Placement Agency Agreement
September 25, 1998
The Zanett Securities Corporation
Tower 49, 31st Floor
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
This agreement ("Agreement") will confirm that The Netplex
Group, Inc., a New York corporation (the "Company"), has retained The Zanett
Securities Corporation ("Zanett" or the "Placement Agent") to assist the
Company, during the thirty (30) day period commencing on the date hereof (the
"Term"), on a "best-efforts" basis, in connection with the placement of up to
1,700 units (the "Units") at a price of $1,000 per Unit, each Unit consisting of
(i) a prepaid common stock purchase warrant (the "Prepaid Warrants") which
entitles the holder thereof to acquire up to $1,000 of the Company's common
stock, par value $.001 per share (the "Common Stock"), on the terms and subject
to the conditions contained in such Prepaid Warrants (or an aggregate of up to
$1,700,000 of Common Stock based on the sale of 1,700 Units), and (ii)
additional warrants (the "Incentive Warrants") to acquire fifty-five and
fifty-six hundredths (55.56) shares of Common Stock. The shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Prepaid Warrants and the
Incentive Warrants are referred to herein as the "Warrant Shares." The Prepaid
Warrants, the Incentive Warrants and the Warrant Shares are collectively
referred to herein as the "Securities." The Company agrees that, during the
Term, all conversations, negotiations, documents and other materials exchanged
between the Company and the Placement Agent shall not be disclosed or released
to any third party without the prior written consent of Zanett. The Company
acknowledges that certain of the aforementioned Securities may be purchased by
affiliates of Zanett.
The Units are being offered to "accredited investors" in
accordance with Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). Each prospective investor ("Investor")
subscribing to purchase the Units will be required to deliver, among other
things, a Securities Purchase Agreement between the Company and the Investor
(the "Securities Purchase Agreement") in form and substance reasonably
satisfactory to Zanett and the Company, representing and warranting, among other
things, that such Investor is an "accredited investor" as such term is defined
in Regulation D. Contemporaneous with the execution and delivery of the
Securities Purchase Agreement, the Investors shall execute and deliver a
Registration Rights Agreement (the "Registration Rights Agreement") in form and
substance reasonably satisfactory to Zanett and the Company pursuant to which
the Company will agree to provide the Investors certain registration rights
under the Securities Act with respect to the Securities.
The Securities Purchase Agreement, the Prepaid Warrants, the
Incentive Warrants and the Registration Rights Agreement are referred to herein
collectively as the "Offering Documents." The offering of Units described in the
Offering Documents is referred to herein as the "Offering."
1. Appointment of Placement Agent. Zanett is hereby appointed
Placement Agent of the Company for the purposes of assisting the Company in
finding qualified Investors to participate in the Offering. On the basis of the
representations and warranties and subject to the terms and conditions contained
herein, Zanett hereby accepts such agency and agrees to assist the Company in
finding qualified Investors to participate in the Offering. Zanett's agency
hereunder is not terminable by the Company except upon termination of the
Offering. Upon termination of the Offering, all subscriptions received, if any,
shall be returned to Investors.
2. Closing; Placement Fee and Warrant; Expenses.
(a) Closing. Upon satisfaction of the conditions to closing
contained in the Securities Purchase Agreement, the closing (the "Closing") of
the purchase and sale of the Units shall take place at the offices of Klehr,
Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx, LLP or such other mutually agreed place,
at such time and date (the "Closing Date") as may be agreed upon between the
Placement Agent, the Investors and the Company.
(b) Procedures at Closing. Counsel for the Placement Agent
shall act as escrow agent for the Closing (the "Escrow Agent"). At each Closing:
(i) The Company shall deliver to the Escrow Agent, on
behalf of the Placement Agent and the Investors, an opinion of the Company's
outside legal counsel, dated as of the applicable Closing Date, in such form as
may be reasonably acceptable to the Placement Agent and its counsel.
(ii) The Company shall deliver to the Escrow Agent
certificates from the Company, signed by the President or a Vice President
thereof, certifying that attached thereto is a true and correct copy of
resolutions adopted by the Company's Board of Directors authorizing (A) the
execution, delivery and performance of this Agreement, the Securities Purchase
Agreement, the Registration Rights Agreement, the Prepaid Warrants, the
Incentive Warrants and other documentation related to the Offering and (B) the
reservation for issuance and issuance of the Warrant Shares, and certifying that
such resolutions have not been modified, rescinded or amended and are in full
force and effect.
(iii) The Company shall deliver to the Escrow Agent a
certificate of good standing of the Company, dated as of a recent date, from the
Secretary of State of the State of New York.
(iv) Each Investor shall deliver to the Escrow Agent
two executed copies of the Securities Purchase Agreement and Registration Rights
Agreement signed by such Investor,
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and the Company shall deliver to the Escrow Agent with respect to each Investor
two executed copies of its acceptance of the Securities Purchase Agreement and
Registration Rights Agreement executed by such Investor.
(v) Each Investor shall have delivered by wire transfer
to an escrow account designated by the Escrow Agent an amount equal to the
aggregate purchase price of the Units(s) being purchased by such Investor at
such Closing.
(vi) The Company shall have delivered to the Escrow
Agent the duly executed Prepaid Warrants and Incentive Warrants being purchased
by the Investors in such denominations as the Investors shall request.
(vii) The Company and the Placement Agent shall
instruct the Escrow Agent to pay to the Company the purchase price (the
"Purchase Price") for the Units subscribed for at such Closing, less the
Placement Agent Fee (as defined below), out of the funds on deposit in the
escrow account received from Investors whose Securities Purchase Agreements have
been accepted.
(c) Placement Fee; Expenses. The Company covenants and
agrees to pay to the Placement Agent at each Closing a fee (the "Placement Agent
Fee") equal to 9.78% of the aggregate gross proceeds received by the Company
from the sale of the Units at such Closing. Such Placement Agent Fee shall be
delivered by the Escrow Agent to Zanett by wire transfer, in accordance with
Zanett's written wiring instructions, from the funds on deposit in the escrow
account simultaneously with payment for and delivery of the Units at such
Closing under the Securities Purchase Agreement as provided in paragraph 2(a)
above. In addition, the Placement Agent shall be entitled to receive from the
Company a non-accountable expense allowance (the "Expense Allowance") equal to
2.75% of the aggregate gross proceeds received by the Company from the sale of
the Units at the Closing. Such Expense Allowance shall be delivered in the same
manner as the Placement Agent Fee.
(d) Warrants. In addition to the Placement Agent Fee, at
each Closing under the Securities Purchase Agreement, the Company shall issue to
the Placement Agent warrants, in substantially the form attached hereto as
Exhibit A, to purchase twenty-seven and seventy-eight hundredths (27.78) shares
of the Company's Common Stock for each Unit purchased at such Closing (or an
aggregate of up to 46,891.25 shares of Common Stock based on the sale of
1,687.95 Units) (the "Placement Warrants"). The Placement Warrants shall be
exercisable for a period of five (5) years from the date of issuance at a price
per share equal to the average of the closing bid prices for the Common Stock
during the five (5) consecutive trading days ending on the trading day
immediately preceding the applicable Closing Date (the "Average Price"). The
shares of the Company's Common Stock issuable upon exercise of the Placement
Warrants shall hereinafter be referred to as the "Placement Warrant Shares." The
Company shall grant the Placement Agent certain registration rights under the
Securities Act with respect to the Placement Warrant Shares pursuant to the
Registration Rights Agreement.
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(e) Expenses of Offering. The Company shall be responsible
for and shall bear all expenses directly and necessarily incurred by it in
connection with the Offering, including, but not limited to, the following:
filing fees, registrar and transfer agent fees, investigatory fees (including,
but not limited to travel, lodging and entertainment expenses), issuer's counsel
and accounting fees, blue sky fees and counsel, if any, and issue and transfer
taxes, if any. In the event the Closing under the Securities Purchase Agreement
does not occur during the Term, the Company shall reimburse the Placement Agent
for its reasonable out-of-pocket expenses incurred in connection with the
Offering (up to a maximum of $20,000).
(f) Non-Circumvention Period; Lockup Period.
(i) The Company agrees that, during the period
beginning on the date hereof and ending March 31, 2003 (the "Non-Circumvention
Period"), it will not, without the prior written consent of the Placement Agent,
negotiate or contract or have discussions concerning any such matters with any
Investor to obtain additional financing in any form.
(ii) The Company agrees that, during the period
beginning on the date hereof and ending March 31, 2001 (the "Lock-up Period"),
it will not, without the prior written consent of the Placement Agent, contract
with any other party to obtain additional financing in which any equity or
equity-linked securities are issued ("Future Offerings"). Notwithstanding the
foregoing, the Company shall be permitted during the Lock-up Period to contract
with any of the persons or entities identified on Schedule 1 attached hereto
(each an "Approved Person") regarding a Future Offering so long as it shall have
first delivered to the Placement Agent written notice of such proposed Future
Offering, including the terms and conditions thereof, and providing the
Placement Agent an option, which option must be exercised within ten (10)
business days following delivery of such notice, to act as the placement agent
for such Future Offering on terms, including fees, no less favorable to the
Company than those set forth in such notice and to place the securities being
offered by the Company in the Future Offering to the Investors or to such other
persons or entities as the Placement Agent shall determine; provided, however,
that the Company shall not be required to provide the Placement Agent with the
option to act as the placement agent for any such Future Offering to be
conducted with or through any Approved Person at any time on or after the first
date on which the closing bid price of the Common Stock for each of the thirty
(30) consecutive trading days ending on the trading day immediately preceding
such date equals or exceeds two hundred percent (200%) of the Average Price in
effect on the date of the Closing under the Securities Purchase Agreement (the
limitations referred to in this and the immediately preceding sentence are
hereinafter collectively referred to as the "Capital Raising Limitation"). The
Capital Raising Limitation shall not apply to any transaction involving
issuances of securities as consideration in a merger, consolidation or
acquisition of assets, or in connection with any strategic partnership or joint
venture (the primary purpose of which is not to raise equity capital), or as
consideration for the acquisition of a business, product or license by the
Company. The Capital Raising Limitation shall also not apply to (i) the issuance
of securities pursuant to an underwritten public offering, (ii) the issuance of
securities upon exercise or conversion of the Company's options, warrants or
other convertible securities outstanding as of the date hereof, (iii) the grant
of additional options or
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warrants, or the issuance of additional securities, under any Company stock
option, bonus plan or restricted stock plan for the benefit of the Company's
employees, consultants or directors, (iv) the issuance of securities in
connection with a financing with Waterside Capital on substantially the terms
set forth on that certain term sheet dated September 16, 1998 as distributed by
the Company to Zanett or (vi) issuance of securities if the purchase price for
such securities on a per share basis or the purchase price together with the
exercise or conversion price thereof is equal to or greater than the market
price of the Common Stock on the date of issuance of such securities.
3. Representations and Warranties and Covenants of the
Company.
(a) The Company represents and warrants to Zanett that
this Agreement has been duly authorized, executed and delivered by the Company
and, assuming the due execution by Zanett, constitutes a legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms.
(b) The Company has delivered to Zanett true and
complete copies of all reports, schedules, forms, statements and other documents
filed by the Company on or after December 31, 1995 with the Securities and
Exchange Commission (the "SEC") pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents (other than exhibits)
incorporated by reference therein, being hereinafter referred to as the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). Except as
set forth in the financial statements of the Company included in the SEC
Documents, the Company has no liabilities, contingent or otherwise, other than
(i) liabilities incurred in the ordinary course of business subsequent to
December 31, 1997, and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in such financial statements, which,
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individually or in the aggregate, are not material to the financial condition or
operating results of the Company.
(c) The Company recognizes and confirms that Zanett (i)
will use and rely primarily on the SEC Documents and on information available
from generally recognized public sources in performing the services contemplated
by this Agreement without having independently verified the same; (ii) is
authorized to assist the Company in the structuring of the Offering with any
prospective purchaser who is an "accredited investor" as defined in Regulation D
under the Securities Act and to provide copies of the SEC Documents and forms of
the Securities Purchase Agreement and other Offering Documents to prospective
purchasers of the Company's securities in connection with the performance of
Zanett's services hereunder; and (iii) does not assume responsibility for the
accuracy or completeness of the SEC Documents.
(d) In addition to the foregoing, the Company hereby
incorporates by reference all of the representations and warranties and
covenants to be set forth in the Securities Purchase Agreement and the other
Offering Documents with the same force and effect as if specifically set forth
herein.
(e) For so long as Zanett and/or its affiliates own any
Securities, (i) the Company shall provide Zanett, within three (3) business days
of the filing or preparation thereof, with such financial and other statements
including, without limitation, management letters and consolidated financial
statements as are provided to any other lenders to or security holders of the
Company; (ii) in the event any current officer, director, employee, consultant
or other agent ceases, subsequent to the date hereof, to have such relationship
with the Company and such cessation has, or is likely to have, a material
adverse effect on the Company, taken as a whole, the Company shall promptly
notify Zanett of such event, which notification shall comprehensively describe
such circumstances; (iii) the Company shall, on a regular basis, provide to
Zanett updates of any material litigation and/or governmental proceedings which
could reasonably be expected to have a material adverse effect on the business
of the Company; and (iv) the Company shall promptly provide to Zanett notice of
any material event of default under any agreement or other document with any
lender or holder of any security of the Company. Zanett shall hold in confidence
and shall not make any disclosure (except to an Investor) or use of any such
information disclosed to it pursuant to clauses (i) through (iv) above which the
Company determines in good faith to be confidential, and of which determination
Zanett is so notified, unless (a) the release of such information is ordered
pursuant to a subpoena or other order from a court or government body of
competent jurisdiction or (b) the information has been made generally available
to the public other than by disclosure in violation of this or any other
agreement. Anything contained herein to the contrary notwithstanding, Placement
Agent's obligations to proceed with the Offering is conditioned upon Placement
Agent's due diligence investigation of the Company and Zanett shall be fully
informed by the Company of any events which might have a material affect on the
financial condition of the Company. If, in Zanett's opinion, the condition of
the Company, financial or otherwise, and its prospects are affected in a
material and/or adverse manner and do not fulfill Zanett's expectations, Zanett
shall have the sole discretion to review and determine its continued interest in
the Offering.
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(f) For so long as Zanett and/or its affiliates own any
Securities, the Company shall make available, during regular business hours, all
records and books of account of the Company for inspection by Zanett upon not
less than five (5) business days prior written notice from Zanett. The Company
shall permit Zanett, during regular business hours, to inspect its properties
upon not less than five (5) business days prior written notice from Zanett.
(g) The Company has the requisite corporate power and
authority to enter into and perform this Agreement and the Placement Warrants in
accordance with the terms hereof. The execution and delivery of this Agreement
and the Placement Warrants by the Company and the consummation by it of the
transactions contemplated hereby (including, without limitation, the reservation
for issuance and issuance of the Placement Warrant Shares issuable upon exercise
thereof) have been duly authorized by the Company's Board of Directors and no
further consent or authorization of the Company, its Board of Directors, or its
shareholders is required.
(h) The Placement Warrants and the Placement Warrant
Shares issuable upon the exercise thereof are duly authorized and, upon issuance
of the Placement Warrant Shares upon exercise of the Placement Warrants in
accordance with the terms thereof, the Placement Warrant Shares will be validly
issued, fully paid and non-assessable, and free from all taxes, liens and
charges with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of the shareholders of the Company.
(i) The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not (A) result in a violation of the Company's
Certificate of Incorporation or By-laws or (B) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the
Company is bound or affected (except, with respect to clause (B), for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a material
adverse effect on the operation, properties, prospects or financial condition of
the Company ("Material Adverse Effect")). The Company is not in violation of its
Certificate of Incorporation or By-laws and is not in default (and no event has
occurred which with notice or lapse of time of both would put the Company in
default) under, nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. The business of the Company is not
being conducted, and shall not be conducted, in violation of any law, ordinance
or regulation of any governmental entity, except for possible violations which
either singly or in the aggregate do not have a Material Adverse Effect. Except
as specifically contemplated by this Agreement and as required under the
Securities Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or
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order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self regulatory agency in order for it to execute,
deliver or perform any of its obligations under this Agreement in accordance
with the terms hereof.
(j) The Company shall at all times have authorized, and
reserved for the purpose of issuance, a sufficient number of Placement Warrant
Shares to provide for the full exercise of the outstanding Placement Warrants.
(k) The Company shall promptly secure the listing of
the Placement Warrant Shares upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all Placement
Warrant Shares from time to time issuable upon exercise of the Placement
Warrants.
4. Publicity. The Company shall not make any reference to
Zanett or to any of its affiliates in any release or other communication without
Zanett's prior written consent. Without Zanett's prior written consent, no
advice rendered by Zanett in connection with the services performed by Zanett
pursuant to this Agreement will be quoted by the Company, its affiliates or
representatives nor will any such advice be referred to in any report, document,
release or other communication, whether oral or written, prepared or issued or
transmitted by such person, except to the extent required by law (in which case
the appropriate party shall so advise Zanett in writing prior to such use and
shall consult with Zanett with respect to the form and timing of the
disclosure).
5. Indemnification and Contribution.
(a) To the extent permitted by law, the Company will
indemnify, hold harmless and defend Zanett and each of its directors, officers,
partners, members, employees, agents and each person who controls Zanett within
the meaning of the Securities Act or the Exchange Act, if any, (each, an
"Indemnified Person"), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, in respect thereof, "Claims") to which any of them may become
subject insofar as such Claims arise out of or are based upon: (i) any
transaction contemplated by this Agreement, the retention of Zanett as Placement
Agent under this Agreement, the performance of services by Zanett hereunder or
any involvement or alleged involvement of Zanett in the Offering or (ii) any
breach of any of the Company's representations, warranties or covenants
contained herein. The Company shall reimburse each of the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 5(a) shall not (i) apply in instances where the Claims
were the result of Zanett's gross negligence or based on Zanett's wilful
misconduct, and (ii) apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld.
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(b) Promptly after receipt by an Indemnified Person under
this Section 5 of notice of the commencement of any action (including any
governmental action), such Indemnified Person shall, if a Claim in respect
thereof is made against the Company under this Section 5, deliver to the Company
a written notice of the commencement thereof, and the Company shall have the
right to participate in, and, to the extent the Company so desires, to assume
control of the defense thereof with counsel mutually satisfactory to the Company
and the Indemnified Person; provided, however, that an Indemnified Person shall
have the right to retain its own counsel (with the fees of such counsel not to
exceed $250 per hour), with the fees and expenses to be paid by the Company, if,
in the reasonable opinion of counsel retained by the Indemnified Person, the
representation by such counsel of the Indemnified Person and the Company would
be inappropriate due to actual or potential differing interests between such
Indemnified Person and any other party represented by the Company's counsel in
such proceeding. The Company shall pay for only one separate legal counsel for
the Indemnified Persons, and such legal counsel shall be selected by Placement
Agent. The failure to deliver written notice to the Company within a reasonable
time of the commencement of any such action shall not relieve the Company of any
liability to the Indemnified Person under this Section 5, except to the extent
that the Company is actually prejudiced in its ability to defend such action.
The indemnification required by this Section 5 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
(c) To the extent any indemnification by the Company of an
Indemnified Person is prohibited or limited by law or otherwise unavailable in
respect of any Claim, the Company agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable under Section 5 to
the fullest extent permitted by law. In this regard, the Company shall
contribute to the amount paid or payable by such Indemnified Person as a result
of any such Claim (i) in such portion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Indemnified Person,
on the other, from the structuring and issuance of the securities in the
Offering or any other transaction in which Zanett rendered services hereunder or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and of the Indemnified Person, on the other, in
connection with untrue statements or omissions or other actions (or alleged
untrue statements, omissions or other actions) which resulted in such Claim as
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Indemnified Person, on the
other, shall be deemed to be in the same proportion as the total gross proceeds
received by the Company in the Offering or any other financing bears to such
Indemnified Person's compensation. The relative fault of the Company on the one
hand and of the Indemnified Person on the other shall be determined by reference
to, among other things, whether such untrue statements or omissions or other
actions (or alleged untrue statements, omissions or other actions) relate to
information supplied or action taken by the Company, on the one hand, or by the
Indemnified Person, on the other, and the relevant persons' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statements, omission or actions. The amount paid or payable by a party as
a result of the Claim shall be deemed to include any legal or
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other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The Company and Zanett agree
that it would not be just and equitable if contribution pursuant to this Section
5 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
(d) The aforesaid indemnity and contribution agreements
shall apply to any related activities engaged in by any Indemnified Person prior
to this date and to any modification of Zanett's engagement hereunder, and shall
remain in full force and effect regardless of any investigation made by or on
behalf of Placement Agent or any of its agents, employees, officers, directors
or controlling persons and shall survive the issuance of any securities in any
transaction referred to hereunder (including the Offering) and any termination
of this Agreement or Placement Agent's engagement hereunder. The Company agrees
to promptly notify Zanett of the commencement of any litigation or proceeding
against it or any of its directors, officers, agents or employees in connection
with the transactions contemplated hereby.
(e) The Company also agrees that no Indemnified Person
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company, its owners, creditors or security holders for or in
connection with advice or services rendered or to be rendered by Zanett pursuant
to this Agreement, the transactions contemplated hereby or any Indemnified
Person's actions or inactions in connection with any such advice, services or
transactions except for liabilities (and related expenses) of the Company that
are determined by a final judgment of a court of competent jurisdiction to have
resulted primarily from such Indemnified Party's gross negligence or wilful
misconduct in connection with any such advice, actions, inactions or services.
6. Survival of Certain Provisions. The representations,
warranties, covenants and provisions contained in Section 2(f), Section 3,
Section 4 and Section 5 hereof shall survive in full force and effect until that
date which is three (3) years from the date hereof (or such longer period as may
be specified in such provisions) regardless of (a) any completion or termination
of any financing contemplated by this Agreement (including the Offering), (b)
any termination of this Agreement, or (c) any investigation made by or on behalf
of Placement Agent or any affiliate of Placement Agent, and shall be binding
upon, and shall inure to the benefit of, any successors, assigns, heirs and
personal representatives of the Company, Zanett, the Indemnified Parties and any
holder of Placement Warrants.
7. Miscellaneous.
(a) All notices, requests, demands and other communications
which are required or may be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered personally, receipt acknowledged
or five (5) days after being sent by registered or certified mail, return
receipt requested, postage prepaid. All notices shall be made to the parties at
the addresses designated above or at such other or different addresses which
party may subsequently provided with notice thereof, and, to their respective
legal counsel, as follows:
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(i) If to Placement Agent, to
The Zanett Securities Corporation
Tower 49, 31st Floor
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
-with a copy to -
Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esquire
(ii) If to the Company, to
The Netplex Group, Inc.
0000 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
XxXxxx, XX 00000
Attention: Xxxx Xxxxx, President and CEO
-with a copy to -
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
(b) This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument. This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the party so delivering this
Agreement.
(c) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without regard to its
conflict of laws provisions). The Company hereby agrees to submit to the
exclusive jurisdiction of an arbitration panel of the National Association of
Securities Dealers, Inc. located in the City of New York in the State of New
York in connection with any suit, action or proceeding related to this Agreement
or any of the matters contemplated hereby, irrevocably waives any defense of
lack of personal jurisdiction and irrevocably agrees that all claims in respect
of any suit, action or proceeding may be heard and determined in by
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such panel. The Company irrevocably waives, to the fullest extent it may
effectively do so under applicable law any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought before any such court and any claims that any such suit, action or
proceeding brought in any such arbitration panel has been brought in an
inconvenient forum. Each party agrees to pay or reimburse the other for all
reasonable costs and expenses incurred in connection with the enforcement of any
of its rights under this Agreement, including without limitation, all attorneys'
fees and expenses of its counsel.
(d) The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a part of this
Agreement.
(e) This Agreement may not be modified or amended except in
writing duly sworn by the parties hereto.
(f) If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
(g) Each party to this Agreement has participated in the
negotiation and drafting of this Agreement. As such, the language used herein
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
party to this Agreement.
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Please sign and return the original and one copy of this letter to
indicate your acceptance of the terms set forth herein whereupon this letter and
your acceptance shall constitute a binding agreement between you and the
Company.
Very truly yours,
The Netplex Group, Inc.
By:______________________________
Accepted and Agreed to this
25th day of September, 1998.
THE ZANETT SECURITIES CORPORATION
By:______________________________
Name: Xxxxxxx Xxxxxxxx
Title: President