CLEAR SKIES GROUP, INC. PLACEMENT AGENT AGREEMENT Dated: November 14, 2007
CLEAR
SKIES GROUP, INC.
Dated:
November 14, 2007
Westminster
Securities Corporation
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Ladies
and Gentlemen:
The
undersigned, Clear Skies Group, Inc., a New York corporation, (together with
its
successors, the “Company”),
proposes to issue and sell a minimum of $3,250,000 (“Minimum
Offering”)
and up
to $6,500,000 (“Maximum
Offering”)
of its
common stock, par value $0.001 per share (the “Common Stock”), in units
consisting of 50,000 shares of common stock (“Units”)
at a
purchase price of $25,000 per Unit in a private placement of securities (the
“Offering”).
This
Placement Agent Agreement (“Agreement”)
is to
confirm the arrangement with you, Westminster Securities Corp. (the
“Placement
Agent”),
with
respect to the sale of the Units by Placement Agent and certain other selected
broker-dealers acceptable to us as exclusive placement agent for the Offering.
As used herein, Company includes the publicly-traded parent successor to the
business and assets of Company which will upon closing of the Offering will
agree to be bound by the terms and agreements hereof as if a party
hereto.
SECTION
1. Offering
Summary.
(a) Securities.
The
Units, the shares of the Company’s Common Stock underlying the Units
(“Shares”)
and
the Placement Agent Warrants (as hereinafter defined) are referred to
collectively herein as the “Securities”.
The
Securities shall conform in all material respects to descriptions thereof
contained in the Transaction Documents (as hereinafter defined).
(b) Documents.
The
terms and conditions of the sale and issuance of the Units and the rights held
by the purchasers of the Units with respect to the Offering and the securities
underlying the Units will be as set forth in (i) the private placement
memorandum relating to the Offering (ii) the agreements between the Company
and
the purchasers of the Units (including, without limitation, the subscription
agreement, the registration rights agreement, and the reconfirmation of
subscription), and (iii) all exhibits, schedules and supplements to the
foregoing, and all documents included or incorporated by reference therein
(including, without limitation, any of the Company’s filings or Company approved
draft filings with the SEC delivered to offerees of the Units so included or
incorporated) (all such documents hereinafter collectively referred to as the
“Transaction
Documents”).
(c) Timing.
The
date on which the Offering is authorized by the Company to commence is November
14, 2007 and is herein called the “Commencement
Date.”
Each
closing on the sale of Units is herein called the “Closing”,
and
each such date a “Closing
Date”.
(d) Exemption.
The
Offering will not be registered with the Securities and Exchange Commission
(“SEC”)
nor
with any state securities authority, but rather will be offered as a private
placement solely to accredited investors pursuant to an exemption from
registration under Regulation D (“Regulation
D”)
promulgated under Section 4(2) and Rule 506 of the Securities Act of 1933,
as
amended (“Securities
Act”),
and
available state securities law exemptions. The Units are to be offered and
sold
in the Offering only to “accredited investors”, as that term is defined in Rule
501(a) promulgated under Regulation D.
SECTION
2. Representations
and Warranties of the Company.
The
Company hereby represents, warrants and covenants with the Placement Agent
as
follows:
(a) Subsidiaries.
As used
herein, including with respect to the representations and warranties contained
herein, unless the context otherwise requires, the term “Company” shall include
the Company together with all of its direct and indirect wholly owned
subsidiaries, if any (the “Subsidiaries”),
and
all representations and warranties of the Company herein shall also be deemed
made on behalf of and with respect to each such Subsidiary of the Company,
except where the context indicates that such representation and warranty applies
only to the Company, including, without limitation, any representations and
warranties relating to the capital stock of the Company. The Company currently
has no Subsidiaries. The Company intends to reorganize upon the initial closing
of the Offering and to have Subsidiaries pursuant to the “reverse merger”
transaction as described in the Transaction Documents.
(b) Disclosure.
The
Transaction Documents, which have been prepared by the Company and subject
to
the reasonable approval of the Placement Agent, will be carefully prepared
to
disclose such information concerning the Company that management of the Company
determines would be material to an investment opportunity in the Company..
To
the knowledge of the Company, the Transaction Documents as of their respective
dates, as may be amended and supplemented from time to time, are true and
correct in all material respects and as of each Closing Date and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(c) Representations.
The
Transaction Documents will include representations and warranties of the Company
in such form and covering such matters as is usual and customary for a
transaction of this nature.
(d) Compliance.
The
Company will comply in all material respects with the Transaction Documents.
(e) Financials.
Except
as disclosed in the Transaction Documents, the audited financial statements
of
the Company for its most recent two fiscal years and the unaudited financial
statements for the interim period since the end of the most recent fiscal year,
each as included in the Transaction Documents (collectively, the “Financial
Statements”),
fairly present in all material respects the information purported to be shown
therein of the Company, at the respective dates to which they apply; and such
Financial Statements have been prepared in conformity with GAAP consistently
applied throughout the periods involved and are in accordance in all material
respects with the books and records of the Company.
(f) Litigation.
Except
as disclosed in the Transaction Documents, there are no actions, suits or
proceedings at law or in equity pending, or to the Company’s knowledge,
threatened, against the Company before or by any federal or state commission,
regulatory body, administrative agency or other governmental body wherein,
either in any case or in the aggregate, an unfavorable ruling, decision or
finding would have a material adverse effect on the financial condition, results
of operations, assets or business of the Company or its Subsidiaries (a
“Material
Adverse Effect”).
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(g) No
Conflicts.
The
execution and delivery by the Company of this Agreement, the consummation and
performance of the transactions herein contemplated, and compliance with the
terms of this Agreement by the Company will not conflict with, result in a
material breach of, or constitute a material default under, the Certificate
of
Incorporation or the bylaws of the Company, in each case as amended, or any
indenture, mortgage, deed of trust or other agreement or instrument to which
the
Company is now a party or by which it or any of its assets or properties is
bound, or any law, order, rule, regulation, writ, injunction, judgment or decree
of any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its business or properties,
to
the extent that such conflict, breach or default could have a Material Adverse
Effect.
(h) Survival.
All of
the representations, agreements and warranties in this Section 2 shall survive
delivery of and payment for all or any part of the Units for two (2) years
from
and after closing on the sale of Units.
SECTION
3. Issuance,
Sale and Delivery of the Units.
(a) Sale.
The
Placement Agent hereby agrees to offer the Units directly to subscribers
identified by the Placement Agent on a “best efforts, mini-max basis” for the
Minimum Offering and up to the Maximum Offering, as may be increased as provided
in the Transaction Documents.
(b) Payment.
The
Units will be offered for cash and for exchange of certain existing debt
securities of the Company as provided for in the Transaction Documents. The
cash
proceeds of the Offering will be deposited in escrow in a non-interest bearing
account with Signature Bank (“Escrow
Agent”)
in
accordance with the terms of the Transaction Documents and as set forth in
the
escrow agreement to be executed among the Company, the Placement Agent, and
the
Escrow Agent.
(c) Closing.
A
Closing will not be held unless as least the Minimum Offering has been raised
and the subscribers for at least the Minimum Offering have reconfirmed their
subscription pursuant to the procedures set forth in the Transaction Documents.
During the period of escrow, subscribers will not be entitled to a return of
their subscriptions, except as required by law. The Offering will continue
until
the first to occur of (i) the completion of the Maximum Offering (as may be
increased as provided in the Transaction Documents), (ii) December 15, 2007
(unless extended by the Company to no later than January 31, 2008) or (iii)
the
termination of the Offering by the Company. On each scheduled Closing Date
as
the Company and the Placement Agent may agree, the Company shall deliver to
the
Placement Agent such opinions, documents and certificates as are provided for
herein and shall cause the certificates representing the Securities comprising
the Units to be issued as promptly as possible and in any event within ten
(10)
days of each Closing Date. No funds shall be disbursed from escrow in connection
with the Closing without the written consent of both the Company and the
Placement Agent.
(d) Return
of Funds.
Unless
a Closing is held, the Offering will terminate and all funds theretofore
received from the sale of the Units will be promptly returned to the subscribers
without deduction therefrom or interest thereon. Notwithstanding anything
contained herein to the contrary, the Company, in its sole discretion, shall
have the right to accept or reject any subscription upon which the escrow agent
shall be instructed to return any rejected amount to any potential investor
together with the appropriate cancellation of any signed subscription agreements
prior to consummation of such potential investors’ purchase of such Units (or
applicable portion thereof), without interest or deduction. The Company may
withdraw its offer to sell the Units at any time prior to acceptance of a
subscription or terminate the offering. No purchase will be effective unless
and
until accepted by the Company and included in a Closing.
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(c)
The
parties hereto represent that at each Closing, the representations and
warranties herein contained, and the statements contained in all certificates
theretofore or simultaneously delivered by any party to another pursuant to
this
Agreement, shall be true and correct, except as otherwise disclosed in any
certificate delivered at such Closing.
SECTION
4. Covenants
of the Company.
The
Company covenants and agrees with the Placement Agent that:
(a) True
and Complete.
On the
Commencement Date, and on each Closing Date, the Transaction Documents (as
amended or as supplemented, if the same shall have been amended or supplemented)
will not (i) contain an untrue statement of a material fact and will not omit
to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were
made, not misleading and (ii) contain any material, non-public information
required to be disclosed to the general public in order to comply with
Regulation FD promulgated under the Securities Exchange Act of 1934, as amended,
unless all recipients of the Transaction Documents execute a confidentiality
agreement in form and substance acceptable to the Company and the Placement
Agent, prior to receipt of the Transaction Documents.
(b) Amendments.
The
Company will prepare promptly upon the reasonable request of the Placement
Agent, such amendments or supplements to the Transaction Documents, in such
form
as in the opinion of counsel to the Placement Agent may be reasonably necessary
or advisable in connection with the Offering. In addition, if at any time prior
to the final Closing of the Offering, (i) an event relating to or affecting
the
Company shall have occurred which, in the judgment of the Company or in the
opinion of counsel for the Placement Agent, would cause the Transaction
Documents as then in effect to include an untrue statement of a material fact
or
to omit to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, or (ii) it is otherwise necessary to amend
or
supplement the Transaction Documents, the Company shall promptly notify the
Placement Agent of the occurrence and shall promptly prepare and deliver to
the
Placement Agent, without charge, sufficient copies of an amended or supplemented
Transaction Documents, and shall use its reasonable best efforts to cause the
appropriate state securities authorities to take any required action with regard
to any amendment as may be necessary to permit the lawful use of the Transaction
Documents, as so amended and supplemented, in connection with the
Offering.
(c) Blue
Sky.
The
Company’s counsel shall prepare and file any necessary filings, in the
reasonable opinion of Company’s counsel or Placement Agent’s counsel, under the
state securities, or so-called “blue sky” laws and regulations (the
“Blue
Sky Laws”)
and
the Company shall pay the filing fees and all other expenses in connection
with
any such qualification in such jurisdictions as the Placement Agent shall
designate, and to continue such qualification in effect so long as required
for
the purposes of the Offering; provided, however, that the Company shall not
be
required to qualify as a foreign corporation or to file a consent to service
of
process in any jurisdiction in any action other than one arising out of the
offering or sale of the Units. The Company will provide copies to the Placement
Agent of all documents, exhibits and information filed in connection with the
qualification of the Units for sale under the Blue Sky Laws.
(d) Rights.
The
forms of the Transaction Documents shall contain the information,
representations, rights, warranties and covenants as shall be reasonably
acceptable to Placement Agent and its counsel. The Company shall not release
any
Transaction Documents unless they are reasonably acceptable to the Placement
Agent and its counsel.
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(e) Securities.
At each
Closing, (i) the Securities will conform, in all material respects, to all
statements with regard thereto contained in the Transaction Documents, (ii)
the
Securities shall have been duly and validly authorized , (iii) each portion
of
the Securities, when issued, exercised and/or paid for (as applicable), or
otherwise earned, each in accordance with its terms, will be validly issued,
fully paid and nonassessable and (iv) all shares of Common Stock that comprise
the Securities shall have been duly and validly reserved for issuance. The
Company shall ensure that all exercises and conversions properly requested
in
accordance with the terms of the Securities shall be effected promptly by the
Company following payment of any applicable exercise or conversion
price.
SECTION
5. Other
Agreements of the Company and the Placement Agent.
(a) Engagement
Letter.
The
Company and the Placement Agent hereby acknowledge that they are parties to
an
engagement letter dated June 27, 2007 (the “Engagement
Letter”),
which
contains various agreements and representations among them. The Engagement
Letter shall continue to remain in full force and effect and shall survive
any
termination of this Agreement; provided that this Agreement may supplement
the
Engagement Letter only with respect to the terms and conditions of the Offering
described herein. The Company will pay all cash and security-based compensation
and expenses due to the Placement Agent in the manner, amounts and at times
set
forth in the Engagement Letter, as summarized below and supplemented herein.
(b) Cash
Compensation.
As per
the Engagement Letter, the Placement Agent’s cash commission shall be equal to
eight percent (8%) of the gross cash proceeds received by the Company from
the
sale of Units. Notwithstanding the foregoing, the Company hereby agrees that
with respect solely to any Units sold by selected dealers of the Placement
Agent
(pursuant to Section 5(f) below), such cash commission shall be increased to
nine percent (9%) of the gross cash proceeds received by the Company from the
sale of Units by any such selected dealer. The Placement Agent’s cash
compensation shall be due and payable by the Company in full at each Closing
with respect to gross proceeds for Units deliverable on such date.
(c) Warrant
Compensation.
The
Placement Agent shall receive additional compensation in the form of warrants
(“Placement
Agent Warrants”)
issuable to Westminster Securities Corp. or its designees to purchase shares
of
Common Stock, in an amount equal to four percent (4%) of the total number of
shares of Common Stock underlying Units sold in the Offering, exercisable at
the
price per share of the Shares. The Placement Agent Warrants and the shares
of
Common Stock issuable upon exercise of the Placement Agent Warrants shall have
piggy-back registration, anti-dilution and other rights as disclosed in the
Transaction Documents, and shall be exercisable any time from the initial
Closing Date until the third anniversary thereof. Warrant compensation shall
be
paid in full within thirty (30) days of the final Closing Date with respect
to
the total Units sold in the Offering.
(d) Fees
and Expenses.
As per
the Engagement Letter, the Company will reimburse the Placement Agent for its
(i) reasonable legal fees, (ii) approved travel and entertainment, (iii)
printing, telecommunications and mailing costs and (iv) due diligence review
expenses relating to the Offering, provided the total of all such reimbursable
fees shall not exceed $25,000 in the aggregate. In addition, the Company will
be
responsible for its own fees, expenses and taxes (excluding any taxes on the
income or revenue of the purchasers of the Units) incident to the Offering,
including as relates to the preparation, printing and distribution of the
Transaction Documents, the establishment of the escrow account with the Escrow
Agent, the issuance of the Units and the fees and expenses of counsel and
accountants for the Company.
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(e) Finders.
The
Company and the Placement Agent mutually represent that they know of no third
party who rendered any service in connection with the introduction of the
Company to the Placement Agent and who is making a claim against anyone for
a
“finder’s fee” or similar type of fee in connection with the Offering. Each
party hereby indemnifies the other against any claims by any person known to
it
and not known to the other parties hereto, who shall claim to have rendered
services in connection with the introduction of the Company to the Placement
Agent or to have such a claim and who shall make a claim for a fee in connection
therewith.
(f) Selected
Dealers.
The
Placement Agent shall have the right to associate itself with such other members
of FINRA and/or foreign investment firms duly licensed, if required, in their
respective locales offering the Units only offshore to the United States as
additional agents as the Placement Agent may elect, in its sole discretion,
with
the consent of the Company, which consent shall not be unreasonably withheld.
Such additional agents may become selected dealers subject to this Agreement
by
signing a Selected Dealer Agreement in form satisfactory to the Placement Agent
in which such Selected Dealers also agree to offer the Units in accordance
with
Regulation D and the terms and conditions set forth in the Transaction
Documents. The Placement Agent shall have the right to share any compensation
due to the Placement Agent hereunder, with such additional agents and in such
amounts as the Placement Agent deems fit, in its sole judgment. In addition,
such additional agents shall be afforded the same indemnification by the Company
as offered to the Placement Agent hereunder.
(g) Publicity.
Neither
party shall issue any press releases, utilize general advertising, or make
any
public disclosures concerning the Offering during the term of the
Offering,
unless
subject to a “safe harbor” of Regulation D and subject to agreement between the
parties. Subsequent to the final Closing, the
Company will consult with the Placement Agent prior to issuing any press release
or filing any current report or other filing with the SEC with respect to the
Offering. The
Placement Agent will be afforded the opportunity to review, comment on, and
approve any such public disclosure document relating to the Offering prior
to
release, provided Placement Agent’s approval shall not be unreasonably withheld.
Subsequent to the public announcement of the completed Offering, each of the
Company and the Placement Agent may make factual references to the Offering
on
an ongoing basis.
SECTION
6. Indemnification.
(a) Indemnification.
The
Company hereby agrees to indemnify and hold harmless the Placement Agent, its
directors, officers, agents, employees, members, affiliates, counsel and each
other person or entity who controls the Placement Agent within the meaning
of
Section 15 of the Securities Act (collectively, the “Agent
Indemnified Parties”)
from
and against any and all losses, claims, damages or liabilities (or actions
in
respect thereof), joint or several, to which they or any of them may become
subject under the Securities Act or any other statute or at common law, and
to
reimburse such Agent Indemnified Parties for any reasonable legal or other
expense (including the cost of any investigation and preparation) incurred
by
them in connection with any litigation, whether or not resulting in any
liability, but only insofar as such losses, claims, liabilities and litigation
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact required to be stated in the Transaction Documents,
or omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are
made,
not misleading (including, but not limited to, any documents deemed to be
incorporated into the Transaction Documents by reference), (ii) any material
breach by the Company of any representation, warranty or covenant contained
herein, (iii) any matter otherwise relating to, arising out of or in connection
with the Offering or (iv) Placement Agent’s service as Placement Agent
hereunder; provided,
however,
that
the indemnity provisions contained in this subsection (a) shall not apply to
(x)
amounts paid in settlement of any such litigation if such settlement is effected
without the consent of the Company (which shall not be unreasonably withheld,
delayed or denied), or (y) the Placement Agent or any other Agent Indemnified
Parties in respect of any such losses, claims, damages, liabilities or actions
(A) arising out of, or based upon any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by the Placement Agent or such Agent Indemnified Parties specifically
for use in connection with the preparation of the Transaction Documents or
any
amendment thereof or supplement thereto or (B) arising from the willful
misconduct or gross negligence of the Placement Agent or any other Agent
Indemnified Party.
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(b) Reimbursement.
The
Company will reimburse all Agent Indemnified Parties for all reasonable expenses
(including, but not limited to, reasonable fees and disbursements of counsel
for
the Agent Indemnified Parties) incurred by any such Agent Indemnified Parties
in
connection with investigating, preparing and defending any such action or claim,
whether or not in connection with pending or threatened litigation in connection
with the transaction to which an Agent Indemnified Party is a party, as such
expenses are incurred or paid. The Placement Agent agrees, promptly upon
receipt, to notify the Company in writing of the receipt of written notice
of
the commencement or threatened action against it or against any other Agent
Indemnified Parties, in respect of which indemnity may be sought from the
Company on account of the indemnity provisions contained in this subsection
(a),
but the failure to timely give such notice shall not act to eliminate the
Company's obligations hereunder except to the extent the Company can demonstrate
actual prejudice therefrom. In case any such action shall be brought against
the
Placement Agent or any other Agent Indemnified Parties, the Company shall be
entitled to participate in (and, to the extent that it shall wish, to direct)
the defense thereof at its own expense, but such defense shall be conducted
by
counsel reasonably satisfactory to the Placement Agent or such other Agent
Indemnified Parties.
(c) Survival.
The
indemnity provision set forth herein, and the representations and warranties
of
the Company set forth in this Agreement, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of the
Placement Agent or by or on behalf of any of the Agent Indemnified Parties,
subject to the limitations contained herein, and shall survive the delivery
of
the Units, and any successor of the Placement Agent or any other Agent
Indemnified Parties shall be entitled to the benefit of the respective indemnity
provisions for a period of two years following the Closing.
(d) Contribution.
In
order to provide for just and equitable contribution in any case in which (i)
any person entitled to indemnification under this Section 6 makes claim for
indemnification pursuant hereto but it is judicially determined (by the entry
of
a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 6 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any such
person in circumstances for which indemnification is provided under this Section
6, then and in each such case, the Company and the Placement Agent shall
contribute to the aggregate losses, claims, damages or liabilities to which
they
may be subject (after any contribution from others) in such proportion so that
the Placement Agent is responsible for an aggregate amount equal to the
Placement Agent’s actual cash commission received from the Company on account of
the sale of such Units (which amount shall be nine percent (9%) of gross
proceeds with respect to Units sold be selected dealers pursuant to Section
5(f)
and eight percent (8%) of gross proceeds with respect to all other Units sold),
and the Company is responsible for the remaining portion; provided however,
that
in any such case, no person guilty of a fraudulent misrepresentation (within
the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
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(e) Notice.
Promptly after receipt by any party to this Agreement (or its representative)
of
notice of the commencement of any action, suit or proceeding, such party will,
if a claim for contribution in respect thereof is to be made against another
party (the “Contributing
Party”),
notify the Contributing Party in writing of the commencement thereof, but the
omission to so notify the Contributing Party will not relieve it from any
liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any
party and such party so notifies a Contributing Party or his or its
representative of the commencement thereof within the aforesaid period, the
Contributing Party will be entitled to participate therein, with the notifying
party and any other Contributing Party similarly notified. Any such Contributing
Party shall not be liable to any party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such Contributing Party. The
contribution provisions contained in this Section 6 are in addition to any
other
rights or remedies which the Company and the Placement Agents may have hereunder
or otherwise.
SECTION
7. Conditions
of the Placement Agent’s Obligations.
The
Placement Agent’s obligation to act as the agent of the Company hereunder, and
the Placement Agent's obligation to use its best efforts to find purchasers
for
the Units, shall be subject to the following conditions:
(a) The
Placement Agent shall have satisfactorily completed its due diligence
examination.
(b) The
Company’s representations and warranties herein contained shall be accurate, in
all material respects, as of each Closing Date.
(c) The
Company shall, in all material respects, have performed upon, fulfilled, or
complied with all of its covenants, conditions and agreements herein contained
and in the Transaction Documents, as of each Closing Date.
(d) The
Placement Agent shall not have disclosed in writing to the Company that the
Transaction Documents or any amendment or supplement thereto contains an untrue
statement of a fact which in the opinion of counsel to the Placement Agent,
is
material or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(e) Between
the Commencement Date and each Closing Date, the Company (i) shall have
conducted its business in the usual and ordinary manner as the same was being
conducted on the Commencement Date, (ii) shall not have sustained any loss
on
account of fire, explosion, flood, accident, calamity or other cause, of such
character as shall have a Material Adverse Effect, (iii) shall not have had
any
litigation or proceeding instituted, or to the knowledge of the Company
threatened, against the Company or before or by any federal or state commission,
regulatory body or administrative agency or other governmental body, domestic
or
foreign, wherein an unfavorable ruling, decision or finding would have a
Material Adverse Effect, and (iv) shall not have suffered from or experienced
any other event which has had or would have a Material Adverse Effect.
(f) The
authorization of the Securities, the Transaction Documents, and all corporate
proceedings and other legal matters incident thereto and to this Agreement
shall
be reasonably satisfactory in all material respects to Placement Agent and/or
its counsel.
(g) The
Company shall have furnished to the Placement Agent the opinion of its counsel
dated as of each Closing Date substantially in the form attached hereto as
Exhibit
A.
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(h) The
Company shall have furnished to the Placement Agent a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company dated as of
each Closing Date in the form attached hereto as Exhibit
B.
All
the
opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance satisfactory to Placement Agent or its
counsel, whose approval shall not be unreasonably withheld or delayed.
SECTION
8. Termination.
(a) This
Agreement may be terminated by the Placement Agent by notice to the Company
in
the event that the Company shall have failed or been unable to comply with
any
of the terms, conditions or provisions of this Agreement on the part of the
Company to be performed, complied with or fulfilled within the respective times
herein provided for, unless compliance therewith or performance or satisfaction
thereof shall have been expressly waived by the Placement Agent in
writing.
(b) This
Agreement shall automatically be terminated upon any termination of the
Offering.
(c) This
Agreement may be terminated by the Placement Agent by notice to the Company
at
any time if, in the sole judgment of the Placement Agent, the Offering or the
sale or the payment for or the delivery of the Units is rendered impracticable
or inadvisable because (i) additional material governmental restrictions not
in
force and effect on the date hereof shall have been imposed upon trading in
securities generally, or minimum or maximum prices shall have been generally
established, or trading in securities generally on the principal exchange on
which the Company’s securities are or were traded shall have been suspended or a
general banking moratorium shall have been established by federal or New York
State authorities, (ii) a war, major hostilities, terrorist or similar activity,
act of God or other calamity shall have occurred which materially adversely
affects the ability of the Placement Agent to perform its obligations hereunder,
(iii) of a Material Adverse Effect or (iv) the Placement Agent, in its sole
discretion, shall be dissatisfied with the results of its due diligence
investigation.
(d) Any
termination of this Agreement pursuant to this section shall be without
liability of any character (including, but not limited to, loss of anticipated
profits or consequential damages) on the part of any party hereto, except that
the Company shall remain obligated to pay the costs and expenses provided to
be
paid by it specified in Section 5 through the date of termination, and the
Company shall be obligated to pay all losses, claims, damages or liabilities,
joint or several, payable by the Company under Section 6.
SECTION
9. Placement
Agent’s Representations and Warranties.
The
Placement Agent represents and warrants to and agrees with the Company
that:
(a) The
Placement Agent is registered as a broker-dealer with the Securities and
Exchange Commission and is a member in good standing of the Financial Industry
Regulatory Authority (“FINRA”).
(b) The
Placement Agent will not effect offers or sales of the Units in any jurisdiction
unless it or its representative is duly licensed to effect offers and sales
in
such jurisdiction and the offer and sale of the Units are registered or exempt
from registration in such jurisdiction.
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(c) The
Placement Agent has duly authorized this Agreement and this Agreement is the
valid, binding and enforceable obligation of the Placement Agent.
(d) In
making
any offer of the Units, the Placement Agent will not make any material
representation to potential investors not contained in the Transaction Documents
which has not been authorized in writing by the Company.
(e) The
Placement Agent shall not utilize any general advertising or solicitation to
offer the Units and shall otherwise comply in all respects with the requirements
of Regulation D and applicable state and federal securities laws, rules and
regulations applicable to Placement Agent and the activities of Placement Agent
contemplated hereunder.
SECTION
10. Miscellaneous.
(a) Effective
Date.
This
Agreement shall become effective as of the date hereof.
(b) No
Third Party Beneficiaries.
This
Agreement is made solely for the benefit of the Placement Agent, the Company
and
any controlling person referred to in Section 15 of the Securities Act, and
their respective successors and assigns, and no other person shall acquire
or
have any right under or by virtue of this Agreement (other than any selected
dealers pursuant to Section 5(f) herein). The term “successor” or the term
“successors and assigns” as used in this Agreement shall not include any
purchaser, as such, of any of the Units.
(c) Notices.
Except
as otherwise expressly provided in this Agreement, (a) whenever notice is
required by the provisions of this Agreement to be given to the Company, such
notice shall be given
in
writing, addressed to the Company at the address set forth in the Transaction
Documents,
with a
copy to Xxxxxx and Xxxxx, LLP, 000 X. 00xx
Xxxxxx,
Xxx Xxxx, XX 00000 Attn: Xxxxxx Xxxxxx, Esq. and (b) whenever notice is required
by the provisions of this Agreement to be given to the Placement Agent, such
notice shall be in writing addressed to the Placement Agent at the address
set
forth above, with a copy to Xxxxxxx Xxxxxxxxx Xxxxx LLP, 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000, Attn: Xxxxxx Xxxxx,
Esq.
(d) Headings.
The
headings in this Agreement are for reference only and shall not limit or
otherwise affect any of the terms or provisions hereof.
(e) Severability.
The
provisions of this Agreement shall be deemed severable, so that if any part,
section or provision hereof shall be declared unlawful or unenforceable, the
remaining parts, sections or provisions hereof shall not be affected thereby
and
shall remain in full force and effect.
(f) Jointly
Drafted.
This
Agreement shall be deemed to have been drafted jointly by the parties
hereto.
(g) Governing
Law.
The
validity, interpretation and construction of this Agreement, and of each part
hereof, will be governed by the local laws of the State of New York, without
giving effect to its conflict of law principles or rules. In the event of a
dispute, the parties hereto agree to be bound by the arbitration procedures
of
the American Arbitration Association, and that such arbitration shall take
place
in the New York City metropolitan area. In actions not involving collection
by
the Placement Agent of compensation and/or reimbursement expenses, the
prevailing party shall be reimbursed by the nonprevailing party for all
reasonable attorney’s fees and costs (including all arbitration costs) incurred
by the prevailing party in resolving such dispute. In any action in which
Placement Agent seeks compensation and/or reimbursement of expenses, the Company
shall reimburse Placement Agent for all costs associated with such action
(including but not limited to reasonable attorney fees) as and when the
Placement Agent provides the Company with invoices for such costs and expenses.
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(h) Counterparts;
Facsimile Signatures.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which together will constitute one and the same instrument.
This Agreement may be executed by facsimile signatures or scanned electronic
mail (e-mail) attachment.
(i) Limitation
on Services.
The
Placement Agent shall not be obligated to provide advice or perform services
to
the Company that are not specifically addressed in this Agreement and/or the
Engagement Letter. The obligations of the Placement Agent described in this
Agreement and the Engagement Letter consist solely of best efforts services
to
the Company. In no event shall the Placement Agent be required or permitted
without express authorization by this Agreement or the Engagement Letter to
make
decisions for the Company or to provide legal or accounting services. All final
decisions with respect to acts of the Company or its affiliates, whether or
not
made pursuant to or in reliance upon information or advice furnished by the
Placement Agent hereunder, shall be those of the Company or such affiliates,
and
the Placement Agent shall under no circumstances be liable for any expense
incurred or loss suffered by the Company as a consequence of such
decisions.
(j) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and authorized assigns. Any attempt by either party
to assign any rights, duties, or obligations which may arise under this
Agreement without the prior written consent of the other party shall be
void.
(k) Entire
Agreement.
This
Agreement and the Engagement Letter contain the entirety of the agreements
between the parties with respect to the subject matters hereof and thereof,
and
neither party is relying on any agreement, representation, warranty, or other
understanding not expressly stated in this Agreement and/or the Engagement
Letter.
(l) Survival.
The
parties acknowledge that certain provisions of this Agreement must survive
any
termination or expiration thereof in order to be fair and equitable to the
party
to whom any promise or duty to perform is owed under such provision prior to
such termination or expiration of the Agreement. Therefore, the parties agree
that the provisions of Sections 1, 2, 3, 4, 5, 6, 7, 8(d), 9 and 10 shall
survive the termination or expiration of this Agreement for the period required
to meet and satisfy any obligations and promises arising therein and
thereunder
[REMAINDER
OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]
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[SIGNATURE
PAGE TO PLACEMENT AGENT AGREEMENT]
Please
confirm that the foregoing correctly sets forth the Agreement between the
Placement Agent and the Company.
|
CLEAR
SKIES GROUP, INC.
|
|||
|
By:
|
/s/
Xxxx Xxxxx
|
||
|
Xxxx
Xxxxx, Chairman & CEO
|
|||
We
hereby
confirm as of the date hereof that the above letter sets forth the agreement
between the Company and us.
|
WESTMINSTER
SECURITIES CORPORATION
|
||
|
By:
|
/s/
Xxxx X. X’Xxxx
|
|
|
Xxxx
X. X’Xxxx, Chairman & CEO
|
||
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