October 5, 2007 Mr. Tim Tangredi President/CEO
October
5, 2007
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President/CEO
Dais
Analytic Corporation
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Dear
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This
Placement Agent Agreement (“Agreement”) represents our understanding of the
basis upon which Legend Merchant Group, Inc. (“LMG”) is engaged to act as
placement agent (“Placement Agent”), as described below to Dais Analytic
Corporation (the “Company”), and this version replaces any previous version of
said understanding.
1. BEST
EFFORTS OFFERING
LMG will
seek to raise capital for the Company (the “Placement”), on a best efforts
basis, from the sale of equity or equity-related securities in a structure to be
mutually determined by LMG and the Company. The Placement shall be made to
"accredited investors" (“Investors”) as such term is defined under Rule 501 (a)
of the Securities Act of 1933, as amended (the “Act”) without registration
pursuant to the exemption from registration provided by Regulation D under the
Act. The term of this Agreement shall expire on October 15, 2007,
unless mutually extended by the parties hereto in writing. The terms
of the Placement, including the pricing of the stock, the rights and preferences
of the stock, and the demand and piggyback registration rights and other rights
offered to the Investors, if any, shall be determined by the Company after
consultation with LMG. The Placement Agent shall have comparable
registration rights to those offered to the Investors.
2. CONFIDENTIAL
PRIVATE PLACEMENT MEMORANDUM
The
Company has prepared a Confidential Private Offering Memorandum (“PPM”) covering
the proposed offering of the stock which Company, shall has or shall have
reviewed by legal counsel for compliance with anti-fraud and other disclosure
requirements of the federal and state securities laws. The PPM shall
be in form and substance reasonably satisfactory to Legend and its
counsel. The Company agrees that it shall use reasonable efforts to
modify or supplement the PPM during the course of the Offering to insure that
the PPM does not contain any substantially 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 not materially misleading in light of the
circumstances in which they were made.
3. FEES AND
EXPENSES
Upon the
closing of the Placement, the Company shall pay to LMG a total cash fee equal to
8% of the Placement. In addition, upon closing of the Placement, the Company
shall issue to LMG five year term Warrants for common shares equal in number to
10% of the common shares underlying the Warrants issued to Investors at Closing
under the Placement at an exercise price per share equal to the exercise price
per share in the Warrant issued to Investors at closing of
Placement.
Furthermore,
both parties do hereby agree that North American Funds and any and all of its
affiliates (provided any such affiliate is first introduced to Company by
LMG) are considered to be introductions first made to the Company by
LMG. As such, LMG, if its meets all other requirements of this
Agreement will be entitled to the same fees described above (a cash fee equal to 7% of
the gross proceeds of the Placement and a 5 year Warrant to purchase 10% of the
number of shares issued to Investors at an exercise price per share equal to the
exercise price per share in the
warrant issued to Investors at closing of the Placement) for
any investments made in the Company by North American Funds and any and all of
its affiliates until December 31, 2007.
Notwithstanding
any provision of this Agreement to the contrary, any compensation, remuneration
or fees of any nature payable to LMG under any provision of this Agreement
shall, in addition to any and all other requirements for payment, be payable to
LGM if and only to the extent the investment in Company upon which the
compensation is to be based was made by an Investor first introduced to Company
by LMG and LMG participated in substantive discussions and negotiations relating
to the closing of said investment .
LGM’s
sole compensation under this Agreement is stated herein. Any expenses incurred
by LGM in its performance of this Agreement or by third parties engaged by LGM
with relation to this Agreement shall be borne by LGM.
4. FURTHER
REPRESENTATIONS AND AGREEMENTS OF THE COMPANY
The
Company further represents and agrees that (i) it is authorized to enter into
this Agreement and to carry out the offering contemplated hereunder and this
Agreement constitutes a legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, (ii) the Company’s management will be
reasonably available to Legend, its agents, auditors, counsel, officers and
directors to discuss the Company and the Company’s business, at mutually
agreeable times and locations, (iii) the Company will deliver to Legend at the
closing of the Placement: (a) a certificate, from Company and executed on its
behalf by both its President and Treasurer, to the effect that the PPM does not,
to its knowledge, contain any substantially untrue statement of material fact or
fail to state any material fact required to be stated therein or necessary to
make the material statements therein true in light of the circumstances in which
they were made, and (b) all necessary corporate approvals have been obtained to
enable the Company deliver the stock issuable in accordance with the terms of
the Placement and any Common stock issuable upon exercise of the
Warrants.
6. FURTHER
REPRESENTATIONS AND AGREEMENTS OF LEGEND
LGM
represents and agrees (i) it will comply with all applicable rules
and regulations: (a) in connection with the sale of Stock in the
Placement and (b) with regard to all services it provides to or on behalf
of Company, (ii) LGM’s management will be reasonably available to
Company, its agents, auditors, counsel, officers and directors to discuss the
Placement and LGM’s services under this Agreement, at mutually agreeable times
and locations, and (iii) it is authorized to enter into this Agreement and to
carry out the offering contemplated hereunder and this Agreement constitutes a
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms.
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7.
FUTURE PRIVATE OFFERINGS/BUSINESS DEVELOPMENT
OPPORTUNITIES
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If,
during a period of twelve (12) months after the date of this Agreement, the
Company intends to retain a lead manager and book runner or exclusive placement
agent in connection with any Rule 144A offering, private placement or PIPE
offering (“Financings”) that may be undertaken by the Company,
the Company shall discuss that opportunity with LMG and allow LMG three (3)
business days to make an initial proposal to represent the Company in those
Financings. In addition, if, during the term of this Agreement
and for a period of twelve (12) months after the date of this
Agreement, the Company intends to engage an investment banker to
assist the Company in its business development activities or in connection with
merger and acquisition activities, the Company shall discuss that
opportunity with LMG and allow LMG three (3) business days to make an
initial proposal to represent the Company in those business development and
merger and acquisition activities.
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8. INDEMNIFICATION AND
DISCLOSURE
LMG and
the Company have entered into a separate letter agreement, dated the date
hereof, and
attached as Exhibit A hereto, providing for the indemnification of LMG by
the Company and of the Company by LMG in connection with LMG’s engagement
hereunder, the terms of which are incorporated into this agreement in their
entirety.
The
Company recognizes and confirms that LMG in acting pursuant to this engagement
will be using publicly available information and information in reports and
other materials provided by or on behalf of the Company by its agents and that
LMG does not assume responsibility for and may rely, without independent
verification, on the accuracy and completeness of any Company provided
information. The Company agrees to furnish or cause to be furnished
to LMG all reasonably necessary or appropriate non-confidential information for
use in its engagement and hereby warrants that any information relating to the
Company that is furnished to LMG by or on behalf of the Company, will be, to its
knowledge, true and correct in all material respects and not materially
misleading given the context in which said information is presented by Company.
LGM agrees to hold in confidence and not disclose, use or permit to be used any
confidential information provided by Company to LGM, its employees, directors,
officers or agents without the written consent of Company
LMG may
not, without its prior written consent, be quoted or referred to in any written
document, release or communication prepared, issued or transmitted by the
Company (including any entity controlled by, or under common control with, the
Company and any director, officer, employee or agent thereof). The
Company may not, without its prior written consent, be quoted or referred to in
any written document, release or communication prepared, issued or transmitted
by the LMG (including any entity controlled by, or under common control with,
LMG and any director, officer, employee or agent thereof). LMG hereby warrants
that any information relating to Company, its operations or this Agreement which
is secured from a source other than Company and provided to third parties by
LMG, its agents or by others at LMG’s request will be materially true, correct
and complete. Further, LGM warrants that any information provided to it by
Company will be used by LGM and its agents only for the purpose and in the
context for which it was provided, that LGM’s representation of said information
will be a true and correct and that LGM shall not through omission or otherwise
use said information in any manner so as to present an untrue or misleading
representation of Company.
Following
closing of the Placement, LMG shall have the right to place advertisements in
financial and other newspapers and journals at its own expense describing its
services to the Company hereunder; subject to prior written approval of the
Company, which will not be unreasonably withheld.
9. LEGAL
JURISDICTION
This
Agreement is governed by the laws of the State of New York, without regard to
such state’s rules concerning conflicts of law, and will be binding upon and
inure to the benefit of the Company and LMG and their respective successors and
assigns. The Company and LGM also hereby submits to the jurisdiction
of the state and federal courts located in New York County, New York in any
proceeding arising out of or relating to this Agreement, agrees not to commence
any suit, action or proceeding relating thereto except in such courts, and
waives, to the fullest extent permitted by law, the right to move to dismiss or
transfer any action brought in such court on the basis of any objection to
personal jurisdiction, venue or inconvenient forum. This Agreement
may be executed in two or more counterparts, each of which shall be deemed to be
an original, but all of which shall constitute one and the same
agreement.
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The
Company and LGM further agree to accept and acknowledge services of any and all
process which may be served in any such suit, action or proceeding in the State
of New York and agree that service of process upon it mailed by certified mail,
return receipt requested, to its address shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding.
LMG will
act under this Agreement as an independent contractor with duties solely to the
Company. The Company acknowledges that LMG and its affiliates may have and may
in the future have investment banking and other relationships with parties other
than the Company, which parties may have interests with respect to this
placement. Although LMG in the course of such other relationships may
acquire information about the placement, potential purchasers of the Securities
or such other parties, LMG shall have no obligation to disclose such information
to the Company or to use such information on behalf of the
Company. Furthermore, the Company acknowledges that LMG may have
fiduciary or other relationships whereby LMG may exercise voting power over
securities of various persons, which securities may from time to time include
securities of the Company or of potential purchasers of the stock or others with
interests in respect of the placement. The Company acknowledges that
LMG may exercise such powers and otherwise perform its functions in connection
with such fiduciary or other relationships without regard to its relationship to
the Company hereunder. Provided however, that LMG’s obligations shall remain in
full force and effect.
LMG is a
full service securities firm engaged in securities trading and brokerage
activities, as well as providing investment banking, financing and financial
advisory services. In the ordinary course of our trading, brokerage
and financing activities, LMG or its affiliates may at any time hold long or
short positions, and may trade or otherwise effect transactions, for our own
account or the accounts of customers, in debt or equity securities or senior
loans of the Company.
Notwithstanding
any provision herein to the contrary, LGM and its agents shall not use or
disclose directly or indirectly any non-public information secured in
anticipation of, during or as a result of this Agreement for its benefit or for
the benefit of any third party.
10. MISCELLANEOUS
Governing
Law. This Agreement and the transactions contemplated hereby
shall be governed in all respects by the laws of the State of New York, without
giving effect to its conflict of law principles.
Counterparts. This
Agreement may be executed in any number of counterparts each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.
Notices. Whenever
notice is required to be given pursuant to this Agreement, such notice shall be
in writing and shall either be (i) mailed by first class mail, postage, prepaid,
return receipt requested and addressed (a) if to Legend, Legend
Merchant Group, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; and (b) if to the Company, Dais Analytic Corporation, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or (ii) delivered personally or by express
courier. The notice shall be deemed given, if sent by mail, on the
fifth business day after deposit in a United States post office receptacle, or
if delivered personally or by express courier, then upon receipt.
Amendments. This
Agreement may not be amended, modified or waived, except in a writing signed by
all of the parties hereto.
Rights
After Termination. If, the Company issues
securities to a person or entity introduced to the Company by Legend within 12
months after the date of this Agreement, the Company shall pay the cash portion of the remuneration described in Section 4
above with respect to the
proceeds invested by that person or entity and such payment shall be
made within a reasonable
period after the closing of the sale of the securities to such person or
entity. For purposes
of this Section, the parties, within five (5) business days of
the termination of this Agreement, shall agree upon and attach to
this Agreement a list of all persons and entities who, during the term of this
Agreement, meet the requirements for remuneration or compensation under this
Agreement. All representations made by LGM herein and its obligations relative
to confidentiality shall survive termination or expiration of this
Agreement.
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If the
foregoing correctly sets forth the understanding and agreement between LMG and
the Company, please so indicate in the space provided for that purpose below,
together with the enclosed duplicate original, and return one (1) of these
originals to us, whereupon this letter shall constitute a binding agreement as
of the date hereof.
Agreed
and Accepted:
Legend
Merchant Group,
Inc. Dais Analytic
Corporation
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Mr
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President
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President/CEO
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| Dated: October 15, 2007 | Dated: October 16, 2007 |
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Exhibit
A
Ladies
and Gentlemen:
In
connection with the engagement of Legend Merchant Group, Inc. (“LMG”) to advise
and assist Dais Analytic Corporation (the “Company”) with the subject matter in
the letter agreement dated the date hereof between LMG and the Company, the
Company agrees to indemnify and hold harmless LMG and its affiliates and their
respective directors, officers, agents and employees and each other person
controlling LMG or any of LMG’s affiliates (collectively, the “LGM Indemnified
Parties”), to the full extent lawful, from and against any losses, expenses,
claims or proceedings (collectively, “Losses”) (i) related to or arising out of
(A) materially untrue or misleading oral or written information provided by the
Company, its employees or other agents, which information either the Company or
LMG, at the Company’s written request or with the Company’s written consent and
in the context offered, provided to any actual or potential buyers, sellers,
investors or offerees and such information directly and primarily resulted in
said Losses , or (B) any material action or failure to act by the Company, its
directors, officers, agents or employees provided Company knew or should have
reasonably known such action or failure to act would result in Company
providing, or having LGM provide on its behalf, materially untrue or misleading
information to actual or potential buyers, sellers, investors or offerees given
the context in which the information was requested or presented by Company
and provided such actions or failure to act were the direct and
primary cause of said Losses, or (ii) otherwise related to or arising out of
this engagement or any transaction or conduct in connection therewith and
resulting primarily from the Company’s negligence, bad faith or willful
misconduct, except that these clauses (i) and (ii) shall not apply with respect
to (x) any losses that resulted from the negligence, bad faith or
willful misconduct of any Indemnified Parties, or (y) any amount paid in
settlement of claims without the Company’s written consent.
LMG
agrees to indemnify and hold harmless Dais Analytic Corporation and its
affiliates and their respective directors, officers, agents, and employees and
each other person controlling Dais or any of Dais’ affiliates
(collectively, the "Dais Indemnified Parties"), to the full extent lawful ,from
and against any Losses related to or arising out of (A) materially untrue or
misleading oral or written information about the Company, its employees,
directors, officers or agents, which information either the Company or its
employees did not provide to LMG, was known or should have been reasonably known
by LGM to be incorrect, was not used by LGM or its agents in the
context for which it was provided or failed to include all information known or
provided to LGM, whether or not provided by Dais Indemnified Parties to LGM, and
as such was materially untrue or misleading, or (b) otherwise related to or
arising out of LMG's engagement or any transaction or conduct in connection
therewith and resulting primarily from LMG's negligence, bad faith, or willful
misconduct
In no
event shall LMG be responsible to Dais Indemnified Parties for any amounts in
excess of the amount of the compensation actually paid by the Company to LMG (in
cash or otherwise) in connection with the engagement (exclusive of amounts paid
for reimbursement of expenses or paid under this agreement) Further, in no event
shall Company be responsible to LMG Indemnified Parties for any amounts under
the foregoing indemnity in excess of the funds received by Company due to
issuance of stock under the Placement .
Promptly
after receiving notice of the commencement of any action or other proceeding in
respect of which indemnification or reimbursement may be sought hereunder, the
indemnified party will notify the indemnifying party thereof; but the
omission or delay to notify shall not relieve the indemnifying
party from any obligation hereunder unless, and only to the extent
that, the indemnifying party has been prejudiced by such omission or
delay. If any such action or other proceeding shall be brought
against any indemnified party, the indemnifying party shall, upon written notice
given reasonably promptly following indemnified party’s notice to the
indemnifying party of such action or proceeding, be entitled to assume the
defense thereof at its expense with counsel chosen by the indemnifying party’s
and reasonably satisfactory to the indemnified parties; provided, however, that
any indemnified party may at its own expense retain separate counsel to
participate in such defense. Notwithstanding the foregoing, such
indemnified party shall have the right to employ separate counsel at its own
expense and to control its own defense of such action or proceeding if, in the
reasonable opinion of counsel to
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such
indemnified party, (i) there are legal defenses available to such indemnified
party or to other indemnified parties that are different from or additional to
those available to the Company, or (ii) a conflict or likely conflict exists
between the indemnifying party and such indemnified party that would make such
separate representation advisable; provided, however, that in no event shall the
indemnifying party be required to pay fees and expenses under this indemnity for
more than one counsel in any one legal action or group of related legal actions,
or fees and expenses that are not reasonable and customary. The
indemnifying party agrees that it will not, without the prior written consent of
the indemnified party, which consent shall not be unreasonably withheld or
delayed, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters that
are the subject of LMG’s engagement (whether or not any Indemnified Party is a
party thereto) unless such settlement, compromise or consent includes an
unconditional release of the indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
The
foregoing agreement is in addition to any rights LMG and Company may have at
common law or otherwise and shall be binding on and inure to the benefit of any
successors, assigns, and personal representatives of the Company, LGM, Dais
Indemnified Parties and each Indemnified Party. This agreement is
governed by the laws of the State of New York, without regard to such state’s
rules concerning conflicts of laws. Each of the parties hereto also
hereby submits to the jurisdiction of the state and federal courts located in
New York County, New York in any proceeding arising out of or relating to this
agreement, agrees not to commence any suit, action or proceeding relating hereto
except in such courts, and waives, to the fullest extent permitted by law, the
right to move to dismiss or transfer any action brought in such court on the
basis of any objection to personal jurisdiction, venue or inconvenient
forum. Solely for purposes of enforcing this agreement, each party
hereby consents to personal jurisdiction, service of process and venue in any
court in which any claim or proceeding that is subject to this agreement is
brought against the other party.
This
agreement shall remain in full force and effect notwithstanding the completion
or termination of the engagement.
| Very truly yours, | |
| Dais Analytic Corporation | |
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By:
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/s/ ▇▇▇ ▇▇▇▇▇▇▇▇ |
| ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇ | |
| President/CEO | |
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