EXHIBIT 10.28
PLACEMENT AGENCY AGREEMENT
THIS AGREEMENT ("AGREEMENT"), made as of the day of March 3, 2000, by and
between XXXXXXXXX.XXX, a Nevada corporation ("COMPANY"), and MAY XXXXX GROUP,
INC., a Maryland corporation (the "AGENT").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell its Series A Preferred
Stock (the "Securities") resulting in gross proceeds to the Company of up to
$1,250,000 (the "OFFERING") not involving a public offering without registration
under the Securities Act of 1933, as amended (the "ACT"), pursuant to exemptions
from the registration requirements of the Act under Regulation D promulgated
under the Act ("REGULATION D"), as described below; and
WHEREAS, the Agent has offered to assist the Company in placing $1,000,000
of the Securities on a "BEST EFFORTS BASIS" with respect to the Securities and
on a "BEST EFFORTS" basis with respect to sales of Securities thereafter up to
the Maximum Securities (as defined below), and the Company desires to secure the
services of the Agent on the terms and conditions hereinafter set forth;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual promises,
conditions and covenants herein contained, the parties hereto do hereby agree as
follows:
1. Engagement of Agent.The Company hereby appoints the Agent as its
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exclusive placement agent for the Offering, to sell up to of $1,000,000 of
Securities (the "MAXIMUM SHARES") on a "BEST EFFORTS BASIS," resulting in gross
proceeds to the Company of up to $1,000,000 (the "MAXIMUM AMOUNT"). The Agent,
on the basis of the representations and warranties herein contained, but subject
to the terms and conditions herein set forth, accepts such appointment and
agrees to use its best efforts to find purchasers for the Securities. This
appointment shall be irrevocable for the period commencing as of the date hereof
and ending as further described in Section 5 herein, which period maybe extended
by the consent of the Company and the Agent (the "OFFERING PERIOD").
2. Representations and Warranties of the Xxxxxxx.Xx order to induce the
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Agent to enter into this Agreement, the Company hereby represents and warrants
to and agrees with the Agent as follows:
2.1 Offering Documents.The Company and the Placement Agent have prepared a
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Securities Purchase Agreement, certain exhibits thereto and Registration Rights
Agreement, which documents have been or will be sent to proposed investors. In
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addition, proposed investors have received or will receive prior to closing
copies of the Company's REGISTRATION STATEMENT ON FORM and possibly other
documents that are to be filed with the SEC ("SEC DOCUMENTS"). The SEC Documents
were prepared in conformity with the requirements (to the extent applicable) of
the Securities and Exchange Act of 1934, as amended (the "ACT") and the rules
and regulations ("RULES AND REGULATIONS") of the Commission promulgated
thereunder. As used in this Agreement, the term "OFFERING DOCUMENTS" refers to
and means the SEC Documents, the Subscription Agreement and all amendments,
exhibits and supplements thereto, together with any other documents which are
provided to the Agent by, or approved for Agent's use by, the Company for the
purpose of this Offering.
2.2 Provision of Offering Documents.The Company shall deliver to the Agent,
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without charge, as many copies of the Offering Documents as the Agent may
reasonably require for the purposes contemplated by this Agreement. The Company
authorizes the Agent, in connection with the Offering of the Securities, to use
the Offering Documents as from time to time amended or supplemented in
connection with the offering and sale of the Securities and in accordance with
the applicable provisions of the Act and Regulation D. The Company consents to
the Agent's distribution of the Offering Documents to prospective subscribers as
a disclosure document about the Company, its business, prospects, financial
condition and other matters.
2.3 Accuracy of Offering Documents.The Offering Documents, at the time of
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delivery to subscribers for the Securities, conformed in all material respects
with the requirements, to the extent applicable, of the Act and the applicable
Rules and Regulations and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. On the Closing Date (as hereinafter
defined), the Offering Documents will contain all statements which are required
to be stated therein in accordance with the Act and the Rules and Regulations
for the purposes of the proposed Offering, and all statements of material fact
contained in the Offering memorandum will be true and correct, and the Offering
Documents will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Company does not make any
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representations or warranties as to the information contained in or omitted from
the Offering Documents in reliance upon written information furnished on behalf
of the Agent specifically for use therein.
2.4 Duty to Amend.If during such period of time as in the opinion of the
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Agent or its counsel any Offering Documents relating to this offering are
required to be delivered under the Act, any event occurs or any event known to
the Company relating to or affecting the Company shall occur as a result of
which the Offering Documents as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time after
the date hereof to amend or supplement the Offering Documents to comply with the
Act or the applicable Rules and Regulations, the Company shall forthwith notify
the Agent thereof and shall prepare such further amendment or supplement to the
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Offering Documents as may be required and shall furnish and deliver to the Agent
and to others, whose names and addresses are designated by the Agent, all at the
cost of the Company, a reasonable number of copies of the amendment or
supplement or of the amended or supplemented Offering Documents which, as so
amended or supplemented, will not contain an untrue statement of a material fact
or omit to state any material fact necessary in order to make the Offering
Documents not misleading in the light of the circumstances when it is delivered
to a purchaser or prospective purchaser, and which will comply in all respects
with the requirements (to the extent applicable) of the Act and the applicable
Rules and Regulations.
2.5 Corporation Condition.The Company's condition is as described in its
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Offering Documents, except for changes in the ordinary course of business and
normal year-end adjustments that are not in the aggregate materially adverse to
the Company. The Offering Documents, taken as a whole, present fairly the
business and financial position of the Company as of the Closing Date.
2.6 No Material Adverse Change.Except as may be reflected in or
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contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to the Closing Date,
there shall not have been any material adverse change in the condition,
financial or otherwise, or in the results of operations of the Company or in its
business taken as a whole.
2.7 No Defaults.Except as disclosed in the Offering Documents or in writing
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to the Agent, the Company is not in default in any material respect in the
performance of any obligation, agreement or condition contained in any material
debenture, note or other evidence of indebtedness or any material indenture or
loan agreement of the Company. The execution and delivery of this Agreement, and
the consummation of the transactions herein contemplated, and compliance with
the terms of this Agreement will not conflict with or result in a breach of any
of the terms, conditions or provisions of, or constitute a default under, the
Articles of Incorporation or By-Laws of the Company (in any respect that is
material to the Company), any material note, indenture, mortgage, deed of trust,
or other agreement or instrument to which the Company is a party or by which the
Company or any property of the Company is bound, or to the Company's knowledge,
any existing law, order, rule, regulation, writ, injunction or decree of any
government, governmental instrumentality, agency or body, arbitration tribunal
or court, domestic or foreign, having jurisdiction over the Company or any
property of the Company. The consent, approval, authorization or order of any
court or governmental instrumentality, agency or body is not required for the
consummation of the transactions herein contemplated except such as may be
required under the Act or under the Blue Sky or securities taws of any state or
jurisdiction.
2.8 Incorporation and Standing.The Company is, and at the Closing Date will
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be, duly formed and validly existing in good standing as a corporation under the
laws of the State of Nevada and with full power and authority (corporate and
other) to own its properties and conduct its business, present and proposed, as
described in the Offering Documents; the Company, has full power and authority
to enter into this Agreement; and the Company is duly qualified and in good
standing as a foreign entity in each jurisdiction in which the failure to so
qualify would have a material adverse effect on the Company or its properties.
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2.9 Legality of Outstanding Securities.Prior to the Closing Date, the
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outstanding securities of the Company have been duly and validly authorized and
issued, fully paid and non-assessable and conform in all material respects to
the statements with regard thereto contained in the Offering Documents.
2.10 Legality of Securities.The Securities, when sold and delivered, will
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constitute legal, valid and binding obligations of the Company, enforceable in
accordance with the temps thereof, and shall be duly and validly issued and
outstanding, fully paid and nonassessable. The Securities to be delivered at the
Closing shall be duly and validly issued and outstanding, fully paid and
non-assessable.
2.11 Litigation.Except as set forth in the SEC Documents, there is now, and
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at the Closing Date there will be, no action, suit or proceeding before any
court or governmental agency, authority or body pending or, to the knowledge of
the Company, threatened, which might result in judgments against the Company not
adequately covered by insurance or which collectively might result in any
material adverse change in the condition (financial or otherwise) or business of
the Company or which would materially adversely affect the properties or assets
of the Company.
2.12 Finders.The Company does not know of any outstanding claims for
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services in the nature of a finder's fee or origination fees with respect to the
sale of the Securities hereunder for which the Agent may be responsible, and the
Company will indemnify the Agent from any liability for such fees by any party
who has a claim for such compensation from the Company and for which person the
Agent is not legally responsible.
2.13 Tax Returns.The Company has filed all federal and state tax returns
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which are required to be filed, and has paid all taxes shown on such returns and
on all assessments received by it to the extent such taxes have become due. All
taxes with respect to which the Company is obligated have been paid or adequate
accruals have been set up to cover any such unpaid taxes.
2.14 Authority.The execution and delivery by the Company of this Agreement
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have been duly authorized by all necessary action, and this Agreement is the
valid, binding and legally enforceable obligation of the Company subject to
standard qualifications as to the availability of equitable remedies, the effect
of bankruptcy and other laws relating to the protection of debtors and public
policy opinions promulgated by the Commission with respect to indemnification
against liabilities under the Act.
2.15 Actions by the Company.The Company will not take any action, which
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will impair the effectiveness of the transactions contemplated by this
Agreement.
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3. ISSUE, SALE AND DELIVERY OF THE SECURITIES.
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3.1 Deliveries of Securities.Certificates in such form that, subject to
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applicable transfer restrictions as described in the Subscription Agreement,
they can be negotiated by the purchasers thereof (issued in such denominations
and in such names as the Agent may direct the Company to issue) for the
Securities, and warrants representing the Agent's warrant compensation described
in Section 3.6 below ("WARRANTS"), shall be delivered by the Company to counsel
to the Agent, with copies made available to the Agent for checking at least one
(1) full business day prior to the Closing Date, it being understood that the
directions from the Agent to the Company shall be given at least two (2) full
business days prior to the Closing Date. The certificates for the Securities and
the Warrants shall be delivered at the Closing and at each Subsequent Closing
(as defined hereinafter).
3.2 Escrow of Funds.Pursuant to the Escrow Agreement, a copy of which is
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attached hereto as Exhibit "A" (the "ESCROW AGREEMENT"), executed by the
Company, the Agent and the escrow agent (the "ESCROW AGENT"), the subscribers
shall place all funds for purchase of Securities for each Closing in an escrow
account set up by the Company. The Company shall have the right to approve or
object the subscriptions of each subscriber, as described in the Subscription
Agreement. At such time as subscribers subscribing for the Shares delivered to
the Agent their signed subscription documents, those subscribers have been
approved by the Company and all other Closing conditions have been met, Escrow
Agent shall release the subscription funds to the Company and counsel to the
Agent shall release the certificates representing the Securities to the
subscribers (the "CLOSING"). In the event that the Initial Closing shall be for
an amount of Securities less than the Maximum Amount, the Offering may be
continued, and additional Closings may be held (each a "SUBSEQUENT CLOSING")
throughout the Offering Period.
3.3 Closing Date.The Initial Closing and any Subsequent Closing shall take
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place at the offices of Xxxxxx Xxxxxxxx, L.L.P., 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx
0, Xxxxx, Xxx Xxxxxx 00000 at such time and date ("CLOSING DATE") as will be
fixed either orally or in writing by notice to be given by the Agent to the
Company after consultation with the Company, such Closing Date to be not less
than one (1) full business day after the date on which such notice shall have
been given. The Closing Date may be changed by mutual agreement of the Agent and
the Company.
3.4 Agent's Compensation.The Company shall pay the Agent:
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(a) A commission of seven and one half percent (7 %) of the $1,000,000
proceeds of the Initial Offering and any subsequent Offerings in cash; and
(b) In addition to the fees and reimbursement of costs set forth in
Sections 3.4 and 3.5 of this Agreement, the Company, upon the Agent's placement
of the Maximum Shares of the Securities resulting in Maximum Amount of gross
proceeds to the Company, shall issue to the Agent May Xxxxx Group, Inc. and it's
assignees, warrants to purchase shares of the Company's common stock, in an
amount equal to one hundred and seventy five (175,000) at a price of one
hundred and ten percent (110%) of the Closing Bid Price on the Closing Date. In
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the event the Agent is not successful in the placement of the Maximum Shares of
the Securities resulting in Maximum Amount of gross proceeds to the Company, the
Company shall issue Warrants to purchase shares of the Company's Common Stock on
a pro rata basis of 17,500 warrants for every $100,000 raised by the agent. The
Warrants shall have cashless exercise provisions. The term of the Warrant shall
be five years. The Warrant and the shares of common stock issuable upon exercise
of the Warrants shall have registration rights as described in the Registration
Rights Agreement, set forth as an exhibit to the Subscription Agreement; it
being understood that, if the SEC requires removal of the Warrants from any
registration statement in which the Warrants have a right by contract to be
included, the removal of the Warrants shall not constitute a breach of contract
by the Company, and the Company will use best efforts to include the Warrants
(or underlying shares) in a registration statement in a manner acceptable to the
SEC. It is specifically understood by the Company that the Company must register
the Warrants for the Agent in the same registration statement described in the
Registration Rights Agreements. The Company shall deliver the Warrants to the
Agent with in five (5) business days of the Agents conclusion of its duties as
the Placement Agent for the Offering.
3.5 Payment of Fees.The Escrow Agent shall be instructed to pay all fees
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including, but not limited to the legal fees of Agent's counsel, XXXXXX
XXXXXXXX, LLP, which shall not exceed $15,000) and cost reimbursements and
Warrants pursuant to section 3.4 of this Agreement, directly to the Agent from
the proceeds of the Closing and all Subsequent Closing, simultaneous with the
transfer of proceeds to the Company.
4. OFFERING OF THE SECURITIES ON BEHALF OF THE COMPANY.
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4. 1 In offering the Securities for sale, the Agent shall offer them solely
as an agent for the Company, and such offer shall be made upon the terms and
subject to the conditions set forth in the Offering Documents. The Agent shall
commence making such offer as an agent for the Company as soon as possible
following delivery of the Offering Documents.
4.2 The Agent will not make offers to sell the Securities to, or solicit
offers to subscribe for any Securities from, persons or entities that are not
"accredited investors" as defined in Regulation D.
5. NON-CIRCUMVENTION.The Company hereby agrees as follows:
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5.1 The Company agrees to maintain the confidentiality of the Agent's
clients, except as required by applicable law. Such clients shall be those
entities, which invest or have been offered an opportunity to invest by the
Agent in the Offering (the "CLIENTS"). For a period of two years from the
Closing, the Company will not solicit or enter into any financing transaction
with the Clients without the written consent of Agent and payment to Agent
compensation no less than the compensation to be paid to Agent hereunder for
raising a like amount.
5.2 In the event that Company breaches Section 5.1 of this Agreement,
Agent shall be entitled to receive compensation in the same proportion to the
financing done without Agent's participation as the compensation to Agent under
this Agreement bears to the financing raised in this Offering.
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6. COVENANTS OF THE COMPANY.The Company covenants and agrees with the
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Agent that:
6.1 After the date hereof, the Company will not at any time, prepare and
distribute any amendment or supplement to the Offering Documents, of which
amendment or supplement the Agent shall not previously have been advised and the
Agent and its counsel furnished with a copy within a reasonable time period
prior to the proposed adoption thereof, or to which the Agent shall have
reasonable objected in writing on the ground that it is not in compliance with
the Act or the Rules and Regulations (if applicable).
6.2 The Company will pay, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming effective
or is terminated, all costs and expenses incident to the performance of its
obligations under this Agreement, including all expenses incident to the
authorization of the Securities and their issue and delivery to the Agent, any
original issue taxes in connection therewith, all transfer taxes, if any,
incident to the initial sale of the Securities, the fees and expenses of the
Company's counsel (except as provided below} and accountants, the cost of
reproduction and furnishing to the Agent copies of the Offering Documents as
herein provided.
6.3 As a condition precedent to the Initial Closing, the Company will
deliver to the Agent a true and correct copy of the Articles of Incorporation of
the Company, and all amendments and certificates of designation of preferences
of preferred stock, including without limitation the certificate of designation
of preferences regarding the Securities, certified by the Secretary of State of
Delaware.
6.4 Prior to the Closing Date, the Company will cooperate with the Agent in
such investigation as it may make or cause to be made of all of the properties,
business and operations of the Company in connection with the Offering of the
Securities. The Company will make available to it in connection therewith such
information in its possession as the Agent may reasonably request and will make
available to the Agent such persons as the Agent shall deem reasonably necessary
and appropriate in order to verify or substantiate any such information so
supplied.
6.5 The Company shall be responsible for making any and all filings
required by the Blue Sky authorities and filings required by the laws of the
jurisdictions in which the subscribers who are accepted for purchase of
Securities are located, if any. Agent shall assist Company in this respect, but
such filings shall be the responsibility of Company.
6.6 Corporation Condition.The Company's condition is as described in its
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Offering Documents, except for changes in the ordinary course of business and
normal year-end adjustments that are not individually or in file aggregate
materially adverse to the Company. The Offering Documents, taken as a whole,
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will present fairly the business and financial position of the Company as of
each Closing Date.
6.7 No Material Adverse Change.Except as may be reflected in or
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contemplated by the Offering Documents, subsequent to the dates as of which
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information is given in the Offering Documents, and prior to each Closing Date,
there shall not have been any material adverse change in the condition,
financial, or otherwise, or in the results of operations of the Company or in
its business taken as a whole.
7. INDEMNIFICATION.
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7.1 The Company agrees to indemnify and hold harmless the Agent, each
person who controls the Agent within the meaning of Section 15 of the Act and
the Agent's employees, accountants, attorneys and agents (the "AGENT'S
INDEMNITEES") against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act or any
other statute or at common law for any legal or other expenses (including the
costs of any investigation and preparation) incurred by them in connection with
any litigation, whether or not resulting in any liability, but only insofar as
such losses, claims, damages, liabilities and litigation arise out of or are
based upon any untrue statement of material fact contained in the Offering
Documents or any amendment or supplement thereto or any application or other
document filed in any state or jurisdiction in order to qualify the Securities
under the Blue Sky or securities laws thereof, or the omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, ,xxxxx the circumstances under which they were made, not
misleading, all as of the date of the Offering Documents or of such amendment as
the case may be; provided, however, that the indemnity agreement contained in
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this Section 7.1 shall not apply to amount paid in settlement of any such
litigation, if such settlements are made without the consent of the Company, nor
shall it apply to the Agent's Indemnitees in respect to any such losses, claims,
damages or liabilities arising out of or based upon any such untrue statement or
alleged untrue statement or any such omission or alleged omission, if such
statement or omission was made in reliance upon information furnished in writing
to the Company by the Agent specifically for use in connection with the
preparation of the Offering Documents or any such amendment or supplement
thereto or any application or other document filed in any state or jurisdiction
in order to qualify the Securities under the Blue Sky or securities law thereof
This indemnity agreement is in addition to any other liability which the Company
may otherwise have to the Agent's Indemnitees. The Agent's Indemnitees agree,
within ten (10) days after the receipt by them of written notice of the
commencement of any action against them in respect to which indemnity may be
sought from the Company under this Section 7. 1, to notify the Company in
writing of the commencement of such action; provided, however, that the failure
of the Agent's indemnitees to notify the Company' of any such action shall not
relieve the Company from any liability which it may have to the Agent's
Indemnitees on account of the indemnity agreement contained in this Section 7.1,
and further shall not relieve the Company from any other liability which it may
have to the Agent's Indenmitees, and if the Agent's Indemnitees shall notify the
Company of the commencement thereof, the Company shall be entitled to
participate in (and, to the extent that the Company shall wish, to direct) the
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defense thereof at its own expense, but such defense shall be conducted by
counsel of recognized standing and reasonably satisfactory to the Agent's
Indemnitees, defendant or defendants, in such litigation. The Company agrees to
notify the Agent's Indenmitees promptly of the commencement of any litigation or
proceedings against the Company or any of the Company's officers or directors of
which the Company may' be advised in connection with the issue and sale of any
of the Securities and to furnish to the Agent's Indemnitees, at their request,
to provide copies of all pleadings therein and to permit the Company's
Indemnitees to be observers therein and apprise the Agent's Indemnitees of all
developments therein, all at the Company's expense.
7.2 The Agent agrees, in the same manner and to the same extent as set
forth in Section 7.1 above, to indemnify and hold harmless the Company, and the
Company's and Company's employees, accountants, attorneys and agents (the
"COMPANY'S INDEMNITEES") with respect to (i) any statement in or omission from
the Offering Documents or any amendment or supplement thereto or any application
or other document filed in any state or jurisdiction in order to qualify the
Securities under the Blue Sky or securities laws thereof, or any information
furnished pursuant to Section 3.4 hereof, if such statement or omission was made
in reliance upon information furnished in writing to the Company by the Agent on
its behalf specifically for use in connection with the preparation thereof or
supplement thereto, or (ii) any untrue statement of a material fact made by the
Agent or its agents not based on statements in the Offering Documents or
authorized in writing by the Company, or with respect to any misleading
statement made by the Agent or its agents resulting from the omission of
material facts which misleading statement is not based upon the Offering
Documents, or information furnished in writing by the Company or, (iii) any
breach of any representation, warranty or covenant made by the Agent in this
Agreement. The Agent's liability hereunder shall be limited to the amount
received by it for acting as Agent in connection with the Offerings. The Agent
shah not be liable for amounts paid in settlement of any such litigation if such
settlement was effected without its consent. In case of the commencement of any
action in respect of which indemnity may be sought from the Agent, the Company's
Indemnitees shall have the same obligation to give notice as set forth in
Section 7.1 above, subject to the same loss of indemnity in the event such
notice is not given, and the Agent shall have the same right to participate in
(and, to the extent that it shall wish, to direct) the defense of such action at
its own expense, but such defense shall be conducted by counsel of recognized
standing reasonably satisfactory to the Company. The Agent agrees to notify the
Company's Indemnitees and, at their request, to provide copies of ail pleadings
therein and to permit the Company's Indemnitees to be observers therein and
apprise them of all the developments therein, all at the Agent's expense.
8. EFFECTIVENESS OF AGREEMENT.This Agreement shall become effective (i) at
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9:00 A.M., Union, New Jersey time, on the date hereof or (ii) upon release by
the Agent of the Securities for offering after the date hereof, whichever shall
last occur. The Agent agrees to notify the Company immediately after the Agent
shall have taken any action by such release or otherwise wherein this Agreement
shall have become effective. This Agreement shall, nevertheless, become
effective at such time earlier than the time specified above after the date
hereof as the Agent may determine by notice to the Company.
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9. CONDITIONS OF THE AGENT'S OBLIGATIONS.The Agent's obligations to act as
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agent of the Company hereunder and to find purchasers for the Securities shall
be subject to the accuracy, as of the Closing Date, of the representations and
warranties on the part of the Company herein contained, to the fulfillment of or
compliance by the Company with all covenants and conditions hereof, and to the
following additional conditions:
9.l Counsel to the Agent shall not have objected in writing or shall not
have failed to give his consent to the Offering Documents (which objection or
failure to give consent shall not have been done unreasonably).
9.2 The Agent shall not have disclosed to the Company that the Offering
Documents, or any amendment thereof or supplement thereto, contains an untrue
statement of fact, which, in the opinion of counsel to the Agent, is material,
or omits to state a 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, under the circumstances in which they were made, not misleading.
9.3 Between the date hereof and the Closing Date, the Company shall not
have sustained any loss on account of fire, explosion, flood, accident, calamity
or any other cause of such character as would materially adversely affect its
business or property considered as an entire entity, whether or not such loss is
covered by insurance.
9.4 Between the date hereof and the Closing Date, there shall be no
litigation instituted or threatened against the Company, and there shall be no
proceeding instituted or threatened against the Company before or by any federal
or state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding would materially adversely affect the business, franchises, license,
permits, operations or financial condition or income o f the Company considered
as an entity.
9.5 Except as contemplated herein or as set forth in the Offering
Documents, during the period subsequent to the most recent financial statements
contained in the Offering Documents, if any, and prior to the Closing Date, the
Company (i) shall have conducted its business in the usual and ordinary manner
as the same is being conducted as of the date hereof and (ii) except in the
ordinary course of business, the Company shall not have incurred any liabilities
or obligations (direct or contingent) or disposed of any assets, or entered into
any material transaction or suffered or experienced any substantially adverse
change in its condition, financial or otherwise. At the Closing Date, the equity
account of the Company shall be substantially the same as reflected in the most
recent balance sheet contained in the Offering Documents without considering the
proceeds from the sale of the Securities other than as may be set forth in the
Offering Documents.
9.6 The authorization of the Securities by the Company and all proceedings
and other legal matters incident thereto and to this Agreement shall be
reasonably satisfactory in all respects to counsel to the Agent, who shall have
furnished the Agent on the Closing Date with such favorable opinion with respect
to the sufficiency of all corporate proceedings and other legal matters relating
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to this Agreement as the Agent may reasonably require, and the Company shall
have furnished such counsel such documents as he may have requested to enable
him to pass upon the matters referred to in this subparagraph.
9.7 The Company shall have furnished, to the Agent the opinion, dated the
Closing Date, addressed to the Agent, from counsel to the Company, as required
by the Subscription Agreement.
9.8 The Company shall have furnished to the Agent a certificate of the
Chief Executive Officer of the Company, dated as of the Closing Date, to the
effect that:
(i) the representations and warranties of the Company in this Agreement are
true and correct in all material respects at and as of the Closing Date (other
than representations and warranties which by their terms are specifically
limited to a date other than the Closing Date), and the Company has complied
with all the agreements and has satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(ii) the respective signers have each carefully examined the Offering
Documents, and any amendments and supplements thereto, and, to the best of their
knowledge, in the Offering memorandum, and any amendments and supplements
thereto, all statements contained in the Offering Documents are true and
correct, and neither the Offering Documents, nor any amendment or supplement
thereto, includes any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein under the circumstances in which they were made not misleading, and
since the date hereof, there has occurred no event required to be set forth ii1
an amended or supplemented Offering Documents, which has not been set forth;
except as set forth in the Offering Documents, since the respective dates as of
which or the periods for which the information is given in the Offering
Documents and prior to the date of such certificate, (a) there has not been any
substantially adverse change, financial and otherwise, in the affairs of
condition in the Company, and (b) the Company has not incurred any material
liabilities, direct or contingent, or entered into any material transactions,
otherwise than in the ordinary course of business.
10. TERMINATION,
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10.1 This Agreement may be terminated by the Agent by notice, of five (5)
business days, to the Company in the event that the Company shall have failed or
been unable to comply with any of the terms, conditions or provisions of this
Agreement on the part of the Company to be performed, complied with or fulfilled
within the respective times, if any, herein provided for, unless compliance
therewith or performance or satisfaction thereof shall have been expressly
waived by the Agent in writing.
10.2 This Agreement may be terminated by the Company by notice, of five (5)
business days, to the Agent in the event that the Agent shall have failed or
been unable to comply with any of the terms, conditions or provisions of this
Agreement on the part of the Agent to be performed, complied with or fulfilled
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within the respective times, if any, herein provided for, unless compliance
therewith or performance or satisfaction thereof shall have been expressly
waived by the Company in writing.
10.3 This Agreement may be terminated by the Agent by notice to the Company
at any time, if, in the reasonable, good faith judgment of the Agent, payment
for and delivery of the Securities is rendered impracticable or inadvisable
because: (i) additional material governmental restrictions not in force and
effect on the date hereof shall have been imposed upon trading in securities
generally; (ii) a war or other national calamity shall have occurred; or (iii)
the condition of the market (either generally or with reference to the sale of
the Securities to be offered hereby) or the condition of any matter affecting
the Company or any other circumstance is such that it would be undesirable,
impracticable or inadvisable, in the judgment of the Agent, to proceed with this
Agreement or with the Offering.
10.4 Any termination of this Agreement pursuant to this Section shall be
without liability of any character (including, but not limited to, loss of
anticipated profits or consequential damages) on the part of any party thereto,
except that the Company shall remain obligated to pay the costs and expenses
provided to be paid by it specified in Sections 3, 5, and 6; and the Company and
the Agent shall be obligated to pay, respectively, all losses, claims, damages
or liabilities, joint or several, under Section 7.1 in the case of the Company
and Section 7.2 in the case of the Agent.
11. AGENT'S REPRESENTATIONS, WARRANTIES, AND COVENANTS.The Agent
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represents and warrants to and agrees with the Company that:
11.1 Agent is a corporation duly incorporated and existing under the laws
of the state of Maryland. Agent is registered with the Securities Exchange
Commission and the NASD.
11.2 Agent understands and acknowledges that the Securities are not being
registered under the Act, and that the Offering is to be conducted pursuant to
Regulation D. Accordingly, in conducting its activities under this Agreement,
Agent shall offer Securities only to "accredited investors," as defined in
Regulation D.
11.3 Neither the Agent nor any of its Affiliates will take any action,
which will impair the effectiveness of the transactions contemplated by this
Agreement.
11.4 All corporate actions by Agent required for the execution, delivery
and performance of this Agreement have been taken. The execution and delivery of
this Agreement by the Agent, the observance and performance thereof, and the
consummation of the transactions contemplated herein or in the Offering
Documents do not and will not constitute a material breach of, or a material
default under, any instrument or agreement by which the Agent is bound, and does
not and will not, to the best of the Agent's knowledge, contravene any existing
law, decree or order applicable to it. This Agreement constitutes a valid and
binding agreement of Agent, enforceable in accordance with its terms.
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11.5 Agent's representations and warranties under this Section shall be
true and correct as of the Closing, and shall survive the Closing for a period
of six months.
12. NOTICES.Except as otherwise expressly provided in this Agreement:
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12.1 Whenever notice is required by the provisions of this Agreement to be
given to the Company, such notice shall be in writing, addressed to the Company,
at:
If to Company:
Xxxxxxxxx.xxx Group.
000 Xxxxxxx Xxxx Xxxxx
Xxxxx #000
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
With Copies to Company Counsel:
Xxxxx Xxxxx, Esq.
Silicone Valley Law Group
000 Xxxxx 0xx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
12.2 Whenever notice is required by the provisions of this Agreement to be
given to the Agent, such notice shall be given in writing, addressed to the
Agent, at:
If to the Agent:
The May Xxxxx Group, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
With copy to:
Xxxxxx Xxxxxxxx, L.L.P.
0000 Xxxxxxxxxx Xxxxxx
Xxxxx #0
Xxxxx, Xxx Xxxxxx 00000
12.3 Any notice instructing the Escrow Agent to distribute monies or
Securities held in Escrow must be signed by authorized agents of both the
Company and the Agent in order to be valid.
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13. MISCELLANEOUS.
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13.1 Benefit.This Agreement is made solely for the benefit of the Agent and
--------
the Company, their respective officers and directors and any controlling person
referred to in Section 15 of the Act and their respective successors and
assigns, and no other person may acquire or have any right under or by virtue of
this Agreement, including, without limitation, the holders of any Securities.
The term "SUCCESSOR" or the term "successors and assigns" as used in this
Agreement shall not include any purchasers, as such, of any of the Securities.
13.2 Survival.The respective indemnities, agreements, representations,
---------
warranties, covenants and other statements of the Company and the Agent, or the
officers, directors or controlling persons of the Company and the Agent as set
forth in or made pursuant to this Agreement and the indemnity agreements of the
Company and the Agent contained in Section 7 hereof shall survive and remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Company or the Agent or any such officer, director or controlling person
of the Company or of the Agent; (ii) delivery of or payment for the Securities;
or (iii) the Closing Date, and any successor of the Company or the Agent or any
controlling person, officer or director thereof, as the case may be, shall be
entitled to the benefits hereof.
13.3 Governing Law.The validity, interpretation, and construction of this
---------------
Agreement will be governed by the Laws of the State of New York. The parties
further agree that any action between them shall be heard in New York County,
New York, and expressly consent to the jurisdiction and venue of the Supreme
Court of New York County, New York, and the United States District Court for the
Southern District of New York for the adjudication of any civil action asserted
pursuant to this Paragraph.
13.4 Counterparts.This Agreement may be executed in any number of
-------------
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
13.5 Confidential Information.All confidential financial or business
--------------------------
information (except publicly available or freely usable material otherwise
obtained from another source) respecting either party will be used solely by the
other party in connection with the within transactions, be revealed only to
employees or contractors of such other party who are necessary to the conduct of
such transactions, and be otherwise held in strict confidence.
13.6 Public Announcements.Prior to the Closing Date, neither party hereto
----------------------
will issue any public announcement concerning the within transactions without
the approval of the other party however if a disapproval is not issued within
one (1) business day it will be assumed that the public announcement is
approved.
13.7 Finders.The parties acknowledge that no person has acted as a finder
--------
in connection with the transactions contemplated herein and each will agree to
indemnify the other with respect to any other claim for a finder's fee in
connection with the offering.
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13.8 Financial Advisers.The parties acknowledge that the Company has or may
-------------------
retain financial and other advisors in connection with this transaction (the
"Advisors"), and the Company agrees to indemnify and hold the Placement Agent
harmless for any fees and expenses of the Advisors.
13.9 Recitals.The recitals to this Agreement are a material part hereof,
---------
and each recital is incorporated into this Agreement by reference and made a
part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be executed as of the day and year first above written.
"THE COMPANY"
XXXXXXXXX.XXX GROUP
By:
Name: Xxxx Xxxxxxxx
Title: President
"THE AGENT"
THE MAY XXXXX GROUP, INC.
By:
Name: Xxxxxxx Xxxxxx
Title:
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