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EXHIBIT 10.10
ARISTO INTERNATIONAL CORPORATION
PLACEMENT AGENCY AGREEMENT
July 31, 1996
Xxxxx & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Aristo International Corporation, a Delaware corporation (the
"Company"), hereby confirms its agreement with you as follows:
1. The Offering. The Company is offering to persons who
qualify as "accredited investors", as that term is defined in Regulation D under
the Securities Act of 1933, as amended (the "Act"), up to 1,500,000 shares of
the Company's Common Stock, par value $.001 (the "Shares") at a price of $5.00
per Share. Such private offering will not be consummated unless subscriptions
for at least 500,000 Shares are received and accepted by the Company on or
before August 23, 1996, unless extended by the mutual agreement of the Company
and you. The foregoing offer and sale of the Shares is hereinafter referred to
as the "Offering".
2. Appointment of Placement Agent. You are hereby appointed
the exclusive placement agent of the Company (the "Placement Agent") during the
Offering Period (as defined herein) for the purpose of assisting the Company in
identifying qualified subscribers as described in the Offering Materials (the
"Subscribers"). The "Offering Period" shall commence on the date the Offering
Materials are first made available to you by the Company for delivery in
connection with the Offering and shall terminate on or before the close of
business on August 23, 1996 unless extended by agreement between you and the
Company. You hereby accept such agency and agree to assist the Company in
identifying qualified Subscribers on a "best efforts" basis. Your agency
hereunder may not be terminated by the Company, except upon termination of the
Offering. It is understood that the offering and sale of the Shares is intended
by all parties to be exempt from the registration requirements of the Act
pursuant to Section 4(2) thereof and the rules and regulations of the Securities
and Exchange Commission thereunder (the "Rules and Regulations").
3. Offering Materials. The Company has prepared and delivered
to the Placement Agent a reasonable number of copies of a Confidential Private
Placement Memorandum dated July 15, 1996 and the disclosure documents referred
to therein relating to,
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among other things, the Company and the Offering. The public disclosure
documents include recent periodic reports filed by the Company with the
Securities and Exchange Commission. Such Confidential Private Placement
Memorandum, including all documents delivered in connection therewith, is
referred to herein as the "Offering Materials," except that if the Offering
Materials shall be supplemented or amended, the term "Offering Materials" shall
refer to the Offering Materials as so supplemented or amended from and after the
time of delivery to you of such supplement or amendment.
4. Closing; Delivery; Placement Fees.
(a) It is anticipated that the closing of the
purchase and sale of the Shares will take place in one or more closings (each, a
"Closing") at the offices of Xxxxx & Company Incorporated, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 10:00 a.m. on such dates as shall be agreed upon by you
and the Company (the "Closing Date").
(b) At the Closing there shall be delivered to the
Company on behalf of each Subscriber two executed copies of the Purchase
Agreement to be entered into by the Company and each of the Subscribers
purchasing Shares (the "Purchasers") substantially in the form delivered to the
Placement Agent (the "Purchase Agreement"), and there shall also be delivered on
behalf of each Purchaser the full purchase price of the Shares which such
Purchaser is to purchase. At the Closing, the Company will deliver to the
Purchasers certificates representing the Shares purchased by them and other
documents as set forth in the Purchase Agreements.
(c) Simultaneous with the Closing, as provided in
paragraph (b) above, the Company shall pay or cause to be paid to the Placement
Agent a placement fee equal to 7% of the gross proceeds raised in the Offering
and shall reimburse the Placement Agent for its out-of-pocket expenses as
provided in Section 6(c) hereof, against the presentation of bills therefor.
5. Representations and Warranties of the Company. The Company
hereby confirms for the benefit of the Placement Agent the representations and
warranties made by it to the Subscribers in Section 2 of the Purchase Agreement,
and hereby further represents and warrants that this Agreement has been duly
authorized, executed and delivered on behalf of the Company, and constitutes a
valid and binding agreement of the Company, enforceable in accordance with its
terms, except as rights to indemnity or contribution hereunder may be limited by
Federal or state securities laws.
6. Covenants of the Company. The Company covenants and agrees
with the Placement Agent that:
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(a) The Company will notify you of any event of
which it is aware and as a result of which the Offering Materials would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading; and it will not use any
amendment or supplement to the Offering Materials until you have given your
consent to such amendment or supplement. The Company will conduct the Offering
in compliance with Section 4(2) of the Act and the Rules and Regulations and all
applicable state securities laws and regulations.
(b) The Company will use its best efforts to qualify
the Shares for offer and sale under the Blue Sky or securities laws of such
jurisdictions as you may designate and to continue such qualifications in effect
for so long as may be required for purposes of the private placement of the
Shares, except that the Company shall not be required in connection therewith or
as a condition thereof to qualify as a foreign corporation or to execute a
general consent to service of process in any State.
(c) The Company covenants and agrees with you that
the Company will pay all expenses, fees and taxes in connection with (i) the
preparation of the Offering Materials and all other documents delivered to
prospective investors, (ii) the furnishing of the opinions of counsel for the
Company and other closing documents and (iii) the qualification of the Shares
for offer or sale under the securities laws of such jurisdictions as you may
reasonably designate. The Company also agrees that it will reimburse you for
your out-of-pocket expenses in connection with the Offering, and will pay the
reasonable fees and expenses of Xxxxxx XxXxxxxx & Carnelutti, special counsel to
the Purchasers pursuant to the Purchase Agreements.
(d) The Company agrees to cooperate with the
Placement Agent and special counsel to the Purchasers with respect to their due
diligence investigation.
7. Representations, Warranties and Covenants of the Placement
Agent. The Placement Agent represents, warrants and covenants as follows:
(a) This Agreement has been duly executed and
delivered by the Placement Agent and constitutes a valid and binding obligation
of the Placement Agent, enforceable against it in accordance with its terms,
except as rights to indemnity or contribution hereunder may be limited by
Federal or state securities laws.
(b) The Placement Agent will not make an offer of
Shares by any form of general solicitation or general advertising in violation
of Rule 502(c) of Regulation D.
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(c) The Placement Agent shall deliver copies of the
Offering Materials, together with any amendments or supplements, to each
Subscriber prior to investment. The Placement Agent shall not deliver to any
offeree without the consent of the Company any information concerning the
Offering other than the documents contemplated to be delivered hereby.
8. Conditions of Placement Agent's Performance. The purchase
and sale of the Shares and the obligations of the Placement Agent as provided
herein shall be subject to the accuracy in all material respects, as of the date
hereof and the Closing Date (as if made on and as of such Closing Date), of the
representations and warranties of the Company herein, to the performance in all
material respects by the Company of its obligations hereunder, and to the
following additional conditions:
(a) You shall have received the opinion of Xxxxxx
Xxxxxx Flattau & Klimpl, counsel for the Company, in the form attached hereto as
Exhibit B.
(b) You shall have received a certificate, dated such
Closing Date, of the President of the Company to the effect that:
(i) The representations and warranties of
the Company in this Agreement are true and correct in
all material respects as if made on and as of such
Closing Date; and the Company has complied with all
the agreements and satisfied all the conditions in
all material respects on its part to be performed or
satisfied at or prior to such Closing Date; and
(ii) Except as set forth in the Offering
Materials or in the Purchase Agreement and subsequent
to the date of the most recent financial statements
included with the Offering Materials, there has not
been any material adverse change in the condition
(financial or otherwise), business or results of
operations of the Company and its subsidiaries taken
as a whole.
(c) The Company shall have furnished to you such
certificates, in addition to those specifically mentioned herein, as you or your
counsel may have reasonably requested, as to the accuracy and completeness at
such Closing Date (and as of the date of any accepted subscriptions subsequent
to the Closing Date) of any statement in the Offering Materials, as to the
accuracy at such Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, and as to the fulfillment
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of the conditions concurrent and precedent to the obligations of
the Placement Agent hereunder.
9. Indemnification. (a) The Company will indemnify and hold
harmless the Placement Agent, the directors and officers of the Placement Agent
and each person, if any, who controls the Placement Agent within the meaning of
the Act against any losses, claims, damages or liabilities, joint or several, to
which the Placement Agent or any such directors, officers or controlling persons
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 any material fact
contained in the Offering Materials, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(ii) the Company's engagement of Xxxxx & Company Incorporated as Placement Agent
or any service the Placement Agent performs for the Company or on its behalf
pursuant to the Engagement Letter dated February 22, 1996 between the Company
and the Placement Agent or this Agreement, except to the extent that any such
loss, claim, damage or liability is found by a court of competent jurisdiction
in a judgment that has become final (in that it is no longer subject to appeal
or review) to have resulted directly and primarily from such Indemnified
Person's violation or breach of such Engagement Letter or this Agreement, gross
negligence or willful misconduct. Subject to subsection (c) below, the Company
will reimburse the Placement Agent or any such directors, officers or
controlling persons for any reasonable legal or other expenses reasonably
incurred by the Placement Agent or any such directors, officers or controlling
persons in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Offering Materials in
reliance upon and in conformity with written information furnished by and with
respect to the Placement Agent specifically for use in the preparation thereof.
The Company shall not be required to indemnify the Placement Agent or any such
directors, officers or controlling persons for any payment made to any claimant
in settlement of any suit or claim unless such payment is approved by the
Company, which approval shall not be unreasonably withheld or delayed. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have, but in no event shall an indemnified party receive more than the
amount of his claim.
(b) The Placement Agent will indemnify and hold harmless the
Company, its officers and directors and each person, if any, who controls the
Company within the meaning of the Act
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against any losses, claims, damages or liabilities, joint or several, to which
the Company, or any such directors, officers or controlling persons may be or
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 any untrue statement or alleged untrue statement of any material fact
contained in the Offering Materials or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Offering Materials in reliance upon and in conformity with written information
furnished by and with respect to the Placement Agent specifically for use in the
preparation thereof; and (subject to subsection (c) below) will reimburse the
Company or any such directors, officers or controlling persons for any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or actions. The Placement Agent shall not be
required to indemnify the Company or any such directors, officers or controlling
persons for any payment made to any claimant in settlement of any suit or claim
unless payment is approved by the Placement Agent, which approval shall not be
unreasonably withheld or delayed. This indemnity agreement will be in addition
to any liability the Placement Agent may otherwise have, but in no event shall
an indemnified party receive more than the amount of his claim.
(c) Promptly after receipt by an indemnified party under
subparagraphs 9(a) or (b) of notice of the commencement of any action or other
proceeding (including governmental investigations) in respect of which indemnity
may be sought, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under such subparagraphs, promptly notify
the indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under such subparagraph. In
case any such action shall be brought against any indemnified party, and it
shall promptly notify the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, assume and control the defense thereof with counsel chosen by it
and after notice from the indemnifying party to such indemnified party of its
election so to assume and control such defense with counsel chosen by it, it
shall bear all expenses of such defense. Any such indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless:
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(i) the indemnifying party has agreed to pay such fees and
expenses; or
(ii) the indemnifying party shall have failed to assume the defense
of such action or proceeding and employ counsel reasonably satisfactory
to such indemnified party in any such action or proceeding; or
(iii) the named parties to any such action or proceeding (including
any impleaded parties) include both such indemnified party and the
indemnifying party, and such indemnified party shall have been advised
by counsel that there may be one or more legal defenses available to
such party which are different from or additional to those available to
the indemnifying party (in which case, if such indemnified party
notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of such indemnified party).
The indemnifying party shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for the indemnified party, which firm
shall be designated in writing by the indemnified party.
10. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 9(a) or 9(b)
hereof is for any reason held to be unavailable to any party entitled to such
indemnification, each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of losses, claims, damages and
liabilities of the nature contemplated by such indemnification provisions
(including any investigation, legal and other expenses incurred in connection
with, and amounts paid in settlement of, any action, suit or proceeding or any
claims asserted) to which the Company and the Placement Agent may be subject, in
such proportions so that the Placement Agent is responsible for that portion in
each case represented by the percentage that the respective placement fee
appearing in Section 4(c) of this Agreement [(including the value of the
warrants issued to the Placement Agent pursuant to such Section )] bears to the
offering price of the Shares, and the Company is responsible for the remaining
portion; provided, however, that no person guilty of fraudulent
misrepresentation shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purpose of this Section 10,
each person, if any, who controls the Placement Agent
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within the meaning of Section 15 of the Act shall have the same rights to
contribution as the Placement Agent, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act, each officer of the Company
and each director of the Company shall have the same right to contribution as
the Company, subject in each case to the prior sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which claim for
contribution may be sought, promptly notify the other party or parties in
writing of the commencement thereof, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this Section 8. No party shall be liable for contribution with respect to
any action or claim settled without its consent.
11. Representations and Agreements to Survive Delivery. All
representations, warranties or agreements of the Company or of the Placement
Agent herein or in certificates delivered pursuant hereto shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Placement Agent or any controlling person, the Company, or any of
its officers, directors or controlling persons, and shall survive delivery of
the Shares.
12. Termination. The Placement Agent's obligation to proceed
hereunder is conditioned upon its continuing judgment that market conditions in
general, and as they relate to the Company's securities in particular, are such
as to continue to make appropriate the offering and sale of the Shares in the
manner provided for herein. Notwithstanding the foregoing, this Agreement shall
terminate if the Closing of the sale of the Shares does not take place on or
before [September __,] 1996, unless extended by the Company and the Placement
Agent. Upon any such termination, (i) the Company shall reimburse the Placement
Agent for its out-of-pocket expenses, and pay the reasonable fees and expenses
of special counsel to the Purchasers, in each case as provided in section 6(b)
hereof, and (ii) the obligations of the parties set forth in Sections 9 and 10
shall survive termination of this Agreement.
13. Notice. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to you
shall be mailed, delivered or telegraphed and confirmed to you c/o Allen &
Company Incorporated, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx X.
Xxxxx, with a copy to Xxxxxx XxXxxxxx & Carnelutti, 000 Xxxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attn: Xxxxxxx X. Price or, if sent to the Company, at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, XX 00000, Attn: President, with a copy to Xxxxxx Xxxxxx
Flattau & Klimpl,
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LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attn: Xxxxx
X. Xxxxxxx.
14. Benefits of the Agreement. This Agreement shall inure to
the benefit of and be binding upon the Company and the Placement Agent and their
respective successors and assigns.
15. Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
Very truly yours,
ARISTO INTERNATIONAL CORPORATION
By: ____________________________
Name:
Title:
XXXXX & COMPANY INCORPORATED
By: ___________________________________
Name:
Title:
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