable law, and hereby irrevocably and unconditionally
waive any
right to claim that any suit, action, proceeding or litigation so commenced
has
been commenced in an inconvenient forum.
D. This
Agreement and the other agreements referenced herein contain the entire
understanding between the parties hereto and may not be modified or amended
except by a writing duly signed by the party against whom enforcement of
the
modification or amendment is sought.
E. If
any
provision of this Agreement shall be held to be invalid or unenforceable,
such
invalidity or unenforceability shall not affect any other provision of
this
Agreement.
[REMAINDER
OF PAGE INTENTIALLY LEFT BLANK]
9
IN
WITNESS WHEREOF,
the
parties hereto have executed this Placement Agent Agreement as of the date
first
written above.
|
Startech
Environmental Corporation
|
|
|
By:_____________________________
|
|
|
Name: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
|
Title: Chief
Financial Officer
|
|
|
Newbridge
Securities Corporation
|
|
|
By:____________________________
|
|
|
Name: ▇▇▇
▇. ▇▇▇▇▇
|
|
|
Title: President
|
|
10