PLACEMENT AGENCY AGREEMENT
THIS PLACEMENT AGENCY AGREEMENT ("Agreement") is made as of this 12th
day of June, 2000, by and between XxxXxxxx.xxx Inc., a Nevada Corporation
("Company"), and The May Xxxxx Group, Inc., a Maryland corporation (the
"Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell, pursuant to the
Securities Purchase Agreement, Two Million Five Hundred Thousand Dollars
($2,500,000) of debentures (the "Debentures"), convertible into shares of common
stock, par value $0.00001 per share, of the Company (the "Securities"),
resulting in gross proceeds to the Company of $2,500,000 (the "Offering") in one
or more series of transactions outside of the U.S. to purchasers who are not
citizens or residents of the U.S., and not involving a public offering and
without registration under the Securities Act of 1933, as amended (the "Act"),
pursuant to one or more of the exemptions from the registration requirements of
the Act provided by Section 4(2), Rule 506 of Regulation D promulgated under the
Act ("Regulation D"), or Regulation S promulgated under the Act ("Regulation D")
as described below; and
WHEREAS, the Company proposes to issue, pursuant to an Equity Line of
Credit Agreement, common stock resulting in gross proceeds to the Company of
$10,000,000 (the "Equity Credit Line Offering") in one or more series of
transactions outside of the U.S. to purchasers who are not citizens or residents
of the U.S., and not involving a public offering and without registration under
the Securities Act of 1933, as amended (the "Act"), pursuant to one or more of
the exemptions from the registration requirements of the Act, provided by
Section 4(2), Regulation D, or Regulation S as described below; and
WHEREAS, the Agent is willing to assist the Company in placing the
Securities on a "best efforts basis" basis and the Company desires to secure the
services of the Agent on the terms and conditions hereinafter set forth;
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
placement agent for the Offering pursuant to the Securities Purchase Agreement,
on a "best efforts" resulting in gross proceeds to the Company of $2,500,000
(the "Maximum Amount") and to issue up to $10,000,000 worth of the Company's
common stock pursuant to the Equity Line of Credit resulting in gross proceeds
to the Company of up to $10,000,000 Dollars. 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
reasonable 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 8, which period may be 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. Organization and Qualification. The Company and its
subsidiaries are corporations duly organized and validly existing in
good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power to own their
properties and to carry on their business as now being conducted. Each
of the Company and its subsidiaries is duly qualified as a foreign
corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a whole.
2.2. Authorization, Enforcement, Compliance with Other
Instruments. The Company has the requisite corporate power and
authority to enter into and perform this Agreement. This Agreement has
been duly authorized by the Company's Board of Directors and no further
consent or authorization is required by the Company, its Board of
Directors or its stockholders. This Agreement, constitutes the valid
and binding obligations of the Company enforceable against the Company
in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors'
rights and remedies.
2.3. No Conflicts. Except as disclosed in Schedule 2.3, the
execution, delivery and performance of this Agreement by the Company
and the consummation by the Company of the transactions contemplated
hereby will not (i) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences, and Rights
of any outstanding series of preferred stock of the Company or By-laws
or (ii) conflict with or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or, to the best of the
Company's knowledge, result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of The
Nasdaq Stock Market, Inc.'s OTC Bulletin Board on which the common
stock, $0.00001 par value per share, of the Company ("Common Stock") is
quoted) applicable to the Company or any of its subsidiaries or by
which any property or asset of the Company or any of its subsidiaries
is bound or affected. Except as disclosed in Schedule 2.3, neither the
Company nor its subsidiaries is in violation of any term of or in
default under its Certificate of Incorporation or By-laws
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or their organizational charter or by-laws, respectively, or any
material contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its subsidiaries. To the best
knowledge of the Company, the business of the Company and its
subsidiaries is not being conducted, and the Company shall use its best
efforts to assure that it shall not be conducted in violation of any
law, ordinance, regulation of any governmental entity. Except as
specifically contemplated by this Agreement and as required under the
Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement in accordance with the terms hereof or
thereof. Except as disclosed in Schedule 2.3, all consents,
authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the date hereof. The Company and
its subsidiaries are unaware of any facts or circumstances, which might
give rise to any of the foregoing.
2.4. SEC Documents: Financial Statements. Since January 5,
2000, the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the Securities and
Exchange Commission ("SEC") pursuant to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the "1934 Act") (all
of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred
to as the "SEC Documents"). The Company has delivered to the Agent or
its representative, or made available through the SEC's electronic web
site located at xxxx://xxx.xxx.xxx, true and complete copies of the SEC
Documents. As of their respective dates, the financial statements of
the Company disclosed in the SEC Documents (the "Financial Statements")
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in
the case of un-audited interim statements, to the extent they may
exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company
as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of un-audited
statements, to normal year-end audit adjustments). No other information
provided by or on behalf of the Company to the Buyer which is not
included in the SEC Documents, including, without limitation,
information referred to in Section 2.6 of this Agreement, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.
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2.5. Absence of Litigation. Except as disclosed on Schedule
2.5, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of
the Company or any of its subsidiaries, threatened against or affecting
the Company, the Common Stock or any of the Company's subsidiaries,
wherein an unfavorable decision, ruling or finding would (i) have a
material adverse effect on the transactions contemplated hereby (ii)
adversely affect the validity or enforceability of, or the authority or
ability of the Company to perform its obligations under, this Agreement
or any of the documents contemplated herein or (iii) except as
expressly disclosed in the SEC Documents, have a material adverse
effect on the business, operations, properties, financial condition or
results of operation of the Company and its subsidiaries taken as a
whole.
2.6. No Materially Adverse Contracts, Etc. Except as set forth
in the SEC Documents, neither the Company nor any of its subsidiaries
is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation which in the judgment of
the Company's officers has or is expected in the future to have a
material adverse effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company
or its subsidiaries. Neither the Company nor any of its subsidiaries is
a party to any contract or agreement which in the judgment of the
Company's officers has or is expected to have a material adverse effect
on the business, properties, operations, financial condition, results
of operations or prospects of the Company or its subsidiaries.
3. Issue, Sale and Delivery of the Securities.
3.1. Deliveries of Securities. Certificates in such form,
subject to applicable transfer restrictions as described in the
Securities Purchase Agreement proposed to be entered into between the
Company and Investors ("Purchase Agreement"), and warrants representing
the Agent's warrant compensation described in Section 3.4(b) below
("Warrants"), shall be delivered by the Company to counsel 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 (as hereinafter defined).
3.2. Escrow of Funds. Pending Closing purchasers shall place
all funds for purchase of Securities, less the fees and expenses of the
Agent and its counsel, in an escrow account with an escrow agent to be
designated by the Company and the Placement Agent ("Escrow Agent") and
as set up by the Company in accordance with the terms of an escrow
agreement between the Company, the Agent and the Escrow Agent. The
Company shall have the right to approve or object to the subscriptions
of any purchaser. At such time as purchasers purchasing the Debentures
have delivered to the Agent a signed Purchase Agreement, and provided
those purchasers have been
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approved by the Company and all other Closing conditions have been met,
Escrow Agent shall release the subscription funds to the Company and
the Company shall release the certificates representing the Securities
to the subscribers (the "Closing"). In the event the Closing is not
held on or before June 12, 2000, all subscription proceeds shall be
immediately returned to purchasers without deduction or charge by the
Escrow Agent.
3.3. Closing Date. The Closing shall take place at the offices
of Xxxxxx Xxxxxxxx, L.L.P., 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0, Xxxxx, Xxx
Xxxxxx 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. The Closing Date may be changed by mutual
written agreement of the Agent and the Company.
3.4. Agent's Compensation. The Company shall pay the Agent:
(a) A commission of Three Percent (3%) of the gross
subscription proceeds received by the Company, pursuant to the
sale of the Debentures, pursuant to the Securities Purchase
Agreement at the Closing to be paid in cash or Common Stock of
the Company as determined by the Agent (the "Gross Proceeds");
and a commission of Three Percent (3%) of the gross proceeds
received by the Company, pursuant to the issuance of commons
stock of the company, pursuant to the Equity Line of Credit
Agreement at each Closing to be paid in cash or Common Stock
of the Company as determined by the Agent (the "Gross
Proceeds"); and
3.5. Payment of Fees. The Escrow Agent shall be instructed to: The
Escrow Agent shall be instructed to:
(a) Pay the Placement Agent's fees and all of the
reasonable legal, administrative, and escrow fees,
associated with the sale of the Debentures, of The
May Xxxxx Group, Inc.'s counsel, Xxxxxx Xxxxxxxx,
LLP, in the amount of Thirty Five Thousand Dollars
($35,000), directly to the Agent's counsel from the
proceeds of the sale of the Debentures simultaneous
with the transfer of proceeds to the Company.
Subsequently on each advance date pursuant to the
Equity Line of Credit Agreement, the Company will pay
Xxxxxx Xxxxxxxx, LLP, the sum of One Thousand Five
Hundred ($1,500) Dollars for legal, administrative,
and escrow fees.
(b) In addition to the fees and reimbursement of costs
set forth in Sections 3.5 of this Agreement, upon
closing with respect to the sale of the Debentures at
the Closing, the Company shall issue to the Xxxxxx
Xxxxxxxx, LLP., and/or its assignees warrants to
purchase twenty five thousand (25,000) shares of
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the Company's Common Stock. Such warrants shall be
exercisable at a price of $2.00. The Warrants shall
have cashless exercise provisions. The term of the
Warrants shall be five years. The Warrants and the
shares of Common Stock issuable upon exercise of the
Warrants shall have registration rights as described
in the Registration Rights 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. Except as set forth in the
immediately preceding sentence, it is specifically
understood by the Company that the Company must
register the Shares underlying the Warrants for the
Agent in the same registration statement described in
the Registration Rights Agreements between the
Company and purchasers and contemplated by the
Purchase Agreement. The Warrants shall be delivered
by the Company to the Xxxxxx Xxxxxxxx, LLP
simultaneous with and contingent upon a Closing with
respect to the Maximum Amount.
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
Purchase Agreement and Equity Line of Credit Agreement. The Agent shall
commence making such offer as an agent for the Company as soon as
possible following delivery of the Purchase Agreement.
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. Non-Circumvention. The Company hereby agrees as follows:
5.1. 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.
5.2. In the event that Company breaches Section 5.1 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.
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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 Purchase
Agreement, of which amendment 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
under the Act (if applicable).
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 purchasers, 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 and Agent's counsel as set forth in Section 3.5
(except as provided below) and accountants, the cost of reproduction
and furnishing to the Agent copies of the Purchase Agreement as herein
provided.
6.3 Prior to the Closing Date, and during the normal business
hours, 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.
6.4 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 purchasers 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.
6.5 Corporation Condition. The Company's condition is as
described in the Purchase Agreement and the SEC Documents referred to
therein, 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.
6.6 No Material Adverse Change. Except as may be reflected in
or contemplated by the Purchase Agreement prior to the Closing, there
shall not have
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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 Purchase Agreement or any amendment 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
Purchase Agreement or of such amendment as the case may be; provided,
however, that the indemnity agreement contained in this Section 7.1
shall not apply to amounts 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 any such omission, if such statement or
omission was made solely in reliance upon information furnished in
writing to the Company by the Agent specifically for use in connection
with the preparation of the Purchase Agreement or any such amendment
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
8
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 employees, accountants,
attorneys and agents (the "Company's Indemnitees") with respect to (i)
any statement in or omission from the Purchase Agreement or any
amendment 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 solely 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 Purchase Agreement 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 Purchase Agreement, 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
Offering. 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 ail 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.
8. Effectiveness of Agreement. This Agreement shall become effective
upon the date of the execution hereof and shall remain in full force and effect
until June 12 , 2000, or until the Closing, if earlier.
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
9
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.l. Counsel to the Agent shall not have objected in writing
or shall not have failed to give his consent to the Purchase Agreement
(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 Purchase Agreement, or any amendment thereof, 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.
9.5. Except as contemplated herein or as set forth in the
Purchase Agreement, during the period subsequent to the most recent
financial statements referred to in the Purchase Agreement, 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
referred to in the Purchase Agreement without considering the proceeds
from the sale of the Securities.
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
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may reasonably 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 Purchase 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
Purchase Agreement, and any amendments thereto, and, to the best of
their knowledge, all statements contained in the Purchase Agreement
are true and correct, and neither the Purchase Agreement, nor any
amendment 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; except as set forth in the
Purchase Agreement, since the respective dates as of which or the
periods for which the information is given in the Purchase Agreement
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 written
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
written notice to the Agent in the event that the Agent shall have
failed or been unable to comply with
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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. 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 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 Canada. Agent is not registered with the Securities
Exchange Commission and is not a member. The Agent will not offer the
securities in the U.S. or to citizens or residents of the U.S.
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, Section 4(2) of the Act, or
Regulation S, and that the Company is not making the disclosures
required for offerings to purchasers other than accredited investors.
Accordingly, in conducting its activities under this Agreement, Agent
shall offer Securities only to "accredited investors," as defined in
Regulation D.
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 Purchase Agreement 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'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:
12
If to Company: XxxXxxxx.xxx, Inc.
0000 Xxxxxxx Xxxx 0xx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx, President and CEO
with a copy to: Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: W. Xxxxxxx Xxxxxxxxx, Esq.
Xxx Xxxxxxxxxx, Esq.
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: May Xxxxx Group, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
with copy to: Xxxxxx Xxxxxxxx, L.L.P.
0000 Xxxxxxxxxx Xxxxxx
Xxxxx #0
Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
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
13
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 New York. The parties further agree that any action between
them shall be heard in New York County, New York, and expressly consent
to the jurisdiction and venue of the Supreme Court of New York County,
New York, and the United States District Court for the Southern
District of New York 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, except as may be
required by applicable securities or other laws.
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. Financial Advisers. The parties acknowledge that the
Company has or may retain financial and other advisers in connection
with this transaction (the "Advisers"), and the Company agrees to
indemnify and hold the Placement Agent harmless for any fees and
expenses of the Advisers.
13.9. 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.
14
13.10. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with regard to the subject matter hereof
and supersedes all prior agreements or understandings between the
parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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.
XXXXXXXX.XXX INC.
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Operating Officer
THE MAY XXXXX GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
16
SCHEDULE 2.3
No Conflicts
None
17
SCHEDULE 2.5
Litigation
None
18
