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EXHIBIT 10.1
XXXXXXXXXX & CO., INC.
SELLING AGENT AGREEMENT
October 5, 1999
Xxxxxxxxxx & Co., Inc.
00 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Gentlemen:
Geographics, Inc. (the "Company"), on the basis of the representations,
warranties, covenants and conditions contained herein, hereby confirms the
agreement made with respect to the retention of Xxxxxxxxxx & Co., Inc. (the
"Selling Agent") as exclusive agent of the Company to assist the Company in
finding qualified purchasers, pursuant to the terms of this Selling Agent
Agreement (the "Agreement"), for a minimum of $1,000,000 (the "Minimum
Offering") and a maximum of $3,000,000 of common stock, no par value per share
(the "Common Stock" or "Securities"), at a purchase price of $0.33 per share on
a "best efforts, all or none" basis with respect to the Minimum Offering and,
thereafter, on a "best efforts" basis until all of the Securities are sold or
the earlier termination of the offering (the "Offering"). The Securities are
described in the Offering Memorandum (as defined in paragraph 1(a) below). For
purposes hereof, unless the context otherwise requires, the "Company" shall
include Geographics, Inc. and its consolidated subsidiaries.
The Company confirms the agreements made by it with respect to the sale
of the Securities by the Selling Agent, as follows:
1. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with you, the
Selling Agent, as of the date hereof, and as of each Closing Date and until the
last Closing Date (which is hereinafter defined in paragraph 11 of this
Agreement) that:
(1) An offering memorandum, attached hereto as Annex A, which includes
all reports filed by the Company pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act") (such offering memorandum, the exhibits
and attachments thereto, and reports being hereinafter referred to as the
"Offering Memorandum"), relating to the private Offering of the Securities,
copies of which have theretofore been delivered to you, has been prepared by the
Company in order to consummate the Offering pursuant to an exemption contained
under the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
promulgated thereunder.
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(2) As of the Effective Date of the Offering Memorandum (which is defined
as the date of this Agreement) and at all times subsequent thereto until the
last Closing Date, neither the Offering Memorandum nor any supplement or
amendment thereto will include any untrue statement of a material fact or omit
to state any material fact necessary to make statements therein, in light of the
context in which they were made, not misleading; provided, however, that the
Company makes no representations, warranties or agreement as to information
contained in or omitted from the Offering Memorandum in reliance upon, and in
conformity with, written information furnished to the Company by the Selling
Agent specifically for use in the Offering Memorandum.
(3) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Memorandum, and
is duly qualified to do business as a foreign corporation and is in good
standing in all other jurisdictions in which the nature of its business or the
character or location of its properties requires such qualification, except
where failure to so qualify will not materially adversely affect the business,
properties or financial condition of the Company taken as a whole (a "Material
Adverse Effect").
(4) The authorized, issued and outstanding securities of the Company as of
the Effective Date and each Closing Date of the Offering is as set forth in the
Offering Memorandum; all of the issued and outstanding securities of the Company
have been, or will be when issued as set forth in the Offering Memorandum, duly
authorized, validly issued, fully paid, and non-assessable; the issuances and
sales of all such securities complied in all material respects with applicable
Federal and State securities laws; to the Company's knowledge, the holders
thereof have no rights of rescission against the Company with respect thereto,
and except as set forth in Section 180.0622(b) of the Wisconsin Business
Corporation Law, relating to shareholder liability for wages, as judicially
interpreted ["Section 180.0622(b)"], are not subject to personal liability by
reason of being such holders; none of such securities were issued in violation
of the preemptive rights of any holders of any security of the Company or
similar contractual rights granted by the Company; except as set forth in the
Offering Memorandum, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or agreements or other rights to
convert any obligation into, any securities of the Company have been granted or
entered into by the Company; and all of the securities of the Company, issued
and to be issued as set forth in the Offering Memorandum, conform to all
statements relating thereto contained in the Offering Memorandum.
(5) The warrant and shares of Common Stock issuable upon the exercise of
the warrant to be issued to the Selling Agent, as more fully described in
paragraph 3(a) below, are duly authorized, and when issued and delivered
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, and no personal liability will attach to the ownership thereof
,except as set forth in Section 180.0622(b).
(6) This Agreement has been duly and validly authorized, executed and
delivered by the Company, and upon due execution of this Agreement by the
Selling Agent, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except that rights
to indemnity hereunder may be limited by applicable Federal and state
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securities laws, and except as such enforceability may be limited by bankruptcy,
insolvency or other laws affecting the rights of creditors generally. The
Company has full power and authority to authorize, issue and sell the Securities
on, and subject to, the terms and conditions set forth in the Offering
Memorandum, and no consent, approval, authorization or order of any governmental
authority is required in connection with such authorization, execution and
delivery, except such as may be required under the Act or state securities laws,
in which event, the Company has complied therewith.
(7) Except as described in the Offering Memorandum, the Company is not in
violation, breach of or default under, and consummation of the transactions
herein contemplated and the fulfillment of the terms of this Agreement will not
conflict with, or result in a breach of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
of the property or assets of the Company or any of the terms of any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company may be bound or to which
any of the property or assets of the Company is subject, except to the extent
that any such conflict, breach, default or imposition would not have a Material
Adverse Effect, nor will such action result in any material violation of the
provisions of the articles of incorporation or by-laws of the Company, as
amended, or any statute or any order, rule or regulation applicable to the
Company of any court or of any regulatory authority or other governmental body
having jurisdiction over the Company.
(8) The Company has good and marketable title to all properties and assets
described in the Offering Memorandum as owned by it, free and clear of all
liens, charges, encumbrances or restrictions, except such as are disclosed in
the Offering Documents, or to the extent that the failure to have title or the
existence of such liens, charges, encumbrances or restrictions would not have a
Material Adverse Effect; all of the material leases and subleases under which
the Company is the lessor or sublessor of properties or assets or under which
the Company holds properties or assets as lessee or sublessee as described in
the Offering Memorandum are in full force and effect, and the Company is not in
default in any material respect with respect to any of the terms or provisions
of any of such leases or subleases, and no claim has been asserted by anyone
adverse to the rights of the Company as lessor, sublessor, lessee, or sublessee
under any of the leases or subleases mentioned above, or affecting or
questioning the right of the Company to continued possession of the leased or
subleased premises or assets under any such lease or sublease; and the Company
owns or leases all such properties described in the Offering Memorandum as are
necessary to its operations as now conducted and, except as otherwise stated in
the Offering Memorandum, as proposed to be conducted as set forth in the
Offering Memorandum.
(9) Xxxx Xxxxx LLP, Certified Public Accountants, who has given its report
on certain financial statements which are included in the Offering Memorandum,
is, to the Company's knowledge, independent public accountants as required by
the Act and the rules and regulations thereunder.
(10) The financial statements and schedules, together with related notes,
set forth in the Offering Memorandum present fairly the financial condition,
results of operations and cash flows of the Company, on the basis stated in the
Offering Memorandum, at the respective dates and for the
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respective periods to which they apply, provided that financial statements which
are not as of the end of any fiscal year are subject to such adjustments as may
be required in the normal course of preparation of annual financial statements.
Said statements and related notes and schedules have been prepared in accordance
with generally accepted accounting principles applied on a basis which is
consistent during the periods involved. The Company's internal accounting
controls and procedures are sufficient to cause the Company to comply in all
material respects with generally accepted accounting principles applied on a
basis which is consistent during the periods involved.
(11) Subsequent to the date of the most recent financial statements
incorporated by reference in the Offering Memorandum through the final Closing
Date, and except as set forth in the Offering Memorandum, (i) the Company has
not incurred and will not have incurred any material liabilities or obligations,
direct or contingent, and has not entered into and will not have entered into
any material transactions other than as contemplated in the Offering Memorandum
except in the ordinary course of business, (ii) the Company has not and will not
have paid or declared any dividends or have made any other distribution on its
capital stock; (iii) there has not been and will not be any material change in
the capital stock of, or any material incurrence of long-term debt by, the
Company; (iv) the Company has not and will not have issued any warrants, options
or other rights to purchase any securities of the Company; and (v) there has not
been and will not have been any change in the business, financial condition or
results of operations of the Company, or in the book value of the assets of the
Company, arising for any reason whatsoever, that would result in a Material
Adverse Effect.
(12) Except as set forth in the Offering Memorandum, there is not now
pending or, to the knowledge of the Company, threatened, any action, suit,
proceeding, inquiry, arbitration or investigation against the Company or any of
its current officers or directors, nor, to the knowledge of the Company, any
such action, suit proceeding, inquiry, arbitration, or investigation, which
would result in a Material Adverse Effect.
(13) The Company has filed all necessary federal, state and foreign income
and franchise tax returns and has paid all taxes shown as due thereon; and there
is no tax deficiency which has been or to the knowledge of the Company might be
asserted against the Company that has not been provided for in the financial
statements or otherwise disclosed in the Offering Memorandum.
(14) Except where the same would not have a Material Adverse Effect, the
Company has sufficient licenses, permits and other governmental authorizations
currently required for the conduct of its business or the ownership of its
property as described in the Offering Memorandum and is complying therewith and
owns or possesses adequate rights to use all material patents, patent
applications trademarks, service marks, trade-names, trademark registrations,
service xxxx registrations, copyrights, and licenses necessary for the conduct
of such business and has not received any notice of conflict with the asserted
rights of others in respect thereof. None of the activities or businesses of the
Company are in violation of, or cause the Company to violate, any law, rule,
regulation or order of the United States, any state, county or locality, or of
any agency or body of the United States or of any state, county or locality, the
violation of which would have a Material Adverse Effect.
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(15) The Company has not, directly or indirectly, at any time (i) made any
contributions to any candidate for political office, or failed to disclose fully
any such contribution, in violation of law or (ii) made any payment to any
state, federal or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments or
contributions required or allowed by applicable law.
(16) On the Closing Date, all transfer or other taxes (including franchise,
capital stock or other tax, other than income taxes, imposed by any
jurisdiction) if any, which are required to be paid in connection with the sale
and transfer of the Securities will have been fully paid or provided for by the
Company and all laws imposing such taxes will have been fully complied with.
(17) Except as described in the Offering Memorandum, the Company has no
subsidiary corporations. The Company does not have any equity interest in any
partnership, joint venture, association or other entity except as disclosed in
the Offering Memorandum.
(18) The Company is in compliance in all material respects with all
federal, state and local laws and regulations respecting the employment of its
employees and employment practices, terms and conditions of employment and wages
and hours relating thereto. To the Company's knowledge, there are no pending
investigations involving the Company by the U.S. Department of Labor, or any
other governmental agency responsible for the enforcement of such federal, state
or local laws and regulations. To the Company's knowledge, there is un unfair
labor practice charge or complaint against the Company pending before the
National Labor Relations Board or any strike, picketing, boycott, dispute,
slowdown or stoppage pending or to the knowledge of the Company, threatened
against or involving the Company or any predecessor entity. No question
concerning representation exists respecting the employees of the Company and no
collective bargaining agreement or modification thereof is currently being
negotiated by the Company. The Company has received no notice of any grievance
or arbitration proceeding under any expired or existing collective bargaining
agreements of the Company, if any.
(19) Other than as set forth in the Offering Memorandum, the Company has
not entered into any agreement pursuant to which any person is entitled, either
directly or indirectly, to compensation from the Company, from the Selling
Agent, or from any other person, for services as a finder in connection with the
proposed private Offering, and the Company agrees to indemnify and hold harmless
the Selling Agent against any losses, claims, damages or liabilities, joint or
several, which shall include, but not be limited to , all costs to defend
against any such claim, so long as such claim arises out of agreements made or
allegedly made by the Company.
(20) Except as disclosed in the Offering Memorandum, during the past five
years, none of the officers or directors of the Company have been:
(1) the subject of a petition under the federal bankruptcy laws or
any state insolvency law filed by or against them, or a receiver, fiscal
agent or similar officer appointed by a court for their business or
property, or any partnership in which any or them was a general partner at
or within two years before the time of such filing, or any corporation
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or business association of which any of them was an executive officer at or
within two years before the time of such filing;
(2) convicted in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) the subject of any order, judgment or decree not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining any of them from, or otherwise
limiting, any of the following activities:
(1) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the
Commodity Futures Trading Commission, or an associated person of any
of the foregoing, or as an investment adviser, underwriter, broker or
dealer in securities, or as an affiliated person, director or employee
of any investment company, bank, savings and loan association or
insurance company, or engaging in or continuing any conduct or
practice in connection with any such activity;
(2) engaging in any type of business practice; or
(3) engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation
of federal or state securities law or federal commodity laws.
(4) The subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated of any federal or state authority barring,
suspending or otherwise limiting for more than sixty (60) days their right
to engage in any activity described in paragraph (3)(i) above, or be
associated with persons engaged in any such activity;
(5) Found by any court of competent jurisdiction in a civil action or
by the Commission to have violated any federal or state securities law, and
the judgment in such civil action or finding by the Commission has not been
subsequently reversed, suspended or vacated; or
(6) Found by a court of competent jurisdiction in a civil action or
by the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
2. Representations and Warranties of Selling Agent. Selling Agent represents
and warrants to and agrees with the Company that:
(1) Selling Agent is a member in good standing of the National Association
of Securities Dealers, Inc., is registered as a broker/dealer under the
Securities Exchange Act of 1934 (the
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"Exchange Act"), and is licensed as a broker/dealer under each state securities
law applicable to its offer and sale of the Securities, and will immediately
notify the Company in writing of any change in its status as such.
(2) This Agreement has been duly authorized, executed and delivered by
Selling Agent; and constitutes the valid, legal and binding obligation of
Selling Agent, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by applicable federal or state securities
laws, and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
and general equitable considerations.
(3) The consummation of the transactions contemplated hereby will not
result in any breach of the terms or conditions of, or constitute a default
under, any agreement or other instrument to which Selling Agent is a party, or
violate any order, applicable to Selling Agent, of any court or federal or state
regulatory body or administrative agency having jurisdiction over Selling Agent
or over any of its property.
3. Appointment of Selling Agent to Sell the Securities.
(1) Subject to the terms and conditions of this Agreement and based upon
the representations, warranties and agreements herein contained, the Company
hereby appoints the Selling Agent as an agent of the Company, until the last
Closing Date, to find qualified purchasers for the Securities in accordance with
the Act and the rules and regulations thereunder, who shall be accredited
investors as that term is defined in Rule 501(a) under the Act, and the Selling
Agent, on the basis of the representations and warranties of the Company herein,
accepts such appointment and agrees to use its best efforts to find qualified
purchasers for the Securities in accordance with the Act and the rules and
regulations thereunder. The price of the Common Stock shall be $0.33 per share.
The Company shall pay to the Selling Agent a commission of ten percent (10%) of
the gross proceeds derived from the sale of Securities. In addition, the Company
shall pay to the Selling Agent a $10,000 non-accountable expense allowance to
cover out-of-pocket expenses, $5,000 of which has been paid. At each Closing,
the Company shall issue to Selling Agent a warrant to purchase Common Stock
equal to ten percent (10%) of the Common Stock attributable to that Closing.
This warrant shall be exercisable at $0.33 per share and shall expire on August
31, 2001.
(2) The Selling Agent shall have the right to designate one individual to
attend all meetings through August 31, 2000, of the Company's Board of Directors
or committees thereof.
(3) The Selling Agent shall use its best efforts to find qualified
purchasers for the Securities on behalf of the Company, and otherwise perform
its services hereunder, in accordance with the Act and the rules and regulations
thereunder. Any and all funds received from such sale, without any deduction
therefrom whatsoever, including, but not limited to, any commission or any
dealer concession or otherwise, shall be forthwith deposited in escrow or trust
with such agent as is mutually satisfactory to the Company and the Selling
Agent, and shall not be delivered to the Company until such time as
subscriptions to the Minimum Offering have been accepted. In the
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event subscriptions to the Minimum Offering are not received and accepted prior
to October 31, 1999, all subscription proceeds shall be refunded to subscribers
without interest thereon or deduction therefrom. The Company shall have
reasonable grounds to believe that each subscriber to the Securities whose
subscription is accepted is an "accredited investor" within the meaning of Rule
501(a) under the Act. Funds received from any subscriber whose subscription is
rejected shall be promptly refunded, without interest thereon or deduction
therefrom.
4. Delivery of the Securities.
Delivery of the Securities sold by the Selling Agent shall take place
at the offices of the Selling Agent (or at such other place as may be designated
by the Selling Agent), on each Closing Date.
5. Offering the Securities on Behalf of the Company.
It is understood that the Selling Agent proposes to find qualified
purchasers for the Securities in private sales exempt from registration under
the Act as contemplated on the Offering Memorandum, solely as agent for the
Company, upon the terms and conditions set forth in the Offering Memorandum. The
Selling Agent shall commence making such offer as agent for the Company on the
Effective Date, or as soon thereafter as the Selling Agent and the Company deem
advisable. The Selling Agent reserves the right to engage one or more selected
dealers to assist in the placement of the Securities.
6. Covenants of the Company. The Company covenants and agrees with the Selling
Agent that:
(1) The Company has caused to be delivered to you copies of the Offering
Memorandum, and the Company has consented and hereby consents to the use of such
copies for the purposes permitted by the Act. The Company authorizes the Selling
Agent to use the Offering Memorandum in connection with the sale of the
Securities during the offering period and until the last Closing Date, in
compliance with the Act and the rules and regulations thereunder, and for such
period as in the opinion of counsel to the Company and the Selling Agent the use
thereof is required to comply with the applicable provisions of the Act and the
rules and regulations thereunder. If at any time within the offering period
there occurs an event of which the Company has knowledge and which in the
opinion of counsel for the Company or counsel for the Selling Agent should be
set forth in a supplement to the Offering Memorandum in order to make the
statements therein not then materially misleading, in light of the circumstances
existing at the time the Offering Memorandum, is required to be delivered to a
purchaser of the Securities, or in case it shall be necessary to amend or
supplement the Offering Memorandum to comply with law or with the Act and the
rules and regulations thereunder, the Company will notify you promptly and
forthwith prepare and furnish to you copies of such amended Offering Memorandum
or of such supplement to be attached to the Offering Memorandum, in such
quantities as you may reasonably request, in order that the Offering Memorandum,
as so amended or supplemented, will not contain any untrue statement of a
material fact or omit to state any material facts necessary in order to make the
statements in the Offering Memorandum, in the light of the circumstances under
which they are made, not misleading. The preparation and furnishing of any such
amendment or supplement to the Offering Memorandum shall
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be without expense to the Selling Agent. After notice by the Company to the
Selling Agent of the requirement for amendment or supplement to the Offering
Memorandum in accordance with this paragraph, the Selling Agent agrees that it
will not deliver further copies of the Offering Memorandum to any prospective
purchaser until the appropriate amendment or supplement has been supplied by the
Company.
(2) The Company will comply with the Act, the rules and regulations
thereunder, and the provisions of the Exchange Act and the rules and regulations
thereunder in connection with the Offering and issuance of the Securities.
(3) The Company will, at its sole cost and expense, use its best efforts
to perfect any exemption of the sale of the Securities under the securities or
"blue sky" laws of such jurisdictions as are reasonably requested by the Selling
Agent, and will make such applications and furnish such information as may be
required for that purpose and to comply with such laws, provided the Company
shall not be required to qualify as a foreign corporation or a dealer in
securities or to execute a general consent to service of process in any
jurisdiction in any action other than one arising out of the offering or sale of
the Securities. The Company will, from time to time, prepare and file such
statements and reports as are or may be required to continue such qualification
in effect for so long a period as the Selling Agent may reasonably request,
until the last Closing Date.
(4) The Company will apply the net proceeds from the sale of the
Securities substantially in accordance with the Company's statements as set
forth in the Offering Memorandum.
(5) The Company will reserve a sufficient number of shares of Common Stock
issuable upon exercise of the Selling Agent's warrant.
(6) The Company shall at or prior to closing cause all of its officers and
directors to enter into a "lockup" agreement in a form satisfactory to the
Selling Agent whereby such officers and directors agree not to publicly sell any
shares of any class of capital stock of the Company owned by them pursuant to
Rule 144 of the Act or otherwise until March 31, 2000. Notwithstanding the
foregoing, Xx. Xxxxxxx X. Xxxxxx may sell shares acquired by him prior to April
16, 1999.
(7) Between the final closing of the Offering and August 31, 2001, the
Company agrees to provide the purchasers of Common Stock in this Offering, with
respect to the Selling Agent's warrant and the Common Stock underlying same and
the Selling Agent, (collectively, the "Piggyback Shares") with "piggyback"
registration rights for any shares registered by the Company on a registration
statement on Form SB-1, XX-0, X-0, X-0 or any successors thereto. If the
underwriter of such an offering determines that the inclusion of the Piggyback
Shares will adversely affect the market price of the securities offered by such
a registration statement, the Piggyback Shares shall none-the-less be
registered; however, the holders of the Piggyback Shares agree to delay sale of
the Piggyback Shares until such a time as the underwriter shall permit, in its
sole reasonable discretion.
7. Conditions of Selling Agent's Obligations. The obligations of the Selling
Agent to act as agent for the Company are subject, as of the date hereof and as
of each Closing Date, to the
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continuing accuracy of, and compliance with, the representations and warranties
of the Company herein, to the accuracy of statements of officers of the Company
made to the Selling Agent pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder, and to the following additional
conditions:
(1) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects as of this date and at
each Closing Date as if made at the Closing Date, and all covenants and
agreements herein contained to be performed on the part of the Company and all
conditions herein contained to be fulfilled or complied with by the Company at
or prior to the Closing Date shall have been duly performed, fulfilled or
complied with.
(2) The Selling Agent shall have received certificates dated as of each
Closing Date, signed by the Chief Executive Officer and the Principal Accounting
Officer of the Company, certifying that:
(1) they do not know of any litigation instituted or
threatened against the Company or any officer or director of the
Company, of a character required to be disclosed in the Offering
Memorandum which is not disclosed therein;
(2) they have each carefully examined the Offering
Memorandum and, to the best of their knowledge, neither the Offering
Memorandum nor any amendment or supplement thereto contains any untrue
statement of any material fact or omits to state any material fact
required to be stated therein or necessary to make the statement
therein in light of the context in which it was made, not misleading;
and since the Effective Date, to the best of their knowledge, there
has occurred no event required to be set forth in an amendment or
supplement to the Offering Memorandum which has not been so set forth;
(3) since the respective dates as of which information is
given in the Offering Memorandum, there has not been any material
adverse change in the condition of the Company, financial or
otherwise, or in the results of its operations, except as reflected in
or contemplated by the Offering Memorandum; and
(4) each of the representations and warranties set forth in
this Agreement are true and correct as of the Effective Date and as of
each Closing Date, and the Company has complied with all of its
agreements and performed all of its obligations under this Agreement.
(3) The Selling Agent shall have received an opinion of counsel to the
Company in form and substance reasonably satisfactory to the Company.
(4) If any of the conditions provided for in this Section shall not have
been fulfilled as of the date indicated, this Agreement and all obligations of
the Selling Agent under this Agreement may be canceled by the Selling Agent
notifying the Company of such cancellation in writing or by
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facsimile at or prior to the last Closing Date. Any such cancellation shall be
without liability of the Selling Agent to the Company.
8. Indemnification.
(1) The Company agrees to indemnify and hold harmless the Selling Agent
and each person, if any, who controls the Selling Agent within the meaning of
the Section 15 of the Act against any losses, claims, damages or liabilities,
joint or several (which shall, for all purposes of this Agreement, include but
not be limited to, all reasonable costs of defense and investigation and all
attorneys' fees), to which the Selling Agent or such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any breach of the Company's warranties and representations contained
herein, or (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Offering Memorandum, or any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in the Offering
Memorandum, or any amendment or supplement thereto, a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such cases to the
extent, but only to the extent, that any such losses, claim, damages or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Selling Agent specifically for us in the preparation of the Offering
Memorandum or any such amendment or supplement thereof. This indemnity will be
in addition to any liability which the Company may otherwise have.
(2) The Selling Agent will indemnify and hold harmless the Company, each
of its directors, each nominee (if any) for director named in the Offering
Memorandum, and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities (which shall, for
all purposes of this Agreement, include, but not be limited to, all costs of
defense and investigation and all attorneys' fees) to which the Company or any
such director, nominee, officer or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof), arise out of or are based upon (i) any breach
of the Selling Agent's warranties and representations contained herein, or (ii)
any untrue statement or alleged untrue statement of any material fact contained
in the Offering Memorandum, or any amendment or supplement thereto; or (iii) the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statements or
alleged untrue statement or omission or alleged omission was made in the
Offering Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to the Company by the
Selling Agent specifically for use in the Offering Memorandum.
(3) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, promptly notify in writing the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
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it from any liability which it may have to any indemnified party otherwise than
under this Section. In case any such action is brought against any indemnified
party, and it promptly notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, subject to the provisions herein
stated, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. The indemnified
party shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the indemnified party; provided that the fees and expenses of such counsel shall
be at the expense of the indemnifying party if (i) the employment of such
counsel has been specifically authorized in writing by the indemnifying party or
(ii) the named parties to any such action (including any impeded parties)
include both the indemnified party and the indemnifying party and in the
reasonable judgment of the indemnified party, it is advisable for the
indemnified party to be represented by separate counsel (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for
such indemnified party, which firm shall be designated in writing by the
indemnified party). No settlement of any action against an indemnified party
shall be made without the consent of the indemnifying party, which shall not be
unreasonably withheld in light of all factors of importance to such indemnifying
party.
9. Contribution.
(1) If the indemnification provided for in this Agreement is unavailable
to any indemnified party in respect to any losses, claims, damages, liabilities
or expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, will contribute to the amount paid or
payable by such indemnified party, as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand, and by the Selling
Agent on the other hand, from the offering, or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above, but also the relative fault of the Company on the one hand, and of the
Selling Agent on the other hand, in connection with any statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations; provided, that any contribution
hereunder by the Selling Agent shall not exceed the amount of consideration
received by the Selling Agent hereunder. The relative benefits received by the
Company on the one hand, and by the Selling Agent on the other hand, shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of sales commissions, and the non-accountable expense allowance, but before
deducting expenses) received by the Company, bear to the commissions and
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the non-accountable expense allowance received by the Selling Agent. The
relative fault of the Company on the one hand, and of the Selling Agent on the
other hand, will be determined with reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the Company, and its
relative intent, knowledge, access or information and opportunity to correct or
prevent such statement or omission. The Company and the Selling Agent agree that
it would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in this
paragraph. Notwithstanding anything to the contrary, that in any such case, no
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contributions for any person who is
not guilty of such fraudulent misrepresentation.
(2) Within fifteen (15) days after receipt by any party to this Agreement
(or its representative) of notice of the commencement of any action, suit, or
proceeding, such party will, if a claim for contribution in respect thereof is
to be made against another party ("Contributing Party"), notify the Contributing
Party of the commencement thereof, but the omission to so notify the
contributing Party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any such action,
suit or proceeding is brought against any party, and such party notifies a
Contributing Party or its representative of the commencement thereof within the
aforesaid fifteen (15) days, the Contributing Party will be entitled to
participate therein with the notifying party and any other Contributing Party
similarly notified. Any such Contributing Party shall not be liable to any party
seeking contribution on account of any settlement of any claim, action or
proceeding which was effected by such party seeking contribution on account of
any settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such Contributing Party. The
contribution provisions contained in this Section are intended to supersede, to
the extent permitted by law, any right to contribution under the Act, the
Exchange Act or otherwise available.
10. Costs and Expenses.
(1) Whether or not the sale of the Securities by the Company is
consummated, the Company will pay all costs and expenses incident to the
performance of this Agreement by the Company including but not limited to the
fees and expenses of counsel to the Company and of the Company's accountants;
the costs and expenses incident to the preparation, printing and distribution of
the Offering Memorandum (including the financial statements therein and all
amendments and exhibits thereto); all state filing fees, expenses and
disbursements and legal fees to counsel to the Company who shall serve as Blue
Sky counsel to the Company in connection with perfection of the exemption of the
Securities under the state securities or blue sky laws, in such jurisdictions
which the Selling Agent shall reasonably designate; the cost of printing the
certificates evidencing the Securities; the cost of preparing and delivering to
the Selling Agent and its counsel bound volumes containing copies of all
documents and appropriate correspondence, and all closing documents; and the
fees and disbursements of the transfer agent for the Company's securities. The
Company shall pay any and all taxes (including any transfer, franchise, capital
stock or other tax imposed by any jurisdiction) on sales hereunder. The Company
will also pay all costs and expenses incident to the furnishing of any
supplement to be attached to the Offering Memorandum .
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(2) Other than as described in the Offering Memorandum, no person is
entitled, either directly or indirectly, to compensation from the Company, from
the Selling Agent or from any other person for services as a finder in
connection with the proposed offering, and each of the Company and the Selling
Agent agrees to indemnify and hold harmless the other against any losses,
claims, damages or liabilities, joint or several which shall, for all purposes
of this Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees, to which the Selling Agent or the Company
may become subject insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the claim of any
person (other than an employee of the party claiming indemnity) or entity that
he or it is entitled to a finder's fee in connection with the proposed offering
by reason of such person's or entity's influence or prior contact with the
indemnifying party.
11. Closing Date. The offering will terminate on the last Closing Date, which
shall be:
(1) the Termination Date described in the Offering Memorandum, unless
extended mutually by the Company and the Selling Agent to a later date;
(2) the date all of the Securities are sold; or
(3) such earlier date agreed to in writing by the Company and the
Selling Agent.
12. Representations, Warrants and Agreement to Survive Delivery. The respective
indemnities, agreements, representations, covenants, conditions, warranties and
other statements of the Company and/or its officers and/or directors, where
appropriate, and the Selling Agreement set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Selling Agent, the Company or any of its officers or
directors or any controlling person and will survive delivery of and payment for
the securities and the termination of the Agreement.
13. Notices. All communications hereunder will be in writing and, except as
otherwise expressly provided herein, will be mailed, delivered or faxes and
confirmed:
If to the Selling Agent: Xxxxxxxxxx & Company, Inc.
00 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxxx
Copy to: Atlas, Xxxxxxxx, Trop & Borkson, P.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
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If to the Company: Geographics, Inc.
0000 Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
Copy to: Xxxxxxx Xxxx & Friedrich L.L.P.
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
14. Parties in Interest. This Agreement herein set forth is made solely for the
benefit of the Selling Agent, the Company and, to the extent expressed, any
person controlling the Company or of the Selling Agent, and directors of the
Company, and their respective executors, administrators, successors, assigns and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
the Securities or other securities from the Selling Agent.
15. Applicable Law. This Agreement will be governed by, and construed in
accordance with, the laws of the State of Massachusetts applicable to agreement
made and to be entirely performed within Massachusetts. The parties agree that
any action brought by any party against another party in connection with any
rights or obligations arising out of this Agreement shall be instituted properly
in a federal or state court of competent jurisdiction with venue only in Suffolk
County, Massachusetts. A party to this Agreement named as a Defendant in any
action brought in connection with this Agreement in any court outside of the
above-named designated county or district shall have the right to have the venue
of said action changed to the above designated county or district or, if
necessary, have the case dismissed, requiring the other party to refile such
action in an appropriate court in the above designated county or federal
district.
16. Counterparts. This Agreement may be executed in any number of counterparts
and each of such counterparts shall bear all purposes be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
17. Entire Agreement. This Agreement and the agreements referred to within this
Agreement constitute the entire agreement of the parties, and supersedes all
prior agreement, understanding, negotiations and discussions, whether written or
oral, of the parties hereto.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return this Agreement, whereupon it will become a
binding Agreement between the Company and the Selling Agent in accordance with
its terms.
Very truly yours,
GEOGRAPHICS, INC.
By:/s/ Xxxxx X. Xxxxxx
--------------------------
President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXXXXXX & CO., INC.
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------
President
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