Exhibit 10.10
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") dated this 8th day of
December, 1998, is between ConMat Technologies, Inc. a Florida corporation
("ConMat"), and The Eastwind Group, Inc., a Delaware corporation ("Eastwind").
RECITALS
A. Eastwind is a holding company that currently owns all of the outstanding
shares of the common stock of Polychem Corporation ("Polychem"), par value $0.01
per share ("Polychem Common Stock").
B. The parties desire to enter into a share exchange transaction whereby
ConMat will acquire all of the outstanding shares of Polychem Common Stock from
Eastwind in exchange for (i) one million (1,000,000) shares of newly issued
common stock of ConMat, par value $0.001 per share ("ConMat Common Stock") and
one million three hundred thirty-three thousand three hundred thirty-three
(1,333,333) shares of newly issued Series A convertible preferred stock of
ConMat, par value $0.001 per share ("ConMat Series A Preferred Stock"), and (ii)
the assumption by ConMat of certain liabilities of Eastwind.
NOW, THEREFORE, in consideration of the agreements and mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereby agree as follows:
1. Share Exchange Transaction. At the Closing, Eastwind shall convey,
transfer, assign and deliver to ConMat all of the outstanding shares of Polychem
Common Stock (the "Polychem Shares"), free and clear of any security interest,
lien, pledge, encumbrance or other adverse claim or interest except as provided
herein. In exchange for the Polychem Shares, at the Closing, ConMat shall issue
and deliver to Eastwind (i) one million (1,000,000) shares of ConMat Common
Stock and (ii) one million three hundred thirty-three thousand three hundred
thirty-three (1,333,333) shares of ConMat Series A Preferred Stock
(collectively, the "ConMat Shares"). The rights, preferences and privileges of
the ConMat Series A Preferred Stock shall be as set forth in the form of
Certificate of Designation attached hereto as Exhibit "A".
2. Assumption and Discharge of Eastwind Obligations by ConMat. As further
consideration for the Polychem Shares, at the Closing (defined below), ConMat
will assume and discharge certain liabilities of Eastwind as follows:
(a) $160,000 owed to Xxxx XxXxxxxx, to be discharged by the issuance to
Xxxx XxXxxxxx of 53,333 shares of ConMat Series A Preferred Stock, pursuant to
an agreement in substantially the form attached hereto as Exhibit "B";
(b) $100,000 owed to Xxxxxxx Capital, Ltd., to be discharged by the
payment to Xxxxxxx Capital, Ltd. of $100,000, pursuant to an agreement in
substantially the form attached hereto as Exhibit "C"; and
(c) $500,000 owed to Mentor Special Situation Fund, L.P., a Pennsylvania
limited partnership ("Mentor"), to be discharged by the issuance to Mentor of
166,667 shares of ConMat's Series B Preferred Stock, plus warrants to purchase
166,667 shares of ConMat Common Stock, pursuant to an agreement in substantially
the form attached hereto as Exhibit "D".
3. Obligations of Eastwind to Polychem. In addition to the share exchange
described above, at the Closing, Eastwind shall issue to Polychem a promissory
note (the "Eastwind Note"), in substantially the form attached as Exhibit "E",
in the amount of $940,000 to evidence the outstanding amount owed by Eastwind to
Polychem for prior advances, secured by the pledge of 313,333 shares of Series A
Preferred Stock, pursuant to a Collateral Pledge of Stock Agreement in the form
attached as Exhibit "F"; and
4. Closing. The closing (the "Closing") will be held at the offices of
Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP, located at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, on December 7, 1998 or such other date
and such other place as the parties shall agree, provided that if the Closing
has not been completed by December 31, 1998, this Agreement will terminate and
neither party will have any further obligations to the other except for any
obligations arising out of any breach of its obligations hereunder.
5. Representations and Warranties of Eastwind. Eastwind represents and
warrants to ConMat as follows, which representations and warranties shall be
true and correct as of the date when made and as of the Closing as though made
at that time:
(a) Eastwind is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full corporate
power and authority to execute and deliver this Agreement and to assume and
perform its obligations hereunder.
(b) Polychem is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania.
(c) The authorized capital stock of Polychem consists of 1,000 shares of
Polychem Common Stock, of which only the Polychem shares are currently
outstanding. Eastwind is the lawful owner, of record and beneficially, of the
Polychem Shares free and clear of any security interest, lien, pledge,
encumbrance or other adverse claim or interest other than a pledge in favor of
General Electric Capital Corporation ("GECC"). Upon delivery of certificates
representing the Polychem Shares pursuant to the terms of this Agreement, ConMat
will acquire good title to the Polychem Shares, free and clear of any security
interest, lien, pledge, encumbrance or other adverse claim or interest other
than the pledge in favor of GECC.
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(d) The Polychem Shares are duly authorized, validly issued, fully paid
and non-assessable.
(e) Eastwind has taken all necessary corporate action to authorize the
execution and delivery of this Agreement and this Agreement constitutes the
legal, valid and binding agreement of Eastwind enforceable against Eastwind in
accordance with its terms.
(f) Neither the execution nor delivery of this Agreement by Eastwind,
nor the performance by Eastwind of any of the transactions contemplated hereby
(i) will result in a violation of the certificate of incorporation or by-laws of
Eastwind or Polychem, (ii) conflicts with, or constitutes a breach or default
under any applicable judgment, order, writ, injunction or decree of any court or
any applicable law or any applicable rule or regulation of any administrative
agency or governmental or regulatory authority or (iii) except as set forth on
Schedule I hereto, violates, conflicts with, or constitutes a default (or an
event or condition that, with notice or lapse of time or both, would constitute
a default) under, any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which Eastwind or Polychem
is a party or may be bound, other than with respect to which the other party has
given, or gives prior to Closing, its consent.
(g) Until the ConMat Common Stock is registered under the Securities
Acts of 1933, Eastwind is acquiring the ConMat Shares for its own account, as
principal, for investment purposes only and not with a view to the resale or
distribution of all or any portion thereof. Eastwind has no present intention,
agreement or arrangement to divide the ConMat Shares with others or to resell,
assign, transfer or otherwise dispose of all or any part of the ConMat Shares,
other than to assign the ConMat Common Stock to a trust for the benefit of its
shareholders.
6. Representations and Warranties of ConMat. ConMat represents and warrants
to Eastwind as follows, which representations and warranties shall be true and
correct as of the date when made and as of the Closing as though made at that
time:
(a) ConMat is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida and has full corporate power and
authority to execute and deliver this Agreement and to assume and perform its
obligations hereunder.
(b) ConMat's authorized capital consists of 40,000,000 shares of common
stock, par value $0.001 per share, of which 1,000,000 shares are issued and
outstanding, and 10,000,000 shares of "blank check" preferred stock, par value
$0.001 per share, of which no shares are issued and outstanding. Except as
otherwise indicated in this Agreement or the exhibits thereto, other than the
options granted to Xxxx X. XxXxxxxx for 500,000 shares of Common Stock, there
are no options, warrants or rights to purchase shares of capital stock or other
securities of ConMat authorized, issued or outstanding, nor is ConMat obligated
in any other manner to issue shares of its capital stock or other securities. No
holder of any security of ConMat is entitled to preemptive or similar statutory
or contractual rights with respect to the sale or voting of any shares of
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capital stock of ConMat, either arising pursuant to any agreement or instrument,
to which ConMat is a party, or which are otherwise binding upon ConMat.
(c) Upon delivery at the Closing, the ConMat Shares will be duly
authorized, validly issued, fully paid and non-assessable.
(d) ConMat has taken all necessary corporate action to authorize the
execution and delivery of this Agreement and this Agreement constitutes the
legal, valid and binding agreement of ConMat enforceable against ConMat in
accordance with its terms.
(e) Neither the execution nor delivery of this Agreement by ConMat, nor
the performance by ConMat of any of the transactions contemplated hereby (i)
will result in a violation of the certificate of incorporation or by-laws of
ConMat, (ii) conflicts with, or constitutes a breach or default under any
applicable judgment, order, writ, injunction or decree of any court or any
applicable law or any applicable rule or regulation of any administrative agency
or governmental or regulatory authority or (iii) violates, conflicts with, or
constitutes a default (or an event or condition that, with notice or lapse of
time or both, would constitute a default) under, any contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character to
which ConMat is a party or may be bound.
(f) Based on the representations made by Eastwind in Section 5 above,
and in reliance thereon, the issuance and sale of the ConMat Shares to Eastwind
as contemplated hereby is exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933.
7. Conditions to ConMat's Obligation to Close. The obligation of ConMat to
accept the Polychem Shares and to issue the ConMat Shares at the Closing is
subject to the satisfaction, at or before the Closing, of each of the following
conditions, provided that such conditions are for ConMat's sole benefit and may
be waived by ConMat:
(a) Eastwind shall have delivered to ConMat the Polychem Shares and
shall have performed, satisfied and complied in all material respects with all
terms and provisions of this Agreement;
(b) Eastwind shall have received all authorizations and consents
necessary to consummate the transactions contemplated by this Agreement,
including without limitation, any required shareholder approvals;
(c) Eastwind's board of directors shall have approved the distribution
of the ConMat Common Stock to Eastwind's shareholders immediately following the
effectiveness of a registration statement covering the ConMat Common Stock;
(d) Eastwind shall have issued the Eastwind Note to Polychem; and
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(e) Centennial shall have issued the Centennial Note to Polychem.
8. Conditions to Eastwind's Obligation to Close. The obligation of Eastwind
to accept the ConMat Shares and to deliver the Polychem Shares at the Closing is
subject to the satisfaction, at or before the Closing, of each of the following
conditions, provided that such conditions are for Eastwind's sole benefit and
may be waived by Eastwind:
(a) ConMat shall have issued to Eastwind the ConMat Shares and shall
have performed, satisfied and complied in all material respects with all terms
and provisions of this Agreement;
(b) ConMat shall have received all authorizations necessary to
consummate the transactions contemplated by this Agreement, including without
limitation, any required shareholder approvals;
(c) GECC shall have released Eastwind from all liability under the
Guarantee dated September 30, 1998; and
(d) ConMat shall have discharged certain obligations of Eastwind as
required pursuant to Section 2 of this Agreement.
9. Registration Rights. Each present and future holder of Series A
Preferred Stock shall be entitled to the benefits of the registration rights
granted pursuant to this Section 9.
(a) For purposes of this Section 9:
(i) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document;
(ii) The term "Registrable Securities" means the shares of ConMat
Common Stock issued to Eastwind pursuant to this Agreement and all shares of
ConMat Common Stock issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of any of
the ConMat Common Stock issued to Eastwind pursuant to this Agreement excluding
in all cases, however, any Registrable Securities (x) sold by a person in
transaction in which his rights under this Section 9 are not assigned, (y) sold
in a public offering registered under the Securities Act or (z) sold pursuant to
Rule 144 promulgated under the Securities Act;
(iii) The term "Holder" means any person owning or having the right
to acquire Registrable Securities;
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(iv) The term "SEC" means the Securities and Exchange Commission;
and
(v) The term "Securities Act" shall mean the Securities Act of 1933,
as from time to time amended.
(b) No later than December 31, 1999 the Company shall file with the
Securities and Exchange Commission ("SEC") a registration statement covering the
Registerable Securities, and shall use its best offers to cause such
registration statement is filed (the "Initial Registration"). If such Initial
Registration is not declared effective by the end of such period or does not
include all Registrable Securities, or the Company is not in compliance with its
obligations under Section 9(d), the Holders of a majority of the Registrable
Securities, or the Company is not in compliance with its obligations under
Section 9(d), the Holders of a majority of the Registrable Securities shall have
the right to require by notice in writing that the Company register all or any
part of the Registrable Securities held by such Holders (a "Demand
Registration") and the Company shall thereupon effect such registration in
accordance herewith. The parties agree that if such Holders demand registration
of less than all of the Registrable Securities, the Company, at its option, may
nevertheless file a registration statement covering all of the Registrable
Securities. Upon the filing by the Company of a Registration Statement under
Section 9(c) below, and if the Company is in compliance with its obligations
under Sections 9(c) and (d) below, the Demand Registration rights granted
pursuant to this Section 9(b) shall cease. If such Registration statement is not
declared effective with respect to all Registrable Securities or if the Company
is not in compliance with such obligations, the Demand Registration rights
described herein shall remain in effect.
(ii) If the Holders initiating the registration request hereunder
(the "Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to this Section 9(b) and the
Company shall include such information in the written notice referred to in
Section 9(b)(i). In such event, the right of any Holder to include its, his or
her Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in Section
9(d)(v)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 9(b), if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares of securities that may be included in the underwriting shall be
allocated among all Initiating Holders and other Holders who have been provided
the notice required by Section 9(b)(i) in proportion (as nearly as practicable)
to the number of shares of Registrable Securities requested to be included in
such registration by such Holder and which would be eligible for inclusion in
the registration but for the application of this sentence.
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(iii) Notwithstanding the foregoing, the Company shall not be
required to file a registration statement following the effective date of any
registration of Company securities with respect to which Holders were given the
opportunity to register Registrable Shares under Section 9(c) below, or (B)
during the period of time beginning on the date the Company files a registration
statement with the SEC described in Section 9(c) below and ending on the earlier
to occur of (x) the date which is 120 days after such registration becomes
effective, or (y) the date on which the Company withdraws such registration with
the SEC. In addition, if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 9(b) a certificate signed by the
President of the Company stating that in the good faith judgment of the board of
directors of the Company it would be seriously detrimental to the Company and
its stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period of not more than ninety (90)
days after receipt of the request of the Holders; provided, however, that the
Company may not utilize this right more than once in any twelve (12) month
period.
(c) If (but without any obligation to do so) the Corporation proposes to
register (including for this purpose a registration effected by the Corporation
for stockholders other than the Holders) any shares of its Common Stock under
the Securities Act in connection with the public offering of such securities
solely for cash (other than a registration relating solely to the sale of
securities to employees pursuant to stock option awards and/or to participants
in a Company employee benefit or stock plan, or a registration on any form which
does not include substantially the same information, other than information
related to the selling stockholders or their plan of distribution, as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Corporation shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the
Corporation, the Corporation shall, subject to the provisions of the immediately
preceding sentence and Section 9(e) hereof, cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has
requested to be so registered.
(d) Whenever required under this Section 9 to effect the registration of
any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days.
(ii) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
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(iii) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(iv) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(v) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing under writer of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(vi) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(vii) In the case of an underwritten public offering, furnish, at
the request of any Holder requesting registration of Registrable Securities
pursuant to this Section 9, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a registration
pursuant to this Section 9, (A) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in such form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters and (B) a letter dated such date, from
the independent certified public accountants of the Company, in such form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters.
(e) It shall be a condition precedent to the obligations of the
Corporation to take any action pursuant to this Section 9 with respect to the
Registrable Securities of any selling Holder that such Holder shall have
furnished to the Corporation such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
(f) Except as set forth in this Section 9(f), the Company shall bear and
pay all expenses incurred by it in connection with any registrations, filings or
qualifications pursuant to Section 9(b), including without limitation all
registration, filing and qualification fees, printers, and accounting fees, and
fees and disbursements of counsel for the Company, but excluding underwriter's
commissions and/or discounts with respect to shares sold by Holders, which shall
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be the responsibility of the Holders; provided, however, that (subject to
Section 9(b)(ii) hereof) the Holders participating in any registration pursuant
to Section 9(b) shall reimburse the Company for any expenses of any Demand
Registration proceeding begun pursuant to Section 9(b) if the registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered (in which case all Holders
participating in such withdrawn registration shall bear such expenses pro rata
based upon the number of Registrable Securities to be included in such
registration). In no event shall the Company be required to pay any expenses
incurred by a Holder in connection with any registration, filing or
qualification pursuant to Section 9(b).
(g) The Corporation shall bear and pay all expenses incurred by it in
connection with any registration, filing or qualification of Registrable
Securities with respect to the registrations pursuant to Section 9(c), including
without limitation all registration, filing, and qualification fees, printers
and accounting fees and all fees and disbursements of counsel for the
Corporation relating or allocable thereto. The Corporation shall not pay any
expenses incurred by a Holder in connection with any such registration, filing
or qualification, including, but not limited to underwriting discounts and
commissions relating to Registrable Securities and the fees and disbursements of
any professional advisors (including attorneys and accountants) utilized by the
selling Holders in connection with such registration, filing or qualification.
(h) In connection with any offering involving an underwriting of shares
being issued by the Corporation, the Corporation shall not be required under
Section 9(b) or (c) hereof to include any of the Holders' securities in such
underwriting unless they accept the customary and reasonable terms of the
underwriting as agreed upon between the Corporation and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Corporation. If
the total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Corporation that the underwriters reasonably believe
compatible with the success of the offering, then the Corporation shall be
required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters believe will not
jeopardize the success of the offering (the securities so included to be
allocated first among all holders of Other Securities and next apportioned among
the Holders who have provided notice required by Section 9(b) or (c) and all
other holders of securities subject to registration rights granted by the
Corporation in proportion (as nearly as practicable) to the number of shares of
securities requested to be included in such registration by such Holder and such
other holders and which would have been eligible for inclusion in such
registration but for the application of this sentence, or in such other
proportions as shall mutually be agreed to by such selling stockholders). For
purposes of the provision of the preceding sentence concerning apportionment
amongst the selling stockholders, for any selling stockholder which is a
partnership or corporation, the partners, retired partners and stockholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling stockholder," and any reduction with respect to
such "selling stockholder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such "selling stockholder," as defined in this sentence.
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(i) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any registration by the Corporation as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 9.
(j) In the event any Registrable Securities are included pursuant to a
registration statement under this Section 9:
(i) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Securities Act)
and each person if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Securities Exchange Act of 1934, as amended
(the "Exchange Act") against any losses, claims, damages or liabilities (joint
or several) to which they or any of them may become subject under the Securities
Act, the Exchange Act or any other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (A) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus (but only if such is not corrected in the final
prospectus) contained therein or any amendments or supplements thereto, (B) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading (but
only if such is not corrected in the final prospectus), or (C) any violation or
alleged violation by the Company in connection with the registration of
Registrable Securities under the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; and the Company will pay to each
such Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 9(j)(i) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(ii) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any losses,
claims, damages or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with information furnished by such Holder for
use in connection with such registration; and each such Holder will pay, as
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incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 9(j)(ii), in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section
9(j)(ii) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided that
in no event shall any indemnity under this Section 9(j)(ii) exceed the net
proceeds from the offering received by such Holder.
(iii) Promptly after receipt by an indemnified party under this
Section 9(j) of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 9(j), deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9(j), but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
9(j).
(iv) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 9(j)(i) and
(ii) is applicable but for any reason is held to be unavailable from the Company
with respect to all Holders or any Holder, the Company and the Holder or
Holders, as the case may be, shall contribute to the aggregate losses, claims,
damages and liabilities (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted) to which the Company and one or more
of the Holders may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand, and the Holder or Holders on
the other, in connection with statements or omissions which resulted in such
losses, claims, damages or liabilities. Notwithstanding the foregoing, no Holder
shall be required to contribute any amount in excess of the net proceeds
received by such Holder from the Registrable Securities as the case may be, sold
by such Holder pursuant to the registration statement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Each person, if any, who controls a
Holder within the meaning of the Securities Act shall have the same rights to
contribution as such Holder.
11
(v) The obligations of the Company and Holders under this Section
9(j) shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 9 or otherwise.
9. Miscellaneous Terms and Conditions.
(a) Entire Agreement. This Agreement represents the entire understanding
of the parties hereto as to the subject matter hereof and supersedes any and all
other oral or written agreements and understandings as to such subject matter.
(b) Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, successors and
assigns.
(c) Governing Law. This Agreement will be governed by the laws of the
Commonwealth of Pennsylvania, without regard to conflicts of law principles.
(d) Notices. All notices and other communications between the parties
shall be in writing and shall be deemed to have been given if mailed
first-class, postage prepaid to the address set forth below or such other
address as ConMat or Eastwind may give the other for such purpose:
If to ConMat:
ConMat Technologies
Xxxxxxxx Xxxxxx xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Chairman
Tel.: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Klehr, Harrison, Xxxxxx,
Branzburg & Xxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esquire
Tel: (000) 000-0000
Fax: (000) 000-0000
12
If to Eastwind:
The Eastwind Group, Inc.
000 Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
(e) Further Assurances. Prior to and following the Closing, at the
request of either party, the other party shall deliver any further instruments
of transfer and take all reasonable actions as may be necessary or appropriate
to effectuate the transactions contemplated by this Agreement.
(f) Execution in Counterparts. This Agreement may be executed and
delivered by facsimile and in counterparts, each of which shall be deemed to be
an original as against any party whose signature appears thereon, and all of
such shall together constitute one and the same instrument.
(g) Section Headings. The section headings are inserted for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
(h) DAR Group Fees. Eastwind agrees to be responsible for all fees and
expenses of DAR Group in connection with the transactions contemplated by this
Agreement, which are in the amount of $250,000.00.
13
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the date first written above.
CONMAT TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------
Name: Xxxxxx X. Xxxxxx
Title: President
THE EASTWIND GROUP, INC.
By: /s/ Xxxx X. XxXxxxxx
----------------------
Name: Xxxx X. XxXxxxxx
Title: President
14
