Exhibit 10.10
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CONDOR CAPITAL INCORPORATED
PLACEMENT AGENT AGREEMENT
Dated as of: December 4 , 2000
May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Ladies and Gentlemen:
The undersigned, Condor Capital 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 that certain Securities Purchase Agreement
(the "Purchase Agreement"), dated the date hereof, between the Company and the
investor(s) named therein (the "Investors"), for the issuance and sale by the
Company (the "Offering") of the Company's Convertible Debenture (the
"Convertible Debenture"), which is convertible into shares of the Company's
Common Stock (the "Common Stock"), for an aggregate purchase price of up to
$1,300,000. All capitalized terms used herein and not otherwise defined shall
have the same meaning ascribed to them as in the Purchase Agreement. The
Investor(s) will be granted certain registration rights with respect to the
Common Stock issuable upon conversion of the Convertible Debentures, as more
fully set forth in the Registration Rights Agreement between the Company and the
Investor(s) dated the date hereof, and May Xxxxx and Xxxxxx Xxxxxxxx will be
granted warrants to purchase Common Stock of the Company and certain
registration rights as described herein. The documents to be executed and
delivered in connection with the Offering, including but not limited to this
Agreement, the Purchase Agreement, the Registration Rights Agreement, the
Investor Questionaire, the escrow agreement with First Union National Bank (the
"Escrow Agreement"), the Placement Agent's Warrants (as hereinafter defined) and
the Placement Agent's Registration Rights Agreement (as hereinafter defined),
Purchase Agreement, related documents and the Company's SEC Documents.The
Company's Convertible Debentures and the Placement Agent's Warrants are
sometimes referred to hereinafter collectively 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.
A. Upon the occurrence of the Closing, the funds received in respect of the
shares of Convertible Debentures purchased by the Investor(s) will be disbursed
in accordance with the terms of the 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 pursuant to the Offering, and
(ii) legal fees and other expenses related thereto due to May Xxxxx'x counsel
and the Escrow Agent.
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B. In addition to the foregoing compensation, the Company shall issue (i)
to May Xxxxx upon the execution of the Purchase Agreement a warrant in
substantially the form annexed hereto as Exhibit "A" to purchase 500,000 shares
of Common Stock at an exercise of 110% of the Closing Bid Price of the Company's
Common Stock on the date of Closing; each warrant exercisable in part or in
whole at any time by May Xxxxx, as applicable, at its discretion for a period of
sixty (60) months from the date hereof (collectively, the "Placement Agent's
Warrants'). The Placement Agent's Warrants shall be issued to the individuals
and in the amounts set forth on Schedule A attached hereto. May Xxxxx shall be
entitled to certain demand registration rights with respect to the shares of
Common Stock issuable upon exercise of the Placement Agent's Warrants pursuant
to a registration rights agreement in substantially the same form annexed hereto
(the "Placement Agent's Registration Rights Agreement").
3. Representations, Warranties and Covenants of May Xxxxx.
A. May Xxxxx represents, warrants and covenants to the Company as follows:
(i) May Xxxxx has the necessary power to enter into this Agreement,
the Placement Agent's Warrants, the Placement Agent's Registration Rights
Agreement, the Escrow Agreement and to consummate the transactions
contemplated hereby and thereby.
(ii) The execution and delivery by May Xxxxx of this Agreement, the
Placement Agent's Warrants, the Placement Agent's Registration Rights
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, the Placement Agent's Warrants, the Placement Agent's
Registration Rights 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 Purchase Agreement, a Registration
Rights Agreement and Escrow Agreement and the documents related thereto,
May Xxxxx will, through the Escrow Agent, promptly forward copies of the
Purchase Agreement, Registration Rights Agreement and 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 of the 1933 Act and the
Company reserves the right, in its sole discretion, upon recipet and review
of the Purchase Agreement, Investor Questionaire, Registration Rights
Agreement, executed by the Investor(s) to reject any Purchase Agreement
from such Investor(s).
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(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(s) is an Accredited Investor including at the minimum
the completion by each Investor if the Investor Questionaire and (b) that
any information furnished by the Investor(s) 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 Convertible Debentures will be honored, paid
or enforceable against the Investor in accordance with its terms, or (y)
subject to the performance of May Xxxxx' obligations and the accuracy of
May Xxxxx' 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
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.
A. The Company represents and warrants to May Xxxxx as follows:
(i) The execution, delivery and performance of each of this Agreement,
the Purchase Agreement, the Escrow Agreement, the Placement Agent's
Registration Rights Agreements, the Placement Agent's Warrants and the
Registration Rights Agreement executed with the Investor(s) has been or
will be duly and validly authorized by the Company and is, or with respect
to this Agreement, the Purchase Agreement, the Escrow Agreement, the
Placement Agent's Registration Rights Agreements, the Placement Agent's
Warrants and the Registration Rights Agreement executed with the
Investor(s) 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, the Purchase Agreement and the
Placement Agent's Warrants have been duly authorized and, when issued and
paid for in accordance with (x) this Agreement, the Purchase Agreement and
the Placement Agent's Warrants 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.
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(ii) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the 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 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 _________ shares of authorized Common Stock, of which
___________ will be issued and outstanding as of the date hereof.
(iii) The Convertible Debentures to be issued in accordance with the
Purchase Agreement has been duly authorized and when issued and paid for in
accordance with this Agreement, the Purchase Agreement, the Placement
Agent's Warrants and the certificates/instruments representing such
Convertible Debentures 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 personal property stated in the Purchase Agreement, related documents
and the Company's SEC Documents, 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 the Purchase Agreement, related documents and the Company's SEC
Documents, 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 the
Purchase Agreement, related documents and the Company's SEC Documents, .
(vi) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada. Except
as set forth in the the Purchase Agreement, related documents and the
Company's SEC Documents, 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
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business) as described in the the Purchase Agreement, related documents and
the Company's SEC Documents, . Any disclosures in the the Purchase
Agreement, related documents and the Company's SEC Documents, 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 Purchase Agreement, the Registration Rights Agreement, the Escrow
Agreement, the Placement Agent's Warrants and the Placement Agent's
Registration Rights 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 Purchase Agreement,
Registration Rights Agreement, the Escrow Agreement, the Placement Agent's
Warrants and the Placement Agent's Registration Rights 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
the Purchase Agreement, related documents and the Company's SEC Documents,
the outstanding debt, the property and the business of the Company conform
in all material respects to the descriptions thereof contained in the
Purchase Agreement, related documents and the Company's SEC Documents.
(viii) Except as set forth in the Purchase Agreement, related
documents and the Company's SEC Documents, 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 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 Purchase Agreement, the Registration Rights
Agreement, the Escrow Agreement, the Placement Agent's Warrants, the
Placement Agent's Registration Rights Agreement nor the issuance and sale
or delivery of the Securities, nor the consummation of any of the
transactions contemplated herein or in the Purchase Agreement, the
Registration Rights Agreement, the Escrow Agreement, the Placement Agent's
Warrants, or the Placement Agent's Registration Rights 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 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 Purchase
Agreement, related documents and the Company's SEC Documents; 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.
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(ix) Subsequent to the dates as of which information is given in the
Purchase Agreement, related documents and the Company's SEC Documents, 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 Purchase
Agreement, related documents and the Company's SEC Documents, and except
for loans from its former CEO, 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 Convertible Debentures or
any other arrangements, agreements or understandings that may affect May
Xxxxx' 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 Purchase Agreement, related documents
and the Company's SEC Documents as being owned or possessed by the Company)
and, except as set forth in the Purchase Agreement, related documents and
the Company's SEC Documents, 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 Purchase
Agreement, related documents and the Company's SEC Documents 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 Purchase Agreement, related documents
and the Company's SEC Documents and except for its arrangements with
Motorola, 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 it has developed, uses, employs or
intends to use or employ, other than to their respective licensors.
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(xiii) Subject to the performance by May Xxxxx of its obligations
hereunder, the 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 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 Purchase Agreement, related
documents and the Company's SEC Documents 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 Purchase
Agreement, related documents and the Company's SEC Documents are true and
correct as of the date of the Purchase Agreement, related documents and the
Company's SEC Documents 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 Purchase Agreement, related documents and the Company's
SEC Documents, 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.
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 Purchase Agreement, related documents and the Company's
SEC Documents 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 conversion of the Convertible Debentures in connection
with the Purchase Agreement and upon exercise of the Placement Agent's
Warrants to be qualified or registered for sale on terms consistent with
those stated in the Registration Rights Agreement and the Placement Agent's
Registration Rights Agreement, respectively, and under the securities laws
of such jurisdictions as May Xxxxx and the Investor(s) 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 to 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 shareholders.
D. To deliver, during the Registration Period, to May Xxxxx, upon May
Xxxxx' written request, in the manner provided in Section 10(B) of this
Agreement, (i) within forty five (45) days after the close of each fiscal
quarter, 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
shareholders at the time that such documents, reports and information are
furnished to its shareholders.
E. To comply with the terms of the Purchase Agreement, the
Registration Rights Agreement, the Escrow Agreement, the Placement Agent's
Warrants and the Placement Agent's Registration Rights Agreement.
F. To keep available out of its authorized Common Stock solely for the
purpose of issuance upon the exercise of the Placement Agent's Warrant,
such number of shares of Common Stock as shall then be issuable upon the
exercise or conversion thereof.
G. To issue to May Xxxxx, or May Xxxxx' designee, upon the execution
of the Purchase Agreement, the Placement Agent Warrants to purchase 500,000
shares of Common Stock in the form substantially as annexed hereto.
H. 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.
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6. Indemnification.
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 (collectively, the "May Xxxxx Indemnified Parties") 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 there under (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 any of May Xxxxx Indemnified Parties becomes 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 of a material fact contained in (a)
Section 4 of this Agreement, (b) the Purchase Agreement, related documents
and the Company's SEC Documents (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 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, covenant or agreement made by the Company in this
Agreement. The Company further agrees that upon demand by a May Xxxxx
Indemnified Party, 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 a May Xxxxx Indemnified
Party 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 (collectively, the
"Company Indemnified Parties"), 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 Indemnified Parties 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 any of the May Xxxxx Indemnified
Parties.
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C. Within five (5) business days after receipt by an indemnified party
of notice of commencement of any action covered by Section 6(A) or 6(B)
hereof, the party to be indemnified shall notify the indemnifying party of
the commencement thereof; provided, however, that the omission by one
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 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.
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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.
11
7. Payment of Expenses.
Each of the Company and the Investor(s) shall pay all costs and
expenses incurred by such party in connection with the Offering; provided,
however, that the legal fees and expenses incurred by May Xxxxx in
connection with the Offering, in the amount of $10,000, shall be paid for
by the Company at the time of Closing to Xxxxxx Xxxxxxxx LLP.
8. Conditions of Closing
Closing shall be held at the offices of May Xxxxx' counsel Xxxxxx
Xxxxxxxx LLP. 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 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 counsel
from___________, 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 and certificates 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 Purchase Agreement, related documents
and the Company's SEC Documents, 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 material adverse
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 Purchase Agreement, related documents and the
Company's SEC Documents; (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 Purchase Agreement, related documents and the
Company's SEC Documents or to May Xxxxx in writing; (iii) except as set
forth in the Purchase Agreement, related documents and the Company's SEC
Documents, 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
Purchase Agreement, related documents and the Company's SEC Documents, the
Company shall not have issued any securities (other than those to be issued
as provided in the Purchase Agreement, related documents and the Company's
SEC Documents) 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 indebtedness to it's former
CEO and trade payable debt; (v) no material amount of the assets of the
Company shall have been pledged or mortgaged, except as indicated in the
Purchase Agreement, related documents and the Company's SEC Documents; 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 would materially adversely affect the
businesses, prospects or financial condition or income of the Company,
except as set forth in the Purchase Agreement, related documents and the
Company's SEC Documents.
12
D. At the Closing, May Xxxxx shall have received a certificate of the
Company signed by an executive officer of the Company, 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 date, the representations and warranties of the Company set forth
herein are true and correct.
E. At the Closing, the Company shall have duly executed and delivered
to May Xxxxx, or its designees, the Placement Agent's Warrants, in the
names and denominations specified by May Xxxxx.
9. Termination.
This Agreement shall be co-terminus with, and terminate upon the same
terms and conditions as those set forth in, the Purchase Agreement. The
rights of the Investor(s) and the obligations of the Company under the
Registration Rights Agreement, and the rights of May Xxxxx and the
obligations of the Company under the Placement Agent's Warrants and the
Placement Agent's Registration Rights Agreement 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 notices, consents, waivers, or other communications required or
permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of receipt is received by the sending party); (iii) three (3)
days after being sent by U.S. certified mail, return receipt requested, or
(iv) one (1) day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive
the same. The addresses and facsimile numbers for such communications shall
be:
To May Xxxxx:
May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx - Xxxxx #0
Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
To the Company:
Condor Capital Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxx
Attention: Xxx Xxxx and Xxx Xxxxxxx
with copy to:
Xxxxxx X. Xxxxxxx, Esq.
Wenthur & Chachas
0000 Xx Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
13
or to such other address of which written notice is given to the others.
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, the Schedules hereto 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.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CONDOR CAPITAL INC.
By: /s/ Xxx Xxxx
-------------------------------------
Name: Xxx Xxxx
Title: President/CEO
MAY XXXXX GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
15
SCHEDULE A
Warrants
--------
Name Amount
---- ------
The May Xxxxx Group, Inc.
Xxxx Xxxxxx
Xxxxxx Singer
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
16
EXHIBIT "A"
Form of May Xxxxx Warrant
(attached hereto)
17
