SOLOMON TECHNOLOGIES, INC.
0000 X & X XXXXXXXXXX XXXXXXXXX
XXXXXX XXXXXXX, XXXXXXX 00000
Xxxxxx 0, 0000
Xxxxx Xxxxxx Securities Corporation
00 Xxxxxxxx Xxxxxx Xxxxx 000
Xxxxxx, XX 00000
Gentlemen:
Solomon Technologies, Inc. (the "Company"), on the basis of the
representations, warranties, covenants and conditions contained herein, hereby
confirms the agreement made with respect to the retention of First Xxxxxx
Securities Corporation (the "Placement Agent") as the Placement Agent of the
Company to offer and sell on a "best efforts" basis, pursuant to the terms of
this Placement Agent Agreement (the "Agreement"), shares of Series A Redeemable
Convertible Preferred Stock ("Preferred" or "Preferred Shares") as set forth in
the Private Placement Memorandum dated July 26, 2004 attached hereto as Exhibit
A (the "Offering"). It is anticipated that the Preferred Shares will not be
registered under the Securities Act of 1933 (the "Act"), although the shares
obtainable upon conversion of the Preferred ("Conversion Shares") and the shares
obtainable upon exercise of warrants issuable to the purchasers of the Preferred
(the "Warrant Shares") are subject to a Registration Rights Agreement between
the Company and each investor. The closing shall occur as provided in the
Private Placement Memorandum ("Closing Date").
The Company confirms the agreements made by it with respect to the sale
of the Preferred Shares by the Placement Agent, as follows:
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with the Placement Agent, as of the date
hereof, and as of the Closing Date (as hereinafter defined) that:
(a) A Confidential Private Placement Memorandum dated July 26, 2004
("Private Placement Memorandum") relating to the Offering, copies of which have
heretofore been delivered to Placement Agent, has been prepared by the Company
in order to consummate the Offering pursuant to an exemption contained in, the
Act, and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") promulgated thereunder.
(b) As of the date of the Private Placement Memorandum ("Effective
Date") and at all times subsequent thereto, neither the Private Placement
Memorandum nor any supplement or amendment thereto will include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein, or necessary to make statements therein, in light of the context
in which they were made, not misleading; provided, however, that the Company
makes no representations, warranties or agreements as to information contained
in or omitted from the Private Placement Memorandum in reliance upon, and in
conformity with, written information furnished to the Company by the Placement
Agent specifically for use in the preparation of the Private Placement
Memorandum.
(c) The Company has been duly incorporated and is validly existing
as a corporation and in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Private Placement
Memorandum, and is duly qualified to do business as a foreign corporation and is
in good standing in all other jurisdictions in which the nature of its business
or the character or location of its properties requires such qualification,
except where failure to so qualify will not materially affect the Company's
business, properties or financial condition.
(d) The authorized, issued and outstanding securities of the
Company as of the Closing Date is as set forth in the Private Placement
Memorandum; all of the issued and outstanding securities of the Company have
been, or will be when issued as set forth in the Private Placement Memorandum,
duly authorized, validly issued, fully paid, and non-assessable; the issuances
and sales of all such securities complied in all material respects with
applicable Federal and state securities laws; the holders thereof have no rights
of rescission against the Company with respect thereto; none of such securities
were issued in violation of the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the Company; except as
set forth in the Private Placement Memorandum, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or agreements or
other rights to convert any obligation into, any securities of the Company have
been granted or entered into by the Company; and all of the securities of the
Company, issued and to be issued as set forth in the Private Placement
Memorandum, conform to all statements relating thereto contained in the Private
Placement Memorandum.
(e) The shares of Convertible Preferred Stock have been duly
authorized and when issued and delivered to the holders, will be duly
authorized, validly issued, fully paid and non-assessable and free of preemptive
rights, and no personal liability will attach to the ownership thereof. The
shares of Common Stock acquirable upon conversion of the Convertible Preferred
Stock and exercise of the Warrants have been duly authorized and reserved for
such issuances, and, when issued, will be validly issued, fully paid and
non-assessable and free of preemptive rights, and no personal liability will
attach to the ownership thereof.
(f) This Agreement has been duly and validly authorized, executed
and delivered by the Company, and assuming due execution of this Agreement by
the Placement Agent, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or other laws affecting
the rights of creditors generally. The Company has full power and lawful
authority to authorize, issue and sell the Preferred on the terms and conditions
set forth in the Private Placement Memorandum, and no consent, approval,
authorization or order of any governmental authority is required in connection
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with such authorization, execution and delivery, except such as may be required
under the Act or state securities laws.
(g) Except as described in the Private Placement Memorandum, the
Company is not in material violation, breach of or default under, and
consummation of the transactions herein contemplated and the fulfillment of the
terms of this Agreement will not conflict with, or result in a breach of, or
constitute a material default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the property or assets of the
Company pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company may be bound or to which any of the property or assets of the
Company is subject, nor will such action result in any material violation of the
provisions of the charter documents or by-laws of the Company, as amended, or
any statute or any order, rule or regulation applicable to the Company of any
court or of any regulatory authority or other governmental body having
jurisdiction over the Company.
(h) Subject to the qualifications stated in the Private Placement
Memorandum, the Company has good and marketable title to all properties and
assets described in the Private Placement Memorandum as owned by it, free and
clear of all liens, charges, encumbrances or restrictions, except such as are
not materially significant or important in relation to its business; all of the
material leases and subleases under which the Company is the lessor or sublessor
of properties or assets or under which the Company holds properties or assets as
lessee or sublessee as described in the Private Placement Memorandum are in full
force and effect, and, except as described in the Private Placement Memorandum,
the Company is not in default in any material respect with respect to any of the
terms or provisions of any of such leases or subleases, and no claim has been
asserted by anyone adverse to rights of the Company as lessor, sublessor,
lessee, or sublessee under any of the leases or subleases mentioned above, or
affecting or questioning the right of the Company to continued possession of the
leased or subleased premises or assets under any such lease or sublease except
as described or referred to in the Private Placement Memorandum; and the Company
owns or leases all such properties described in the Private Placement Memorandum
as are necessary to its operations as now conducted and, except as otherwise
stated in the Private Placement Memorandum, as proposed to be conducted as set
forth in the Private Placement Memorandum.
(i) Subsequent to the respective dates as of which information is
set forth in the Private Placement Memorandum and to and including the
Termination Date (as defined in Section 9), except as set forth in or
contemplated by the Private Placement Memorandum, (i) the Company has not
incurred and except in the ordinary course of business, will not have incurred
any material liabilities or obligations, direct or contingent, and has not
entered into and will not have entered into any material transactions other than
as contemplated in the Private Placement Memorandum, (ii) the Company has not
and will not have paid or declared any dividends or have made any other
distribution on its capital stock; (iii) there has not been any change in the
capital stock of, or any incurrence of long-term debt by, the Company; (iv) the
Company has not issued any warrants, options or other rights to purchase any
securities of the Company; and (v) there has not been and will not have been any
material adverse change in the business, financial condition or results of
operations of the Company, or in the book value of the assets of the Company,
arising for any reason whatsoever.
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(j) Except as set forth in the Private Placement Memorandum, there
is not now pending or, to the knowledge of the Company, threatened, any action,
suit, proceeding, inquiry, arbitration or investigation against the Company or
any of the officers or directors of the Company.
(k) Except as disclosed in the Private Placement Memorandum, the
Company has filed all necessary income and franchise tax returns and has paid
all taxes shown as due thereon; and there is no tax deficiency which has been or
to the knowledge of the Company might be asserted against the Company that has
not been provided for in the financial statements.
(l) The Company has sufficient licenses, permits and other
governmental authorizations currently required for the conduct of its business
or the ownership of its property as described in the Private Placement
Memorandum and is in all material respects complying therewith and owns or
possesses adequate right to use all material patents, patent applications
trademarks, service marks, trade-names, trademark registrations, service xxxx
registrations, copyrights, and licenses necessary for the conduct of such
business and has not received any notice of conflict with the asserted rights of
others in respect thereof. To the best knowledge of the Company, none of the
activities or business of the Company are in violation of, or cause the Company
to violate, any law, rule, regulation or order, the violation of which would
have a material adverse impact upon the condition (financial or otherwise),
business, property, prospective results of operations, or net worth of the
Company.
(m) The Company has no subsidiary corporations nor has it any
equity interest in any partnership, joint venture, association or other entity,
except as disclosed in the Private Placement Memorandum.
(n) Other than as set forth in the Private Placement Memorandum and
Schedule A hereto, the Company has not entered into any agreement pursuant to
which any person is entitled, either directly or indirectly, to compensation
from the Company, from the Placement Agent, or from any other person, for
services as a finder in connection with the Offering, and the Company agrees to
indemnify and hold harmless the Placement Agent against any losses, claims,
damages or liabilities, joint or several, which shall include, but not be
limited to, all costs to defend against any such claim, so long as such claim
arises out of agreements made or allegedly made by the Company.
(o) Based upon written representations received from the officers
and directors of the Company, except as disclosed in the Private Placement
Memorandum, during the past five years, none of the officers or directors of the
Company or each subsidiary have been:
(1) Subject of a petition under the Federal bankruptcy laws or
any state insolvency law filed by or against them, or by a
receiver, fiscal agent or similar officer appointed by a court for
their business or property, or any partnership in which any of them
was a general partner at or within two years before the time of
such filing, or any corporation or business association of which
any of them was an executive officer at or within two years before
the time of such filing;
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(2) Convicted in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations and other
minor offenses);
(3) The subject of any order, judgment, or decree not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining any of
them from, or otherwise limiting, any of the following activities:
(i) acting as a futures commission merchant, introducing
broker, commodity trading advisor commodity pool operator,
floor broker, leverage transaction merchant, any other person
regulated by the Commodity Futures Trading Commission, or an
associated person of any of the foregoing, or as an investment
adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment
company, escrow agent, savings and loan association or
insurance company, or engaging in or continuing any conduct or
practice in connection with any such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection
with any violation of Federal or State securities law or
Federal Commodity laws.
(4) The subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated of any Federal or State
authority barring, suspending or otherwise limiting for more than
sixty (60) days either of their right to engage in any activity
described in paragraph (3) (i) above, or be associated with persons
engaged in any such activity;
(5) Found by any court of competent jurisdiction in a civil
action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by
the Commission has not been subsequently reversed, suspended or
vacated; or
(6) Found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any Federal Commodities Law, and the judgment in such
civil action or finding by the Commodity Futures Trading Commission
has not been subsequently reversed, suspended or vacated.
(p) Based upon written representations received from the officers
and directors of the Company, each of the officers and directors of the Company
have reviewed the sections in the Private Placement Memorandum relating to their
biographical data and equity ownership position in the Company, and all
information contained therein is true and accurate.
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(q) Based upon written representations received by the Company, no
officer, director or five percent (5%) or greater stockholder of the Company has
any direct or indirect affiliation or association with any member of the
National Association of Securities Dealers, Inc. ("NASD"), except as disclosed
in the Private Placement Memorandum or to the Placement Agent in writing, and no
beneficial owner of the Company's unregistered securities has any direct or
indirect affiliation or association with any NASD member except as disclosed in
the Private Placement Memorandum or to the Placement Agent in writing. The
Company will advise the Placement Agent if any five percent (5%) or greater
shareholder of the Company is or becomes an affiliate or associated person of an
NASD member.
2. Appointment of Placement Agent to Sell the Preferred Shares.
(a) Subject to the terms and conditions of this Agreement and upon
the basis of the representations, warranties and agreements herein contained,
the Company hereby appoints the Placement Agent as its exclusive placement
agent, until the last Closing Date, to sell the Preferred Shares, and the
Placement Agent, on the basis of the representations and warranties of the
Company herein, accepts such appointment and agrees to use its best efforts to
sell the Preferred Shares pursuant to the applicable exemptions from
registration under the Act as contemplated in the Private Placement Memorandum.
The price at which the Placement Agent shall sell the Preferred Shares, as agent
for the Company, shall be $1.00 per Preferred Share, and the Company shall pay a
commission of $0.085 per Preferred Share to the Placement Agent in respect of
each Preferred Share sold by, or on behalf of, the Company, including the sale
by the Company of any Preferred Shares to existing Preferred A shareholders as a
result of preemptive rights agreements between the Company and Preferred A
Shareholders.
(b) The Placement Agent shall use its best efforts to sell the
Preferred Shares on behalf of the Company, and the Placement Agent will instruct
investors to make all remittances payable to an escrow agent to be determined by
the Placement Agent ("Escrow Agent") for this Offering. Any and all funds
received from such sale, without any deduction therefrom whatsoever, including,
but not limited to, any commission or any dealer concession or otherwise shall
be forthwith deposited with the Escrow Agent by the Company upon receipt and
acceptance of the subscription agreement by the Company. The Escrow Agent shall
pay to the Placement Agent all compensation due to the Placement Agent as
described in the Private Placement Memorandum (including the commission
described above) at the time of disbursement of the funds to the Company.
3. Delivery of the Securities. Delivery of the securities shall take
place at the offices of Escrow Agent or at such other place as determined by the
Company and the Escrow Agent, on such date after the Closing Date as the
Placement Agent shall designate.
4. Offering the Preferred Shares on Behalf of the Company. It is
understood that the Placement Agent proposes to offer the Preferred Shares in
private sales exempt from registration under the Act as contemplated in the
Private Placement Memorandum, solely as agent for the Company, upon the terms
and conditions set forth in the Private Placement Memorandum. The Placement
Agent represents and warrants to the Company that the Offering by the Placement
Agent will comply with Rule 506 promulgated under the Act with respect to the
sale of securities solely to "accredited investors" as such term is defined
under Rule 501 promulgated under the Act. The Placement Agent shall commence
6
making such offer as agent for the Company on the Effective Date, or as soon
thereafter as the Placement Agent deems advisable.
5. Covenants of the Company. The Company covenants and agrees with the
Placement Agent that:
(a) The Company has caused to be delivered to Placement Agent
copies of the Private Placement Memorandum, and the Company has consented and
hereby consents to the use of such copies for the purposes permitted by the Act.
The Company authorizes the Placement Agent to use the Private Placement
Memorandum in connection with the sale of the Preferred Shares during the
offering period and until the Termination Date, and for such period as in the
opinion of counsel to the Company and the Placement Agent the use thereof is
required to comply with the applicable provisions of the Act and the Rules and
Regulations. If at any time within the offering period, there occurs an event of
which the Company has knowledge and which materially affects the Company or the
securities of the Company, or which in the opinion of counsel for the Company or
counsel for the Placement Agent should be set forth in a supplement to the
Private Placement Memorandum in order to make the statements therein not then
misleading, in light of the circumstances existing at the time the Private
Placement Memorandum is required to be delivered to a purchaser of the Preferred
Shares, or in case it shall be necessary to amend or supplement the Private
Placement Memorandum to comply with law or with the Act and the Rules and
Regulations, the Company will notify Placement Agent promptly and forthwith
prepare and furnish to Placement Agent copies of such amended Private Placement
Memorandum or of such supplement to be attached to the Private Placement
Memorandum, in such quantities as Placement Agent may reasonably request, in
order that the Private Placement Memorandum, as so amended or supplemented, will
not contain any untrue statement of a material fact or omit to state any
material facts necessary in order to make the statements in the Private
Placement Memorandum, in the light of the circumstances under which they are
made, not misleading. The preparation and furnishing of any such amendment or
supplement to the Private Placement Memorandum shall be without expense to the
Placement Agent. The Company will comply with the Act and the Rules and
Regulations thereunder, in connection with the offering and issuance of the
Preferred Shares.
(b) The Company will, at its sole cost and expense, use its best
efforts to qualify and register the Preferred Shares for sale under the
securities or "blue sky" laws of such jurisdictions as the Placement Agent
reasonably requests, and will make such applications and furnish such
information as may be required for that purpose and to comply with such laws,
provided the Company shall not be required to qualify as a foreign corporation
or a dealer in securities or to execute a general consent to service of process
in any jurisdiction in any action other than one arising out of the offering or
sale of the Preferred Shares. The Company will, from time to time, prepare and
file such statements and reports as are or may be required to continue such
qualification in effect for so long a period as the Placement Agent may
reasonably request.
(c) The Company will apply the net proceeds from the sale of the
Preferred Shares substantially in accordance with its statement as set forth
under "Use of Proceeds" in the Private Placement Memorandum.
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(d) Prior to the Termination Date, the Company will, promptly upon
Placement Agent's request, prepare any amendments or supplements to the Private
Placement Memorandum, and take any other action, which in the reasonable opinion
of counsel to the Placement Agent, after consultation with counsel to the
Company, may be necessary or advisable in connection with the offer and sale of
the Preferred Shares.
(e) Prior to the Termination Date, the Company will not issue,
directly or indirectly, without Placement Agent's prior consent, any press
release or other communication or hold any press conference with respect to the
Company, or its activities or the offering of the Preferred Shares, other than
routine customary advertising of the Company's products and services, and except
as required by any applicable law or the directives of any relevant regulatory
authority in any relevant jurisdiction.
6. Conditions of Placement Agent's Obligation. The obligations of the
Placement Agent to act as agent for the Company are subject, as of the date
hereof and as of the Closing Date, to the continuing accuracy of, and compliance
with, the representations and warranties of the Company herein, to the accuracy
of statements of officers of the Company made pursuant to the provisions hereof,
to the performance by the Company of its obligations hereunder, and to the
following conditions:
(a) Since the date as of which information is presented in the
Private Placement Memorandum; (i) there shall not have been any material adverse
change in the capital stock or other securities of the Company or any material
adverse change in the long-term debt of the Company or any subsidiary except as
set forth in or contemplated by the Private Placement Memorandum; (ii) there
shall not have been any material adverse change in the general affairs,
business, properties or condition (financial or otherwise), management, or
results of operations of the Company whether or not arising from transactions in
the ordinary course of business, in each case other than as set forth in or
contemplated by the Private Placement Memorandum; (iii) the Company shall not
have sustained any material interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Private Placement
Memorandum; (iv) the Private Placement Memorandum and any amendments or
supplements thereto shall contain all statements which are required to be stated
therein in accordance with of the Act and the Rules and Regulations, and shall
in all material respects conform to the requirements thereof, and neither the
Private Placement Memorandum nor any amendment or supplement thereto shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstance under which they are made, not misleading. The
Placement Agent's obligations under this Agreement shall cease, if in the
reasonable judgment of the Placement Agent, any such development referred to in
clauses (i), (ii), (iii) or (iv) makes it impracticable or inadvisable to
consummate the sale and delivery of the Preferred Shares by the Placement Agent.
(b) At each Closing Date, except as set forth in the Private
Placement Memorandum, there is not pending or, to the knowledge of the Company,
threatened, any material action, suit, proceeding, inquiry, arbitration or
investigation against the Company or any of the officers of directors of the
Company or any subsidiary, nor any such material action, suit, proceeding,
8
inquiry, arbitration, or investigation, which would likely materially and
adversely affect the condition (financial or otherwise), business prospects, net
worth, or properties of the Company.
(c) Each of the representations and warranties of the Company
contained herein shall be true and correct as of this date and at the Closing
Date as if made at the Closing Date, and all covenants and agreements herein
contained to be performed on the part of the Company and all conditions herein
contained to be fulfilled or complied with by the Company at or prior to the
Closing Date shall have been duly performed, fulfilled or complied with.
(d) The Placement Agent shall have received, as of the date hereof
and on the Closing Date, certificates dated as of the date hereof and as of the
Closing Date, signed by the President or Chief Executive Officer of the Company,
certifying that:
(i) He has carefully examined the Private Placement Memorandum and,
to the best of his knowledge, neither the Private Placement
Memorandum nor any amendment or supplement thereto contains an
untrue statement of any material fact or omits to state any
material fact required to be stated therein or necessary to make
the statement therein in light of the context in which they were
made, not misleading; and since the Effective Date, to the best of
his knowledge, there has occurred no event required to be set forth
in an amendment or supplement to the Private Placement Memorandum
which has not been so set forth;
(ii) Since the respective dates as of which information is given in
the Private Placement Memorandum, there has not been any material
adverse change in the condition of the Company or any subsidiary,
financial or otherwise, or in the results of its operations, except
as reflected in or contemplated by the Private Placement Memorandum
or any amendment or supplement thereto and except as so reflected
or contemplated since such dates, there has not been any material
transaction entered into by the Company;
(iii) Each of the representations and warranties set forth in the
Placement Agent Agreement are true and correct as of the Effective
Date and as of the Closing Date, and the Company has complied with
all of its agreements and performed all of its obligations under
the Placement Agent Agreement;
(e) If any of the conditions herein provided for in this Section
shall not have been fulfilled as of the date indicated, this Agreement and all
obligations of the Placement Agent under this Agreement may be canceled at, or
at any time prior to, the Closing Date by the Placement Agent notifying the
Company of such cancellation in writing or by telegram at or prior to the
Closing Date. Any such cancellation shall be without liability of the Placement
Agent to the Company.
7. Indemnification.
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(a) The Company agrees to indemnify and hold harmless the Placement
Agent and each person, if any, who controls the Placement Agent within the
meaning of the Act against any losses, claims, damages or liabilities, joint or
several (which shall, for all purposes of this Agreement, include but not be
limited to, all reasonable costs of defense and investigation and all reasonable
attorneys' fees) , to which the Placement Agent or such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any breach of the warranties and representations contained herein, or
(ii) any untrue statement or alleged untrue statement of any material fact
contained in (a) the Private Placement Memorandum, or any amendment or
supplement thereto, (b) any blue sky application or other document executed by
the Company specifically for that purpose or based upon written information
furnished by the Company and filed in any state or other jurisdiction in order
to qualify any or all of the securities under the securities laws thereof (any
such application, document or information being hereinafter called a "Blue Sky
Application"), or arise out of or are based upon the omission or alleged
omission to state in the Private Placement Memorandum, or any amendment or
supplement thereto, or in any Blue Sky Application, a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
the Company will not be liable in any such cases to the extent, but only to the
extent, that any such losses, claim, damages or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Placement Agent
specifically for use in the preparation of the Private Placement Memorandum or
any such amendment or supplement thereof or any such Blue Sky Application. This
indemnity will be in addition to any liability which the Company may otherwise
have.
(b) Promptly after receipt by the Placement Agent under this Section of
notice of the commencement of any action, the Placement Agent will, if a claim
in respect thereof is to be made against the Company under this Section, notify
the Company in writing of the commencement thereof; but the omission so to
notify the Company will not relieve the Company from any liability which it may
have to the Placement Agent otherwise than under this Section. In case any such
action is brought against the Placement Agent, and it notifies the Company of
the commencement thereof, the Company will be entitled to participate in, and,
to the extent that it may wish, to assume the defense thereof, subject to the
provisions herein stated, with counsel reasonably satisfactory to the Placement
Agent, and after notice from the Company to the Placement Agent of its election
so to assume the defense thereof, the Company will not be liable to the
Placement Agent under this Section for any legal or other expenses subsequently
incurred by the Placement Agent in connection with the defense thereof other
than reasonable costs of investigation. The Placement Agent shall have the right
to employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense
of the Company if the Company has assumed the defense of the action with counsel
reasonably satisfactory to the Placement Agent.
8. Costs and Expenses.
(a) Whether or not the sale of the Preferred Shares by the Company is
consummated, the Company will pay all accountable costs and expenses incident to
the performance of this Agreement by the Company including but not limited to
the fees and expenses of counsel to the Company and of the Company's
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accountants; the costs and expenses incident to the preparation, printing,
filing and distribution of the Private Placement Memorandum (including the
financial statements therein and all amendments and exhibits thereto); all state
filing fees, expenses and disbursements in connection with the qualification of
the Preferred Shares under the state securities or blue sky laws in such
jurisdictions which the Placement Agent and the Company shall designate; the
cost of printing and furnishing to the Placement Agent copies of the this
Agreement; the cost of printing the certificates evidencing the securities
comprising the Preferred Shares; fees and disbursements of the transfer agent,
if any, for the Company's securities; fees and costs of counsel to the Placement
Agent; and fees and costs of the Escrow Agent. The Company shall pay any and all
taxes (including any transfer, franchise, capital stock or other tax imposed by
any jurisdiction) on sales hereunder. The Company will also pay all costs and
expenses incident to the furnishing of any supplement to be attached to the
Private Placement Memorandum.
(b) Other than as described in the Private Placement Memorandum, no
person is entitled, either directly or indirectly, to compensation from the
Company, from the Placement Agent or from any other person for services as a
finder in connection with the Offering, and the Company agrees to indemnify and
hold harmless the Placement Agent against any losses, claims, damages or
liabilities, joint or several which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees, to which the Placement Agent may become subject insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon the claim of any person (other than an employee of the
party claiming indemnity) or entity that he or it is entitled to a finder's fee
in connection with the Offering by reason of such person's or entity's influence
or prior contact with the Company.
9. Termination Date. The Offering will terminate on the earliest of
(the "Termination Date"):
(a) September 30, 2004, unless extended by the Company and the
Placement Agent until October 30, 2004;
(b) the date accepted subscriptions and funds for $4,000,000 are
received; or
(c) such earlier date specified in writing by the Company and the
Placement Agent.
Any Closing Date pursuant to this Private Placement Memorandum may be extended
for an additional ten (10) business days at the election of the Company and the
Placement Agent in the event funds are not cleared after any extension period.
10. Representations, Warranties and Agreements to Survive Delivery. The
respective indemnities, agreements, representations, covenants, conditions,
warranties and other statements of the Company and the Placement Agent set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Placement Agent, the
Company or any of their officers or directors or any controlling person and will
survive delivery of and payment for the Preferred Shares and the termination of
this Agreement.
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11. Notice. All communications hereunder will be in writing and, except
as otherwise expressly provided herein, will be mailed, delivered and confirmed:
If to the Placement Agent:
First Xxxxxx Securities Corporation
00 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
If to the Company:
Solomon Technologies, Inc.
0000 X & X Xxxxxxxxx,
Xxxxxx Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. XxXxxxxxx, Xx.
12. Parties in Interest. This Agreement herein set forth is made solely
for the benefit of the Placement Agent, the Company and, to the extent
expressed, any person controlling the Company or of the Placement Agent, and
directors of the Company, nominees for directors (if any) named in the Private
Placement Memorandum, and their respective executors, administrators,
successors, assigns and no other person shall acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" shall not include
any purchaser of the Preferred Shares or other securities from the Placement
Agent.
13. Applicable Law. This Agreement will be governed by, and construed
in accordance with, the laws of The Commonwealth of Massachusetts applicable to
agreements made and to be entirely performed within Massachusetts.
14. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
15. Entire Agreement. This Agreement and the agreements referred to
within this Agreement constitute the entire agreement of the parties, and
supersedes all prior agreements, understanding, negotiations and discussions,
whether written or oral, of the parties hereto.
***
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return this Agreement, whereupon it will become a
binding Agreement between the Company and the Placement Agent in accordance with
its terms.
Very truly yours,
SOLOMON TECHNOLOGIES, INC.
By: /s/ Xxxxx X. XxXxxxxxx, Xx.
---------------------------
Xxxxx X. XxXxxxxxx, Xx.
President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
FIRST XXXXXX SECURITIES CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
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