V-ONE CORPORATION
SHARES OF COMMON STOCK
PLACEMENT AGENT AGREEMENT
THE PLACEMENT AGENT AGREEMENT (the "AGREEMENT") is entered into as of the
date set forth on the signature page hereof by and between V-ONE Corporation, a
Delaware corporation (the "COMPANY"), and LaSalle St. Securities, Inc., an
Illinois corporation (the "PLACEMENT AGENT").
The Company proposes to offer and sell solely to "accredited investors" as
such term is defined in Regulation D ("REGULATION D") promulgated under the
Securities Act of 1933, as amended (the "ACT"), upon the terms and subject to
the conditions set forth in the accompanying form of subscription agreement (the
"SUBSCRIPTION AGREEMENT") attached as an exhibit to the Offering Memorandum (as
defined below), shares ("SHARES") of the Company's common stock, par value
$0.001 per share ("COMMON STOCK"), at the prevailing closing bid price for the
Shares on the Nasdaq National Market on the day of the Closing of this placement
(as defined below), but in no event less than $1.625 per Share (the "OFFERING
PRICE"), such that the gross sale proceeds raised is at least $3,600,000. The
Company has reserved the right to sell additional Shares with additional gross
sale proceeds of no more than $2,400,000 on the same terms set forth above in
the event this Offering is oversubscribed (the "OVER SUBSCRIPTION OPTION"). An
investor must purchase a minimum of $100,000 of the Common Stock; however, this
requirement may be waived by the Company in its sole discretion. All Shares are
offered subject to the right of the Company to reject any subscription for
Shares in whole or in part for any reason whatsoever or to sell to any
prospective investor less than the number of Shares subscribed for by such
prospective investor and subject to certain other conditions. This transaction
is referred to herein as the "OFFERING."
The Company has determined to use the services of the Placement Agent as
its exclusive agent to solicit subscriptions for the Shares on a "best efforts"
basis through the earlier of (a) October 26, 1998; or (b) the sale of all Shares
offered, which period can be extended upon agreement of the Company and the
Placement Agent to November 20, 1998 without notice to investors (the "OFFERING
PERIOD"). The Placement Agent hereby agrees to act in such capacity and to use
its best efforts to find purchasers for the Shares in accordance with the terms
and conditions of this Agreement.
Accompanying this Agreement is a copy of the Company's Confidential
Private Placement Memorandum and the subscription documents (including a
Purchaser Representative Questionnaire) attached as an exhibit thereto (the
"SUBSCRIPTION DOCUMENTS") and prepared for use in conjunction with the offer and
sale of the Shares. Investors who subscribe for the Shares (the "SUBSCRIBERS")
will be required to complete the Subscription Documents and execute the
Subscription Agreement forming a part thereof. Such Confidential Private
Placement Memorandum dated October 9, 1998 (and its exhibits) together with the
Subscription Documents is herein called the "OFFERING MEMORANDUM," except that,
if the Confidential Private Placement Memorandum shall be supplemented or
amended as herein provided, the term "OFFERING MEMORANDUM" shall refer, from and
after the supplement or amendment has been delivered to the Placement Agent, to
the Subscription Documents and the Confidential Private Placement Memorandum and
the exhibits thereto as so amended or supplemented.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Placement Agent that:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of Delaware, and has the power and authority
to carry on its business as conducted or proposed to be conducted by it and to
hold title to its property, which business and property is described in the
Offering Memorandum. The Company has the corporate power and authority to
execute and deliver this Agreement, to conduct such business and to perform its
obligations hereunder and consummate the transactions contemplated by each set
of Subscription Documents tendered by a Subscriber that is accepted by the
Company.
(b) When (i) the Company has received payment for subscriptions in
accordance with the provisions of the Subscription Documents and the Offering
Memorandum and (ii) certificates evidencing the Shares have been issued to the
respective Subscribers therefor, the Shares will be validly issued, fully paid
and non-assessable.
(c) As of the date of the Offering Memorandum and to the best of the
Company's knowledge after due inquiry, the Offering Memorandum does not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) Except as disclosed in the Offering Memorandum, there are no
actions, suits, proceedings or investigations pending or, to the best of the
Company's knowledge, threatened against or affecting the Company which could
prevent or interfere with or adversely affect the execution and delivery by the
Company of this Agreement or the performance by the Company of its obligations
hereunder or the offering, issuance and sale of the Shares, or which,
individually or in the aggregate, would have a material adverse effect on the
value of the assets or the operation of the business of the Company.
(e) Except as otherwise disclosed in the Offering Memorandum, all
requisite authorizations, approvals or orders from any court, governmental or
regulatory official or body necessary to permit the Company to conduct its
business as described in the Offering Memorandum will have been obtained or are
in the process of being applied for prior to the Closing Date (as hereinafter
defined). All requisite authorizations, approvals or orders from any court or
any governmental or regulatory official or body necessary for the consummation
by the Company of the transactions contemplated by this Agreement will have been
obtained or are in the process of being applied for prior to the Closing Date;
PROVIDED, HOWEVER, that the Company (i) shall file the Registration Statement
contemplated by Section 8 of the Subscription Agreement forming part of the
Subscription Documents within the time period contemplated by such section, (ii)
shall file an additional listing application with Nasdaq National Market
regarding the Shares and the Underlying Shares (as hereinafter defined) within
15 days of the Closing Date and (iii) shall file any documents required by
federal or state securities laws or the securities laws of foreign jurisdictions
either before or after the Closing Date as required by the laws of such
jurisdictions.
(f) This Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes the valid and binding agreement of
the Company, enforceable in accordance with its terms, except that (i) such
enforcement may be subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally and general principals
of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law) and (ii) the indemnification provisions of this Agreement
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may be held to violate public policy (under either federal or state law) in the
context of the offer or sale of securities.
(g) The Company's execution and delivery of this Agreement, the
fulfillment of the terms set forth herein and the consummation of the
transactions contemplated herein will not conflict with or constitute a breach
of, or default under (i) the Company's articles of incorporation or by-laws,
(ii) any material agreement, indenture or instrument by which the Company is
bound (except to the extent such conflict, breach or default would not have a
material adverse effect on the value of the assets or the operation of the
business of the Company), or (iii) any law, administrative regulation or court
decree (except to the extent such conflict, breach or default would not have a
material adverse effect on the value of the assets or the operation of the
business of the Company).
(h) It is the Company's present intention to utilize the proceeds
from the sale of the Shares substantially in the manner set forth in the
Offering Memorandum. Further, the Company has no present intention to make any
material changes in its business as described in the Offering Memorandum.
(i) The Company represents and warrants that the financial
statements of the Company contained on the Exhibits to the Offering Memorandum
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby, and present fairly
the financial position of the Company as of the date indicated. In the opinion
of management, all adjustments (consisting only of normal recurring adjustments)
have been made which are considered necessary for a fair presentation of such
information for the periods presented. Except for the transactions contemplated
by the Offering Memorandum, there has been no material adverse change in the
condition of the Company, financial or otherwise, from that set forth in the
Offering Memorandum.
(j) On the date hereof, and at the Closing Date, the Company is not
or will not be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(k) Neither the Company nor any of its affiliates have received or
are entitled to receive, directly or indirectly, any compensation or other
benefit in connection with the Offering including, but not limited to, any
commission or similar fee, except as described in the Offering Memorandum.
(l) The Company has not paid or awarded, and will not pay or award,
directly or indirectly, any commission or other compensation to any person
engaged to render investment advice to a potential purchaser of the Shares as an
inducement to advise the purchase of the Shares, except as such commissions or
other compensation may be paid or awarded to the Placement Agent in accordance
with this Agreement in connection with the sale of the Shares as described in
the Offering Memorandum.
(m) Any written or oral information provided to prospective
purchasers of Shares by authorized representatives of the Company other than the
Placement Agent ("AUTHORIZED PERSONS") will not contain any untrue statement of
a material fact or, when taken together with the information set forth in the
Offering Memorandum, omit to state a 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.
(n) The sale of the Shares has been duly and validly authorized by
the Company. There are no outstanding options, warrants or other rights to
purchase or otherwise acquire any Shares of the Company or any security
convertible into such Shares, except as described in the Offering Memorandum.
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(o) None of the Company or, to the Company's knowledge, any of its
current directors or officers:
(i) would be required to make any disclosure required pursuant
to Items 103 or 401(f) of Regulation S-K with respect to such person that
has not previously been made in a filing by the Company with the
Securities and Exchange Commission ("COMMISSION");
(ii) is subject to a United States Postal Service false
representation order entered within five years prior to the date hereof;
or is subject to a restraining order or preliminary injunction entered
under Section 3007 of title 39, United States Code, with respect to any
conduct alleged to constitute postal fraud;
(iii) has been or has been named as an underwriter of any
securities covered by any registration statement which is the subject of
any pending proceeding under Section 8 of the Act, or is the subject of
any refusal order or stop order entered thereunder within five years prior
to the date hereof; or
(iv) has filed a registration statement that is the subject of
a currently effective stop order entered pursuant to any state's
securities law within five years prior to the date hereof.
(p) Other than the Placement Agent, the Company has not contracted
with any person to act as a finder or investment adviser in connection with
these transactions described herein and the Company agrees to indemnify the
Placement Agent with respect to any claim for such a finder's fee in connection
with the Offering. No current director or owner of more than 10% of the
Company's outstanding shares of Common Stock (other than ▇▇▇▇ Capital
Management, LLC and Advantage Fund II Ltd., of which the Company has no
knowledge) is a member of a broker-dealer registered with the National
Association of Securities Dealers, Inc. (the "NASD") or an employee or
associated member of a broker-dealer registered with the NASD.
(q) On the date hereof and at the Closing Date, the Company will not
be disqualified pursuant to Rule 507(a) of Regulation D from relying on the
exemption contained in Rule 506 of Regulation D.
(r) The Company is not:
(i) currently subject to any state administrative enforcement
order or judgment entered by that state's securities administrator within
five years prior to the date hereof or subject to any state's
administrative enforcement order or judgment in which fraud or deceit,
including but not limited to making untrue statements of material facts
and omitting to state material facts, was found and the order or judgment
was entered within five years prior to the date hereof; or
(ii) subject to any state's administrative enforcement order
or judgment that prohibits, denies or revokes the use of any exemption
from registration in connection with the offer, purchase or sale of
securities.
2. REPRESENTATIONS AND WARRANTIES OF THE PLACEMENT AGENT. The
Placement Agent hereby represents, warrants and agrees with the Company that:
(a) The Placement Agent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois, with the
corporate power and authority to conduct its business, to execute and deliver
this Agreement, and to perform the obligations contemplated herein.
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(b) This Agreement has been duly and validly authorized, executed
and delivered by the Placement Agent and constitutes the valid, binding and
enforceable agreement of the Placement Agent, except to the extent that (i) such
enforcement may be subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting the rights of creditors generally and general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), and (ii) the indemnification provisions of this
Agreement may be held to violate public policy (under either federal or state
law) in the context of the offer or sale of securities.
(c) The Placement Agent's execution and delivery of this Agreement,
and the performance of its obligations hereunder, will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
its articles of incorporation or bylaws, any agreement or instrument to which it
is a party or by which it is bound, or any judgment, decree, order or, to its
knowledge, any statute, rule or regulation applicable to Placement Agent.
(d) As of the date of the Offering Memorandum, the information
contained in the Offering Memorandum relating to the Placement Agent, if any,
does not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) The Placement Agent is (i) a broker-dealer duly registered
pursuant to the provisions of the Securities Exchange Act of 1934, as amended
("EXCHANGE ACT"); (ii) a member in good standing of the NASD; and (iii) duly
registered as a broker-dealer under the applicable statutes and regulations of
each state in which the Shares will be offered and sold, except (A) such states
or other jurisdictions in the United States in which the Placement Agent is
exempt from registration or such registration is not otherwise required and (B)
such jurisdictions where the Shares will be offered and sold outside of the
United States, in which jurisdictions the Shares will be offered and sold
through broker-dealers duly registered under the applicable laws of such
jurisdictions who are selected by the Placement Agent to offer and sell the
Shares in such jurisdictions. The Placement Agent will maintain all its
registrations as well as those of each individual who participates in the offer
or sale of the Shares as the Placement Agent's agent or registered
representative, in good standing throughout the Offering Period and the
Placement Agent will comply with all statutes and other requirements of law
applicable to it with respect to its brokerage activities within those
jurisdictions. To the extent required by applicable law, any individual who
participates in the offer or sale of the Shares as the Placement Agent's agent
or registered representative will be duly registered as a registered
representative or principal of the Placement Agent pursuant to the provisions of
the NASD rules.
(f) Neither Placement Agent nor any of its directors or officers nor
any beneficial owner of 10% or more of any class of its equity securities, nor
any of their respective affiliates (nor any other person serving in a similar
capacity):
(i) has been convicted within ten years prior to the date
hereof of any crime or offense involving the purchase or sale of any
security, involving the making of a false statement with the Commission,
or arising out of such person's conduct as an underwriter, broker, dealer,
municipal securities dealer or investment adviser;
(ii) is subject to any order, judgment or decree of any court
of competent jurisdiction temporarily or preliminarily enjoining or
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restraining, or is subject to any order, judgment, or decree of any court
of competent jurisdiction, entered within five years prior to the date
hereof, permanently enjoining or restraining such person from engaging in
or continuing any conduct or practice in connection with the purchase or
sale of any security, involving the making of a false filing with the
Commission or arising out of the conduct of the business of an
underwriter, broker, dealer, municipal securities dealer or investment
adviser;
(iii) is subject to an order of the Commission entered
pursuant to Section 15(b), 15B(a), or 15B(c) of the Exchange Act, or is
subject to an order of the Commission entered pursuant to Section 203(e)
or (f) of the Investment Advisers Act of 1940;
(iv) is suspended or expelled from membership in, or suspended
or barred from association with a member of, an exchange registered as a
national securities exchange pursuant to Section 6 of the Exchange Act, an
association registered as a national securities association under Section
15A of the Exchange Act, or a Canadian securities exchange or association
for any act or omission constituting conduct inconsistent with just and
equitable principles of trade;
(v) is subject to a United States Postal Service false
representation order entered within five years prior to the date hereof;
or is subject to a restraining order or preliminary injunction entered
under Section 3007 of title 39, United States Code, with respect to any
conduct alleged to constitute postal fraud;
(vi) has been or has been named as an underwriter of any
securities covered by any registration statement which is the subject of
any pending proceeding or examination under Section 8 of the Act, or is
the subject of any refusal order or stop order entered thereunder within
five years prior to the date hereof;
(vii) has taken or failed to take any other act or are subject
to any other order or proceedings, that would make unavailable any limited
offering exemption from registration or qualification requirements of
federal or state securities laws;
(viii) has filed a registration statement that is the subject
of a currently effective stop order entered pursuant to any state's
securities law within five years prior to the date hereof;
(ix) has been convicted within five years prior to the date
hereof of any felony or misdemeanor in connection with the offer, purchase
or sale of any security or any felony involving fraud or deceit, including
but not limited to forgery, embezzlement, obtaining money under false
pretenses, larceny or conspiracy to defraud;
(x) is currently subject to any state administrative
enforcement order or judgment entered by that state's securities
administrator within five years prior to the date hereof or is subject to
any state's administrative enforcement order or judgment in which fraud or
deceit, including but not limited to making untrue statements of material
facts and omitting to state material facts, was found and the order or
judgment was entered within five years prior to the date hereof;
(xi) is subject to any state's administrative enforcement
order or judgment that prohibits, denies or revokes the use of any
exemption from registration in connection with the offer, purchase or sale
of securities; or
(xii) is currently subject to any order, judgment or decree of
any court of competent jurisdiction temporarily or preliminarily
6
restraining or enjoining, or is subject to any order, judgment or decree
of any court of competent jurisdiction permanently restraining or
enjoining, such party from engaging in or continuing any conduct or
practice in connection with the purchase or sale of any security or
involving the making of any false filing with the state entered within
five years prior to the date hereof.
3. SALE OF THE SHARES BY THE PLACEMENT AGENT. The Company and the
Placement Agent hereby agree as follows:
(a) The Offering will be made solely to accredited investors to whom
the Placement Agent has furnished copies of the Offering Memorandum and in
reliance upon the exemption from registration under Section 4(2) of the Act and
the provisions of Rule 506 of Regulation D, and as permitted in the
jurisdictions in which the Shares are to be offered. The Placement Agent shall
make reasonable inquiry to determine whether an accredited investor is
purchasing for its own account or if it is purchasing for the account of others.
In the case of any purchaser acting on behalf of others, the Placement Agent
shall require such other persons(s) to complete the Subscription Documents.
(b) The Company hereby appoints the Placement Agent as its exclusive
selling agent to solicit prospective purchasers of the Shares and as such to
effect sales of the Shares, on a best efforts basis, for the Company during the
period commencing with the date of the Offering Memorandum and ending on the
Closing Date. Notwithstanding the foregoing, the Placement Agent is not acting
as a selling agent with respect to any sale of the Shares to any existing
shareholder of the Company. The Company may not terminate the Placement Agent's
agency hereunder other than upon the Placement Agent's failure to perform its
obligations hereunder in a material respect, upon the Placement Agent's material
breach of any of its representations and warranties contained herein or upon the
Placement Agent's gross negligence or willful misconduct. Subject to the terms
and conditions and upon the basis of the representations and warranties herein
set forth, the Placement Agent accepts such appointment and agrees to use its
best efforts to find prospective purchasers for the Shares in accordance with
the terms and conditions of this Agreement.
(c) Each person desiring to purchase Shares (a "SUBSCRIBER") will be
required to complete and execute the Subscription Documents. Each Subscriber
will deliver payment by check payable to the order of "LaSalle National Bank
Escrow Agent for V-ONE Corporation" or by wire transfer, in the amount of the
aggregate purchase price of the Shares subscribed for, to the Escrow Agent (as
hereinafter defined). Each Subscriber will return to the Placement Agent such
Subscription Documents together with such check (or wire transfer) and any other
documents that may be required under state or foreign securities laws or by the
Company. Neither the Placement Agent nor any investment adviser is permitted to
sign any Subscription Documents for any Subscriber. The Placement Agent will
ascertain that each set of Subscription Documents submitted by a Subscriber has
been completed and executed by such Subscriber, and Placement Agent will then
forward such Subscription Documents, such other documents and a copy of such
check or information regarding such wire transfer to the Company and shall
forward such check and a copy of such Subscription Documents and other documents
to LaSalle National Bank, Chicago, Illinois (the "ESCROW AGENT").
(d) The Placement Agent shall transmit all checks and Subscription
Documents to the Escrow Agent by the end of the next business day following
receipt by the Placement Agent. Transmittal of the Subscription Documents and
the other information described in Section 3(c) to the Company will be effected
in accordance with the same timetable.
(e) Upon receipt of a Subscriber's Subscription Documents, the
Company will determine promptly whether it wishes to accept the Subscriber as a
7
holder of Shares in the Company, it being understood that the Company reserves
the right to reject the tender of any Subscription Documents before the end of
the second business day following the Company's receipt of the Subscription
Documents, and to reject all tenders after the $3,600,000 in gross sale proceeds
have been raised (subject to the Company's right to raise an additional
$2,400,000 as previously described); PROVIDED, HOWEVER, that any acceptance by
the Company is subject to the fulfillment of all of the terms and conditions
relating to the Offering contained in this Agreement and the Offering
Memorandum, and that any failure by the Company to expressly reject a tender of
Subscription Documents shall not be deemed to constitute an acceptance thereof.
Should the Company determine to reject a tender, it will promptly notify the
Escrow Agent and the Placement Agent of such determination. The Placement Agent
will notify the Subscriber of such determination, and the Escrow Agent will
issue and mail (or wire transfer) to the Subscriber, a check in an amount equal
to the tendered subscription amount for the Shares by noon of the business day
following the day that the Company indicates to the Escrow Agent that the tender
has been rejected.
(f) Pending the Closing, all payments received and accepted from
Subscribers, will be deposited in an escrow account (the "ESCROW ACCOUNT") with
the Escrow Agent. However, mere deposit of a check or receipt of a wire transfer
will not constitute acceptance by the Company of Subscription Documents. Such
funds may be temporarily invested only in investments described in the Escrow
Agreement ("ESCROW AGREEMENT") dated the date hereof among the Company, the
Placement Agent and the Escrow Agent. Prior to the Closing, the Company will
have no right to obtain any funds from the Escrow Agent. The right of the
Company to receive funds, including any interest on the funds, at the Closing is
subject to fulfillment of the conditions specified in Section 8 hereof. Funds,
including any interest on the funds, will be made available to the Company at
the Closing.
(g) Prior to the Closing or termination of the Offering, the Company
shall from time to time amend the Offering Memorandum in order to update the
information contained therein as follows, and the Placement Agent shall
cooperate with the Company in connection with any amendments thereto. In such
event, the Company promptly will notify the Placement Agent by telephone,
promptly confirmed in writing by telecopy, to suspend solicitation of offers to
purchase Shares, and, if so notified by the Company, the Placement Agent shall
forthwith suspend such solicitation and cease using the Offering Memorandum
until such time as the Company advises that solicitation may be resumed. If
requested to do so by the Company, the Placement Agent shall also provide such
amended or supplemented Offering Memorandum to each Subscriber who has
previously submitted Subscription Documents and offer such Subscriber the
opportunity to revoke its subscription for Shares. If, in connection therewith,
the Company shall, with the cooperation of the Placement Agent, decide to amend
or supplement the Offering Memorandum, the Company (i) will advise the Placement
Agent promptly by telephone (with confirmation in writing by telecopy), (ii)
will prepare an amendment or supplement to the Offering Memorandum that will
correct such untrue statement or omission or will make such other change as may
be necessary, and (iii) will supply such amended or supplemented Offering
Memorandum to the Placement Agent. If such amendment or supplement is
satisfactory in all respects to the Placement Agent, the Placement Agent will
resume the solicitation of offers to purchase Shares.
(h) The Placement Agent (i) has not offered or sold and, prior to
the expiration of the period of six months from the Closing Date (as hereinafter
defined), will not offer or sell any Shares to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances that have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995, (ii) has complied and will
comply with all applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ with
respect to anything done by it in relation to the Shares in, from or otherwise
8
involving the United Kingdom, and (iii) has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Shares to a person who is of a kind described
in Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisements)
(Exemptions) Order 1995 or is a person to whom such document may otherwise
lawfully be issued or passed on; and (iv) has complied and will comply with all
securities laws in the United Kingdom and elsewhere in Europe in connection with
the offering of Shares.
(i) The Placement Agent acknowledges that the distribution of the
Shares to purchasers in Ontario, Canada has not been qualified by a prospectus
filed under the Securities Act (Ontario) and represents and agrees that (i) it
has not offered or sold and will not offer or sell, directly or indirectly, the
Shares to purchasers in Ontario except pursuant to an exemption from the
prospectus filing requirement of the Securities Act (Ontario); (ii) it has
complied and will comply with all applicable provisions of the Securities Act
(Ontario) in connection with the offer and sale of the Shares in Ontario; and
(iii) it has distributed in Ontario documents relating to the distribution of
the Shares only to persons eligible to purchase Shares pursuant to an exemption
from the prospectus filing requirements of the Securities Act (Ontario).
(j) The Placement Agent acknowledges that the distribution of the
Shares to purchasers in Sweden has not been qualified by a prospectus filed
under the Swedish Financial Instruments Trading Act (LAGEN ▇▇ ▇▇▇▇▇▇ MED
FINANSIELLA INSTRUMENT) and represents and agrees that it has complied and will
comply with the Swedish Investment Firms Act (LAGEN OM VARDEPAPPERSRORELSE), the
Financial Instruments Trading Act and all other applicable laws and regulations
in respect of the offer and sale of Shares in Sweden.
4. CLOSING DATE. The Company may hold a "CLOSING" of the Offering at
any time after (i) subscriptions for the minimum of $3,600,000 in gross sale
proceeds have been received and accepted, (ii) the Escrow Agent confirms that
such proceeds constitute "collected funds" (as such term is defined in the
Escrow Agreement), and (iii) all the conditions to the right of the Company to
obtain funds as set forth in this Agreement, including Section 8 hereof, have
been satisfied. On the date of the Closing ("CLOSING DATE") (A) the Company and
the Placement Agent shall jointly notify the Escrow Agent to release the funds
from the Escrow Account; (B) the Company will issue the Shares or instruct its
transfer agent to issue the Shares to each person whose Subscription Documents
have been accepted by the Company (individually, a "PURCHASER" and,
collectively, the "PURCHASERS"); (C) counsel for the Company shall deliver its
opinion to the Placement Agent as provided by Section 8 hereof; and (D) all
accepted subscription amounts will be delivered to the Company. The Offering
will expire on the earlier of (a) $6,000,000 in gross sale proceeds have been
raised relating to the sale of Shares or (b) October 26, 1998, unless the
Offering is extended to November 20, 1998, upon agreement of the Company and the
Placement Agent, without notice to the prospective investors. Pending the
Closing, each Subscriber's payment accompanying its Subscription Documents will
be deposited in a segregated escrow account with the Escrow Agent.
5. COMPENSATION. For the services of the Placement Agent in
soliciting and obtaining purchasers of the Shares, the Company agrees to pay the
Placement Agent at the Closing (as hereinafter defined), (i) a selling
commission equal to eight percent (8%) of the aggregate gross sale proceeds
received from the sale of Shares (the "SELLING COMMISSION"), plus an amount
equal to one and one-half percent (1.5%) of the aggregate gross sale proceeds
received from the sale of Shares ("EXPENSE ALLOWANCE"), as a nonaccountable
expense allowance. In the event that the Offering is terminated for any reason
by the Company other than a breach of the representations or warranties by the
Placement Agent, the Company agrees to pay all accountable fees, costs and
disbursements incurred and/or due and payable by Placement Agent and its legal
counsel up to an amount, which shall not exceed $30,000. In the event the
Offering is terminated by Placement Agent for any reason other than a breach of
9
the representations or warranties by the Company, each party shall bear its own
expenses relating to the Offering.
(a) Upon the Closing, the Company will issue to the Placement Agent
or its designees at a per Share exercise price equal to the greater of $2.125
and the Offering Price (the "WARRANT PRICE") a warrant ("AGENT WARRANT")
entitling the Agent to purchase an aggregate of 50,000 shares of Common Stock.
The Agent Warrant is exercisable at any time after one year from the initial
closing of the Offering and shall expire, if not exercised, five (5) years from
the date of the Closing (the "WARRANT EXERCISE TERM"). The Aggregate Warrant
Price shall be payable by giving the Placement Agent the option to pay the
exercise price either (i) by reducing the shares issuable upon exercise by such
number of shares as the fair market value of which is equal to the exercise
price for the number of shares to be exercised or (ii) by paying cash.
(b) If, at any time during the Warrant Exercise Term, the Company
shall determine to prepare and file with the Commission a Registration Statement
relating to an offering for its own account or the account of others under the
Act of any of its shares of Common Stock (other than on Form S-4 or Form S-8 or
their then equivalents), the Company shall send to then holders ("HOLDERS") of
the Agent Warrants and/or the shares of Common Stock then issued or issuable on
exercise of the Agent Warrants ("UNDERLYING SHARES") written notice of such
determination and, if within ten (10) days after receipt of such notice, one or
more of such Holders shall so request in writing, the Company shall include in
such Registration Statement all or any part of the Underlying Shares such
Holders request to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock that may be included in the Registration Statement because, in such
underwriter(s)' judgment, such limitation is necessary to effect an orderly
public distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Underlying Shares with
respect to which such Holders have requested inclusion hereunder. Any exclusion
of Underlying Shares shall be made pro rata among the Holders seeking to include
Underlying Shares, in proportion to the number of Underlying Shares sought to be
included by such Holders; PROVIDED, HOWEVER, that the Company shall not exclude
any Underlying Shares unless the Company has first excluded all outstanding
securities the holders of which are not entitled by right to inclusion of
securities in such Registration Statement; and PROVIDED FURTHER, HOWEVER, that,
after giving effect to the immediately preceding proviso, any exclusion of
Underlying Shares shall be made pro rata with holders of other securities having
the right to include such securities in the Registration Statement, based on the
number of securities for which registration is requested except to the extent
such pro rata exclusion of such other securities is prohibited under any written
agreement entered into by the Company with the holder of such other securities
prior to the date of this Agreement, in which case such other securities shall
be excluded, if at all, in accordance with the terms of such agreement. The
obligations of the Company under this Section 5(b) may be waived by Holders
holding a majority in interest of the Underlying Shares and shall expire with
respect to a Holder when all of such Holder's Underlying Shares may be sold
pursuant to Rule 144(k).
(c) All reasonable expenses (other than underwriting discounts and
commissions and other fees and expenses of investment bankers and other than
brokerage commissions) incurred in connection with the Registration Statements
described in Section 5(b), including, without limitation, all registration,
listing and qualifications fees, printers and accounting fees and the fees and
disbursements of counsel for the Company, shall be borne by the Company;
PROVIDED, HOWEVER, that each Holder shall bear the fees and out-of-pocket
expenses of any legal counsel retained by such Holder.
(d) The Selling Commissions and Expense Allowance will be paid on or
promptly following the Closing.
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(e) The Placement Agent will not be entitled to a Selling Commission
or the Expense Allowance with respect to any tendered Subscription Documents
that are rejected by the Company or in which it is determined that the
solicitation or obtaining of purchasers by the Placement Agent was made in
violation of the securities laws of the United States or any state or other
jurisdiction or this Agreement.
6. FURTHER AGREEMENTS OF THE COMPANY.
(a) The Company covenants and agrees that it will pay or cause to be
paid (i) all expenses, if any, in connection with the soliciting and obtaining
of purchasers of the Shares including reasonable travel expenses in connection
with investor presentations, and (ii) all expenses and fees in connection with
the preparation, delivery and shipping of the Offering Memorandum (including the
exhibits to the Offering Memorandum and any amendments or supplements thereto);
PROVIDED, HOWEVER, that the Placement Agent shall be solely responsible for the
payment of all of the fees and costs of its counsel.
(b) The Company will furnish to the Placement Agent promptly as soon
as the same shall be filed copies of all filings by the Company on Form D for
the Offering.
(c) For three years from the Closing Date, neither the Company nor
any affiliate will utilize the names of Subscribers obtained by the Placement
Agent for the purpose of solicitation, or contact such persons in connection
with any other offering by the Company or an affiliate of the Company or other
security by the Company or an affiliate of the Company, unless such person was
originally introduced to the Placement Agent by the Company or an affiliate of
the Company. Should the names of such persons be utilized contrary to the
foregoing, the Company shall pay to the Placement Agent an amount equal to six
percent (6%) of the amount invested by such persons in such other offering. This
amount shall be due and payable upon the date such person's proceeds are
invested.
(d) The Company agrees that it will furnish or make available to the
Placement Agent or the Placement Agent's counsel any and all documentation
reasonably requested in connection with the Placement Agent's due diligence
efforts regarding information in the Offering Memorandum.
(e) The Company and all of its affiliates will not take any action
in connection with the Offering which would cause the Offering not to comply
with Section 4(2) of the Act and Regulation D.
(f) The Company will not sell Shares to any person if the Company
has reason to believe that material information supplied or representations or
warranties made by that person are not fully accurate and unless immediately
prior to making such sale the Company reasonably believes that such person is an
"accredited investor" within the meaning of Section 501(a) of Regulation D.
(g) The Company shall exercise reasonable care to assure the
Subscribers are not underwriters within the meaning of Section 2(11) of the Act,
shall take all actions required by Rule 502(d) of Regulation D and shall place a
legend on each certificate which is provided to the purchasers stating that the
Shares have not been registered under the Act and, where applicable, state
securities laws, and setting forth or referring to the restrictions on
transferability and sale of the Shares.
(h) The Company shall make available to each offeree and any
individual advising such offeree the opportunity to ask questions and receive
answers concerning the Company and the terms and conditions of the Offering, and
to obtain any additional information, to the extent that such information is in
the possession of the Company or can be acquired by any of it without
unreasonable effort or expense, necessary to verify the accuracy of the
information contained in the Offering Memorandum.
11
(i) The Company will duly and timely file (i) with the Commission
all required Form Ds with respect to the sale of the Shares and (ii) all forms
required to be filed under applicable state securities laws and regulations and
by the regulatory agencies charged with enforcement thereof.
(j) The Company will notify the Placement Agent immediately upon
receipt thereof and confirm the notice in writing of the issuance by the
Commission or any state securities administrator of any order enjoining the sale
of the Shares or of the initiation of any proceeding for that purpose. The
Company will make every reasonable effort to prevent the issuance of any such
order and, if any such order shall be issued, to obtain the lifting of the order
at the earliest possible time.
(k) For a period of two (2) years after the date of this Agreement,
if the Company decides to retain the services of an investment banking firm, the
Company will notify the Placement Agent about any Business Transaction (as
hereinafter defined) and will consider the Placement Agent's proposal to act as
the Company's agent for the Business Transaction. A "BUSINESS TRANSACTION" means
any merger involving the Company or any of its subsidiaries, the acquisition by
the Company or any of its subsidiaries of any entity or the assets thereof and
the acquisition of the Company or any of its subsidiaries by another entity. The
Company agrees to pay the Placement Agent compensation calculated in accordance
with the ▇▇▇▇▇▇ formula if the Placement Agent introduces an acquisition or
merger candidate to the Company and the acquisition or merger is consummated.
7. FURTHER AGREEMENTS OF THE PLACEMENT AGENT.
(a) The Placement Agent hereby represents that it is currently, and
will remain throughout the offering of Shares, a member in good standing of the
NASD. The Placement Agent agrees that it will not allow commissions to be paid
to any other broker-dealer, including foreign broker-dealers registered pursuant
to the Exchange Act.
(b) The Placement Agent agrees that it will accept subscriptions
only from investors who have received a copy of the Offering Memorandum, who
have fully completed and executed the appropriate Subscription Documents, and
who the Placement Agent has reasonable grounds to believe, on the basis of
information obtained from the Subscriber and any other information known by the
Placement Agent, that the investor is an "accredited investor" as such term is
defined in Regulation D. The Placement Agent will not give any information or
make any representation in connection with the offering of the Shares other than
those contained in the Offering Memorandum furnished by the Company. The
Placement Agent agrees not to publish, circulate or use any other advertisement
or solicitation material without the prior written approval of the Company or
otherwise conduct the Offering in a manner which would be deemed to be general
advertising or general solicitation or violate any federal or state securities
laws applicable to the Offering.
(c) The Placement Agent agrees that if and when the Company supplies
it with copies of any supplement to the Offering Memorandum, the Placement Agent
will affix such copies of such supplement to copies of the Offering Memorandum
already in the Placement Agent's possession, and that thereafter the Placement
Agent will only distribute Offering Memoranda containing such supplement and
that the Placement Agent will accept subscriptions only from investors who have
received a copy of the Offering Memorandum containing such supplement. The
Placement Agent further agrees to comply with all instructions from the Company
concerning the destruction of out-dated Offering Memoranda and the use of
supplemented or amended Offering Memoranda.
12
(d) The Placement Agent agrees to solicit Subscribers only in the
states and other jurisdictions that have been approved in advance by the Company
with any limitations described therein and in the states and jurisdictions in
which the Placement Agent is licensed or qualified to make offers and sales of
the Shares.
(e) The Placement Agent and all of its affiliates will not take any
action in connection with the Offering that would cause the Offering not to
comply with Section 4(2) of the Act or Regulation D.
(f) The Placement Agent will not sell Shares to any Person if the
Placement Agent has reason to believe that material information supplied or
representations or warranties made by that person are not fully accurate and
unless immediately prior to making such sale the Placement Agent reasonably
believes that such Person is an "accredited investor" within the meaning of
Section 501(a) of Regulation D.
(g) The Placement Agent or any person acting on its behalf will not
offer the Shares by means of any form of general solicitation or general
advertising.
8. CONDITIONS TO THE RIGHT OF THE COMPANY TO OBTAIN FUNDS. The right
of the Company to obtain funds from the Escrow Agent on the Closing Date is
subject to the accuracy of and compliance with the representations and
warranties of the Company contained in Section 1 hereof as of the date hereof
and as of the Closing Date, to the accuracy of the statements of the Company
made pursuant to the provisions hereof, and to the following further conditions:
(a) No order enjoining the sale of the Shares or of the initiation
of any proceeding for that purpose will have been issued prior to the Closing
Date and will be in effect at that date, and no proceedings for the issuance of
such order will be pending or threatened at that date.
(b) On the Closing Date, there will have been furnished to the
Placement Agent the opinion of the counsel for the Company, dated as of the
Closing Date, subject to such assumptions as such counsel will deem necessary to
render such opinion, substantially to the effect that:
(i) the Company is a corporation organized under the laws of
the State of Delaware and is validly existing as a corporation under such
laws;
(ii) the sale and issuance of the Shares has been duly
authorized by all necessary corporate action on the part of the Company.
When subscriptions for the Shares have been accepted by the Company and
payment in full has been received, the Shares will be duly authorized,
validly issued, fully paid and nonassessable;
(iii) this Agreement has been duly and validly authorized,
executed and delivered, by and on behalf of the Company and constitutes
the valid and binding agreement, enforceable in accordance with its terms,
of the Company; PROVIDED, HOWEVER, that the opinion as to enforceability
of this Agreement may be subject to bankruptcy, insolvency,
reorganization, moratorium, liquidation, receivership, fraudulent
conveyance, fraudulent transfer or other similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies or
by other equitable principles of general application and PROVIDED FURTHER,
HOWEVER, that such counsel need express no opinion as to the
enforceability of any indemnification and contribution provisions
contained in this Agreement;
13
(iv) to the knowledge of such counsel, the consummation of the
transactions contemplated herein do not conflict with or result in a
material breach of any of the terms, provisions or conditions of any
material agreement or instrument to which the Company is a party or by
which the Company may be bound, or violate any order, rule or regulation
applicable to the Company of any court or governmental body or
administrative agency having jurisdiction over the Company;
(v) to the knowledge of such counsel, there is no litigation
or governmental proceeding pending, threatened against or involving the
property or business of the Company, which would materially and adversely
affect the value of the assets or the operation of the business of the
Company; and
(vi) based on the Company's and the Placement Agent's
representations, warranties and covenants set forth in this Agreement, and
the Purchasers' representations, warranties and covenants in the
Subscription Documents, the Shares may be issued without registration
under the Act. In addition, for purposes of rendering the opinions set
forth in this Paragraph (vii), such counsel may assume that (A) all of the
purchasers from the Company of the Shares will be "accredited investors"
within the meaning of Rule 501 of Regulation D, (B) the offering of the
Shares cannot be integrated with any other offering of securities by the
Company, (C) neither the Company, the Placement Agent nor any person
acting on its behalf has offered the Shares by means of any form of
general solicitation or general advertising, (D) the limitations on resale
of the Shares are implemented by the Company as required by Rule 502(d) of
Regulation D, (E) the Company timely files a Form D and amendments thereto
as required by Rule 503 of Regulation D, and (F) the Company is not
disqualified from relying on Rule 506 of Regulation D pursuant to Rule
507(a) of Regulation D.
(c) The representations and warranties of the Company herein will be
true and correct in all material respects as of the Closing Date, as if made as
of the Closing Date, and all agreements herein contained to be performed on the
part of the Company at or prior to the Closing Date will have been so performed.
Upon receipt by the Company of such certificates and documents, the
Company will direct the Escrow Agent in writing to release to the Company the
funds in the Escrow Account.
If any of the conditions specified in this Section 8 will not have been
fulfilled when and as required by this Agreement, this Agreement and all
Placement Agent's obligations hereunder may be canceled at, or at any time prior
to, the Closing Date by Placement Agent. Any such cancellation will be without
liability on the Placement Agent's part. Notice of such cancellation will be
given to the Company at the address specified in Section 12 hereof, in writing,
or by telecopy or telephone confirmed in writing.
9. INDEMNIFICATION.
(a) Subject to the provisions of paragraphs (b) through (e) of this
Section 9: the Company agrees to indemnify and hold harmless Placement Agent and
each person who controls Placement Agent within the meaning of the Act
(collectively, the "PLACEMENT AGENT INDEMNIFIED PARTIES") against any losses,
claims, damages or liabilities, joint or several, to which such Placement Agent
Indemnified Party may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum, (ii) the omission or alleged
omission to state in the Offering Memorandum a material fact required to be
stated therein or necessary to make the statements therein, in light of the
14
circumstances under which they were made, not misleading, or (iii) the Company's
breach of any of the representations and warranties in Section 1 of this
Agreement or failure to comply with any of the provisions of Section 3 or
Section 6 of this Agreement; and will reimburse the Placement Agent Indemnified
Parties for any legal or other expenses reasonably incurred by such Placement
Agent Indemnified Party in connection with investigating or defending any such
claim, liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability (i) arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Placement
Agent specifically for use with reference to the Placement Agent in the
preparation of the Offering Memorandum or (ii) is primarily the result of the
Placement Agent's willful misconduct or gross negligence. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) The Company agrees to indemnify and hold harmless the Placement
Agent Indemnified Parties, in the manner and to the extent provided in Paragraph
(a) of this Section 9; PROVIDED, HOWEVER, that no such indemnification by the
Company of the Placement Agent Indemnified Parties will be permitted under this
Agreement against any liability, loss or damage incurred by them in connection
with any claim or settlement alleging federal or state securities law
violations, unless such lawsuits alleging such claims are successfully defended
and a court approves indemnification of litigation costs, unless such lawsuits
are dismissed with prejudice on the merits, or unless such lawsuits are settled
and a court approves the settlement and the indemnification.
(c) The Placement Agent agrees to indemnify and hold harmless the
Company and each person who controls the Company within the meaning of the Act
(collectively, the "COMPANY INDEMNIFIED PARTIES"), against any losses, claims,
damages or liabilities to which such respective Company Indemnified Party may
become subject under the Act or otherwise insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum, (ii) the omission or alleged omission to
state in the Offering Memorandum a 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 or (iii) the Placement Agent's breach of any
of the representations and warranties in Section 2 of this Agreement or failure
to comply with any of the provisions of Section 3 or Section 7 of this
Agreement, with respect to clauses (i) or (ii) only, to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and conformity with written
information furnished to the Company by the Placement Agent specifically for use
with reference to Placement Agent in the preparation of the Offering Memorandum;
and will reimburse each such Company Indemnified Party for any legal or other
expenses reasonably incurred by such Company Indemnified Party in connection
with investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability that
Placement Agent may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 9, promptly notify in writing the indemnifying party of the
commencement thereof; and the omission so to promptly notify the indemnifying
party will relieve it from any liability under this Section 9 as to the
particular item for which indemnification is then being sought, but not from any
other liability that it may have to any indemnified party. In no event shall the
indemnifying party be liable for the fees and expenses of more than one counsel
for all indemnified parties in connection with any one action or separate but
substantially similar or related actions arising out of the same general
15
allegations or circumstances (other than such local counsel as may be employed
by counsel to the indemnified parties to render legal advice with respect to the
laws of, or legal services in, states or jurisdictions other than those states
and jurisdictions in which counsel to the indemnified parties is admitted to
practice law.) In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, and upon such assumption the indemnifying party
will not be liable to such indemnified party under this Section 9 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. Any such
indemnifying party will not be liable to any such indemnified party on account
of any settlement of any claim or action effected without the consent of such
indemnifying party.
10. EFFECTIVE DATE. Provided that at least one counterpart of this
Agreement will then have been executed and delivered, this Agreement will become
effective upon delivery by the Company of telecopies, correspondence or other
notification to the Placement Agent indicating the Offering Memorandum is
released for distribution.
11. SURVIVAL OF INDEMNITIES, WARRANTIES AND REPRESENTATIONS. The
respective indemnity agreements of the Company and Placement Agent contained in
Section 9 hereof, and the representations and warranties of the Company and
Placement Agent set forth herein, will remain operative and in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Company or Placement Agent, or any
controlling person referred to in Section 9, and will survive the delivery of
and payment for the Shares, and any successor to the Placement Agent or the
Company or of any such controlling person or any legal representative of any
such controlling person, as the case may be, will be entitled to the benefit of
the respective indemnity agreements.
12. NOTICES. Except as is otherwise provided in this Agreement, (a)
whenever notice is required by the Provisions of this Agreement or otherwise to
be given to the Company, such notice will be in writing addressed to the Company
at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; and (b) whenever notice is required by the provisions of this
Agreement or otherwise to be given to Placement Agent, such notice will be in
writing addressed to the Placement Agent at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇. Any notice referred to herein may be
given in writing or by telecopy or telephone and if by telecopy or telephone
will be immediately confirmed in writing. Notice (unless actual) will be
effective upon mailing or telecopy transmission, as the case may be.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement is made
solely for the benefit of Placement Agent, the Company and the controlling
persons referred to in Section 9 hereof, and their respective successors and
assigns, and no other person will acquire or have any right by virtue or this
Agreement, and the term "successors and assigns," as used in this Agreement,
will not include any Purchaser.
14. GOVERNING LAW. This Agreement is to be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law.
15. FURTHER CONDITIONS. Until the Closing Date, this Agreement may
be terminated by the Placement Agent at its option by giving notice to the
Company, if (a) the Company shall have become a party to any litigation which,
in the opinion of counsel to the Placement Agent, could have a material adverse
effect on the value of the assets or operation of the business of the Company,
(b) there shall have been, since the respective dates as of which information is
16
in the Offering Memorandum, any material adverse change in the condition,
financial or otherwise, of the Company, which change in the Placement Agent's
reasonable judgment shall render it inadvisable to proceed with the delivery of
the Shares, (c) there shall have been any important change in market levels,
major catastrophe, substantial change in national, international or world
affairs, national calamity, postal strike, act of God or other event or
occurrence which, in the Placement Agent's reasonable judgment, will materially
disrupt the financial markets of the United States, or (d) a general banking
moratorium shall have been declared by federal or state authorities.
16. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
of the Placement Agent and the Company with respect to the subject matter hereof
and terminates and supersedes all prior agreements and understandings between or
among the Placement Agent and the Company with respect to the subject matter
hereof.
18. HEADINGS. The descriptive headings in this Agreement have been
inserted for convenience only and do not constitute a part of this Agreement.
17
IN WITNESS whereof, the parties have signed this Agreement as of the 9th
day of October, 1998.
V-ONE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer
LASALLE ST. SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President