PLACEMENT AGENCY AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 26th day of August
1998, by and between D.H. Marketing & Consulting, Inc., a Nevada
corporation ("Company"), and X.X. Xxxxx Securities, Inc., a Georgia
corporation (the "Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell Series A
Preferred Stock (the "Securities") resulting in gross proceeds to the
Company of up to $3,000,000 (the "Offering") not involving a public
offering without registration under the Securities Act of 1933, as
amended (the "Act"), pursuant to exemptions from the registration
requirements of the Act under Regulation D promulgated under the Act
("Regulation D"), as described below; and
WHEREAS, the Agent has offered to assist the Company in placing
the Securities on a "best efforts basis" with respect to the Series A
Preferred Stock (as defined below) and on a "best efforts" basis with
respect to sales of Securities thereafter up to the Maximum Series A
Preferred Stock (as defined below), and the Company desires to secure
the services of the Agent on the terms and conditions hereinafter set
forth;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises, conditions and covenants herein contained, the parties hereto
do hereby agree as follows:
1. Engagement of Agent. The Company hereby appoints the Agent
as its exclusive placement agent for the Offering, to sell up to of
$3,000,000 of Securities (the "Maximum Shares") on a "best efforts
basis," resulting in gross proceeds to the Company of up to $3,000,000.
The Agent, on the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth,
accepts such appointment and agrees to use its best efforts to find
purchasers for the Securities. This appointment shall be irrevocable
for the period commencing as of the date hereof and ending as further
described in Section 5 herein, which period maybe extended by the
consent of the Company and the Agent (the "Offering Period").
2. Representations and Warranties of the Company. In order
to induce the Agent to enter into this Agreement, the Company hereby
represents and warrants to and agrees with the Agent as follows:
2.1 Offering Documents. The Company and the Placement Agent
have prepared a Subscription Agreement, certain exhibits thereto,
Registration Rights Agreement, and the Preferred Stock regarding the
Securities, which documents have been or will be sent to proposed
investors. In addition, proposed investors have received or will
receive prior to closing copies of the Company's Report on 10-KSB for
the period ended December 31, 1997, and possibly other documents that
are to be filed with the SEC ("SEC Documents"). The SEC Documents were
prepared in conformity with the requirements (to the extent applicable)
of the Securities and Exchange Act of 1934, as amended (the "Act") and
the rules and regulations ("Rules and Regulations") of the Commission
promulgated thereunder. As used in this Agreement, the term "Offering
Documents" refers to and means the SEC Documents, the Subscription
Agreement and all amendments, exhibits and supplements thereto,
together with any other documents which are provided to the Agent by,
or approved for Agent's use by, the Company for the purpose of this
Offering.
2.2 Provision of Offering Documents. The Company shall deliver
to the Agent, without charge, as many copies of the Offering Documents
as the Agent may reasonably require for the purposes contemplated by
this Agreement. The Company authorizes the Agent, in connection with
the Offering of the Securities, to use the Offering Documents as from
time to time amended or supplemented in connection with the offering
and sale of the Securities and in accordance with the applicable
provisions of the Act and Regulation D. The Company consents to the
Agent's distribution of the Offering Documents to prospective
subscribers as a disclosure document about the Company, its business,
prospects, financial condition and other matters.
2.3 Accuracy of Offering Documents. The Offering Documents,
at the time of delivery to subscribers for the Securities, conformed
in all material respects with the requirements, to the extent
applicable, of the Act and the applicable Rules and Regulations and did
not include 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. On the Closing Date (as hereinafter
defined), the Offering Documents will contain all statements which are
required to be stated therein in accordance with the Act and the Rules
and Regulations for the purposes of the proposed Offering, and all
statements of material fact contained in the Offering memorandum will
be true and correct, and the Offering Documents will not include 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; provided, however, that the Company does not make any
representations or warranties as to the information contained in or
omitted from the Offering Documents in reliance upon written
information furnished on behalf of the Agent specifically for use
therein.
2.4 Duty to Amend. If during such period of time as in the
opinion of the Agent or its counsel any Offering Documents relating to
this offering are required to be delivered under the Act, any event
occurs or any event known to the Company relating to or affecting the
Company shall occur as a result of which the Offering Documents as then
amended or supplemented would include an untrue statement of a material
fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary at any time after the date
hereof to amend or supplement the Offering Documents to comply with the
Act or the applicable Rules and Regulations, the Company shall
forthwith notify the Agent thereof and shall prepare such further
amendment or supplement to the Offering Documents as may be required
and shall furnish and deliver to the Agent and to others, whose names
and addresses are designated by the Agent, all at the cost of the
Company, a reasonable number of copies of the amendment or supplement
or of the amended or supplemented Offering Documents which, as so
amended or supplemented, will not contain an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the Offering Documents not misleading in the light of the
circumstances when it is delivered to a purchaser or prospective
purchaser, and which will comply in all respects with the requirements
(to the extent applicable) of the Act and the applicable Rules and
Regulations.
2.5 Corporation Condition. The Company's condition is as
described in its Offering Documents, except for changes in the ordinary
course of business and normal year-end adjustments that are not in the
aggregate materially adverse to the Company. The Offering Documents,
taken as a whole, present fairly the business and financial position
of the Company as of the Closing Date.
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2.6 No Material Adverse Change. Except as may be reflected in
or contemplated by the Offering Documents, subsequent to the dates as
of which information is given in the Offering Documents, and prior to
the Closing Date, there shall not have been any material adverse change
in the condition, financial or otherwise, or in the results of
operations of the Company or in its business taken as a whole.
2.7 No Defaults. Except as disclosed in the Offering Documents
or in writing to the Agent, the Company is not in default in any
material respect in the performance of any obligation, agreement or
condition contained in any material debenture, note or other evidence
of indebtedness or any material indenture or loan agreement of the
Company. The execution and delivery of this Agreement, and the
consummation of the transactions herein contemplated, and compliance
with the terms of this Agreement will not conflict with or result in
a breach of any of the terms, conditions or provisions of, or
constitute a default under, the Articles of Incorporation or By-Laws
of the Company (in any respect that is material to the Company), any
material note, indenture, mortgage, deed of trust, or other agreement
or instrument to which the Company is a party or by which the Company
or any property of the Company is bound, or to the Company's knowledge,
any existing law, order, rule, regulation, writ, injunction or decree
of any government, governmental instrumentality, agency or body,
arbitration tribunal or court, domestic or foreign, having jurisdiction
over the Company or any property of the Company. The consent,
approval, authorization or order of any court or governmental
instrumentality, agency or body is not required for the consummation
of the transactions herein contemplated except such as may be required
under the Act or under the Blue Sky or securities laws of any state or
jurisdiction.
2.8 Incorporation and Standing. The Company is, and at the
Closing Date will be, duly formed and validly existing in good standing
as a corporation under the laws of the State of Nevada and with full
power and authority (corporate and other) to own its properties and
conduct its business, present and proposed, as described in the
Offering Documents; the Company, has full power and authority to enter
into this Agreement; and the Company is duly qualified and in good
standing as a foreign entity in each jurisdiction in which the failure
to so qualify would have a material adverse effect on the Company or
its properties.
2.9 Legality of Outstanding Securities. Prior to the Closing
Date, the outstanding securities of the Company have been duly and
validly authorized and issued, fully paid and nonassessable and conform
in all material respects to the statements with regard thereto
contained in the Offering Documents.
2.10 Legality of Securities. The Securities, when sold and
delivered, will constitute legal, valid and binding obligations of the
Company, enforceable in accordance with the terms thereof, and shall
be duly and validly issued and outstanding, fully paid and
nonassessable. The Common Stock into which the Securities are
convertible, when converted in accordance with the Company's Articles
of Incorporation shall be duly and validly issued and outstanding,
fully paid and non-assessable.
2.11 Litigation. Except as set forth in the Offering Documents,
there is now, and at the Closing Date there will be, no action, suit
or proceeding before any court or governmental agency, authority or
body pending or, to the knowledge of the Company, threatened, which
might result in judgements against the Company not adequately covered
by insurance or which collectively might result in any material adverse
change in the condition (financial or otherwise) or business of the
Company or which would materially adversely affect the properties or
assets of the Company.
2.12 Finders. The Company does not know of any outstanding
claims for services in the nature of a finder's fee or origination-
fees with respect to the sale of the Securities hereunder for which the
Agent may be responsible, and the Company will indemnify the Agent from
any liability for such fees by any party who has a claim for such
compensation from the Company and for which person the Agent is not
legally responsible.
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2.13 Tax Returns. The Company has filed all federal and state
tax returns which are required to be filed, and has paid all taxes
shown on such returns and on all assessments received by it to the
extent such taxes have become due. All taxes with respect to which the
Company is obligated have been paid or adequate accruals have been set
up to cover any such unpaid taxes.
2.14 Authority. The execution and delivery by the Company of
this Agreement have been duly authorized by all necessary action, and
this Agreement is the valid, binding and legally enforceable obligation
of the Company subject to standard qualifications as to the
availability of equitable remedies, the effect of bankruptcy and other
laws relating to the protection of debtors and public policy opinions
promulgated by the Commission with respect to indemnification against
liabilities under the Act.
2.15 Actions by the Company. The Company will not take any
action which will impair the effectiveness of the transactions
contemplated by this Agreement.
3. Issue, Sale and Delivery of the Securities.
3.1 Deliveries of Securities. Certificates in such form that,
subject to applicable transfer restrictions as described in the
Subscription Agreement, they can be negotiated by the purchasers
thereof (issued in such denominations and in such names as the Agent
may direct the Company to issue) for the Securities, and warrants
representing the Agent's warrant compensation described in Section 3.6
below ("Warrants"), shall be delivered by the Company to the Agent,
with copies made available to the Agent for checking at least one (1)
full business day prior to the Closing Date, it being understood that
the directions from the Agent to the Company shall be given at least
two (2) full business days prior to the Closing Date. The certificates
for the Securities and the Warrants shall be delivered at the Closing
and at each Subsequent Closing (as defined hereinafter).
3.2 Escrow of Funds. Pursuant to the Escrow Agreement, a copy
of which is attached hereto as Exhibit "A" (the "Escrow Agreement"),
executed by the Company, the Agent and the escrow agent (the "Escrow
Agent"), the subscribers shall place all funds for purchase of
Securities for each Closing in an escrow account. The Company shall
have the right to approve or object the subscriptions of each
subscriber, as described in the Subscription Agreement. At such time
as subscribers subscribing for the Shares delivered to the Escrow Agent
their signed subscription documents, those subscribers have been
approved by the Company and all other Closing conditions have been met,
Escrow Agent shall release the subscription funds to the Company and
the Agent shall release the certificates representing the Securities
to the subscribers (the "Closing"). In the event that the Initial
Closing shall be for an amount of Securities less than the Maximum
Amount, the Offering may be continued, and additional Closings may be
held (each a "Subsequent Closing") throughout the Offering Period. In
addition, the Agent shall have the right to act as agent for the sale
of additional Preferred Stock or Securities as set forth in Section 5
herein.
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3.3 Closing Date. The Initial Closing and any Subsequent
Closing shall take place at the offices of Xxxx Xxxx Xxxxx & Xxxxx LLP,
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000, 0000 Xxxxxxxxx Xxxx, XX, Xxxxxxx,
Xxxxxxx 00000 at such time and date ("Closing Date") as will be fixed
either orally or in writing by notice to be given by the Agent to the
Company after consultation with the Company, such Closing Date to be
not less than one (1) full business day after the date on which such
notice shall have been given and not less than one (1)) and not more
than ten (10) full business days after the date on which the Escrow
Agent shall have given written notice to the Company and the Agent that
funds deposited with the Escrow Agent total at least the Minimum
Proceeds. The Closing Date may be changed by mutual agreement of the
Agent and the Company.
3.4 Agent's Compensation. The Company shall pay the Agent:
(a) A commission of ten and one-half percent (10.0%) of
the gross subscription proceeds of the Initial Offering and any
subsequent Offerings (the "Gross Proceeds") plus a
non-accountable expense allowance of one percent (1.0%) of the
Gross Proceeds; and
(b) In addition to the fees and reimbursement of costs
set forth in Sections 3.4 and 3.5 of this Agreement, the Company
shall issue to the Agent warrants ("Warrants") to purchase
shares of the Company's Common Stock, in an amount equal to
100,000 Warrants for every $1,000,000 raised in the Offering,
which shall be exercisable for the Company's Common Stock on a
one for one basis at 100% of the Closing Bid Price immediately
prior to the Closing Date (as defined in the "Securities
Purchase Agreement"). The Warrants shall have cashless exercise
provisions. The term of the Warrant shall be five (5) years and
shall become exercisable at any time after one hundred eighty
(180) days from the effective date of a registration,
registering the underlying shares of Common Stock. The shares
of Common Stock issuable upon exercise of the Warrants shall
have registration rights as described in the Registration Rights
Agreement, set forth as an exhibit to the Subscription
Agreement; it being understood that, if the SEC requires removal
of the Warrants from any registration statement in which the
Warrants have a right by contract to be included, the removal of
the Warrants shall not constitute a breach of contract by the
Company, and the Company will use best efforts to include the
Warrants (or underlying shares) in a registration statement in
a manner acceptable to the SEC. The Warrants shall be delivered
by the Company to the Escrow Agent prior to each Closing, and
the Escrow Agent shall deliver to the Agent the Warrants
applicable to each Closing simultaneous with the respective
Closing.
3.5 Payment of Fees. The Escrow Agent shall be instructed to
pay all fees (including, but not limited to Agent's legal fees) and
cost reimbursements and Warrants pursuant to section 3.4 of this
Agreement, directly to the Agent from the proceeds of the Closing and
all Subsequent Closing, simultaneous with the transfer of proceeds to
the Company.
4. Offering of the Securities on Behalf of the Company.
4.1 In offering the Securities for sale, the Agent shall offer
them solely as an agent for the Company, and such offer shall be made
upon the terms and subject to the conditions set forth in the Offering
Documents. The Agent shall commence making such offer as an agent for
the Company as soon as possible following delivery of the Offering
Documents.
4.2 The Agent will not make offers to sell the Securities to,
or solicit offers to subscribe for any Securities from, persons or
entities that are not "accredited investors" as defined in Regulation
D.
5. Right of First Refusal. The Company hereby grants Agent
rights of first refusal as follows:
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5.1 The Agent has the right of first refusal to act as
placement agent for any future private financings of the Company,
whether equity securities, convertible debt securities, or securities
or instruments convertible into or exchangeable for debt or equity
securities of the Company, mergers, acquisitions, or similar
transactions. The duration of the Agent's right of first refusal under
this Section 5.2 shall be for a period of ninety (90) days following
the Final Closing of this Offering.
5.2 In the event that the Company wishes to undertake a
transaction described in this Section 5, the Company must send Agent
a written notice of the proposed transaction (whether the transaction
is initiated by the Company or is offered to the Company by a third
party), in sufficient specificity to allow the Agent to understand the
proposed transaction clearly. This notice must be delivered to Agent
at least twenty days prior to the proposed closing of the transaction.
The Agent shall have ten days from receipt of that notice to determine
whether or not it wishes to exercise its right of first refusal with
respect to that transaction. The Agent shall notify the Company in
writing of its decision to exercise or waive its right of first refusal
with respect to the transaction described in the notice. If the Agent
waives its right of first refusal with respect to a particular
transaction, the Company may proceed with that transaction; provided,
however, that if the terms of the transaction are changed in any
material way from the terms set forth in the notice to the Agent, the
Agent's right of first refusal shall commence again. Agent's waiver
of its rights of first refusal with respect to any specific transaction
shall not act as a waiver of its rights with respect to future
transactions within the applicable time period.
5.3 The Company agrees to maintain the confidentiality of the
Agent's clients, except as required by applicable law. Such clients
shall be those entities which invest or have been offered an
opportunity to invest by the Agent in the Offering (the "Clients").
For a period of two years from the Closing, the Company will not
solicit or enter into any financing transaction with the clients
without the written consent of Agent and payment to Agent compensation
no less than the compensation to be paid to Agent hereunder for raising
a like amount.
5.4 In the event that Company breaches Section 5.1, 5.2, or 5.3
of this Agreement, Agent shall be entitled to receive compensation in
the same proportion to the financing done without Agent's participation
as the compensation to Agent under this Agreement bears to the
financing raised in this Offering.
6. Covenants of the Company. The Company covenants and agrees
with the Agent that:
6.1 After the date hereof, the Company will not at any time,
prepare and distribute any amendment or supplement to the Offering
Documents, of which amendment or supplement the Agent shall not
previously have been advised and the Agent and its counsel furnished
with a copy within a reasonable time period prior to the proposed
adoption thereof, or to which the Agent shall have reasonable objected
in writing on the ground that it is not in compliance with the Act or
the Rules and Regulations (if applicable).
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6.2 The Company will pay, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented
from becoming effective or is terminated, all costs and expenses
incident to the performance of its obligations under this Agreement,
including all expenses incident to the authorization of the Securities
and their issue and delivery to the Agent, any original issue taxes in
connection therewith, all transfer taxes, if any, incident to the
initial sale of the Securities, the fees and expenses of the Company's
counsel (except as provided below) and accountants, the cost of
reproduction and furnishing to the Agent copies of the Offering
Documents as herein provided.
6.3 As a condition precedent to the Initial Closing, the
Company will deliver to the Agent a true and correct copy of the
Articles of Incorporation of the Company, and all amendments and
certificates of designation of preferences of preferred stock,
including without limitation the certificate of designation of
preferences regarding the Securities, certified by the Secretary of
State of Nevada.
6.4 Prior to the Closing Date, the Company will cooperate with
the Agent in such investigation as it may make or cause to be made of
all of the properties, business and operations of the Company in
connection with the Offering of the Securities. The Company will make
available to it in connection therewith such information in its
possession as the Agent may reasonably request and will make available
to the Agent such persons as the Agent shall deem reasonably necessary
and appropriate in order to verify or substantiate any such information
so supplied.
6.5 The Company shall be responsible for making any and all
filings required by the Blue Sky authorities and filings required by
the laws of the jurisdictions in which the subscribers who are accepted
for purchase of Securities are located, if any. Agent shall assist
Company in this respect, but such filings shall be the responsibility
of Company.
6.6 Corporation Condition. The Company's condition is as
described in its Offering Documents, except for changes in the ordinary
course of business and normal year-end adjustments that are not
individually or in the aggregate materially adverse to the Company.
The Offering Documents, taken as a whole, will present fairly the
business and financial position of the Company as of each Closing Date.
6.7 No Material Adverse Change. Except as may be reflected in
or contemplated by the Offering Documents, subsequent to the dates as
of which information is given in the Offering Documents, and prior to
each Closing Date, there shall not have been any material adverse
change in the condition, financial, or otherwise, or in the results of
operations of the Company or in its business taken as a whole.
7. Indemnification.
7.1 The Company agrees to indemnify and hold harmless the
Agent, each person who controls the Agent within the meaning of Section
15 of the Act and the Agent's employees, accountants, attorneys and
agents (the "Agent's Indemnitees") against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them
may become subject under the Act or any other statute or at common law
for any legal or other expenses (including the costs of any
investigation and preparation) incurred by them in connection with any
litigation, whether or not resulting in any liability, but only insofar
as such losses, claims, damages, liabilities and litigation arise out
of or are based upon any untrue statement of material fact contained
in the Offering Documents or any amendment or supplement thereto or any
application or other document filed in any state or jurisdiction in
order to qualify the Securities under the Blue Sky or securities laws
thereof, or the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, under
the circumstances under which they were made, not misleading, all as
of the date of the Offering Documents or of
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such amendment as the case may be; provided, however, that the
indemnity agreement contained in this Section 7.1 shall not apply to
amount paid in settlement of any such litigation, if such settlements
are made without the consent of the Company, nor shall it apply to the
Agent's Indemnitees in respect to any such losses, claims, damages or
liabilities arising out of or based upon any such untrue statement or
alleged untrue statement or any such omission or alleged omission, if
such statement or omission was made in reliance upon information
furnished in writing to the Company by the Agent specifically for use
in connection with the preparation of the Offering Documents or any
such amendment or supplement thereto or any application or other
document filed in any state or jurisdiction in order to qualify the
Securities under the Blue Sky or securities law thereof. This
indemnity agreement is in addition to any other liability which the
Company may otherwise have to the Agent's Indemnitees. The Agent's
Indemnitees agree, within ten (10) days after the receipt by them of
written notice of the commencement of any action against them in
respect to which indemnity may be sought from the Company under this
Section 7. 1, to notify the Company in writing of the commencement of
such action; provided, however, that the failure of the Agent's
Indemnitees to notify the Company of any such action shall not relieve
the Company from any liability which it may have to the Agent's
Indemnitees on account of the indemnity agreement contained in this
Section 7.1, and further shall not relieve the Company from any other
liability which it may have to the Agent's Indemnitees, and if the
Agent's Indemnitees shall notify the Company of the commencement
thereof, the Company shall be entitled to participate in (and, to the
extent that the Company shall wish, to direct) the defense thereof at
its own expense, but such defense shall be conducted by counsel of
recognized standing and reasonably satisfactory to the Agent's
Indemnitees, defendant or defendants, in such litigation. The Company
agrees to notify the Agent's Indemnitees promptly of the commencement
of any litigation or proceedings against the Company or any of the
Company's officers or directors of which the Company may be advised in
connection with the issue and sale of any of the Securities and to
furnish to the Agent's Indemnitees, at their request, to provide copies
of all pleadings therein and to permit the Company's Indemnitees to be
observers therein and apprise the Agent's Indemnitees of all
developments therein, all at the Company's expense.
7.2 The Agent agrees, in the same manner and to the same extent
as set forth in Section 7.1 above, to indemnify and hold harmless the
Company, and the Company's and Company's employees, accountants,
attorneys and agents (the "Company's Indemnitees") with respect to (i)
any statement in or omission from the Offering Documents or any
amendment or supplement thereto or any application or other document
filed in any state or jurisdiction in order to qualify the Securities
under the Blue Sky or securities laws thereof, or any information
furnished pursuant to Section 3.4 hereof, if such statement or omission
was made in reliance upon information furnished in writing to the
Company by the Agent on its behalf specifically for use in connection
with the preparation thereof or supplement thereto, or (ii) any untrue
statement of a material fact made by the Agent or its agents not based
on statements in the Offering Documents or authorized in writing by the
Company, or with respect to any misleading statement made by the Agent
or its agents resulting from the omission of material facts which
misleading statement is not based upon the Offering Documents, or
information furnished in writing by the Company or, (iii) any breach
of any representation, warranty or covenant made by the Agent in this
Agreement. The Agent's liability hereunder shall be limited to the
amount received by it for acting as Agent in connection with the
Offerings. The Agent shall not be liable for amounts paid in
settlement of any such litigation if such settlement was effected
without its consent. In case of the commencement of any action in
respect of which indemnity may be sought from the Agent, the Company's
Indemnitees shall have the same obligation to give notice as set forth
in Section 7.1 above, subject to the same loss of indemnity in the
event such notice is not given, and the Agent shall have the same right
to participate in (and, to the extent that it shall wish, to direct)
the defense of such action at its own expense, but such defense shall
be conducted by counsel of recognized standing reasonably satisfactory
to the Company. The Agent agrees to notify the Company's Indemnitees
and, at their request, to provide copies of all pleadings therein and
to permit the Company's Indemnitees to be observers therein and apprise
them of all the developments therein, all at the Agent's expense.
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8. Effectiveness of Agreement. This Agreement shall become
effective (i) at 9:00 A.M., Atlanta, Georgia time, on the date hereof
or (ii) upon release by the Agent of the Securities for offering after
the date hereof, whichever shall last occur. The Agent agrees to
notify the Company immediately after the Agent shall have taken any
action by such release or otherwise wherein this Agreement shall have
become effective. This Agreement shall, nevertheless, become effective
at such time earlier than the time specified above after the date
hereof as the Agent may determine by notice to the Company.
9. Conditions of the Agent's Obligations. The Agent's
obligations to act as agent of the Company hereunder and to find
purchasers for the Securities shall be subject to the accuracy, as of
the Closing Date, of the representations and warranties on the part of
the Company herein contained, to the fulfillment of or compliance by
the Company with all covenants and conditions hereof, and to the
following additional conditions:
9.1 Counsel to the Agent shall not have objected in writing or
shall not have failed to give his consent to the Offering Documents
(which objection or failure to give consent shall not have been done
unreasonably).
9.2 The Agent shall not have disclosed to the Company that the
Offering Documents, or any amendment thereof or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel
to the Agent, is material, or omits to state a fact, which, in the
opinion of such counsel, is material and is required to be stated
therein, or is necessary to make the statements therein, under the
circumstances in which they were made, not misleading.
9.3 Between the date hereof and the Closing Date, the Company
shall not have sustained any loss on account of fire, explosion, flood,
accident, calamity or any other cause of such character as would
materially adversely affect its business or property considered as an
entire entity, whether or not such loss is covered by insurance.
9.4 Between the date hereof and the Closing Date, there shall
be no litigation instituted or threatened against the Company, and
there shall be no proceeding instituted or threatened against the
Company before or by any federal or state commission, regulatory body
or administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would
materially adversely affect the business, franchises, license, permits,
operations or financial condition or income of the Company considered
as an entity.
9.5 Except as contemplated herein or as set forth in the
Offering Documents, during the period subsequent to the most recent
financial statements contained in the Offering Documents, if any, and
prior to the Closing Date, the Company (i) shall have conducted its
business in the usual and ordinary manner as the same is being
conducted as of the date hereof and (ii) except in the ordinary course
of business, the Company shall not have incurred any liabilities or
obligations (direct or contingent) or disposed of any assets, or
entered into any material transaction or suffered or experienced any
substantially adverse change in its condition, financial or otherwise.
At the Closing Date, the equity account of the Company shall be
substantially the same as reflected in the most recent balance sheet
contained in the Offering Documents without considering the proceeds
from the sale of the Securities other than as may be set forth in the
Offering Documents.
9.6 The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this
Agreement shall be reasonably satisfactory in all respects to counsel
to the Agent, who shall have furnished the Agent on the Closing Date
with such favorable opinion with respect to the sufficiency of all
corporate proceedings and other legal matters relating to this
Agreement as the Agent may reasonably
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require, and the Company shall have furnished such counsel such
documents as he may have requested to enable him to pass upon the
matters referred to in this subparagraph.
9.7 The Company shall have furnished to the Agent the opinion,
dated the Closing Date, addressed to the Agent, from counsel to the
Company, as required by the Subscription Agreement.
9.8 The Company shall have furnished to the Agent a certificate
of the Chief Executive Officer and the Chief Financial Officer of the
Company, dated as of the Closing Date, to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects at
and as of the Closing Date (other than representations and
warranties which by their terms are specifically limited to a
date other than the Closing Date), and the Company has complied
with all the agreements and has satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing
Date; and
(ii) the respective signers have each carefully examined
the Offering Documents, and any amendments and supplements
thereto, and, to the best of their knowledge, in the Offering
memorandum, and any amendments and supplements thereto, all
statements contained in the Offering Documents are true and
correct, and neither the Offering Documents, nor any amendment
or supplement thereto, includes any 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 under
the circumstances in which they were made not misleading, and
since the date hereof, there has occurred no event required to
be set forth in an amended or supplemented Offering Documents,
which has not been set forth; except as set forth in the
Offering Documents, since the respective dates as of which or
the periods for which the information is given in the Offering
Documents and prior to the date of such certificate, (a) there
has not been any substantially adverse change, financial and
otherwise, in the affairs of condition in the Company, and (b)
the Company has not incurred any material liabilities, direct or
contingent, or entered into any material transactions, otherwise
than in the ordinary course of business.
10. Termination.
10.1 This Agreement may be terminated by the Agent by notice to
the Company in the event that the Company shall have failed or been
unable to comply with any of the terms, conditions or provisions of
this Agreement on the part of the Company to be performed, complied
with or fulfilled within the respective times, if any, herein provided
for, unless compliance therewith or performance or satisfaction thereof
shall have been expressly waived by the Agent in writing.
10.2 This Agreement may be terminated by the Company by notice
to the Agent in the event that the Agent shall have failed or been
unable to comply with any of the terms, conditions or provisions of
this Agreement on the part of the Agent to be performed, complied with
or fulfilled within the respective times, if any, herein provided for,
unless compliance therewith or performance or satisfaction thereof
shall have been expressly waived by the Company in writing.
10.3 This Agreement may be terminated by the Agent by notice to
the Company at any time, if, in the reasonable, good faith judgment of
the Agent, payment for and delivery of the Securities is rendered
impracticable or inadvisable because: (i) additional material
governmental restrictions not in force and effect on the date hereof
shall have been imposed upon trading in securities generally; (ii) a
war or other national calamity shall have occurred; or (iii) the
condition of the market (either generally or with reference to the sale
of the
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Securities to be offered hereby) or the condition of any matter
affecting the Company or any other circumstance is such that it would
be undesirable, impracticable or inadvisable, in the judgment of the
Agent, to proceed with this Agreement or with the Offering.
10.4 Any termination of this Agreement pursuant to this Section
shall be without liability of any character (including, but not limited
to, loss of anticipated profits or consequential damages) on the part
of any party thereto, except that the Company shall remain obligated
to pay the costs and expenses provided to be paid by it specified in
Sections 3, 5, and 6; and the Company and the Agent shall be obligated
to pay, respectively, all losses, claims, damages or liabilities, joint
or several, under Section 7.1 in the case of the Company and Section
7.2 in the case of the Agent.
11. Agent's Representations, Warranties, and Covenants. The
Agent represents and warrants to and agrees with the Company that:
11.1 Agent is a corporation duly incorporated and existing under
the laws of the state of Georgia. Agent is registered with the
Securities Exchange Commission and the NASD.
11.2 Agent understands and acknowledges that the Securities are
not being registered under the Act, and that the Offering is to be
conducted pursuant to Regulation D. Accordingly, in conducting its
activities under this Agreement. Agent shall offer Securities only to
"accredited investors," as defined in Regulation D.
11.3 Neither the Agent nor any of its Affiliates will take any
action which will impair the effectiveness of the transactions
contemplated by this Agreement.
11.4 All corporate actions by Agent required for the execution,
delivery and performance of this Agreement have been taken. The
execution and delivery of this Agreement by the Agent, the observance
and performance thereof, and the consummation of the transactions
contemplated herein or in the Offering Documents do not and will not
constitute a material breach of, or a material default under, any
instrument or agreement by which the Agent is bound, and does not and
will not, to the best of the Agent's knowledge, contravene any existing
law, decree or order applicable to it. This Agreement constitutes a
valid and binding agreement of Agent, enforceable in accordance with
its terms.
11.5 Agent understands that the Company is relying upon Agent's
representations and warranties in connection with the Offering and the
sale of the Securities contemplated by this Agreement.
11.6 Agent's representations and warranties under this Section
shall be true and correct as of the Closing, and shall survive the
Closing for a period of six months.
12. Notices. Except as otherwise expressly provided in this
Agreement:
12.1 Whenever notice is required by the provisions of this
Agreement to be given to the Company, such notice shall be in writing,
addressed to the Company, at:
If to Company: D.H. Marketing & Consulting, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
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With a copy to: Xxx X. Xxxxxx, Esq.
Law Offices of Xxx X. Xxxxxx
0000 X. Xxxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
12.2 Whenever notice is required by the provisions of this
Agreement to be given to the Agent, such notice shall be given in
writing, addressed to the Agent, at:
If to the Agent: X.X. Xxxxx Securities, Inc.
Atlanta Financial Center, East Tower
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
With a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxx Xxxx Xxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
12.3 Any notice instructing the Escrow Agent to distribute
monies or Securities held in Escrow must be signed by authorized agents
of both the Company and the Agent in order to be valid.
13. Miscellaneous.
13.1 Benefit. This Agreement is made solely for the benefit of
the Agent and the Company, their respective officers and directors and
any controlling person referred to in Section 15 of the Act and their
respective successors and assigns, and no other person may acquire or
have any right under or by virtue of this Agreement, including, without
limitation, the holders of any Securities. The term "successor" or the
term"successors and assigns" as used in this Agreement shall not
include any purchasers, as such, of any of the Securities.
13.2 Survival. The respective indemnities, agreements,
representations, warranties, covenants and other statements of the
Company and the Agent, or the officers, directors or controlling
persons of the Company and the Agent as set forth in or made pursuant
to this Agreement and the indemnity agreements of the Company and the
Agent contained in Section 7 hereof shall survive and remain in full
force and effect, regardless of (i) any investigation made by or on
behalf of the Company or the Agent or any such officer, director or
controlling person of the Company or of the Agent; (ii) delivery of or
payment for the Securities; or (iii) the Closing Date, and any
successor of the Company or the Agent or any controlling person,
officer or director thereof, as the case may be, shall be entitled to
the benefits hereof.
13.3 Governing Law. The validity, interpretation, and
construction of this Agreement will be governed by the Laws of the
State of Georgia. This Agreement and each Warrant Certificate
hereunder shall be governed by and interpreted in accordance with the
laws of the State of Nevada without regard to the principles of
conflict of laws. Any dispute or controversy between the parties
arising in connection with this Agreement or the subject matter
contemplated by this Agreement shall be resolved by arbitration before
a three-member panel of the American Arbitration Association in
accordance with the commercial arbitration rules of said forum and the
Federal Arbitration Act, 9 U.S.C. 1 et seq., with the resulting award
being final and conclusive. Said arbitrators shall be empowered to
award all forms of relief and damaged claimed, including, but not
limited to, attorney's fees, expenses of litigation and arbitration,
exemplary damages, and prejudgment interest. The parties further agree
that any arbitration action between them shall be heard in Atlanta,
Georgia, and expressly consent to the jurisdiction and venue of the
Superior Court of Xxxxxx County, Georgia, and the United States
District
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Court for the Northern District of Georgia, Atlanta Division for the
adjudication of any civil action asserted pursuant to this Paragraph.
13.4 Counterparts. This Agreement may be executed in any number
of counterparts, each of which may be deemed an original and all of
which together will constitute one and the same instrument.
13.5 Confidential Information. All confidential financial or
business information (except publicly available or freely usable
material otherwise obtained from another source) respecting either
party will be used solely by the other party in connection with the
within transactions, be revealed only to employees or contractors of
such other party who are necessary to the conduct of such transactions,
and be otherwise held in strict confidence.
13.6 Public Announcements. Prior to the Closing Date, neither
party hereto will issue any public announcement concerning the within
transactions without the approval of the other party.
13.7 Finders. The parties acknowledge that no person has acted
as a finder in connection with the transactions contemplated herein and
each will agree to indemnify the other with respect to any other claim
for a finder's fee in connection with the offering.
13.8 Recitals. The recitals to this Agreement are a material
part hereof, and each recital is incorporated into this Agreement by
reference and made a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be executed as of the day and year first above written.
"THE COMPANY"
D.H. MARKETING & CONSULTING, INC.
By: /s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx, President
"THE AGENT"
X.X. XXXXX SECURITIES, INC.
By: /s/ XXXXXX XXXXXXX
Xxxxxx Xxxxxxx, President
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