EXHIBIT 4.2
PICK - UPS PLUS, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: March 29, 2001
May ▇▇▇▇▇ Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Pick - Ups Plus, Inc., (the "COMPANY"), hereby agrees
with May ▇▇▇▇▇ Group, Inc. ("MAY ▇▇▇▇▇") as follows:
1. OFFERING. The Company hereby engages May ▇▇▇▇▇ to act as its
exclusive placement agent in connection with the Securities Purchase Agreement
(as defined herein) for the issuance and sale by the Company (the "OFFERING") of
convertible debentures (the "CONVERTIBLE DEBENTURES") which shall be convertible
into the Company's Common Stock, $0.001 par value per share (the "COMMON
STOCK"), at a price per share equal to the Conversion Price, as that term is
defined in the Convertible Debentures . All capitalized terms used herein and
not otherwise defined shall have the same meaning ascribed to them as in the
Securities Purchase Agreement. The Investors will be granted certain
registration rights with respect to the Common Stock as more fully set forth in
the Registration Rights Agreement between the Company and the Investors (the
"INVESTORS' REGISTRATION RIGHTS AGREEMENT") dated the date hereof. The documents
to be executed and delivered in connection with the Offering, including, but not
limited, to this Agreement, the Securities Purchase Agreement dated the date
hereof between the Company and the Investors named therein (the "SECURITIES
PURCHASE AGREEMENT"), the Investors' Registration Rights Agreement, the Escrow
Agreement with First Union National Bank (the "ESCROW AGREEMENT") the Warrants
(as defined herein) and the Placement Agent's Registration Rights Agreement (as
defined herein), are referred to sometimes hereinafter collectively as the
"OFFERING MATERIALS." The Company's Common Stock and the Convertible Debentures
are sometimes collectively referred to hereinafter as the "SECURITIES". May
▇▇▇▇▇ shall not be obligated to sell any Securities and this Offering by May
▇▇▇▇▇ shall be solely on a "best efforts basis."
2. INFORMATION.
A. Upon the occurrence of each Closing, the funds received in
respect of the Convertible Debentures purchased by the Investor(s) will be
disbursed in accordance with the terms of the Securities Purchase Agreement, net
of (i) the commission payable to May ▇▇▇▇▇, equal to ten percent (10%) of the
gross proceeds from the sale of the Convertible Debentures , (ii) legal fees and
other expenses related thereto due to May ▇▇▇▇▇'▇ counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
an amount not to exceed Twenty Five Thousand Dollars ($25,000) to be paid
directly from the gross proceeds of the sale of Convertible Debentures ($10,000
for legal fees for the transactions contemplated herein which shall be payable
upon the Secondary Closing as the term is defined in the Securities Purchase
Agreement and $15,000 for legal fees for the Equity Line of Credit transaction
which shall be payable upon the Initial Closing as the term is defined in the
Securities Purchase Agreement); and (iii) legal fees and expenses of the
Company's counsel pursuant to the retainer agreement between the Company and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
B. In addition to the foregoing compensation, the Company shall
issue to May ▇▇▇▇▇ upon the execution of the Securities Purchase Agreement a
warrant in substantially the form annexed hereto as Exhibit "A" to purchase
100,000 shares of Common Stock at an exercise of 110% of the closing bid price
of the Company's Common Stock on the date of Closing; each warrant exercisable
in part or in whole at any time by May ▇▇▇▇▇, as applicable, at its discretion
for a period of sixty (60) months from the date hereof (collectively, the
"PLACEMENT AGENT'S WARRANTS"). The Placement Agent's Warrants shall be issued to
the individuals and in the amounts set forth on Schedule A attached hereto. May
▇▇▇▇▇ shall be entitled to certain demand registration rights with respect to
the shares of Common Stock issuable upon exercise of the Placement Agent's
Warrants pursuant to a registration rights agreement in substantially the same
form annexed hereto (the "PLACEMENT AGENT'S REGISTRATION RIGHTS AGREEMENT").
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MAY ▇▇▇▇▇.
A. May ▇▇▇▇▇ represents, warrants and covenants as follows:
(i) May ▇▇▇▇▇ has the necessary power to enter into this
Agreement, the Placement Agent's Registration Rights Agreement and the Escrow
Agreement and to consummate the transactions contemplated hereby and thereby.
(ii) The execution and delivery by May ▇▇▇▇▇ of this Agreement,
the Escrow Agreement, Placement Agent's Registration Rights Agreement, and the
consummation of the transactions contemplated herein and therein will not result
in any violation of, or be in conflict with, or constitute a default under, any
agreement or instrument to which May ▇▇▇▇▇ is a party or by which May ▇▇▇▇▇ or
its properties are bound, or any judgment, decree, order or, to May ▇▇▇▇▇'▇
knowledge, any statute, rule or regulation applicable to May ▇▇▇▇▇. This
Agreement, Placement Agent's Registration Rights Agreement, and the Escrow
Agreement when executed and delivered by May ▇▇▇▇▇, ▇▇▇▇ constitute the legal,
valid and binding obligations of May ▇▇▇▇▇, enforceable in accordance with their
respective terms, except to the extent that (a) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity, or (c) the indemnification provisions hereof or thereof
may be held to be violative of public policy.
(iii) Upon receipt of an executed Securities Purchase Agreement,
the Investors' Registration Rights Agreement, Placement Agent's Registration
Rights Agreement, Escrow Agreement, the Warrants, and the documents related
thereto, May ▇▇▇▇▇ will, through the Escrow Agent, promptly forward copies of
the Securities Purchase Agreement, Registration Rights Agreement and Escrow
Agreement and the documents related thereto to the Company or its counsel.
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(iv) May ▇▇▇▇▇ will not deliver any documents related to the
Offering to any person it does not reasonably believe to be an Accredited
Investor as defined in Rule 501 (a) (3) of Regulation D.
(v) May ▇▇▇▇▇ will not intentionally take any action that it
reasonably believes would cause the Offering to violate the provisions of the
1933 Act, the 1934 Act, the respective rules and regulations promulgated there
under (the "RULES AND REGULATIONS") or applicable "BLUE SKY" laws of any state
or jurisdiction.
(vi) May ▇▇▇▇▇ shall use all reasonable efforts to determine
(a) whether the Investor is an Accredited Investor and (b) that any information
furnished by the Investor is true and accurate. May ▇▇▇▇▇ shall have no
obligation to insure that (x) any check, note, draft or other means of payment
for the Convertible Debentures will be honored, paid or enforceable against the
Investors in accordance with its terms, or (y) subject to the performance of May
▇▇▇▇▇'▇ obligations and the accuracy of May ▇▇▇▇▇'▇ representations and
warranties hereunder, (1) the Offering is exempt from the registration
requirements of the 1933 Act or any applicable state "BLUE SKY" law or (2)
whether each Investor is an Accredited Investor.
(vii) May ▇▇▇▇▇ is a member of the National Association of
Securities Dealers, Inc., and is a broker-dealer registered as such under the
1934 Act and under the securities laws of the states in which the Securities
will be offered or sold by May ▇▇▇▇▇, unless an exemption for such state
registration is available to May ▇▇▇▇▇. May ▇▇▇▇▇ is in compliance with all
material rules and regulations applicable to May ▇▇▇▇▇ generally and applicable
to May ▇▇▇▇▇'▇ participation in the Offering.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of each of this
Agreement, the Securities Purchase Agreement, the Convertible Debentures, the
Escrow Agreement, the Investors Registration Rights Agreement, , Placement
Agent's Registration Rights Agreement, and the Warrants has been or will be duly
and validly authorized by the Company and is, or with respect to this Agreement,
the Securities Purchase Agreement, the Convertible Debentures, the Escrow
Agreement, and the Investors' Registration Rights Agreement will be, a valid and
binding agreement of the Company, enforceable in accordance with its respective
terms, except to the extent that (a) the enforceability hereof or thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles of equity
or (c) the indemnification provisions hereof or thereof may be held to be
violative of public policy. The Securities to be issued pursuant to the
transactions contemplated by this Agreement and the Securities Purchase
Agreement have been duly authorized and, when issued and paid for in accordance
with (x) this Agreement, the Securities Purchase Agreement and the
certificates/instruments representing such Securities, (y) will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except to the extent that (1) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, and
(2) the enforceability thereof is subject to general principles of equity. All
corporate action required to be taken for the authorization, issuance and sale
of the Securities has been duly and validly taken by the Company.
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(ii) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Securities Purchase Agreement. The Company is
not a party to or bound by any instrument, agreement or other arrangement
providing for it to issue any capital stock, rights, warrants, options or other
securities, except for this Agreement and the agreements described herein and as
described in the Securities Purchase Agreement. All issued and outstanding
securities of the Company, have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights of rescission
or preemptive rights with respect thereto and are not subject to personal
liability solely by reason of being security holders; and none of such
securities was issued in violation of the preemptive rights of any holders of
any security of the Company.
(iii) The Common Stock to be issued in accordance with
Securities Purchase Agreement has been duly authorized and when issued and paid
for in accordance with the this Agreement, the Securities Purchase Agreement and
the certificates/instruments representing such Common Stock, will be validly
issued, fully-paid and non-assessable; the holders thereof will not be subject
to personal liability solely by reason of being such holders; such Securities
are not and will not be subject to the preemptive rights of any holder of any
security of the Company.
(iv) The Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal property
necessary to conduct its business (including, without limitation, any real or
personal property stated in the Offering Materials to be owned or leased by the
Company), free and clear of all liens, encumbrances, claims, security interests
and defects of any material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.
(v) There is no litigation or governmental proceeding pending
or, to the best of the Company's knowledge, threatened against, or involving the
properties or business of the Company, except as set forth in the Offering
Materials and/or disclosed to May ▇▇▇▇▇ and it's employees.
(vi) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware. Except as set forth in the Offering Materials, the Company does not
own or control, directly or indirectly, an interest in any other corporation,
partnership, trust, joint venture or other business entity. The Company is or
will apply to be duly qualified or licensed and in good standing as a foreign
corporation in each jurisdiction in which the character of its operations
requires such qualification or licensing and where failure to so qualify would
have a material adverse effect on the Company. The Company has all requisite
corporate power and authority, and all material and necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies (domestic and foreign) to conduct
its businesses (and proposed business) as described in the Offering Materials.
Any disclosures in the Offering Materials concerning the effects of foreign,
federal, state and local regulation on the Company's businesses as currently
conducted and as contemplated are correct in all material respects and do not
omit to state a material fact. The Company has all corporate power and authority
to enter into this Agreement, the Securities Purchase Agreement, the
Registration Rights Agreement, and the Escrow Agreement, to carry out the
provisions and conditions hereof and thereof, and all consents, authorizations,
approvals and orders required in connection herewith and therewith have been
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obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required by the Company for the issuance of
the Securities or execution and delivery of the Securities Purchase Agreement,
the Investors Registration Rights Agreement, the Escrow Agreement, the Placement
Agent's Registration Right's Agreement, and the Warrants except for applicable
federal and state securities laws. The Company, since its inception, has not
incurred any liability arising under or as a result of the application of any of
the provisions of the 1933 Act, the 1934 Act or the Rules and Regulations.
(vii) There has been no material adverse change in the condition
or prospects of the Company, financial or otherwise, from the latest dates as of
which such condition or prospects, respectively, are set forth in the Offering
Materials, and the outstanding debt, the property and the business of the
Company conform in all material respects to the descriptions thereof contained
in the Offering Materials.
(viii) To the best of the Company's knowledge and except as set
forth in the Offering Materials, the Company is not in breach of, or in default
under, any term or provision of any material indenture, mortgage, deed of trust,
lease, note, loan or Securities Purchase Agreement or any other material
agreement or instrument evidencing an obligation for borrowed money, or any
other material agreement or instrument to which it is a party or by which it or
any of its properties may be bound or affected. The Company is not in violation
of any provision of its charter or by-laws or in violation of any franchise,
license, permit, judgment, decree or order, or in violation of any material
statute, rule or regulation. To the best of the Company's knowledge neither the
execution and delivery of this Agreement, the Securities Purchase Agreement, the
Investor's Registration Rights Agreement, the Escrow Agreement, the Placement
Agent's Registration Rights Agreement, and the Warrants, nor the issuance and
sale or delivery of the Securities, nor the consummation of any of the
transactions contemplated herein or in the Securities Purchase Agreement, the
Investor's Registration Rights Agreement, the Escrow Agreement, the Placement
Agent's Registration Rights Agreement, and the Warrants, nor the compliance by
the Company with the terms and provisions hereof or thereof, has conflicted with
or will conflict with, or has resulted in or will result in a breach of, any of
the terms and provisions of, or has constituted or will constitute a default
under, or has resulted in or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
pursuant to the terms of any indenture, mortgage, deed of trust, note, loan or
Securities Purchase Agreement or any other agreement or instrument evidencing an
obligation for borrowed money, or any other agreement or instrument to which the
Company may be bound or to which any of the property or assets of the Company is
subject except (a) where such default, lien, charge or encumbrance would not
have a material adverse effect on the Company and (b) as described in the
Offering Materials; nor will such action result in any violation of the
provisions of the charter or the by-laws of the Company or, assuming the due
performance by May ▇▇▇▇▇ of its obligations hereunder, any material statute or
any material order, rule or regulation applicable to the Company of any court or
of any foreign, federal, state or other regulatory authority or other government
body having jurisdiction over the Company.
(ix) Subsequent to the dates as of which information is given
in the Offering Materials, and except for the documents related to the Company's
Equity Line of Credit Agreement with Cornell Capital Partners, L.P., dated March
29, 2001, or as may otherwise be indicated or contemplated herein or therein,
the Company has not (a) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, or (b) entered into any
5
transaction other than in the ordinary course of business, or (c) declared or
paid any dividend or made any other distribution on or in respect of its capital
stock. Except as described in the Offering Materials, the Company has no
outstanding obligations to any officer or director of the Company.
(x) There are no claims for services in the nature of a
finder's or origination fee with respect to the sale of the Common Stock or any
other arrangements, agreements or understandings that may affect May ▇▇▇▇▇'▇
compensation, as determined by the National Association of Securities Dealers,
Inc.
(xi) The Company owns or possesses, free and clear of all liens
or encumbrances and rights thereto or therein by third parties, the requisite
licenses or other rights to use all trademarks, service marks, copyrights,
service names, trade names, patents, patent applications and licenses necessary
to conduct its business (including, without limitation, any such licenses or
rights described in the Offering Materials as being owned or possessed by the
Company) and, except as set forth in the Offering Materials, there is no claim
or action by any person pertaining to, or proceeding, pending or threatened,
which challenges the exclusive rights of the Company with respect to any
trademarks, service marks, copyrights, service names, trade names, patents,
patent applications and licenses used in the conduct of the Company's businesses
(including, without limitation, any such licenses or rights described in the
Offering Materials as being owned or possessed by the Company) except any claim
or action that would not have a material adverse effect on the Company; the
Company's current products, services or processes do not infringe or will not
infringe on the patents currently held by any third party.
(xii) Except as described in the Offering Materials, the Company
is not under any obligation to pay royalties or fees of any kind whatsoever to
any third party with respect to any trademarks, service marks, copyrights,
service names, trade names, patents, patent applications, licenses or technology
it has developed, uses, employs or intends to use or employ, other than to their
respective licensors.
(xiii) Subject to the performance by May ▇▇▇▇▇ of its obligations
hereunder, the Securities Purchase Agreement and the offer and sale of the
Securities comply, and will continue to comply, up to the Registration Period
(as defined in the Securities Purchase Agreement) in all material respects with
the requirements of Rule 506 of Regulation D promulgated by the SEC pursuant to
the 1933 Act and any other applicable federal and state laws, rules, regulations
and executive orders. Neither the Offering Materials nor any amendment or
supplement thereto nor any documents prepared by the Company in connection with
the Offering will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. All statements of material facts in the Offering Materials are
true and correct as of the date of the Offering Materials and will be true and
correct on the date of the Closing.
(xiv) All material taxes which are due and payable from the
Company have been paid in full or adequate provision has been made for such
taxes on the books of the Company except for those taxes disputed in good faith
the Company does not have any tax deficiency or claim outstanding assessed or
proposed against it.
(xv) None of the Company nor any of its officers, directors,
employees or agents, nor any other person acting on behalf of the Company, has,
directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
6
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who is or may be in a position to
help or hinder the business of the Company (or assist it in connection with any
actual or proposed transaction) which (A) might subject the Company to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, or (B) if not given in the past, might have had a materially adverse
effect on the assets, business or operations of the Company as reflected in any
of the financial statements contained in the Offering Materials, or (C) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company in the future.
5. CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY.
The Company covenants and agrees at its expense and without any expense
to May ▇▇▇▇▇ as follows:
A. To advise May ▇▇▇▇▇ of any material adverse change in the
Company's financial condition, prospects or business or of any development
materially affecting the Company or rendering untrue or misleading any material
statement in the Offering Materials occurring at any time as soon as the Company
is either informed or becomes aware thereof.
B. To use its commercially reasonable efforts to cause the Common
Stock issuable upon exercise of the Convertible Debentures and the Warrants to
be qualified or registered for sale on terms consistent with those stated in the
Investors' Registration Rights Agreement, the Placement Agent's Registration
Rights Agreement, and under the securities laws of such jurisdictions as May
▇▇▇▇▇ and the Investor shall reasonably request, provided that such states and
jurisdictions do not require the Company to qualify as a foreign corporation.
Qualification, registration and exemption charges and fees shall be at the sole
cost and expense of the Company.
C. Upon written request, to provide and continue to provide the each
holder of Securities, copies of all quarterly financial statements and audited
annual financial statements prepared by or on behalf of the Company, other
reports prepared by or on behalf of the Company for public disclosure and all
documents delivered to the Company's stockholders.
D. To deliver, during the Registration Period, to May ▇▇▇▇▇, upon
May ▇▇▇▇▇'▇ request, within forty five (45) days after each fiscal quarter, a
statement of its income for each such quarterly period, and its balance sheet
and a statement of changes in stockholders' equity as of the end of such
quarterly period, all in reasonable detail, certified by its principal financial
or accounting officer; (ii) within ninety (90) days after the close of each
fiscal year, its balance sheet as of the close of such fiscal year, together
with a statement of income, a statement of changes in stockholders' equity and a
statement of cash flow for such fiscal year, such balance sheet, statement of
income, statement of changes in stockholders' equity and statement of cash flow
to be in reasonable detail and accompanied by a copy of the certificate or
report thereon of independent auditors if audited financial statements are
prepared; and (iii) a copy of all documents, reports and information furnished
to its stockholders at the time that such documents, reports and information are
furnished to its stockholders.
E. To comply with the terms of the Securities Purchase Agreement,
the Investors' Registration Rights Agreement, the Escrow Agreement, the
Placement Agent's Registration Rights Agreement, and the Warrants.
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F. To ensure that any transactions between or among the Company, or
any of its officers, directors and affiliates be on terms and conditions that
are no less favorable to the Company, than the terms and conditions that would
be available in an "arm's length" transaction with an independent third party.
6. INDEMNIFICATION.
A. The Company hereby agrees that it will indemnify and hold May
▇▇▇▇▇ and each officer, director, shareholder, legal counsel, employee or
representative of May ▇▇▇▇▇, and each person controlling, controlled by or under
common control with May ▇▇▇▇▇ within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act or the SEC's Rules and Regulations promulgated
there under (the "RULES AND REGULATIONS"), harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which May ▇▇▇▇▇ or such indemnified person of May ▇▇▇▇▇ may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in (a) Section 4 of this Agreement, (b) the Offering
Materials (except those written statements relating to May ▇▇▇▇▇ given by an
indemnified person for inclusion therein), (c) any application or other document
or written communication executed by the Company or based upon written
information furnished by the Company filed in any jurisdiction in order to
qualify the Common Stock under the securities laws thereof, or any state
securities commission or agency; (ii) the omission or alleged omission from
documents described in clauses (a), (b) or (c) above of a material fact required
to be stated therein or necessary to make the statements therein not misleading;
or (iii) the breach of any representation, warranty, covenant or agreement made
by the Company in this Agreement. The Company further agrees that upon demand by
an indemnified person, at any time or from time to time, it will promptly
reimburse such indemnified person for any loss, claim, damage, liability, cost
or expense actually and reasonably paid by the indemnified person as to which
the Company has indemnified such person pursuant hereto. Notwithstanding the
foregoing provisions of this Paragraph 6(A), any such payment or reimbursement
by the Company of fees, expenses or disbursements incurred by an indemnified
person in any proceeding in which a final judgment by a court of competent
jurisdiction (after all appeals or the expiration of time to appeal) is entered
against May ▇▇▇▇▇ or such indemnified person as a direct result of May ▇▇▇▇▇ or
such person's gross negligence or willful misfeasance will be promptly repaid to
the Company.
B. May ▇▇▇▇▇ hereby agrees that it will indemnify and hold the
Company and each officer, director, shareholder, employee or representative of
the Company, and each person controlling, controlled by or under common control
with the Company within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations, harmless from and against any and
all loss, claim, damage, liability, cost or expense whatsoever (including, but
not limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
8
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of May ▇▇▇▇▇ or its officers, employees or
representatives in its acting as Placement Agent for the Offering or (ii) the
breach of any representation, warranty, covenant or agreement made by May ▇▇▇▇▇
in this Agreement (iii) any false or misleading information provided to the
Company by one of the May ▇▇▇▇▇ indemnified persons.
C. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 6(A) or 6(B), the party to be
indemnified shall, within five (5) business days, notify the indemnifying party
of the commencement thereof; the omission by one (1) indemnified party to so
notify the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other indemnified party that has given such notice
and shall not relieve the indemnifying party of any liability outside of this
indemnification if not materially prejudiced thereby. In the event that any
action is brought against the indemnified party, the indemnifying party will be
entitled to participate therein and, to the extent it may desire, to assume and
control the defense thereof with counsel chosen by it which is reasonably
acceptable to the indemnified party. After notice from the indemnifying party to
such indemnified party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under such
Section 6(A) or 6(B) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, but the
indemnified party may, at its own expense, participate in such defense by
counsel chosen by it, without, however, impairing the indemnifying party's
control of the defense. Subject to the proviso of this sentence and
notwithstanding any other statement to the contrary contained herein, the
indemnified party or parties shall have the right to choose its or their own
counsel and control the defense of any action, all at the expense of the
indemnifying party if, (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action at the expense of the indemnifying party, or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstance, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such indemnified parties. No
settlement of any action or proceeding against an indemnified party shall be
made without the consent of the indemnifying party.
9
D. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6(A) or 6(B)
is due in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company and May ▇▇▇▇▇ shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that May
▇▇▇▇▇ shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the gross
proceeds paid to May ▇▇▇▇▇ and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(D), any person controlling, controlled by or under
common control with May ▇▇▇▇▇, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights to
contribution as May ▇▇▇▇▇ and each person controlling, controlled by or under
common control with the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and each officer of the Company and each director
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against the other party under this
Section 6(D), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any obligation they may have hereunder or
otherwise if the party from whom contribution may be sought is not materially
prejudiced thereby. The indemnity and contribution agreements contained in this
Section 6 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified person or any termination
of this Agreement.
7. PAYMENT OF EXPENSES.
The Company hereby agrees to bear all of the expenses in connection
with the Offering, including, but not limited to the following: filing fees,
printing and duplicating costs, advertisements, postage and mailing expenses
with respect to the transmission of Offering Materials, registrar and transfer
agent fees, Escrow Agent fees and expenses, fees of the Company's counsel and
accountants, issue and transfer taxes, if any.
8. CONDITIONS OF CLOSING
The Closings (as the term is defined in the Securities Purchase
Agreement) shall be held at the offices of May ▇▇▇▇▇ or its counsel. The
obligations of May ▇▇▇▇▇ hereunder shall be subject to the continuing accuracy
of the representations and warranties of the Company herein as of the date
hereof and as of the Closing Dates (as the term is defined in the Securities
Purchase Agreement ) with respect to the Company as if it had been made on and
as of such Closing Dates; the accuracy on and as of the Closing Dates of the
statements of the officers of the Company made pursuant to the provisions
hereof; and the performance by the Company on and as of the Closing Dates of its
covenants and obligations hereunder and to the following further conditions:
A. At the Initial Closing (as the term is defined in the Securities
Purchase Agreement) May ▇▇▇▇▇ shall receive the opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ P.C.,
dated as of the date of the Initial Closing, which opinion shall be in form and
substance reasonably satisfactory to counsel for May ▇▇▇▇▇.
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B. At or prior to the Initial Closing, counsel for May ▇▇▇▇▇ shall
have been furnished such documents, certificates and opinions as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Agreement and the Offering Materials, or in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
C. At and prior to the Closings (as the term is defined in the
Securities Purchase Agreement), (i) there shall have been no material adverse
change nor development involving a prospective change in the condition or
prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Offering
Materials; (ii) there shall have been no transaction, not in the ordinary course
of business, entered into by the Company other than the documents relating to
the Company's Equity Line of Credit Agreement with Cornell Capital Partners,
L.P. which has not been disclosed in the Offering Materials or to May ▇▇▇▇▇ in
writing; (iii) except as set forth in the Offering Materials, the Company shall
not be in default under any provision of any instrument relating to any
outstanding indebtedness for which a waiver or extension has not been otherwise
received; (iv) except as set forth in the Offering Materials, the Company shall
not have issued any securities (other than those to be issued as provided in the
Offering Materials) or declared or paid any dividend or made any distribution of
its capital stock of any class and there shall not have been any change in the
indebtedness (long or short term) or liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material amount of the
assets of the Company shall have been pledged or mortgaged, except as indicated
in the Offering Materials; and (v) no action, suit or proceeding, at law or in
equity, against the Company or affecting any of its properties or businesses
shall be pending or threatened before or by any court or federal or state
commission, board or other administrative agency, domestic or foreign, wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.
D. At Closings, May ▇▇▇▇▇ shall receive a certificate of the Company
signed by an executive officer and chief financial officer, dated as of the
applicable Closings, to the effect that the conditions set forth in subparagraph
(C) above have been satisfied and that, as of the applicable closing, the
representations and warranties of the Company set forth herein are true and
correct.
9. TERMINATION.
This Agreement shall be co-terminus with, and terminate upon the same
terms and conditions as those set forth in, the Securities Purchase Agreement.
The rights of the Investor and the obligations of the Company under the
Registration Rights Agreement, and the rights of May ▇▇▇▇▇ and the obligations
of the Company shall survive the termination of this Agreement unabridged.
10. MISCELLANEOUS.
A. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all which shall be deemed
to be one and the same instrument.
B. Any notice required or permitted to be given hereunder shall be
given in writing and shall be deemed effective when deposited in the United
States mail, postage prepaid, or when received if personally delivered or faxed
( upon confirmation of receipt received by the sending party), addressed as
follows:
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If to Placement Agent, to: The May ▇▇▇▇▇ Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, to: Pick - Ups Plus, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ P.C.
▇▇▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address of which written notice is given to the others.
C. This Agreement shall be governed by and construed in all respects
under the laws of the State of New York, without reference to its conflict of
laws rules or principles. Any suit, action, proceeding or litigation arising out
of or relating to this Agreement shall be brought and prosecuted in such federal
or state court or courts located within the State of New York as provided by
law. The parties hereby irrevocably and unconditionally consent to the
jurisdiction of each such court or courts located within the State of New York
and to service of process by registered or certified mail, return receipt
requested, or by any other manner provided by applicable law, and hereby
irrevocably and unconditionally waive any right to claim that any suit, action,
proceeding or litigation so commenced has been commenced in an inconvenient
forum.
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D. This Agreement and the other agreements referenced herein contain
the entire understanding between the parties hereto and may not be modified or
amended except by a writing duly signed by the party against whom enforcement of
the modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
PICK - UPS PLUS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
MAY ▇▇▇▇▇ GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
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