Algiers Resources, Inc.
Balstron Corporation
Daliprint, Inc.
Hartscup Corporation
Mayall Partners, Inc.
PSLRA, Incorporated
Regal Acquisitions, Inc.
Spacial Corporation
Voyer One, Inc.
Voyer Two, Inc.
each a Delaware corporation
Offering of a Maximum of 2,250,000 Shares
of Common Stock, par value $0.001, at $0.25 per Share
PLACEMENT AGENT AGREEMENT
Dated as of December 16, 1998
Tradeway Securities Group, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Algiers Resources, Inc., Balstron Corporation, Daliprint,
Inc., Hartscup Corporation, Mayall Partners, Inc., PSLRA, Incorporated, Regal
Acquisitions, Inc., Spacial Corporation, Voyer One, Inc., Voyer Two, Inc.
(each a "Company" and collectively the "Companies") were each formed as shell
corporations in early 1998 for purposes of merging with a company with an
operating business (a "Merger"), all as more fully described in that certain
Confidential Memorandum dated November 1, 1998 (references to which shall be
deemed to include any and all supplements and amendments thereto and all
financial statements and exhibits that are included therein, referred
collectively to herein as the "Memorandum").
Each Company desires to raise $56,250, through the offer
and sale of up to 225,000 shares of Common Stock, par value $0.001 (the
"Shares") of the Company, as more fully described in the Memorandum, in a
private offering (the "Offering"). A maximum of 225,000 Shares of each
Company (2,250,000 in the aggregate) may be sold in the Offering ("Maximum
Offering"). In addition, the Companies, at the request of a Placement Agent
may agree to allow the Placement Agents, as defined below, to sell up to
225,000 additional Shares of each Company to cover over-allotments. There is
a minimum investment of 2,000 Shares in each Company (20,000 in the
aggregate). An equal investment must be made in each Company.
The offer and sale of the Shares is being made in
accordance with the Memorandum. The Shares will not be registered under the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities or "blue sky" laws and will be offered and sold in reliance upon
the exemptions afforded by Section 4(2) and of the Securities Act and Rule
506 of Regulation D promulgated thereunder and by similar exemptions afforded
by or preempted from the state securities or "blue sky" laws. The subscribers
for the Shares each of whom will be required to execute and deliver the
Subscription Agreement and the Subscription Supplement, Lock-up and
Registration Rights Agreement that accompanies the Memorandum (the
"Subscription Documents") will be issued the Shares (the "Investors").
Subsequent to the Offering, each Company anticipates that it
will file a Form 10 in an attempt to register each Company as public company
with the Securities and Exchange Commission, under Section 12(g) of
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the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Companies may file one at a time or some or all at the same time. Some of the
Companies may attempt to file soon after the closing of the Offering, and
some at a later date, even possibly after a Merger. No assurance can be given
that the registration will be allowed by the regulatory authorities.
Subsequent to a Merger, each Company will use its best
efforts to file a Registration Statement ("Registration Statement") to
register the Common Stock of the Company under the Securities Act and to
include all shares of Common Stock of such Company sold in this offering in
the Registration Statement. However, holders of Common Stock purchased in the
Offering should not depend on such registration rights and may have to rely
on Rule 144 of the Securities Act to trade in the Common Stock (assuming a
Merger has occurred and the Company is a reporting Company in compliance
under the Exchange Act, which cannot be assured). Any liquidity at all is
still subject to the risks related to achievement of registration and a
Merger as described in detail in this Memorandum, especially the section
entitled "Risk Factors." Any registration rights of a holder of Common Stock
purchased in the Offering will expire at such time as all such holders'
Common Stock (other than affiliates of the Company) purchased in the Offering
is saleable pursuant to Rule 144 without volume limitations. Any and all
shares of Common Stock registered in a Registration Statement or otherwise
eligible for sale under Rule 144 will still be subject to the lock-up
provisions set forth below.
Prior to (i) the registration of a Company (ii)
consummation of a Merger and (iii) either the expiration of the relevant
holding period under Rule 144 promulgated pursuant to the Securities Act or
registration of the Common Stock, purchasers of the Common Stock in this
Offering may not sell, pledge, assign or otherwise transfer or hypothecate
any shares of Common Stock of the Company sold in this Offering. After such
registration and Merger, subject to restrictions under federal and state
securities laws, fifty percent (50%) of all Common Stock of the
merged-Company purchased in this Offering by each holder may not be sold
pledged, assigned or otherwise transferred or hypothecated for a period of
six (6) months from the closing of a Merger, and the remaining fifty percent
(50%) of the Common Stock of the merged-Company purchased in this Offering by
such holder will be similarly restricted for a period of twelve (12) months
from the Closing of a Merger unless otherwise agreed to by the Company (the
"Lock-up"). Xx. Xxxxxxxxx, the sole stockholder of each Company has agreed to
restrict his shares of Common Stock in each Company pursuant to the same
provisions as the Lock-up subject to pro-rate release. All shares underlying
the Placement Agent Warrants, as defined below, are also subject to the
Lock-up on the same terms. In order to release any stockholder from the terms
of the Lock-up, all other stockholders must be proportionately released.
All capitalized terms not defined in this Agreement shall
have the meanings ascribed to them in the Memorandum.
Section 1. APPOINTMENT OF PLACEMENT AGENT AND TERMS OF OFFERING.
1.1 APPOINTMENT OF PLACEMENT AGENT. You are hereby invited
to become a Placement Agent ("Placement Agent") and by your confirmation of
this Agreement you agree to act in such capacity for the Offering during the
term of the Offering Period (as defined in Section 1.5 below) and to use your
best efforts to find purchasers for the Shares in accordance with the terms
and conditions set forth in this Agreement.
1.2 CO-PLACEMENT AGENTS. The Company may appoint one or
more registered broker-dealers who are members in good standing of the
National Association of Securities Dealers, Inc., ("NASD") or banks exempt
from broker-dealer registration to serve as co-Placement Agents with you.
1.3 SOLICITATION OF SUBSCRIPTIONS. You hereby agree to
solicit, as an independent contractor and not as an agent of the Company,
Investors acceptable to the Company in accordance with the terms of the
Memorandum and this Agreement.
1.4 SUBSCRIPTIONS.
1.4.1 SOLICITATION PROCEDURES. Each person
desiring to purchase Shares in the Offering shall be required to execute and
deliver to each Company the applicable Subscription Documents and a check in
the amount of $0.25 per Share for the amount purchased of each Company's
Shares made payable to each
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of "Algiers Resources, Inc.", "Balstron Corporation", "Daliprint, Inc.",
"Hartscup Corporation", "Mayall Partners, Inc.", "PSLRA, Incorporated",
"Regal Acquisitions, Inc.", "Spacial Corporation", "Voyer One, Inc.", "Voyer
Two, Inc." By way of example, if an Investor purchased the minimum
subscription of 2,000 Shares of each Company, the Investor must make a check
in the amount of $500 payable to each Company. You shall transmit each
investor's check and original Subscription Documents received by you to the
Companies care of the address listed on the Subscription Documents, retaining
a copy of each for your files. Each Company shall deposit the checks directly
in their respective corporate accounts.
1.4.2 ACCEPTANCE STANDARDS AND PROCEDURES. The
Companies will not consider any proposed subscription until all Subscription
Documents have been completed, signed and delivered. After receipt of all
required Subscription Documents with respect to an Investor, the Companies
will determine whether they wish to accept the offered subscription. No
subscriptions shall be effective unless and until accepted by the Companies.
Subscriptions for Shares will be accepted only from subscribers who meet the
investor suitability standards set forth in the Memorandum. The minimum
required purchase by any Investor shall be 2,000 Shares per Company (20,000
in the aggregate), subject to the right of the Companies in their sole
discretion to allow investment in a lesser amount. The Companies reserve the
right to reject any subscriptions and to allocate subscriptions received in
the event the Shares are oversubscribed.
1.4.3 REJECTION. Subscriptions may be rejected in
whole or in part by the Companies, provided the Companies must notify the
Placement Agent of the rejection of any subscription and return the to the
Placement Agent the funds previously received from the person whose
subscription was paid and the original Subscription Documents, within ten
(10) business days of the receipt of completed Subscription Documents. Should
the Companies determine to reject a subscription, you will promptly return
the Subscription Documents directly to the prospective purchaser and as well
as the funds previously received upon receipt of such documents from the
Companies.
1.5 OFFERING PERIOD. The "Offering Period" shall mean that
period during which any Shares are offered for sale, commencing on the date
upon which the Memorandum is initially delivered to the Companies for
distribution to Investors and continuing until the earlier of (a) the date on
which subscriptions for the maximum number of Shares are accepted or (b)
March 31, 1999, unless earlier terminated by the Companies, or unless further
extended for 120 days by mutual agreement of the Companies and any of the
Placement Agents, to time which the Company may extend the Offering without
further notice to the Investors (the "Termination Date").
1.6 CLOSINGS.
1.6.1 INITIAL CLOSING. If at any time during
the Offering Period, the Companies have accepted any subscriptions, the
subscribers may be admitted as Investors in an initial closing (the "Initial
Closing"). Upon the Initial Closing, the Companies shall remit to the Placement
Agent the commissions then due to the Placement Agent and deliver to each
Investor the certificates representing the Shares purchased by each Investor.
1.6.2 ADDITIONAL CLOSINGS. After the Initial
Closing, the Offering will continue, and the issuance of additional Shares to
subscribers in one or more additional closings ("Additional Closings") may occur
upon acceptance of subscriptions for additional Shares.
1.6.3 FINAL CLOSING. If at any time before the
Termination Date, subscriptions for the maximum number of Shares provided for
herein have been accepted (including subscriptions by the Companies, the
Placement Agent(s) or their affiliates), the subscribers shall be admitted to
the Company as Investors in a final closing (the "Final Closing"). The Companies
shall fix a date no later than ten days after the Termination Date on which the
Final Closing will take place (or, if the tenth day is not a business day, the
next business day) (the "Final Closing Date").
1.6.4 CLOSING CERTIFICATE. The Initial,
Additional and Final Closings will take place at the Companies' offices, or
at such other place as shall be mutually agreed upon by the Companies and
you. At each of the Initial Closing, any Additional Closing and the Final
Closing, you agree to deliver to the Companies
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if so requested by the Companies, a certificate stating (i) the number of
offerees in each of the jurisdictions designated on the blue sky memorandum
(the "Blue Sky Memorandum") delivered to you by the Companies, and (ii) that
your representations and warranties contained in Section 4 are true and
correct with the same effect as though expressly then made and that you have
complied with the covenants contained in Section 5.
1.7 DUE DILIGENCE. You agree to conduct your own
investigation to determine that all material facts upon which each person who
purchases the Shares might rely in making this investment decision have been
accurately and adequately disclosed in the Memorandum to the extent you deem
necessary.
1.8 COMPENSATION TO THE PLACEMENT AGENT. As compensation
for your services hereunder the Company agrees to cause the Company to pay to
you, as a selling commission, an amount equal to ten percent (10%) of the
gross offering proceeds for each Share sold through you, and reimbursement of
certain of your out of pocket expenses. All such compensation under this
Agreement shall be payable not later than ten (10) days following the closing
in which the Investor purchases the Shares. Also as compensation for your
services hereunder the Company agrees to cause the Company to pay to you, as
a selling commission, Placement Agent Warrants (the "Placement Agent
Warrants") to purchase the number of shares of Common Stock of each Company
equal to 30% of the number of Shares of each Company sold by you in the
Offering at an exercise price of $0.255 per share, not later than ten (10)
days following the closing in which the Investor purchasing the Shares is
admitted to the Companies. The Placement Agent Warrants shall be exercisable
for seven years following the completion of the Offering. The Placement Agent
Warrants shall provide for cashless exercise pursuant to which the holder of
the Placement Agent Warrants will receive upon exercise the number of Shares
otherwise issuable upon such exercise, less the number of Shares having an
aggregate Current Market Price on the date of exercise equal to the exercise
price per share multiplied by the number of Shares for which the Placement
Agent Warrants are being exercised and/or by delivery to the Company by the
holder of the Placement Agent Warrants the number of Shares having an
aggregate Current Market Price on the date of exercise equal to the exercise
price multiplied by the number of Shares for which the Placement Agent
Warrants are being exercised. For purposes of the Placement Agent Warrants,
the term "Current Market Price" shall mean (a) if the Shares are traded on
the Nasdaq National Market ("NNM") or on a national securities exchange, the
per share closing price of the Shares on the date of exercise of the
Placement Agent Warrants or (b) if the Shares are traded in the
over-the-counter market and not in the NNM or a national securities exchange,
the average of the per share closing bid prices of the Shares during the
thirty (30) consecutive trading days immediately preceding the date in
question, as reported by the Nasdaq SmallCap Market (or an equivalent
generally accepted reporting service if quotations are not reported on the
Nasdaq SmallCap Market). The closing price referred to in clause (a) above
shall be the last reported sale price or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices,
in either case in the NNM or on the principal stock exchange on which the
Shares are then listed. For purposes of clause (b) above, if trading in the
Shares is not reported by the Nasdaq SmallCap Market, the bid price referred
to in said clause shall be the lowest bid price as reported in the Nasdaq
Electronic Bulletin Board or, if not reported thereon, as reported in the
"pink sheets" published by National Quotation Bureau, Incorporated, and if
the Shares are not so reported, shall be determined by the price of a Share
determined by the Company's Board of Directors in good faith. In the event
that the Placement Agent Warrants have been exercised or remain outstanding
on the effective date of any initial public offering by the Company, the
Dealer Manager shall not be eligible to receive underwriter warrants as
compensation in connection with such initial public offering.
Each Company shall use its best efforts to register the
shares of Common Stock underlying the Placement Agent Warrants of such
Company in the Registration Statement filed by such Company subsequent to a
Merger; provided however, the shares of Common Stock of each Company
underlying the Placement Agent Warrants will be subject to the terms of the
Lock-up.
Payment of these commissions is subject to the following
conditions:
No commission will be payable with respect to any
subscriptions for the Shares which are rejected by the Companies; and
No commissions will be payable to you with respect to any
sale of Shares sold by you until such time as the Companies has received the
total proceeds of any such sale.
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No commissions will be payable with respect to transactions
in jurisdictions where such payments may not legally be made. You may waive
all your compensation in connection with any sales of Shares to you, the
Companies and certain officers, directors, employees or affiliates of you or
the Companies, and you in your discretion may waive all or a portion of your
compensation in connection with any sales of Shares to other purchasers with
whom the Companies or their affiliates have a business relationship.
In no event will the value of the total compensation exceed
the amount allowable in connection with the Companies' obtaining the benefits
of the exemptions from the qualification requirements of state securities
laws.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents, warrants and agrees with you for
your benefit that:
2.1 POWER AND AUTHORITY OF THE COMPANY. Each Company has
been duly organized and is validly existing and in good standing under the
laws of the State of Delaware, with full power and authority to conduct
business as described in the Memorandum. Complete and correct copies of the
Certificate of Incorporation and the Bylaws of each Company and all
amendments thereto have been delivered to you, and no changes therein will be
made subsequent to the date hereof and prior to the Final Closing Date.
2.2 VALIDITY OF ISSUANCE OF SECURITIES. The outstanding
common stock of each Company has been, and the Shares to be issued and sold
by the Companies pursuant to the Offering upon such issuance will be, when
paid thereto for as provided in the Memorandum and the Subscription
Documents, and the execution of all necessary or appropriate amendments or
supplements to, or certificates in connection with, duly authorized, validly
issued, fully paid and non-assessable, and will not be subject to any
preemptive or similar rights. Subscribers for the Shares shall have no
liability in excess of their respective capital contributions.
2.3 ADEQUACY OF THE MEMORANDUM. The \ Companies will have
prepared and delivered to you the Memorandum. The Memorandum does not, and on
any Closing Date will not, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. Every contract or other document
required by the Securities Act or any regulations promulgated thereunder (the
"Regulations") to be described in or attached as an exhibit to the Memorandum
or otherwise made available to Investors has been so described, attached or
made available.
2.4 DUE AUTHORIZATION AND ENFORCEABILITY OF THIS AGREEMENT.
This Agreement has been duly and validly authorized, executed and delivered
by or on behalf of each Company and constitutes the valid, binding and
enforceable agreement of such Company, except to the extent that (i) the
enforceability of this Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally or by 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 state or federal law) in the context of the offer or
sale of securities.
2.5 NO MATERIAL ADVERSE CHANGE. Since the respective dates
as of which information is given in the Memorandum, there has not been any
material adverse change in the condition, financial or otherwise, of each
Company or in the earnings, affairs or business prospects of each Company.
2.6 ABSENCE OF LEGAL OR CONTRACTUAL CONFLICTS. The
execution and delivery of this Agreement by each Company, and the
consummation of the transactions contemplated in the Memorandum, will not, or
with the passage of time or the giving of notice would not, constitute a
breach of, default under or violation of (i) any statute, indenture,
mortgage, deed of trust, voting trust, note, lease or other agreement or any
instrument to which each Company is or will be a party or by which any of
them or their property is or will be bound, or (ii) any order, rule or
regulation applicable to each Company of any court or any governmental body
or administrative agency having jurisdiction over its properties or
businesses.
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2.7 GOVERNMENTAL CONSENTS. No consent, approval,
authorization or order of any court or governmental agency or body has been
or is required for the performance of this Agreement and the consummation of
the transactions contemplated in this Agreement or in the Memorandum by each
Company, except such as have been or are to be obtained under the state
securities or "blue sky" laws.
2.8 ADVERSE CLAIMS. There is not pending, threatened or
contemplated any action, suit or proceeding before or by any court or other
governmental body against each Company and no default exists in the due
performance and observance of any material obligation, term, covenant or
condition of any agreement or instrument to which each Company is or may be a
party, or by which it is bound that is not referred to in the Memorandum and
that might result in any material adverse change in the condition (financial
or otherwise), earnings, affairs or business or prospects of each Company or
might materially and adversely affect any of the assets of each Company.
2.9 LEGAL ACTIONS. There are no actions, suites or
proceedings pending, or to the Companies' knowledge, threatened against or
affecting the Companies or any of its respective officers in their capacity
as such, before or by any Federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding might materially and
adversely affect the Companies or its respective business, properties,
business prospects, condition (financial or otherwise) or results of
operations taken as a whole.
2.10 INVESTMENT COMPANY. On the date hereof and, each
Closing Date, each Company is not and will not be an investment company as
that term is defined in the Investment Company Act of 1940.
2.11 NO OFFERS. No offer, offer to sell, offer for sale,
sale or attempt to dispose of any Shares to any person has been made prior to
the Offering Period upon the authority of each Company.
2.12 ACCURACY OF REPRESENTATIONS. No statement,
representation, warranty or covenant made by the Companies in this Agreement
or made in any certificate or document required by this Agreement to be
delivered to you was or will be, when made, inaccurate, untrue or incorrect
in any material respect.
Section 3. COVENANTS OF THE COMPANIES.
The Companies covenant with you as follows:
3.1 AMENDMENT OF MEMORANDUM. Promptly upon the occurrence
of any event which would cause the Memorandum to include during the Offering
Period an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading, the Companies
will promptly notify you of the event. The Companies will within a reasonable
period of time prepare and furnish to you such number of copies as you may
request of an amendment or amendments of, or a supplement or supplements to,
the Memorandum (in form and substance satisfactory to you) which will amend
or supplement the Memorandum so that as amended or supplemented it shall not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading.
3.2 COMPLIANCE WITH SECURITIES LAWS. The Companies will use
their best efforts to cause the sale of the Shares to take place in a manner
that will permit reliance upon Regulation D promulgated under the Securities
Act and will file the required Form D in a timely fashion. The Companies will
use its best efforts to secure exemptions from qualification or registration
of the Shares or preemption under the securities or "blue sky" laws of such
states in which it advises you in writing that the Shares may be offered, and
will make such applications, file such documents, and furnish such
information as may reasonably be required for that purpose.
3.3 DUE DILIGENCE INQUIRY. Upon request by you, the
Companies will make reasonable effort to furnish you information necessary in
your judgment, or in the judgment of your counsel, to confirm the continued
fairness, accuracy and completeness of the Memorandum in all material
respects during the Offering Period.
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3.4 REPORTS AND OTHER INFORMATION. The Companies will, as
long as any Shares may remain outstanding, furnish directly to you one (1)
copy of each report furnished to Investors at the time such report is
furnished to the Investors.
3.5 DELIVERY OF SALES MATERIAL. The Companies will deliver
to you, from time to time, all sales material (whether designated solely for
broker-dealer use or otherwise) proposed to be used or delivered in
connection with the offering of the Shares.
3.6 LIMITED LIABILITY AND COMPANY STATUS. The Companies
will take all steps necessary to preserve, to the extent possible, the
limited liability of the Investors and their status as corporations.
3.7 NOTIFICATION OF CHANGES. The Companies will notify you
promptly of any change having or which is likely to have a material adverse
change in the condition (financial or otherwise), earnings, affairs or
business or prospects of each Company or might materially and adversely
affect any of the assets of each Company relating to any of the Companies'
representations, warranties, covenants or agreements contained herein that
occurs at any time prior to the Final Closing.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE PLACEMENT AGENT.
You hereby represent, warrant and agree with the Companies
for their benefit that:
4.1 CORPORATE POWER AND AUTHORITY. You have been duly
incorporated and are validly existing as a corporation in good standing under
the laws of the State of your incorporation, with all requisite corporate
power and authority to conduct your business and to perform the obligations
contemplated herein.
4.2 DUE AUTHORIZATION AND ENFORCEABILITY OF THIS AGREEMENT.
This Agreement has been duly and validly authorized, executed and delivered
by you or on your behalf and constitutes your valid, binding and enforceable
agreement, except to the extent that (i) the enforceability of this Agreement
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally or by 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 state or
federal law) in the context of the offer or sale of securities.
4.3 ABSENCE OF LEGAL OR CONTRACTUAL CONFLICTS. Your
execution and delivery of this Agreement, and the performance of your
obligations thereunder, will not result in a violation of, be in conflict
with or constitute a default under any agreement or instrument to which you
are a party or by which you or your properties are bound, or any judgment,
decree, order or, to your knowledge, any statute, rule or regulation
applicable to you.
4.4 ADEQUACY OF THE MEMORANDUM. The information contained
in the Memorandum relating to you, if any, is complete and correct and does
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
4.5 BROKER-DEALER QUALIFICATIONS. You are (and will
continue to be during the term of this Agreement) a member in good standing
of the NASD and agree to abide by the Rules of Fair Practice of such
association. You are properly registered or licensed as a broker or dealer
under applicable federal and state securities laws and regulations. You, your
affiliates, and your or their officers and directors (or any other person
serving in a similar capacity) have not taken or failed to take any act, and
are not subject to any order or proceedings, that would make unavailable any
limited offering exemption from registration or qualification requirements of
state securities laws.
4.6 NO DISQUALIFICATIONS. Neither you nor any of your
directors, officers, predecessors or agents nor any beneficial owner of 10%
or more of any class of your equity securities, nor any of their respective
affiliates (nor any other person serving in a similar capacity):
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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 Securities and
Exchange Commission (the "SEC"), or arising out of such person's conduct as
an underwriter, broker, dealer, municipal securities dealer or investment
adviser;
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, 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 SEC, or arising out of the
conduct of the business of an underwriter, broker, dealer, municipal
securities dealer or investment adviser;
Is subject to an order of the SEC entered pursuant to
section 15(b), 15B(a), or 15B(c) of the Exchange Act; or is subject to an
order of the SEC entered pursuant to section 203(e) or (f) of the Investment
Advisers Act of 1940;
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;
Is subject to a United States Postal Service false
representation order entered within fivprior 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;
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 Securities Act, or
is the subject of any refusal order or stop order entered thereunder within
five years prior to the date hereof;
Has been or has been named as an underwriter of any
securities covered by any filing which is subject to any pending proceeding
under Rule 261 or any similar Rule adopted under section 3(b) of the
Securities Act, or to an order entered thereunder within five years prior to
the date hereof;
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;
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;
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;
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;
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
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Is currently subject to any order, judgment or decree of
any court of competent jurisdiction temporarily or preliminarily 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.
Section 5. COVENANTS OF THE PLACEMENT AGENT.
You covenant with the Companies as follows:
5.1 DELIVERY OF OFFERING MATERIALS. You or a person acting
on your behalf shall furnish to each offeree, concurrently with making an
offer to such offeree (and its purchaser representative, if such a
representative has been selected), a numbered copy of the Memorandum, as it
may have been amended or supplemented by the Companies, and shall maintain
adequate records of each person to whom a Memorandum has been delivered.
Neither you nor any of your agents will give any information or make any
representation with respect to the Companies or its business or affairs other
than the information or representations contained in the Memorandum or any
sales literature authorized for use in connection with the Offering, or such
other information as is specifically authorized by the Companies.
5.2 CONDUCT OF SOLICITATION. You or a person acting on your
behalf will cause each person interested in acquiring Shares to complete and
execute the Subscription Documents (copies of which is included in the
Memorandum) in order to enable the Companies to determine whether such person
is qualified to acquire Shares. You will not execute any Subscription
Documents for any person and will not invest in the Shares through any
person's discretionary trading account without the written approval of such
person. You will abide by, and take reasonable precautions to insure
compliance with, all provisions contained in the Memorandum and THE SELLING
AGREEMENT regulating the terms and manner of conducting the Offering.
5.3 COMPLIANCE WITH FEDERAL SECURITIES LAWS. You will
comply with all applicable requirements of the Securities Act and the rules
and regulations promulgated thereunder, including Regulation D. Specifically,
but without limitation, neither you nor any person acting on your behalf will
offer the Shares by means of any form of general solicitation or general
advertising nor to any person or entity unless you or your licensed personnel
have a substantial pre-existing business relationship with such person or
entity. No advertisement, article, notice or other communication regarding
the Offering will be published by you in any newspaper, magazine or similar
medium or broadcast over television or radio. Neither you nor any of your
agents will sponsor, hold or participate in any seminar or meeting regarding
the Offering at which the persons attending have been invited by any general
solicitation or general advertising. You and any person acting on your behalf
will make offers of the Shares only to persons whom you and your agents have
reasonable grounds to believe and do believe: (a) have such knowledge and
experience in business and financial matters (either alone or together with a
purchaser representative) that they are capable of evaluating the merits and
risks of the prospective investment and of protecting their own interests in
connection with the transaction and (b) meet the investor suitability
requirements contained in the Memorandum. You and any person acting on your
behalf will cooperate with the Companies so that the Shares are sold only to
"accredited investors" as such term is defined in Rule 501 of Regulation D
and you and your agents will exercise reasonable care to ensure that a
purchaser is not an underwriter within the meaning of Section 2(11) of the
Securities Act.
5.4 COMPLIANCE WITH BLUE SKY LAWS. You will comply with all
applicable requirements of any state securities or "blue sky" law or rule or
regulation promulgated thereunder. You will not offer or sell any of the
Shares in any jurisdiction (i) prior to receiving written instructions from
the Companies that offers may be made in such jurisdiction and (ii) except in
compliance with all applicable securities or "blue sky" laws and in
accordance with the Blue Sky Memorandum. With respect to any state which
limits the number of offers and sales which may be made, you shall offer for
sale no more than such number of Shares as we may advise you may be offered
and/or sold.
5.5 MAINTENANCE OF RECORDS. You will retain in your records
and make available to the Companies, for a period of at least five years,
information establishing that each person who purchases the Shares pursuant
to a Subscription Documents solicited by you is within the permitted class of
investors under the
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requirements, if any, of the jurisdiction in which such purchaser is a
resident and the suitability standards set forth in the Memorandum and the
Subscription Documents.
Section 6. COMPANY'S CERTIFICATES.
At the Final Closing Date and any Initial or Additional
Closing Date, you shall have received a certificate signed by an officer of
each Company on behalf of such Company to the effect that (i) the signer has
carefully examined the Memorandum and, in the signer's opinion, at all times
from the time the Memorandum was initially delivered to you for distribution
to investors the Memorandum did not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) since the date the Memorandum was initially delivered to
you for distribution to investors, no event has occurred which should have
been set forth in an amendment of or supplement to the Memorandum but which
has not been so set forth; (iii) no proceedings have been instituted or
threatened by the Commission or any blue sky agency with respect to the
Offering; and (iv) the representations and warranties contained in Section 2
are true and correct with the same effect as though expressly then made and
the Company has complied with the covenants contained in Section 3.
Section 7. INDEMNIFICATION.
7.1 BY THE COMPANY. The Companies will indemnify and hold
harmless you and each person, if any, who controls you within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which you 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 untrue statement or alleged untrue statement of any material fact
contained in the Memorandum, or in any related sales material (whether
designated solely for broker-dealer use or otherwise) which the Companies or
any respective officer thereof authorizes in writing for use by you or any
Placement Agent, or arise out of or are based upon the omission or alleged
omission to state therein any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that none of such persons will be liable to indemnify you or such a
controlling person thereof pursuant to this Section 7.1 to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
any of them by you specifically for use in the Memorandum or sales material;
and will reimburse you and each such controlling person for any legal or
other expenses reasonably incurred in connection with investigating or
defending any such loss, claim, damage, liability or action. Notwithstanding
the foregoing provisions of this Section 7.1, the Companies shall not
indemnify you or any person, if any, who controls you within the meaning of
the Securities Act, for losses, liabilities or expenses arising from or out
of an alleged violation of federal or state securities laws unless (i) there
has been a successful adjudication on the merits of each count involving
alleged securities law violations by the particular indemnitee not caused by
materials supplied by the Companies or (ii) such claims have been dismissed
with prejudice on the merits by a court of competent jurisdiction as to the
particular indemnitee or (iii) a court of competent jurisdiction approves the
settlement of the claims against the particular indemnitee. In any claim
against a Company for indemnification for federal or state securities law
violations, the party seeking indemnification shall place before the court
the position of the SEC, the Massachusetts Securities Division, the Tennessee
Securities Division and any other states that may require it with respect to
the issue of indemnification for securities law violations.
7.2 BY THE PLACEMENT AGENT. You will indemnify and hold
harmless each Company and each other person who controls each Company within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company 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 any material fact
contained in the Memorandum, or any related sales material which the
Companies authorize in writing for use by you, or arise out of or are based
upon the omission or the alleged omission to state therein any material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Companies by you
specifically for use therein and (ii) any breach by you or any Placement
Agent of any representation, warranty or covenant contained in this
Agreement, provided that you or
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any Placement Agent shall be liable under this Section 7.2 only to the extent
that such losses, claims, damages or liabilities result from any action or
inaction by you. You will reimburse any legal or other expenses reasonably
incurred by the Companies or any controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided that you shall reimburse any such legal or other expenses in
connection with investigating or defending any such loss, claim, damage,
liability or action only to the extent that such loss, claim, damage or
liability results from any action or inaction caused by you.
7.3 NOTIFICATION. Promptly after receipt by an indemnified
party under this Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 7, notify the indemnifying party 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 this Section 7. In case any such
action is brought against any indemnified party and it notifies the
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 satisfactory to 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 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation.
Section 8. TERMINATION OF THIS AGREEMENT.
8.1 RIGHT OF TERMINATION. You or the Companies shall have
the right to terminate this Agreement at any time.
8.2 NOTICE. If you elect to terminate this Agreement as
provided in this Section 8, the Companies shall be notified promptly by you
pursuant to Section 9 of this Agreement. If the Companies elect to terminate
this Agreement as provided in this Section 8, you shall be notified promptly
by the Companies or pursuant to Section 9 of this Agreement.
8.3 LIABILITY OF PARTIES. All representations, warranties
and indemnification agreements contained in this Agreement shall remain
operative and in full force and effect, regardless of any termination
pursuant to Section 8.1, and shall survive the Final Closing Date.
Section 9. MISCELLANEOUS PROVISIONS.
9.1 NOTICES. All notices provided for by this Agreement
shall be made in writing either (i) by actual delivery of the notice to the
parties thereunto entitled or (ii) by the mailing of the notice in the United
States mails to the address, as stated below (or at such other address as may
have been designated by written notice), of the party entitled thereto, by
certified or registered mail, return receipt requested. The notice shall be
deemed to have been received in case (i) on the date of its actual receipt by
the party entitled thereto and in case (ii) on the date of deposit in the
United States mail.
All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to you, shall be
mailed or delivered to:
c/o Xxxxx X. Xxxxxxxxx
The Law Office of Xxxxx X. Xxxxxxxxx, Esq.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
9.2 PARTIES. This Agreement shall inure to the benefit of
and be binding upon you, the Companies and each of your and the Companies'
respective successors and legal representatives. Except as otherwise set
forth in this Section, nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this
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Agreement, or any provision herein contained. No purchaser of Shares will be
deemed a successor because of such purchase.
9.3 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
9.4 ARBITRATION. You and the Companies agree that any
controversy arising out of or relating to this Agreement of the Offering
contemplated hereby shall be settled by arbitration in New York, New York, in
accordance with the rules then in effect for the NASD.
9.5 MULTIPLE COUNTERPARTS. This Agreement may be executed
in a number of identical counterparts, each of which shall be deemed to be an
original, but all of which constitute, collectively, one and the same
Agreement; but in making proof of this Agreement, it shall not be necessary
to produce or account for more than one such counterpart.
9.6 MODIFICATION OR AMENDMENT. This Agreement may not be
modified or amended except by written agreement executed by the parties
hereto.
9.7 OTHER INSTRUMENTS. The parties hereto covenant and
agree that they will execute such other and further instruments and documents
as are or may become necessary or convenient to effectuate and carry out this
Agreement.
9.8 VALIDITY. Should any portion of this Agreement be
declared invalid and unenforceable, then such portion shall be deemed to be
severable from this Agreement and shall not affect the remainder of this
Agreement.
9.9 CAPTIONS. The captions used in this Agreement are for
convenience only and shall not be construed in interpreting this Agreement.
9.10 ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties and supersedes any prior understandings or
written or oral agreements between them respecting the subject matter hereof.
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If the foregoing is in accordance with our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement among you and the
Company in accordance with its terms.
Very truly yours,
ALGIERS RESOURCES, INC.
By:\s\ Xxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxx, President
BALSTRON CORPORATION DALIPRINT, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -----------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
HARTSCUP CORPORATION MAYALL PARTNERS, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -----------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
PSLRA, INCORPORATED REGAL ACQUISITIONS, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -----------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
SPACIAL CORPORATION VOYER ONE, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -----------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
VOYER TWO, INC.
By:\s\ Xxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxx, President
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Confirmed and Accepted as of the date first above written:
Tradeway Securities Group, Inc.
--------------------------------------
Print Firm Name
By:\s\ Xxxxxx X. Guiltinar
-----------------------------------
Xxxxxx X. Guiltinar
--------------------------------------
Print Name
C.F.O./Secretary
--------------------------------------
Print Title
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