▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
AGENCY AGREEMENT
As of March 3, 2000
▇.▇. ▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation ("Company"), proposes to offer
for sale in a private placement ("Offering") a minimum of 833,000 shares of
common stock, par value $.01 per share ("Common Stock"), and a maximum of
1,333,000 shares of Common Stock, at a purchase price of $1.375 per share. The
shares of Common Stock ("Shares") will be offered on a "best efforts, $1,145,375
minimum, $1,832,875 maximum" basis, in accordance with Section 4(2) and/or 3(b)
of the Securities Act of 1933, as amended ("Securities Act"), and Rules 501
through 506 of Regulation D ("Reg D") promulgated thereunder, only to
"accredited investors," as defined in Reg D. The minimum subscription amount
will be $27,500, but you may accept subscriptions for amounts less than $27,500
in your discretion and with the Company's consent.
The Shares have the terms and conditions reflected in the Company's
Confidential Term Sheet dated March 3, 2000 to be delivered to each purchaser of
Shares ("Term Sheet"). The Term Sheet, together with all exhibits thereto, will
be referred to herein as the "Offering Documents."
1. Appointment of Placement Agent; The Offering Period.
1.1 Appointment of Placement Agent. ▇.▇. ▇▇▇▇▇▇▇▇ & Co., Inc. ("▇▇▇▇▇▇▇▇"
or "Placement Agent") is hereby appointed exclusive Placement Agent of the
Company during the offering period herein specified ("Offering Period") for the
purpose of assisting the Company in placing the Shares with purchasers who are
qualified accredited investors ("Subscribers"). The Placement Agent hereby
accepts such agency and agrees to assist the Company in placing Shares with the
Subscribers. The Placement Agent's agency hereunder is not terminable by the
Company except upon termination of the Offering or breach by the Placement Agent
of its material obligations hereunder.
1.2 Offering Period. The Offering Period shall commence on the day the
Offering Documents are first made available to the Placement Agent by the
Company and shall continue until March 31, 2000; provided, however, that the
Offering Period may be extended until a date not later than April 30, 2000 by
mutual decision of the Placement Agent and the Company without notice to any
Subscriber (the last day of the Offering Period, as it may be extended, is
referred to as the "Termination Date"). If, at any time during the Offering
Period, subscriptions for at least $1,145,375 of Shares have been received and
accepted (and funds in payment therefor have cleared), then, upon the mutual
consent of the Company and the Placement Agent, a closing ("Initial Closing")
shall take place with respect to such accepted subscriptions and the Company
shall continue the offering until all of the Shares are sold or the Termination
Date, whichever occurs first. After the Initial Closing, subsequent closings
with respect to accepted subscriptions for additional Shares may take place at
any time during the Offering Period as may be mutually determined by the Company
and the Placement Agent (the Initial Closing and any subsequent closing each
will be referred to herein as a "Closing"). If subscriptions for at least
$1,145,375 of Shares are not received and accepted (and funds in payment
therefor cleared) by the Termination Date, then the Offering will be terminated
and all funds received from Subscribers will be returned, without interest and
without any deduction.
1.3 Placement Agent's Purchase Option. The Company hereby agrees to issue
and sell to the Placement Agent (and/or its designees) an option ("Placement
Agent's Purchase Option") to purchase, at an initial exercise price of $1.50 per
share, an aggregate of that number of Shares ("Placement Agent's Shares") as
shall equal 15% of the aggregate number of Shares sold in the Offering. At each
Closing, the Company shall issue that portion of the Placement Agent's Purchase
Option that corresponds to the number of shares sold at such Closing and the
Placement Agent shall pay the Company an amount equal to $.0005 for each share
covered by the portion of the Placement Agent's Purchase Option issued at such
Closing. The Placement Agent's Shares shall be identical to the Shares sold in
the Offering. The Placement Agent's Purchase Option shall be exercisable for a
period of five years commencing on the date of the Initial Closing.
1.4 Offering Documents. The Company will provide the Placement Agent with a
sufficient number of copies of the Offering Documents and the forms of
subscription agreement ("Subscription Agreement") and Confidential Purchaser
Questionnaire to be executed by each purchaser for delivery to potential
Subscribers and such other information, documents and instruments that the
Placement Agent deems reasonably necessary to act as Placement Agent hereunder
and to comply with the rules, regulations and judicial and administrative
interpretations respecting compliance with applicable state and federal statutes
related to the Offering.
1.5 Segregation of Funds. Each subscriber for Shares shall tender to the
Placement Agent a wire transfer or check payable to the order of "CST AAF -
GolfRounds Escrow Account" in the amount of the investment subscribed for, which
funds shall be held in escrow by Continental Stock Transfer & Trust Company, as
escrow agent, in accordance with Rules 10b-9 and 15c2-4 promulgated under the
Securities Exchange Act of 1934 ("Exchange Act"), as set forth in the Offering
Documents.
1.6 No Firm Commitment. The Company understands and acknowledges that the
undertaking by the Placement Agent pursuant to this Agreement is not a "firm
commitment" offering and that the Placement Agent is not obligated in any way to
purchase or sell the Shares offered hereby.
1.7 Participation by Selected Dealers. The Placement Agent may engage other
persons that are members of the National Association of Securities Dealers, Inc.
("NASD") or registered representatives of such members to assist the Placement
Agent in the Offering (each such person being hereinafter referred to as a
"Selected Dealer") and the Placement Agent may allow such persons such part of
the compensation and payment of expenses payable to the Placement Agent
hereunder as the Placement Agent shall determine.
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2. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Placement Agent and the Selected Dealers upon the execution
of this Agreement and again at each Closing as follows:
2.1 Due Incorporation and Qualification. The Company has been duly
incorporated, is validly existing and is in good standing under the laws of its
state of incorporation and is duly qualified as a foreign corporation for the
transaction of business and is in good standing in each jurisdiction in which
the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify would not
have a material adverse effect on the business, operations, assets, financial
condition or prospects of the Company ("Material Adverse Effect"). The Company
has all requisite corporate power and authority necessary to own or hold its
properties and conduct its business as described in the Offering Documents.
2.2 Authorized Capital. The Company is authorized to issue 12,000,000
shares of Common Stock. 2,099,491 shares of Common Stock are currently issued
and outstanding. All of the issued and outstanding shares of Common Stock have
been duly and validly authorized and issued and are fully paid and
non-assessable. None of the holders of such outstanding shares of Common Stock
are subject to personal liability solely by reason of being such a holder. The
offers and sales of such outstanding shares of Common Stock were at all relevant
times either registered under the Securities Act and the applicable state
securities or Blue Sky laws or exempt from such registration.
2.3 No Preemptive Rights; Options; Registration Rights. To the Company's
best knowledge, (a) except as set forth on Schedule 2.3, there are no preemptive
or other rights to subscribe for or purchase, or any restriction upon the voting
or transfer of, any shares of Common Stock or other securities of the Company,
under the Certificate of Incorporation or By-Laws of the Company or under any
agreement or other outstanding instrument to which the Company is a party or by
which it is bound; (b) the Company does not have outstanding any option,
warrant, convertible security, or other right permitting or requiring it to
issue, or otherwise to purchase or convert any obligation into, shares of Common
Stock or other securities of the Company and the Company has not agreed to issue
or sell any shares of Common Stock or other securities of the Company; and (c)
no holder of any of the Company's securities has any "piggyback" or demand
registration rights. Schedule 2.3 sets forth any registration rights held by any
holders of the Company's securities to the Company's best knowledge.
2.4 Financial Statements. To the Company's best knowledge, (a) the
financial statements of the Company included in the Offering Documents
("Financials") fairly present the financial position and results of operations
of the Company at the dates thereof and for the periods covered thereby,
subject, in the case of interim periods, to year-end adjustments and normal
recurring accruals, and (b) the Company has no material liabilities or
obligations, contingent, direct, indirect or otherwise except (i) as set forth
in the latest balance sheet included in the Financials or the footnotes thereto
(the date of such balance sheet being referred to as the "Balance Sheet Date"),
and (ii) those incurred in the ordinary course of business since the Balance
Sheet Date.
2.5 No Material Adverse Changes. To the Company's best knowledge, except as
otherwise stated in the Offering Documents, since the Balance Sheet Date, there
has not been any change in the condition, financial or otherwise, of the Company
that could result, singly or in the aggregate, in a prospective Material Adverse
Effect on the Company, except in each case as described in or contemplated by
the Term Sheet.
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2.6 Subsidiaries. The Company has no subsidiaries and has no interest in,
shares of capital stock of or right to acquire an interest in or shares of
capital stock of any other corporation, limited liability company, partnership
or other entity.
2.7 Taxes. To the Company's best knowledge, (a) the Company has filed all
federal tax returns and all state and municipal and local tax returns (whether
relating to income, sales, franchise, withholding, real or personal property or
other types of taxes) required to be filed under the laws of the United States
and applicable states, and has paid in full all taxes that have become due
pursuant to such returns or claimed to be due by any taxing authority or
otherwise due and owing; provided, however, that the Company has not paid any
tax, assessment, charge, levy or license fee that it is contesting in good faith
and by proper proceedings and adequate reserves for the accrual of same are
maintained if required by generally accepted accounting principles; and (b) the
Company has withheld, collected and paid all levies, assessments, license fees
and taxes to the extent required. As used herein, "tax" or "taxes" include all
taxes, charges, fees, levies or other assessments imposed by any Federal, state,
local, or foreign taxing authority, including, without limitation, income,
premium, recapture, credit, excise, property, sales, use, occupation, service,
service use, leasing, leasing use, value added, transfer, payroll, employment,
license, stamp, franchise or similar taxes (including any interest earned
thereon or penalties or additions attributable thereto).
2.8 Finder's Fees; Other Underwriters. To the Company's best knowledge, (a)
the Company is not obligated to pay a finder's fee to anyone in connection with
the introduction of the Company to the Placement Agent or the consummation of
the Offering contemplated hereunder; and (b) during the 12 month period ending
on the date of this Agreement, the Company did not pay or issue any monies,
securities or other compensation to any member of the NASD or to any affiliate
or associate of such a member or to any other person in consideration for such
person raising funds for the Company or providing financial or public relations
consulting services to the Company, except as set forth on Schedule 2.8.
2.9 No Pending Actions. To the Company's best knowledge, there are no
actions, suits, proceedings, claims or hearings of any kind or nature existing
or pending (or, to the best knowledge of the Company, threatened) or, to the
best knowledge of the Company, any investigations or inquiries, before or by any
court, or other governmental authority, tribunal or instrumentality (or, to the
Company's best knowledge, any state of facts that would give rise thereto),
pending or threatened against the Company, or involving the properties of the
Company, that might result in any Material Adverse Effect or that might
adversely affect the transactions or other acts contemplated by this Agreement
or the validity or enforceability of this Agreement.
2.10 Private Offering Exemption; Offering Documents. To the Company's best
knowledge, the Offering Documents do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Shares, and the Placement
Agent's Purchase Option, conform in all material respects to the descriptions
thereof contained in the Offering Documents. Assuming that (i) a proper Form D
is filed in accordance with Rule 503 of Reg D, (ii) the offer and the sale of
the Shares by the Placement Agent was made in compliance with Rule 502(c) of Reg
D and/or Section 4(2) of the Securities Act, and (iii) the representations of
the Subscribers in the Subscription Agreements signed by them are true and
correct (which facts will not be independently verified by the Company), the
sale of Shares in the Offering is exempt from registration under the Securities
Act and is in compliance with Reg D.
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2.11 Due Authorization. The Company has full right, power and authority to
enter into this Agreement, the Subscription Agreements and the Placement Agent's
Purchase Option, to issue the Shares and the Placement Agent's Shares and to
perform all of its obligations hereunder and thereunder. This Agreement has
been, and the Subscription Agreements and the Placement Agent's Purchase Option,
when executed and delivered, will have been, duly authorized by all necessary
corporate action and no further corporate action or approval is or will be
required for their respective execution, delivery and performance. This
Agreement constitutes, and the Subscription Agreements and the Placement Agent's
Purchase Option, upon execution and delivery will constitute, valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except (i) as the enforceability thereof may be limited by bankruptcy or
other laws now or hereafter in effect relating to or affecting creditors' rights
generally, (ii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be brought,
and (iii) that the enforceability of the indemnification and contribution
provisions of the respective agreements may be limited by the federal and state
securities laws and public policy.
2.12 Non-Contravention; Consents. The Company's execution and delivery of
this Agreement, the Subscription Agreements and the Placement Agent's Purchase
Option, and the incurrence of the obligations herein and therein set forth, and
the consummation of the transactions contemplated herein and therein will not
(i) conflict with, or constitute a breach of, or a default under, the
certificate of incorporation or by-laws of the Company, or any contract, lease
or other agreement or instrument to which the Company is a party or in which the
Company has a beneficial interest or by which the Company is bound; (ii) violate
any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over the
Company or any of its properties or business (collectively, "Laws"), except
where such violation(s) would not, singly or in the aggregate, result in a
Material Adverse Effect; or (iii) have any effect on any permit, certification,
registration, approval, consent, license or franchise (collectively, "Permits")
necessary for the Company to own or lease and operate any of its properties or
to conduct its business, except for such effects as would not, singly or in the
aggregate, have a Material Adverse Effect. No consent, Permit, approval,
authorization, order of, or filing with, any court or governmental authority or
any other third party is required to consummate the transactions contemplated by
this Agreement, the Subscription Agreements and the Placement Agent's Purchase
Option, and the issuance of the Shares and the Placement Agent's Shares, except
that the offer and sale of the Shares and the Placement Agent's Shares in
certain jurisdictions may be subject to the provisions of the securities or Blue
Sky laws of such jurisdictions.
2.13 Valid Issuances. The Shares and the Placement Agent's Shares have been
duly and validly authorized and, when issued and delivered in accordance with
the terms of the Subscription Agreements or the Placement Agent's Purchase
Option, as the case may be, will be duly and validly issued, fully paid and
non-assessable. The holders of the Shares will not be subject to personal
liability by reason of being such holders and will not be subject to the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. All corporate action required to be
taken for the authorization, issuance and sale of the Shares and the Placement
Agent's Shares has been duly and validly taken.
2.14 No Right to Purchase. To the Company's best knowledge, the issuance of
the Shares in the Offering and upon exercise of the Placement Agent's Purchase
Option will not give any holder of any of the Company's outstanding shares of
Common Stock, options, warrants or other convertible securities or rights to
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purchase securities of the Company (i) the right to purchase any additional
shares of Common Stock or any other securities of the Company, or (ii) the right
to purchase any securities at a reduced price.
2.15 No Regulatory Problems. The Company (i) has not filed a registration
statement that is the subject of any pending proceeding or examination under
Section 8 of the Securities Act, and is not and has not been the subject of any
refusal order or stop order thereunder; (ii) is not subject to any pending
proceeding under Rule 258 of the Securities Act or any similar rule adopted
under Section 3(b) of the Securities Act, or to an order entered thereunder;
(iii) has not been convicted of any felony or misdemeanor in connection with the
purchase or sale of any security or involving the making of any false filing
with the Commission; (iv) is not, to its best knowledge, subject to any order,
judgment, or decree of any court of competent jurisdiction temporarily or
preliminarily restraining or enjoining, or any order, judgment, or decree of any
court of competent jurisdiction permanently restraining or enjoining, the
Company 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 Securities and Exchange Commission ("Commission"); and (v) is
not, to its best knowledge, subject to a United States Postal Service false
representation order entered under Section 3005 of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code
or a temporary restraining order or preliminary injunction entered under Section
3007 of Title 39, United States Code, with respect to conduct alleged to have
violated Section 3005 of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code. To the Company's
knowledge, none of the Company's directors, officers, or beneficial owners of 10
percent or more of any class of its equity securities (i) has been convicted of
any felony or misdemeanor 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 advisor; (ii) is subject to any order, judgment
or decree of any court of competent jurisdiction temporarily or preliminarily
enjoining or restraining, or is subject to any order, judgment or decree of any
court of competent jurisdiction 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, or 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 to act constituting conduct inconsistent with just and equitable
principles of trade; or (v) is subject to a United States Postal Service false
representation order entered under Section 3005 of Title 39, United States Code,
or is subject to a restraining order or preliminary injunction entered under
Section 3007 of Title 39, United States Code, with respect to conduct alleged to
have violated Section 3005 of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code.
2.16 Material Contracts; No Defaults. To the Company's best knowledge,
Schedule 2.16 hereto contains a true and complete list of all contracts,
agreements, instruments, indentures, mortgages, loans, leases, licenses,
arrangements or undertakings of any nature, written or oral, of the Company that
involve future payments, performance or services, development of products, or
delivery of goods or materials to or by the Company of an aggregate amount or
value in excess of $25,000 or that otherwise are material to the business or
prospects of the Company (collectively, "Contracts"). The Company has furnished
the Placement Agent with true, correct and complete copies (or where oral,
written descriptions) of all Contracts, including all exhibits, schedules,
amendments, supplements, modifications and waivers thereto. To the Company's
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best knowledge, except as set forth on Schedule 2.16, each of the Contracts is
in full force and effect, the Company has performed in all material respects all
of its obligations thereunder and is not in default thereunder, and no party to
a Contract has made a claim to the effect that the Company has failed to perform
any obligations thereunder. To the knowledge of the Company, there is no plan,
intention, or indication of any contracting party to a Contract to cause
termination, cancellation or modification of such Contract or to reduce or
otherwise change its activity thereunder so as to adversely affect in any
material respect the benefits derived or expected to be derived therefrom by the
Company. The Company does not know of the occurrence of any event or the
existence of any state of facts that with notice or the passage of time or both
could cause it to be in default.
2.17 Conduct of Business; Compliance with Law. The Company has all
requisite corporate power and authority, and, to its best knowledge, has all
necessary Permits, to own or lease its properties and conduct its business as
described in the Offering Documents, except where the failure to have such
Permits would not have a Material Adverse Effect. To its best knowledge, (a) the
Company has been operating its business in compliance with all such Permits,
except where such noncompliance would not have a Material Adverse Effect, (b)
the disclosures in the Offering Documents concerning the effects of federal,
state and local regulation on the Company's business as currently contemplated
are correct in all material respects and do not omit to state a material fact,
and (c) the Company is in compliance with all Laws except where noncompliance,
singly or in the aggregate, would not have a Material Adverse Effect. The
Company is not in violation of any term or provision of its certificate of
incorporation or by-laws.
2.18 Title to Property; Insurance. To its best knowledge, the Company has
good and marketable title to, or valid and enforceable leasehold estates in, all
items of real and personal property (tangible and intangible) owned or leased by
it, free and clear of all liens, encumbrances, claims, security interests,
defects and restrictions of any material nature whatsoever, except such as would
not, singly or in the aggregate, have a Material Adverse Effect. The Company has
adequately insured its properties against loss or damage by fire or other
casualty and maintains such insurance in adequate amounts.
2.19 Intangibles. The Company owns or possesses or, to its knowledge, can
acquire "off-the-shelf" on an as needed basis, the requisite licenses or rights
to use all trademarks, service marks, service names, trade names, patents and
patent applications, and copyrights (collectively, "Intangibles") to be used by
the Company in its proposed business as described in the Term Sheet, and all
such Intangibles, except for "off-the-shelf" licenses, are listed on Schedule
2.19. There is no claim or action by any person pertaining to, or proceeding
pending or, to the Company's knowledge, threatened and the Company has not
received any notice of conflict with, the asserted rights of others that
challenges the exclusive right (except that "off-the-shelf" licenses may be
non-exclusive) of the Company with respect to any Intangibles used in the
conduct of the Company's proposed business except as described in the Offering
Documents. To the best of the Company's knowledge, the Intangibles and the
Company's proposed services and processes do not infringe on any intangibles
held by any third party. To the best of the Company's knowledge, no others have
infringed upon the Intangibles of the Company.
2.20 Management Team. To the Company's knowledge, the background and other
information concerning the officers and directors of the Company previously
furnished to the Placement Agent is true and accurate in all material respects.
2.21 Employee Matters. To the Company's best knowledge, (a) the Company has
generally enjoyed a satisfactory employer-employee relationship with its
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employees and is in compliance in all material respects with all federal, state
and local laws and regulations respecting the employment of its employees and
employment practices, terms and conditions of employment and wages and hours
relating thereto, except where noncompliance, singly or in the aggregate, would
not have a Material Adverse Effect, (b) there are no pending investigations
involving the Company by any government Department of Labor or any other
governmental agency responsible for the enforcement of employment laws and
regulations, (c) there is no unfair labor practice charge or complaint against
the Company pending before a Labor Relations Board or any strike, picketing,
boycott, dispute, slowdown or stoppage pending or threatened against or
involving the Company or any predecessor entity, (d) no questions concerning
representation exist respecting the employees of the Company and no collective
bargaining agreement or modification thereof is currently being negotiated by
the Company, and (e) no grievance or arbitration proceeding is pending under any
expired or existing collective bargaining agreements of the Company, if any.
3. Representations and Warranties of the Placement Agent and Selected Dealers.
The Placement Agent, and each Selected Dealer that the Placement Agent may from
time to time appoint, by signing the Selected Dealer Agreement, severally
represents and warrants as follows:
3.1 Due Incorporation. Such Placement Agent or Selected Dealer is duly
incorporated and validly existing and in good standing under the laws of its
state of incorporation and is duly qualified as a foreign corporation for the
transaction of business and is in good standing in each jurisdiction where the
failure to be so qualified would have a material adverse effect on the business
of such Placement Agent or Selected Dealer.
3.2 Broker/Dealer Registration. Such Placement Agent or Selected Dealer is
registered as a broker-dealer under Section 15 of the Exchange Act.
3.3 Good Standing. Such Placement Agent or Selected Dealer is a member in
good standing of the NASD.
3.4 Sale In Certain Jurisdictions. Sales of Shares by such Placement Agent
or Selected Dealer will be made only in such jurisdictions in which (i) the
Placement Agent or Selected Dealer is a registered broker-dealer or where an
applicable exemption from such registration exists and (ii) the Offering and
sale of Shares is registered under, or is exempt from, applicable registration
requirements.
3.5 Compliance with Laws. Offers and sales of Shares by the Placement Agent
or Selected Dealer will be made in compliance with the provisions of Rule 502(c)
of Reg D and/or Section 4(2) of the Securities Act, and the Placement Agent or
Selected Dealer will furnish to each investor a copy of the Offering Documents
prior to accepting any payments for Shares.
4. Closing.
4.1 Closing. The Closing shall take place at the offices of GM&M, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. At the Closing, payment for the Shares issued
and sold by the Company (by certified check or wire transfer payable to the
order of the Company), less the amount deductible by the Placement Agent
pursuant to Section 4.4 hereof, shall be made against delivery of certificates
representing the Shares.
4.2 Deliveries at Closing. At each Closing, and as a condition to each
Closing, the Company shall deliver or cause to be delivered to the Placement
Agent:
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4.2.1 Opinion of Counsel. The opinion of GM&M, dated as of the date of the
Closing, substantially to the effect that:
(i) The Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the State of Delaware. The
Company has all requisite corporate power to own or lease its properties and
conduct its business as described in the Term Sheet.
(ii) Based on a review of the Company's certificate of incorporation,
the Company is authorized to issue 12,000,000 shares of Common Stock. To such
counsel's knowledge, all issued and outstanding securities of the Company have
been duly authorized and validly issued; the holders thereof are not subject to
personal liability by reason of being such holders; and none of such securities
was issued in violation of any statutory preemptive rights of any holders of any
security of the Company or similar contractual rights granted by the Company. To
such counsel's knowledge, the outstanding options and warrants to purchase
shares of Common Stock set forth on Schedule 2.3 constitute the valid and
binding obligations of the Company, enforceable in accordance with their terms.
(iii) Except as set forth on Schedule 2.3 to this Agreement, there are
no statutory preemptive or other statutory rights to subscribe for or purchase,
or any restriction upon the voting or transfer of, or, to such counsel's
knowledge, any other rights to subscribe for or purchase from the Company any
shares of Common Stock of the Company, or, to such counsel's knowledge, any such
right or restriction under the certificate of incorporation or by-laws of the
Company or under any agreement or other outstanding instrument to which the
Company is a party or by which it is bound. To such counsel's knowledge, except
as set forth on Schedule 2.3, (i) no holders of any securities of the Company or
of any options, warrants or securities of the Company exercisable for or
convertible or exchangeable into securities of the Company have the right to
require the Company to register any such securities of the Company under the
Securities Act or to include any such securities in a registration statement to
be filed by the Company; and (ii) the issuance of the Shares in the Offering,
and the issuance of the Placement Agent's Shares upon exercise of the Placement
Agent's Purchase Option, will not give any holder of any of the Company's
outstanding securities or rights to purchase shares of Common Stock the right to
purchase any additional shares of Common Stock and/or the right to purchase
shares at a reduced price.
(iv) Assuming that (a) a proper Form D is filed in accordance with Rule
503 of Reg D, (b) the offer and the sale of the Shares was made in compliance
with Rule 502(c) of Reg D, and (c) the representations of the Subscribers in the
Subscription Agreements signed by them are true and correct (which facts have
not been independently verified by counsel), the sale of the Shares is exempt
from registration under the Securities Act and is in compliance with Reg D.
(v) The certificates representing the Shares are in proper legal form.
(vi) The Company has all requisite corporate power and authority to
enter into this Agreement, the Subscription Agreements and the Placement Agent's
Purchase Option, to carry out the provisions and conditions thereof and to issue
the Shares and the Placement Agent's Shares. No consents, approvals,
authorizations or orders of, and no filing with, any court or governmental
agency or body (other than such as may be required under the Securities Act and
applicable Blue Sky laws) is required for the valid offer, authorization,
9
issuance, sale and delivery of the Shares and the Placement Agent's Shares and
the consummation of the transactions contemplated by the Offering Documents.
(vii) The Shares have been duly authorized and validly issued and the
holders thereof are not subject to personal liability by reason of being such
holders. This Agreement, the Subscription Agreements and the Placement Agent's
Purchase Option have been duly and validly authorized, executed and delivered by
the Company, and will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except (a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, (b) as
enforceability of any indemnification and contribution provisions may be limited
under the federal and state securities laws and public policy, and (c) that the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(viii) To such counsel's knowledge, the execution, delivery and
performance by the Company of this Agreement, the Subscription Agreements and
the Placement Agent's Purchase Option, the issuance and sale of the Shares and
the Placement Agent's Shares, the consummation of the transactions contemplated
hereby and thereby and the compliance by the Company with the terms and
provisions hereof and thereof, do not and will not, with or without the giving
of notice or the lapse of time, or both, (a) conflict with, or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or modification of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company pursuant to the
terms of, any material mortgage, deed of trust, note, indenture, loan, contract,
commitment or other material agreement or instrument known to such counsel to
which the Company is a party or by which the Company or any of its properties or
assets may be bound, (b) result in any violation of the provisions of the
certificate of incorporation or the by-laws of the Company, or (c) violate any
Law, except where such violation would not have a Material Adverse Effect.
(ix) To such counsel's knowledge, no default exists in the due
performance and observance of any term, covenant or condition of any Contract,
except such defaults that, singly or in the aggregate, would not have a Material
Adverse Effect. To such counsel's knowledge, the Company is not in violation of
any term or provision of its certificate of incorporation or by-laws. To such
counsel's knowledge, the Company is not currently in violation of any Law,
except where such violation would not have a Material Adverse Effect.
(x) To such counsel's knowledge, except as described in the Offering
Documents, including the Financials, there are no claims, actions, suits,
hearings, investigations, inquiries or proceedings of any kind or nature, before
or by any court, governmental authority, tribunal or instrumentality, domestic
or foreign, pending or threatened against or affecting the Company or involving
the properties of the Company that may result in any material adverse change in
the business, properties or financial condition of the Company, or that may
adversely affect the transactions or other acts contemplated by this Agreement
or the validity or enforceability of this Agreement.
The opinion will also contain the following statements by counsel: In the
course of the preparation of the Offering Documents, such counsel has
participated in discussions with officers of the Company. Nothing has come to
such counsel's attention that has caused such counsel to believe that the
Offering Documents contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
10
statements therein, in light of the circumstances under which they were made,
not misleading (except that such counsel need not express any opinion as to (i)
the Financials and other financial or statistical data contained in the Offering
Documents or (ii) intellectual property matters, including with respect to the
Intangibles).
4.2.2 Officers' Certificate. A certificate of the Company, signed by two
executive officers thereof, stating (a) that the representations and warranties
contained in Section 2 hereof are true and accurate at the Closing as applied to
the Company with the same effect as though expressly made at the Closing, (b)
that the Company has complied with all covenants and agreements required to be
complied with as of the Closing, and (c) there has been no Material Adverse
Effect since the commencement of the Offering.
4.2.3 Subscription Agreements. Subscription Agreements signed by the
Company and each of the Subscribers.
4.2.4 Certificates. The certificates representing the Shares.
4.2.5 Consents. Consents of any parties required to consummate this
Offering.
4.2.6 Other Documents. Such other closing documents as shall be
reasonably requested by the Placement Agent or its counsel.
4.3 Conditions.
4.3.1 Conditions to the Placement Agent's Obligations. The obligations of
the Placement Agent under this Agreement shall be subject to the following
conditions:
(i) All representations and warranties of the Company set forth in this
Agreement shall be true and accurate as of the date of each Closing with the
same effect as though expressly made at each Closing;
(ii) The Company has complied with all covenants and agreements
required to be complied with as of the date of each Closing;
(iii) The Company has obtained all consents of third parties required
to be obtained in connection with this Offering; and
(iv) there shall be no action, lawsuit, administrative or other
proceeding pending or threatened that seeks to enjoin the transactions
contemplated by this Agreement.
4.3.2 Conditions to Company's Obligations. The obligations of the Company
under this Agreement shall be subject to the conditions that:
(i) The representations and warranties of the Placement Agent set forth
in Sections 3.4 and 3.5 are true and accurate as of the date of each Closing
with the same effect as though expressly made at each Closing; and
(ii) There shall be no action, lawsuit, administrative or other
proceeding pending or threatened that seeks to enjoin the transactions
contemplated by this Agreement.
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4.4 Placement Agent's Fees and Expenses. At each Closing, the Company shall
pay to the Placement Agent a commission equal to 7% of the gross proceeds of the
Offering and shall deliver the Placement Agent's Purchase Option to the
Placement Agent. At each Closing, the Company shall also pay to the Placement
Agent a non-accountable expense allowance equal to 3% of the gross proceeds of
such Closing. All the foregoing amounts and any other expenses to be paid
pursuant to Section 5.3 are payable at the Placement Agent's direction directly
to the parties who are owed same by deduction from the aggregate purchase price
of the Shares sold.
5. Covenants. The Company covenants and agrees that:
5.1 Amendments to Offering Documents. Until the Offering has been completed
or terminated, if there shall occur any event relating to or affecting, among
other things, the Company or any affiliate, or the proposed operations of the
Company as described in the Offering Documents, as a result of which it is
necessary, in the reasonable opinion of GM&M or counsel for the Placement Agent,
to amend or supplement the Offering Documents in order that the Offering
Documents will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, the
Company shall immediately prepare and furnish to the Placement Agent a
reasonable number of copies of an appropriate amendment of or supplement to the
Offering Documents, in form and substance satisfactory to counsel for the
Placement Agent.
5.2 Use of Proceeds. The net proceeds of the Offering will be used for such
purposes as may be reasonably acceptable to the Placement Agent and described in
the Term Sheet.
5.3 Expenses of Offering and Other Expenses. The Company shall be
responsible for, and shall pay, all fees, disbursements and expenses incurred in
connection with the Offering, including, but not limited to, the Company's legal
and accounting fees and disbursements, the costs of preparing, printing, mailing
and delivering, and filing, where necessary, the Offering Documents and all
amendments and supplements thereto (all in such quantities as the Placement
Agent may reasonably require), preparing and printing the certificates for the
Shares, and the Placement Agent's Purchase Options, including any transfer or
other taxes payable thereon, and the costs of any "due diligence" meetings held
by the Company as requested by the Placement Agent.
5.4 Further Assurances. The Company will take such actions as may be
reasonably required or desirable to carry out the provisions of this Agreement
and the transactions con templated hereby.
5.5 Accuracy of Representations and Warranties. The Company hereby agrees
that, prior to the Termination Date or the Closing, as the case may be, it will
not enter into any transaction or take any action, and will use its best efforts
to prevent the occurrence of any event, that could result in any of its
representations, warranties or covenants contained in this Agreement or any of
the Offering Documents not to be true and correct, or not to be performed as
contemplated, at and as of the time immediately after the occurrence of such
transaction or event.
5.6 Registration Rights. As additional consideration for this Agreement and
the transactions contemplated hereby, and as set forth in each Subscriber's
Subscription Agreement and the Placement Agent's Purchase Option, the Company
agrees with the Placement Agent and will agree with each Subscriber to register
12
the Shares and the Placement Agent's Shares for resale. All expenses of
registration (exclusive of underwriting discounts and commissions) shall be
borne by the Company.
6. Indemnification and Contribution.
6.1 Indemnification of the Placement Agent by the Company. The Company
agrees to indemnify and hold harmless the Placement Agent and each person, if
any, who controls the Placement Agent within the meaning of the Securities Act
and/or the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Placement Agent or controlling person may become
subject, under the Securities 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 (A) in the Offering Documents, or (B) in any blue sky application or
other document executed by the Company specifically for blue sky purposes or
based upon any other written information furnished by the Company or on its
behalf to any state or other jurisdiction in order to qualify any or all of the
Shares under the securities laws thereof (any such application, document or
information being hereinafter called a "Blue Sky Application"), (ii) any breach
by the Company of any of its representations, warranties or covenants contained
herein or in any of the Offering Agreements, or (iii) the omission or alleged
omission by the Company to state in the Offering Documents or in any Blue Sky
Application 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; and will reimburse the Placement Agent and each such
controlling person for any legal or other expenses reasonably incurred by the
Placement Agent or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action, whether arising out
of an action between the Placement Agent and the Company or the Placement Agent
and a third party; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information regarding the Placement Agent that is furnished to the
Company by the Placement Agent specifically for inclusion in the Offering
Documents or any such Blue Sky Application or (ii) any breach by the Placement
Agent of the representations, warranties or covenants contained herein
(together, (i) and (ii) above are referred to as the "Placement Agent
Non-Indemnity Events").
6.2 Indemnification of the Company by the Placement Agent. The Placement
Agent agrees to indemnify and hold harmless the Company and each person, if any,
who controls the Company within the meaning of the Securities Act and/or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which the Company or such controlling person may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any Non- Indemnity Event; and will reimburse the Company and each such
controlling person for any legal or other expenses reasonably incurred by the
Company or such controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action, provided that such loss,
claim, damage or liability is found ultimately to arise out of or be based upon
any Placement Agent Non-Indemnity Event.
6.3 Indemnification of the Selected Dealers by the Company. The Company
agrees to indemnify and hold harmless each Selected Dealer and each person, if
any, who controls a Selected Dealer within the meaning of the Securities Act
and/or the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Selected Dealer or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
13
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 (A) in the Offering Documents, or (B) in any Blue Sky Application,
(ii) any breach by the Company of any of its representations, warranties or
covenants contained herein or in any of the Offering Agreements, or (iii) the
omission or alleged omission by the Company to state in the Offering Documents
or in any Blue Sky Application 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; and will reimburse each Selected Dealer
and each such controlling person for any legal or other expenses reasonably
incurred by such Selected Dealer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action,
whether arising out of an action between such Selected Dealer and the Company or
such Selected Dealer and a third party; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon (i) an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information regarding such Selected Dealer specifically
for inclusion in the Offering Documents or any such Blue Sky Application or (ii)
any breach by such Selected Dealer of the representations, warranties or
covenants contained herein together, (i) and (ii) above are referred to as the
"Selected Dealer Non-Indemnity Events").
6.4 Indemnification of the Company by the Selected Dealers. The Selected
Dealers, severally and not jointly, agree to indemnify and hold harmless the
Company and each person, if any, who controls the Company within the meaning of
the Securities Act and/or the Exchange Act against any losses, claims, damages
or liabilities, joint or several, to which the Company or such controlling
person may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any Selected Dealer Non-Indemnity Event; and will
reimburse the Company and each such controlling person for any legal or other
expenses reasonably incurred by the Company or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action, provided that such loss, claim, damage or liability is
found ultimately to arise out of or be based upon any Selected Dealer
Non-Indemnity Event.
6.5 Procedure. Promptly after receipt by an indemnified party under this
Section 6 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 6, notify in writing the in demnifying party of the
commencement thereof; and the omission so to notify the indemnifying party will
relieve the indemnifying party from any liability under this Section 6 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 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, with
counsel who shall be to the reasonable satisfaction of such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 6 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 shall 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.
6.6 Contribution. If the indemnification provided for in this Section 6 is
unavailable to any indemnified party (other than as a result of the failure to
14
notify the indemnifying party as provided in Section 6.5 hereof) in respect to
any losses, claims, damages, liabilities or expenses referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified party, will
contribute to the amount paid or payable by such indemnified party, as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand, and the Placement Agent or Selected Dealer, on the other hand,
from the Offering, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
relative fault of the Company, on the one hand, and of the Placement Agent or
Selected Dealer, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or expenses
as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Placement Agent or Selected
Dealer, on the other hand, shall be deemed to be in the same proportion as the
total proceeds from the Offering (net of sales commissions and the
nonaccountable expense allowance, but before deducting other expenses) received
by the Company bear to the commissions and nonaccountable expense allowance
received by the Placement Agent or Selected Dealer. The relative fault of the
Company, on the one hand, and the Placement Agent or Selected Dealer, on the
other hand, will be determined with reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the Company, on the one
hand, and the Placement Agent or Selected Dealer, on the other hand, and their
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
6.7 Equitable Considerations. The Company, the Placement Agent and each
Selected Dealer agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
6.8 Attorneys' Fees. The amount payable by a party under this Section 6 as
a result of the losses, claims, damages, liabilities or expenses referred to
above will be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim (including, without limitation, fees and disbursements of counsel
incurred by an indemnified party in any action or proceeding between the
indemnifying party and indemnified party or between the indemnified party and
any third party or otherwise).
7. Termination by Placement Agent. The Placement Agent will have the right to
terminate this Agreement by giving written notice as herein specified, at any
time, at or prior to the Closing: (a) if the Company shall have failed, refused,
or been unable to perform any of its obligations hereunder, or breached any of
its representations or warranties hereunder; or (b) if, in the Placement Agent's
opinion, there has occurred an event materially and adversely affecting the
value of the Common Stock.
8. Notices. Any notice hereunder shall be in writing and shall be effective when
delivered in person or by facsimile transmission and mailed by certified
mail, postage prepaid, return receipt requested, to the appropriate party or
parties, at the following addresses: if to the Placement Agent, to ▇.▇. ▇▇▇▇▇▇▇▇
& Co., Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇- 0260,
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇); with a copy to ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Esq. (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇); if to the Company, to
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇);
15
with a copy to ▇▇▇▇▇▇▇▇ Mollen & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Esq. (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇); or, in each
case, to such other address as the parties may hereinafter designated by like
notice.
9. Parties. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. Neither party may
assign this Agreement or its obligations hereunder without the prior written
consent of the other party. This Agreement is intended to be, and is, for the
sole and exclusive benefit of the parties hereto and the persons described in
Sections 6.1 through 6.4 hereof and their respective successors and assigns, and
for the benefit of no other person, and no other person will have any legal or
equitable right, remedy or claim under, or in respect of this Agreement.
10. Amendment and/or Modification. Neither this Agreement, nor any term or
provision hereof, may be changed, waived, discharged, amended, modified or
terminated orally, or in any manner other than by an instrument in writing
signed by each of the parties hereto.
11. Further Assurances. Each party to this Agreement will perform any and all
acts and execute any and all documents as may be necessary and proper under the
circumstances in order to accomplish the intents and purposes of this Agreement
and to carry out its provisions.
12. Validity. In case any term of this Agreement will be held invalid, illegal
or unenforceable, in whole or in part, the validity of any of the other terms of
this Agreement will not in any way be affected thereby.
13. Waiver of Breach. The failure of any party hereto to insist upon strict
performance of any of the covenants and agreements herein contained, or to
exercise any option or right herein conferred in any one or more instances, will
not be construed to be a waiver or relinquishment of any such option or right,
or of any other covenants or agreements, and the same will be and remain in full
force and effect.
14. Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
there are no representations, inducements, promises or agreements, oral or
otherwise, not embodied in this Agreement. Any and all prior discussions,
negotiations, commitments and understanding relating to the subject matter of
this Agreement are superseded by it.
15. Counterparts. This Agreement may be executed in counterparts and each of
such counterparts will for all purposes be deemed to be an original, and such
counterparts will together constitute one and the same instrument.
16. Law. This Agreement will be deemed to have been made and delivered in New
York City and will be governed as to validity, interpretation, construction,
effect and in all other respects by the internal law of the State of New York,
without regard to principles of conflicts of law. The Company and the Placement
Agent each (i) agree that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted exclusively in New York State
Supreme Court, County of New York, or in the United States District Court for
the Southern District of New York, (ii) waives any objection to the venue of any
such suit, action or proceeding, and the right to assert that such forum is an
inconvenient forum, and (iii) irrevocably consents to the jurisdiction of the
New York State Supreme Court, County of New York, and the United States District
Court for the Southern District of New York in any such suit, action or
proceeding. The Company and the Placement Agent further agree to accept and
16
acknowledge service of any and all process that may be served in any such suit,
action or proceeding in the New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York and
agree that service of process upon either of them mailed by certified mail to
their respective addresses shall be deemed in every respect effective service of
process in any such suit, action or proceeding.
17. Representations, Warranties and Covenants to Survive Delivery. The
respective representations, indemnities, agreements, covenants, warranties and
other statements of the Company and the Placement Agent shall survive execution
of this Agreement and delivery of the Shares and/or the termination of this
Agreement prior thereto.
If you find the foregoing is in accordance with our understanding, kindly
sign and return to us a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement between us.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:____________________________
AGREED:
▇.▇. ▇▇▇▇▇▇▇▇ & CO., INC.
By:______________________________
17