EX 10.10
CINEMA RIDE, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: November 4, 2004
Newbridge Securities Corporation
0000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Cinema Ride, Inc., a Delaware corporation (the
"Company"), hereby agrees with Newbridge Securities Corporation (the "Placement
Agent") and Cornell Capital Partners, LP, a Delaware Limited Partnership (the
"Investor"), as follows:
1. Offering. The Company hereby engages the Placement Agent to act
as its exclusive placement agent in connection with the Standby Equity
Distribution Agreement dated the date hereof (the "Standby Equity Distribution
Agreement"), pursuant to which the Company shall issue and sell to the Investor,
from time to time, and the Investor shall purchase from the Company (the
"Offering") up to Ten Million U.S. Dollars ($10,000,000) of the Company's common
stock (the "Commitment Amount"), par value US$0.08 per share (the "Common
Stock"), at price per share equal to the Purchase Price, as that term is defined
in the Standby Equity Distribution Agreement. The Placement Agent services shall
consist of reviewing the terms of the Standby Equity Distribution Agreement and
advising the Company with respect to those terms.
All capitalized terms used herein and not otherwise defined herein
shall have the same meaning ascribed to them as in the Standby Equity
Distribution 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
"Registration Rights Agreement"). The documents to be executed and delivered in
connection with the Offering, including, but not limited, to the Company's
latest Quarterly Report on Form 10-QSB and Annual Report on Form 10KSB as filed
with the United States Securities and Exchange Commission, this Agreement, the
Standby Equity Distribution Agreement, the Registration Rights Agreement, and
the Escrow Agreement dated the date hereof (the "Escrow Agreement"), are
referred to sometimes hereinafter collectively as the "Offering Materials." The
Company's Common Stock purchased by the Investor hereunder or to be issued in
connection with the conversion of any debentures are sometimes referred to
hereinafter as the "Securities." The Placement Agent shall not be obligated to
sell any Securities.
2. Compensation.
A.Upon the execution of this Agreement, the Company shall issue to
the Placement Agent or its designee twenty thousand (20,000) shares of the
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Company's Common Stock (the "Placement Agent's Shares"). The Placement Agent
shall be entitled to "piggy-back" registration rights, which shall be triggered
upon registration of any shares of Common Stock by the Investor with respect to
the Placement Agent's Shares pursuant to the Registration Rights Agreement dated
the date hereof.
3. Representations, Warranties and Covenants of the Placement Agent.
A. The Placement Agent represents, warrants and covenants as
follows:
(i) The Placement Agent has the necessary power to enter
into this Agreement and to consummate the transactions contemplated
hereby.
(ii) The execution and delivery by the Placement Agent
of this Agreement and the consummation of the transactions
contemplated herein will not result in any violation of, or be in
conflict with, or constitute a default under, any agreement or
instrument to which the Placement Agent is a party or by which the
Placement Agent or its properties are bound, or any judgment,
decree, order or, to the Placement Agent's knowledge, any statute,
rule or regulation applicable to the Placement Agent. This Agreement
when executed and delivered by the Placement Agent, will constitute
the legal, valid and binding obligations of the Placement Agent,
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 in violation of
public policy.
(iii) Upon receipt and execution of this Agreement, the
Placement Agent will promptly forward copies of this Agreement to
the Company or its counsel and the Investor or its counsel.
(iv) The Placement Agent will not intentionally take any
action that it reasonably believes would cause the Offering to
violate the provisions of the Securities Act of 1933, as amended
(the "1933 Act"), the Securities Exchange Act of 1934 (the "1934
Act"), the respective rules and regulations promulgated thereunder
(the "Rules and Regulations") or applicable "Blue Sky" laws of any
state or jurisdiction.
(v) The Placement Agent 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 the
Placement Agent unless an exemption for such state registration is
available to the Placement Agent. The Placement Agent is in material
compliance with the rules and regulations applicable to the
Placement Agent generally and applicable to the Placement Agent's
participation in the Offering.
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4. Representations and Warranties of the Company.
A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of each of
this Agreement, the Standby Equity Distribution 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 Standby Equity Distribution
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 in violation of
public policy. The Securities to be issued pursuant to the
transactions contemplated by this Agreement and the Standby Equity
Distribution Agreement have been duly authorized and, when issued
and paid for in accordance with this Agreement, the Standby Equity
Distribution Agreement and the certificates/instruments representing
such Securities, 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 herein and in the Standby
Equity Distribution 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 were issued in violation of the
preemptive rights of any holders of any security of the Company.
(iii) The Common Stock to be issued in accordance with
this Agreement and the Standby Equity Distribution Agreement has
been duly authorized and, when issued and paid for in accordance
with this Agreement and the Standby Equity Distribution Agreement,
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 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.
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(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
Standby Equity Distribution 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 Offering Materials 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 Standby Equity Distribution 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
the Offering Materials nor the issuance and sale or delivery of the
Securities, nor the consummation of any of the transactions
contemplated in the Offering Materials 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
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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
the Placement Agent 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 and the securities
offered pursuant to the Standby Equity Distribution Agreement dated
the date hereof, 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 the Placement Agent's 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 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 the Placement Agent
of its obligations hereunder the offer and sale of the Securities
complies, and will continue to comply, 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.
(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 by the Company
(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. Representations, Warranties and Covenants of the Investor.
A. The Investor represents, warrants and covenants as follows:
(i) The Investor has the necessary power to enter into
this Agreement and to consummate the transactions contemplated
hereby.
(ii) The execution and delivery by the Investor of this
Agreement and the consummation of the transactions contemplated
herein will not result in any violation of, or be in conflict with,
or constitute a default under, any agreement or instrument to which
the Investor is a party or by which the Investor or its properties
are bound, or any judgment, decree, order or, to the Investor's
knowledge, any statute, rule or regulation applicable to the
Investor. This Agreement when executed and delivered by the
Investor, will constitute the legal, valid and binding obligations
of the Investor, 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
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thereof is subject to general principles of equity, or (c) the
indemnification provisions hereof or thereof may be held to be in
violation of public policy.
(iii) The Investor will promptly forward copies of any
and all due diligence questionnaires compiled by the Investor to the
Placement Agent.
(iv) The Investor is an Accredited Investor (as defined
under the 1933 Act).
(v) The Investor is acquiring the Securities for the
Inventor's own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof in whole or in part and no
other person has a direct or indirect beneficial interest in such
Securities. Further, the Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third
person, with respect to any of the Securities.
(vi) The Investor acknowledges the Investor's
understanding that the offering and sale of the Securities is
intended to be exempt from registration under the 1933 Act by virtue
of Section 3(b) of the 1933 Act and the provisions of Regulation D
promulgated thereunder ("Regulation D"). In furtherance thereof, the
Investor represents and warrants as follows:
(a) The Investor has the financial ability
to bear the economic risk of the Investor's investment,
has adequate means for providing for the Inventor's
current needs and personal contingencies and has no need
for liquidity with respect to the Investor's investment
in the Company; and
(b) The Investor has such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of the
prospective investment. The Inventor also represents it
has not been organized for the purpose of acquiring the
Securities.
(vii) The Investor has been given the opportunity for a
reasonable time prior to the date hereof to ask questions of, and
receive answers from, the Company or its representatives concerning
the terms and conditions of the Offering, and other matters
pertaining to this investment, and has been given the opportunity
for a reasonable time prior to the date hereof to obtain such
additional information in connection with the Company in order for
the Investor to evaluate the merits and risks of purchase of the
Securities, to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense. The Investor
is not relying on the Placement Agent or any of its affiliates with
respect to the accuracy or completeness of the Offering Materials or
for any economic considerations involved in this investment.
6. Certain Covenants and Agreements of the Company.
The Company covenants and agrees at its expense and without any
expense to the Placement Agent as follows:
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A. To advise the Placement Agent and the Investor 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 in connection with the Standby Equity Distribution Agreement 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 the Placement Agent and the Investor shall reasonably request.
Qualification, registration and exemption charges and fees shall be at the sole
cost and expense of the Company.
C. Upon written request, to provide and continue to provide the
Placement Agent and the Investor 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 of the Standby Equity
Distribution Agreement, to the Investor upon the Investor's 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 Offering Materials.
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.
7. Indemnification and Limitation of Liability.
A. The Company hereby agrees that it will indemnify and hold the
Placement Agent and each officer, director, shareholder, employee or
representative of the Placement Agent and each person controlling, controlled by
or under common control with the Placement Agent 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
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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 Placement Agent or such indemnified person of the
Placement Agent 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 the Placement Agent given by the Placement Agent 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,
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 7(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 the Placement Agent or such indemnified person
based upon specific finding of fact that the Placement Agent or such indemnified
person's gross negligence or willful misfeasance will be promptly repaid to the
Company.
B. The Placement Agent 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 material breach of any representation, warranty,
covenant or agreement made by the Placement Agent in this Agreement, or (ii) any
false or misleading information provided to the Company in writing by one of the
Placement Agent's indemnified persons specifically for inclusion in the Offering
Materials.
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C. The Investor hereby agrees that it will indemnify and hold the
Placement Agent and each officer, director, shareholder, employee or
representative of the Placement Agent, and each person controlling, controlled
by or under common control with the Placement Agent 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 Placement Agent or such
indemnified person of the Placement Agent 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 the Investor or its officers, employees or representatives in its
acting as the Investor for the Offering, (ii) the material breach of any
representation, warranty, covenant or agreement made by the Investor in the
Offering Materials, or (iii) any false or misleading information provided to the
Placement Agent by one of the Investor's indemnified persons.
D. The Placement Agent hereby agrees that it will indemnify and hold
the Investor and each officer, director, shareholder, employee or representative
of the Investor, and each person controlling, controlled by or under common
control with the Investor 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 Investor or such indemnified person of the Investor 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 the material breach of any representation, warranty,
covenant or agreement made by the Placement Agent in this Agreement.
E. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 7(A), (B), (C) or (D), 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 7(A), (B), (C), or (D) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof, but
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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.
F. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 7(A) or 7(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 the Placement
Agent 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 the Placement Agent 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 the Placement Agent 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 7(F), any person
controlling, controlled by or under common control with the Placement Agent, or
any partner, director, officer, employee, representative or any agent of any
thereof, shall have the same rights to contribution as the Placement Agent 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 7(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.
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G. The indemnity and contribution agreements contained in this
Section 7 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.
H. The Company hereby waives, to the fullest extent permitted by
law, any right to or claim of any punitive, exemplary, incidental, indirect,
special, consequential or other damages (including, without limitation, loss of
profits) against the Placement Agent and each officer, director, shareholder,
employee or representative of the placement agent and each person controlling,
controlled by or under common control with the Placement Agent within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and Regulations arising out of any cause whatsoever (whether such cause be based
in contract, negligence, strict liability, other tort or otherwise).
Notwithstanding anything to the contrary contained herein, the aggregate
liability of the Placement Agent and each officer, director, shareholder,
employee or representative of the Placement Agent and each person controlling,
controlled by or under common control with the Placement Agent within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and Regulations shall not exceed the compensation received by the Placement
Agent pursuant to Section 2 hereof. This limitation of liability shall apply
regardless of the cause of action, whether contract, tort (including, without
limitation, negligence) or breach of statute or any other legal or equitable
obligation.
8. Payment of Expenses.
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 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.
9. Conditions of Closing.
The Closing shall be held at the offices of the Investor or its
counsel. The obligations of the Placement Agent hereunder shall be subject to
the continuing accuracy of the representations and warranties of the Company and
the Investor herein as of the date hereof and as of the Date of Closing (the
"Closing Date") with respect to the Company or the Investor, as the case may be,
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 and the Investor on
and as of the Closing Date of its covenants and obligations hereunder and to the
following further conditions:
A. Upon the effectiveness of a registration statement covering the
Standby Equity Distribution Agreement, the Investor and the Placement Agent
shall receive the opinion of Counsel to the Company, dated as of the date
thereof, which opinion shall be in form and substance reasonably satisfactory to
the Investor, their counsel and the Placement Agent.
B. At or prior to the Closing, the Investor and the Placement Agent
shall have been furnished such documents, certificates and opinions as it 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.
-12-
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 except the transactions pursuant to the Securities
Purchase Agreement entered into by the Company on the date hereof which has not
been disclosed in the Offering Materials or to the Placement Agent 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) 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 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. If requested at Closing the Investor and the Placement Agent
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.
E. The Placement Agent 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 the Placement Agent's obligations and the
accuracy of the Placement Agent's 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.
10. Termination.
This Agreement shall be co-terminus with, and terminate upon the
same terms and conditions as those set forth in, the Standby Equity Distribution
Agreement. The rights of the Investor and the obligations of the Company under
the Registration Rights Agreement, and the rights of the Placement Agent and the
obligations of the Company shall survive the termination of this Agreement
unabridged.
-13-
11. 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 to such other address of which written notice is given to the others):
If to Placement Agent, to: Newbridge Securities Corporation
0000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to: Cinema Ride, Inc.
00000 Xxxxxxx Xxxxx - Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxxxx & Xxxxx LLP
00000 Xxxxxxxx Xxxx. Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investor: Cornell Capital Partners, LP
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to: Xxxxx Xxxxxxxx, Esq.
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-14-
C. This Agreement shall be governed by and construed in all respects
under the laws of the State of Delaware, 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 Jersey 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 Jersey
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
COMPANY:
CINEMA RIDE, INC.
By:_____________________________
Name: Xxxxxxxx X. Xxxxxxx
Title: CEO
PLACEMENT AGENT:
NEWBRIDGE SECURITIES CORPORATION
By:_____________________________
Name: Xxx X. Xxxxx
Title: President
INVESTOR:
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By:_____________________________
Name: Xxxx X. Xxxxxx
Title: Portfolio Manager
-16-
