Exhibit 10.15
NEXLAND, INCORPORATED
PLACEMENT AGENT AGREEMENT
Dated as of: March 19, 2001
May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Ladies and Gentlemen:
The undersigned, Nexland, Inc. (the "COMPANY"), hereby agrees with May
Xxxxx Group, Inc. ("May Xxxxx") as follows:
1. OFFERING. The Company hereby engages May Xxxxx to act as its
exclusive placement agent in connection with the Securities Purchase Agreement
(as defined herein) for the issuance and sale by the Company (the "Offering") of
convertible debentures (the "Convertible Debentures") which shall be convertible
into the Company's common stock, $0.0001 par value per share (the "COMMON
STOCK")(as converted, the "Conversion Shares"), at a price per share equal to
the Purchase Price, as that term is defined in the Securities Purchase Agreement
dated the date hereof between the Company and the Investor named therein ( the
"SECURITIES PURCHASE AGREEMENT"). All capitalized terms used herein and not
otherwise defined shall have the same meaning ascribed to them as in the
Securities Purchase Agreement. The Investor will be granted certain registration
rights with respect to the Common Stock as more fully set forth in the
Registration Rights Agreement between the Company and the Investor dated the
date hereof. The documents to be executed and delivered in connection with the
Offering, including, but not limited, to this Agreement, the Securities Purchase
Agreement, the Registration Rights Agreement, the Escrow Agreement with First
Union National Bank (the "ESCROW AGREEMENT"), are referred to sometimes
hereinafter collectively as the "OFFERING MATERIALS." The Company's Common Stock
is sometimes referred to hereinafter as the "Securities." May Xxxxx shall not be
obligated to sell any Securities and this Offering by May Xxxxx shall be solely
on a "best efforts basis."
2. INFORMATION.
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Upon the occurrence of each Closing, the funds received in respect
of the Convertible Debentures purchased by the Investors will be disbursed in
accordance with the terms of the Securities Purchase Agreement, net of (i) the
commission payable to May Xxxxx, equal to ten percent (10%) of the gross
proceeds from the sale of Convertible Debentures , and (ii) legal fees and other
expenses related thereto due to May Xxxxx'x counsel, Xxxxxx Xxxxxxxx LLP, an
amount not to exceed Thirty Thousand Dollars ($30,000) ($10,000 for legal fees
for the transactions contemplated herein and $20,000 for legal fees for the
Equity Line of Credit transaction); and (iii) legal fees and expenses of the
Company's counsel.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MAY XXXXX.
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A. May Xxxxx represents, warrants and covenants as follows:
(i) May Xxxxx has the necessary power to enter into this
Agreement and the Escrow Agreement and to consummate the transactions
contemplated hereby and thereby.
(ii) The execution and delivery by May Xxxxx of this Agreement ,
the Escrow Agreement and the consummation of the transactions contemplated
herein and therein will not result in any violation of, or be in conflict with,
or constitute a default under, any agreement or instrument to which May Xxxxx is
a party or by which May Xxxxx or its properties are bound, or any judgment,
decree, order or, to May Xxxxx'x knowledge, any statute, rule or regulation
applicable to May Xxxxx. This Agreement and the Escrow Agreement when executed
and delivered by May Xxxxx, xxxx constitute the legal, valid and binding
obligations of May Xxxxx, enforceable in accordance with their respective terms,
except to the extent that (a) the enforceability hereof or thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles of equity,
or (c) the indemnification provisions hereof or thereof may be held to be
violative of public policy.
(iii) Upon receipt of an executed Securities Purchase Agreement,
a Registration Rights Agreement and the Escrow Agreement and the documents
related thereto, May Xxxxx will, through the Escrow Agent, promptly forward
copies of the Securities Purchase Agreement, the Registration Rights Agreement
and the Escrow Agreement and the documents related thereto to the Company or its
counsel.
(iv) May Xxxxx will not deliver any documents related to the
Offering to any person it does not reasonably believe to be an Accredited
Investor as defined in Rule 501 (a) (3) of Regulation D.
(v) May Xxxxx will not intentionally take any action that it
reasonably believes would cause the Offering to violate the provisions of the
1933 Act, the 1934 Act, the respective rules and regulations promulgated there
under (the "RULES AND REGULATIONS") or applicable "BLUE SKY" laws of any state
or jurisdiction.
(vi) May Xxxxx shall use all reasonable efforts to determine (a)
whether the Investor is an Accredited Investor and (b) that any information
furnished by the Investor is true and accurate. May Xxxxx shall have no
obligation to insure that (x) any check, note, draft or other means of payment
for the Common Stock will be honored, paid or enforceable against the Investor
in accordance with its terms, or (y) subject to the performance of May Xxxxx'x
obligations and the accuracy of May Xxxxx'x representations and warranties
hereunder, (1) the Offering is exempt from the registration requirements of the
1933 Act or any applicable state "Blue Sky" law or (2) the Investor is an
Accredited Investor.
(vii) May Xxxxx is a member of the National Association of
Securities Dealers, Inc., and is a broker-dealer registered as such under the
1934 Act and under the securities laws of the states in which the Securities
will be offered or sold by May Xxxxx, unless an exemption for such state
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registration is available to May Xxxxx. May Xxxxx is in compliance with all
material rules and regulations applicable to May Xxxxx generally and applicable
to May Xxxxx'x participation in the Offering.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of each of this
Agreement, the Securities Purchase Agreement, the Escrow Agreement, and the
Registration Rights Agreement has been or will be duly and validly authorized by
the Company and is, or with respect to this Agreement, the Securities Purchase
Agreement, the Escrow Agreement, and the Registration Rights Agreement will be,
a valid and binding agreement of the Company, enforceable in accordance with its
respective terms, except to the extent that (a) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity or (c) the indemnification provisions hereof or thereof may
be held to be violative of public policy. The Securities to be issued pursuant
to the transactions contemplated by this Agreement and the Securities Purchase
Agreement have been duly authorized and, when issued and paid for in accordance
with (x) this Agreement, the Securities Purchase Agreement and the
certificates/instruments representing such Securities, (y) will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except to the extent that (1) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, and
(2) the enforceability thereof is subject to general principles of equity. All
corporate action required to be taken for the authorization, issuance and sale
of the Securities has been duly and validly taken by the Company.
(ii) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Securities Purchase Agreement. The Company is
not a party to or bound by any instrument, agreement or other arrangement
providing for it to issue any capital stock, rights, warrants, options or other
securities, except for this Agreement and the agreements described herein and as
described in the Securities Purchase Agreement. All issued and outstanding
securities of the Company, have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights of rescission
or preemptive rights with respect thereto and are not subject to personal
liability solely by reason of being security holders; and none of such
securities was issued in violation of the preemptive rights of any holders of
any security of the Company. The Company has 50,000,000 shares of authorized
Common Stock, 36,027,378 of which will be issued and outstanding as of the date
hereof.
(iii) The Common Stock to be issued in accordance with Securities
Purchase Agreement has been duly authorized and when issued and paid for in
accordance with the this Agreement, the Securities Purchase Agreement and the
certificates/instruments representing such Common Stock, will be validly issued,
fully-paid and non-assessable; the holders thereof will not be subject to
personal liability solely by reason of being such holders; such Securities are
not and will not be subject to the preemptive rights of any holder of any
security of the Company.
(iv) The Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal property
necessary to conduct its business (including, without limitation, any real or
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personal property stated in the Offering Materials to be owned or leased by the
Company), free and clear of all liens, encumbrances, claims, security interests
and defects of any material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.
(v) There is no litigation or governmental proceeding pending or,
to the best of the Company's knowledge, threatened against, or involving the
properties or business of the Company, except as set forth in the Offering
Materials.
(vi) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
Except as set forth in the Offering Materials, the Company does not own or
control, directly or indirectly, an interest in any other corporation,
partnership, trust, joint venture or other business entity. The Company is duly
qualified or licensed and in good standing as a foreign corporation in each
jurisdiction in which the character of its operations requires such
qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite corporate power and
authority, and all material and necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies (domestic and foreign) to conduct its businesses (and
proposed business) as described in the Offering Materials. Any disclosures in
the Offering Materials concerning the effects of foreign, federal, state and
local regulation on the Company's businesses as currently conducted and as
contemplated are correct in all material respects and do not omit to state a
material fact. The Company has all corporate power and authority to enter into
this Agreement, the Securities Purchase Agreement, the Registration Rights
Agreement, and the Escrow Agreement, to carry out the provisions and conditions
hereof and thereof, and all consents, authorizations, approvals and orders
required in connection herewith and therewith have been obtained. No consent,
authorization or order of, and no filing with, any court, government agency or
other body is required by the Company for the issuance of the Securities or
execution and delivery of the Securities Purchase Agreement, the Registration
Rights Agreement, and the Escrow Agreement except for applicable federal and
state securities laws. The Company, since its inception, has not incurred any
liability arising under or as a result of the application of any of the
provisions of the 1933 Act, the 1934 Act or the Rules and Regulations.
(vii) There has been no material adverse change in the condition
or prospects of the Company, financial or otherwise, from the latest dates as of
which such condition or prospects, respectively, are set forth in the Offering
Materials, and the outstanding debt, the property and the business of the
Company conform in all material respects to the descriptions thereof contained
in the Offering Materials.
(viii) Except as set forth in the Offering Materials, the Company
is not in breach of, or in default under, any term or provision of any material
indenture, mortgage, deed of trust, lease, note, loan or Securities Purchase
Agreement or any other material agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which it is
a party or by which it or any of its properties may be bound or affected. The
Company is not in violation of any provision of its charter or by-laws or in
violation of any franchise, license, permit, judgment, decree or order, or in
violation of any material statute, rule or regulation. Neither the execution and
delivery of this Agreement, the Securities Purchase Agreement, the Registration
Rights Agreement, the Escrow Agreement, nor the issuance and sale or delivery of
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the Securities, nor the consummation of any of the transactions contemplated
herein or in the Securities Purchase Agreement, the Registration Rights
Agreement, and the Escrow Agreement, nor the compliance by the Company with the
terms and provisions hereof or thereof, has conflicted with or will conflict
with, or has resulted in or will result in a breach of, any of the terms and
provisions of, or has constituted or will constitute a default under, or has
resulted in or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or pursuant to the terms
of any indenture, mortgage, deed of trust, note, loan or Securities Purchase
Agreement or any other agreement or instrument evidencing an obligation for
borrowed money, or any other agreement or instrument to which the Company may be
bound or to which any of the property or assets of the Company is subject except
(a) where such default, lien, charge or encumbrance would not have a material
adverse effect on the Company and (b) as described in the Offering Materials;
nor will such action result in any violation of the provisions of the charter or
the by-laws of the Company or, assuming the due performance by May Xxxxx of its
obligations hereunder, any material statute or any material order, rule or
regulation applicable to the Company of any court or of any foreign, federal,
state or other regulatory authority or other government body having jurisdiction
over the Company.
(ix) Subsequent to the dates as of which information is given in
the Offering Materials, and except as may otherwise be indicated or contemplated
herein or therein, the Company has not (a) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money, or (b)
entered into any transaction other than in the ordinary course of business, or
(c) declared or paid any dividend or made any other distribution on or in
respect of its capital stock. Except as described in the Offering Materials, the
Company has no outstanding obligations to any officer or director of the
Company.
(x) There are no claims for services in the nature of a finder's
or origination fee with respect to the sale of the Common Stock or any other
arrangements, agreements or understandings that may affect May Xxxxx'x
compensation, as determined by the National Association of Securities Dealers,
Inc.
(xi) The Company owns or possesses, free and clear of all liens
or encumbrances and rights thereto or therein by third parties, the requisite
licenses or other rights to use all trademarks, service marks, copyrights,
service names, trade names, patents, patent applications and licenses necessary
to conduct its business (including, without limitation, any such licenses or
rights described in the Offering Materials as being owned or possessed by the
Company) and, except as set forth in the Offering Materials, there is no claim
or action by any person pertaining to, or proceeding, pending or threatened,
which challenges the exclusive rights of the Company with respect to any
trademarks, service marks, copyrights, service names, trade names, patents,
patent applications and licenses used in the conduct of the Company's businesses
(including, without limitation, any such licenses or rights described in the
Offering Materials as being owned or possessed by the Company) except any claim
or action that would not have a material adverse effect on the Company; the
Company's current products, services or processes do not infringe or will not
infringe on the patents currently held by any third party.
(xii) Except as described in the Offering Materials, the Company
is not under any obligation to pay royalties or fees of any kind whatsoever to
any third party with respect to any trademarks, service marks, copyrights,
service names, trade names, patents, patent applications, licenses or technology
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it has developed, uses, employs or intends to use or employ, other than to their
respective licensors.
(xiii) Subject to the performance by May Xxxxx of its obligations
hereunder, the Securities Purchase Agreement and the offer and sale of the
Securities comply, and will continue to comply, up to the Registration Period
(as defined in the Securities Purchase Agreement) in all material respects with
the requirements of Rule 506 of Regulation D promulgated by the SEC pursuant to
the 1933 Act and any other applicable federal and state laws, rules, regulations
and executive orders. Neither the Offering Materials nor any amendment or
supplement thereto nor any documents prepared by the Company in connection with
the Offering will 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, in light of the circumstances under which they were made,
not misleading. All statements of material facts in the Offering Materials are
true and correct as of the date of the Offering Materials and will be true and
correct on the date of the Closing.
(xiv) All material taxes which are due and payable from the
Company have been paid in full or adequate provision has been made for such
taxes on the books of the Company except for those taxes disputed in good faith
the Company does not have any tax deficiency or claim outstanding assessed or
proposed against it.
(xv) None of the Company nor any of its officers, directors,
employees or agents, nor any other person acting on behalf of the Company, has,
directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who is or may be in a position to
help or hinder the business of the Company (or assist it in connection with any
actual or proposed transaction) which (A) might subject the Company to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, or (B) if not given in the past, might have had a materially adverse
effect on the assets, business or operations of the Company as reflected in any
of the financial statements contained in the Offering Materials, or (C) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company in the future.
5. CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY.
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The Company covenants and agrees at its expense and without any expense
to May Xxxxx as follows:
A. To advise May Xxxxx of any material adverse change in the Company's
financial condition, prospects or business or of any development materially
affecting the Company or rendering untrue or misleading any material statement
in the Offering Materials occurring at any time as soon as the Company is either
informed or becomes aware thereof.
B. To use its commercially reasonable efforts to cause the Common Stock
issuable upon exercise of the Convertible Debentures to be qualified or
registered for sale on terms consistent with those stated in the Registration
Rights Agreement and under the securities laws of such jurisdictions as May
Xxxxx and the Investor shall reasonably request, provided that such states and
jurisdictions do not require the Company to qualify as a foreign corporation.
Qualification, registration and exemption charges and fees shall be at the sole
cost and expense of the Company.
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C. Upon written request, to provide and continue to provide the each
holder of Securities, copies of all quarterly financial statements and audited
annual financial statements prepared by or on behalf of the Company, other
reports prepared by or on behalf of the Company for public disclosure and all
documents delivered to the Company's stockholders.
D. To deliver, during the Registration Period, to May Xxxxx, upon May
Xxxxx'x request, within forty five (45) days, a statement of its income for each
such quarterly period, and its balance sheet and a statement of changes in
stockholders' equity as of the end of such quarterly period, all in reasonable
detail, certified by its principal financial or accounting officer; (ii) within
ninety (90) days after the close of each fiscal year, its balance sheet as of
the close of such fiscal year, together with a statement of income, a statement
of changes in stockholders' equity and a statement of cash flow for such fiscal
year, such balance sheet, statement of income, statement of changes in
stockholders' equity and statement of cash flow to be in reasonable detail and
accompanied by a copy of the certificate or report thereon of independent
auditors if audited financial statements are prepared; and (iii) a copy of all
documents, reports and information furnished to its stockholders at the time
that such documents, reports and information are furnished to its stockholders.
E. To comply with the terms of the Securities Purchase Agreement,
the Registration Rights Agreement, and the Escrow Agreement.
F. To ensure that any transactions between or among the Company, or any
of its officers, directors and affiliates be on terms and conditions that are no
less favorable to the Company, than the terms and conditions that would be
available in an "arm's length" transaction with an independent third party.
6. INDEMNIFICATION.
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A. The Company hereby agrees that it will indemnify and hold May
Xxxxx and each officer, director, shareholder, employee or representative of May
Xxxxx, and each person controlling, controlled by or under common control with
May Xxxxx within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act or the SEC's Rules and Regulations promulgated thereunder (the "Rules
and Regulations"), harmless from and against any and all loss, claim, damage,
liability, cost or expense whatsoever (including, but not limited to, any and
all reasonable legal fees and other expenses and disbursements incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation, commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action, suit or proceeding, including any inquiry, investigation or
pretrial proceeding such as a deposition) to which May Xxxxx or such indemnified
person of May Xxxxx may become subject under the 1933 Act, the 1934 Act, the
Rules and Regulations, or any other federal or state law or regulation, common
law or otherwise, arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in (a) Section 4 of this
Agreement, (b) the Offering Materials (except those written statements relating
to May Xxxxx given by an indemnified person for inclusion therein), (c) any
application or other document or written communication executed by the Company
or based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Common Stock under the securities laws
thereof, or any state securities commission or agency; (ii) the omission or
alleged omission from documents described in clauses (a), (b) or (c) above of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (iii) the breach of any representation, warranty,
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covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an indemnified person, at any time or from time to
time, it will promptly reimburse such indemnified person for any loss, claim,
damage, liability, cost or expense actually and reasonably paid by the
indemnified person as to which the Company has indemnified such person pursuant
hereto. Notwithstanding the foregoing provisions of this Paragraph 6(A), any
such payment or reimbursement by the Company of fees, expenses or disbursements
incurred by an indemnified person in any proceeding in which a final judgment by
a court of competent jurisdiction (after all appeals or the expiration of time
to appeal) is entered against May Xxxxx or such indemnified person as a direct
result of May Xxxxx or such person's gross negligence or willful misfeasance
will be promptly repaid to the Company.
B. May Xxxxx hereby agrees that it will indemnify and hold the Company
and each officer, director, shareholder, employee or representative of the
Company, and each person controlling, controlled by or under common control with
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act or the Rules and Regulations, harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of May Xxxxx or its officers, employees or
representatives in its acting as Placement Agent for the Offering or (ii) the
breach of any representation, warranty, covenant or agreement made by May Xxxxx
in this Agreement (iii) any false or misleading information provided to the
Company by one of the May Xxxxx indemnified persons.
C. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 6(A) or 6(B), the party to be
indemnified shall, within five (5) business days, notify the indemnifying party
of the commencement thereof; the omission by one (1) indemnified party to so
notify the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other indemnified party that has given such notice
and shall not relieve the indemnifying party of any liability outside of this
indemnification if not materially prejudiced thereby. In the event that any
action is brought against the indemnified party, the indemnifying party will be
entitled to participate therein and, to the extent it may desire, to assume and
control the defense thereof with counsel chosen by it which is reasonably
acceptable to the indemnified party. After notice from the indemnifying party to
such indemnified party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under such
Section 6(A) or 6(B) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, but the
indemnified party may, at its own expense, participate in such defense by
counsel chosen by it, without, however, impairing the indemnifying party's
control of the defense. Subject to the proviso of this sentence and
notwithstanding any other statement to the contrary contained herein, the
indemnified party or parties shall have the right to choose its or their own
counsel and control the defense of any action, all at the expense of the
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indemnifying party if, (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action at the expense of the indemnifying party, or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstance, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such indemnified parties. No
settlement of any action or proceeding against an indemnified party shall be
made without the consent of the indemnifying party.
D. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6(A) or 6(B)
is due in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company and May Xxxxx shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that May
Xxxxx shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the gross
proceeds paid to May Xxxxx and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(D), any person controlling, controlled by or under
common control with May Xxxxx, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights to
contribution as May Xxxxx and each person controlling, controlled by or under
common control with the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and each officer of the Company and each director
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against the other party under this
Section 6(D), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any obligation they may have hereunder or
otherwise if the party from whom contribution may be sought is not materially
prejudiced thereby. The indemnity and contribution agreements contained in this
Section 6 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified person or any termination
of this Agreement.
7. PAYMENT OF EXPENSES.
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The Company hereby agrees to bear all of the expenses in connection with
the Offering, including, but not limited to the following: filing fees, printing
and duplicating costs, advertisements, postage and mailing expenses with respect
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to the transmission of Offering Materials, registrar and transfer agent fees,
Escrow Agent fees and expenses, fees of the Company's counsel and accountants,
issue and transfer taxes, if any.
8. CONDITIONS OF CLOSING
The Closing shall be held at the offices of May Xxxxx or its counsel.
The obligations of May Xxxxx hereunder shall be subject to the continuing
accuracy of the representations and warranties of the Company herein as of the
date hereof and as of the Date of Closing (the "CLOSING DATE") with respect to
the Company as if it had been made on and as of such Closing Date; the accuracy
on and as of the Closing Date of the statements of the officers of the Company
made pursuant to the provisions hereof; and the performance by the Company on
and as of the Closing Date of its covenants and obligations hereunder and to the
following further conditions:
A. At the Closing, May Xxxxx shall receive the opinion of Xxxxxxxxxxx &
Xxxxxxxx LLP, dated as of the date of the Closing, which opinion shall be in
form and substance reasonably satisfactory to counsel for May Xxxxx.
B. At or prior to the Closing, counsel for May Xxxxx shall have been
furnished such documents, certificates and opinions as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Agreement and the Offering Materials, or in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
C. At and prior to the Closing, (i) there shall have been no material
adverse change nor development involving a prospective change in the condition
or prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Offering
Materials; (ii) there shall have been no transaction, not in the ordinary course
of business, entered into by the Company which has not been disclosed in the
Offering Materials or to May Xxxxx in writing; (iii) except as set forth in the
Offering Materials, the Company shall not be in default under any provision of
any instrument relating to any outstanding indebtedness for which a waiver or
extension has not been otherwise received; (iv) except as set forth in the
Offering Materials, the Company shall not have issued any securities (other than
those to be issued as provided in the Offering Materials) or declared or paid
any dividend or made any distribution of its capital stock of any class and
there shall not have been any change in the indebtedness (long or short term) or
liabilities or obligations of the Company (contingent or otherwise) except for
trade payable debt; (v) no material amount of the assets of the Company shall
have been pledged or mortgaged, except as indicated in the Offering Materials;
and (v) no action, suit or proceeding, at law or in equity, against the Company
or affecting any of its properties or businesses shall be pending or threatened
before or by any court or federal or state commission, board or other
administrative agency, domestic or foreign, wherein an unfavorable decision,
ruling or finding could materially adversely affect the businesses, prospects or
financial condition or income of the Company, except as set forth in the
Offering Materials.
D. At Closing, May Xxxxx shall receive a certificate of the Company
signed by an executive officer and chief financial officer, dated as of the
applicable Closing, to the effect that the conditions set forth in subparagraph
(C) above have been satisfied and that, as of the applicable closing, the
representations and warranties of the Company set forth herein are true and
correct.
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9. TERMINATION.
-----------
This Agreement shall be co-terminus with, and terminate upon the same
terms and conditions as those set forth in, the Securities Purchase Agreement.
The rights of the Investor and the obligations of the Company under the
Registration Rights Agreement, and the rights of May Xxxxx and the obligations
of the Company shall survive the termination of this Agreement unabridged.
10. MISCELLANEOUS.
-------------
A. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all which shall be deemed
to be one and the same instrument.
B. Any notice required or permitted to be given hereunder shall be given
in writing and shall be deemed effective when deposited in the United States
mail, postage prepaid, or when received if personally delivered or faxed ( upon
confirmation of receipt received by the sending party), addressed as follows:
If to Placement Agent, to: The May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000)000-0000
Facsimile: (000) 000-0000
With Copy to: Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to: Nexland, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxx. - Xxxxx 0000
Xxxxx, Xx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address of which written notice is given to the others.
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C. This Agreement shall be governed by and construed in all respects
under the laws of the State of New York, without reference to its conflict of
laws rules or principles. Any suit, action, proceeding or litigation arising out
of or relating to this Agreement shall be brought and prosecuted in such federal
or state court or courts located within the State of New York as provided by
law. The parties hereby irrevocably and unconditionally consent to the
jurisdiction of each such court or courts located within the State of New York
and to service of process by registered or certified mail, return receipt
requested, or by any other manner provided by applicable law, and hereby
irrevocably and unconditionally waive any right to claim that any suit, action,
proceeding or litigation so commenced has been commenced in an inconvenient
forum.
D. This Agreement and the other agreements referenced herein contain the
entire understanding between the parties hereto and may not be modified or
amended except by a writing duly signed by the party against whom enforcement of
the modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
[SIGNATURE PAGE TO FOLLOW]
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NEXLAND, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
MAY XXXXX GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
