NON-EXCLUSIVE FINDER'S AGREEMENT
This Finder's Agreement (this "Agreement") is made as of August 11, 2004,
between VitroTech Corporation, a Nevada corporation (the "Company"), and The
Shemano Group, Inc., a California corporation (the "Finder"). The Finder and the
Company agree:
1. Engagement of Finder: The Company hereby engages the Finder, and the
Finder hereby accepts such engagement, to act as the Company's
non-exclusive finder with respect to sales by the Company in a
private placement transaction (the "Offering) of up to $8 million
aggregate principal amount of Equity, Equity-Related or Debt
Securities ("Securities") of the Company to the investors during the
term of this Agreement as set forth in Section 5.
2. Offering Procedures: The Finder will introduce the Company to
investors who the Finder reasonably believes to be "accredited
investors," as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the "1933
Act"), with whom the Finder has a pre-existing substantive
relationship (the "Offerees").
3. Finder's Compensation: In consideration for the services rendered by
the Finder hereunder, the Company shall pay to the Finder, or cause
the Finder to be paid, compensation as provided in this section
within 3 days of the Company's receipt of funds from the Offerees.
a. Cash Compensation: The Company shall pay to the Finder
cash compensation equal to eight percent (8%) of the
gross Offering funds received in the Offering.
b. Warrants: The Finder shall receive 3% warrant
compensation. The warrant calculation translates to
30,000 warrants per $1 million raised. The warrant's
strike shall equal the strike, expiration and
registration rights of any warrants sold to Offerees in
the Offering, and if the Offering does not provide for
the issuance of warrants, then the warrants issued to
the Finder shall have a strike price equal to the
Offering price of any Equity or Equity-Related
Securities sold, have a five-year term and cashless
exercise after one year if the underlying shares are not
then registered. The warrant shares shall be subject to
equitable adjustment for stock splits, stock dividends
and similar events. The warrant shares shall have
"piggyback" registration rights.
For purposes of determining the Finder's compensation
under this Section 3, the gross offering funds received
in the Offering(s) shall include any amounts paid to the
Company by investors in respect to an exercise or
conversion of any of the Securities or Warrants,
including the value allocated to any securities not
issued pursuant to a "cashless exercise" or similar
provision, whenever actually received by the Company.
4. Certain Matters Relating to Finder's Duties:
a. The Finder's responsibilities shall be limited to
introducing potential investors to the Company, and the
Finder shall not have authority to offer or sell the
Securities to any potential investor. Finder shall not
use any general solicitation or general advertising
within the meaning of the applicable securities laws in
connection with any offering. The finder shall have no
responsibility to participate or assist in any
negotiations between any potential investor and the
Company. The Finder will have no responsibility to act,
and the parties contemplate that the Finder will not
act, as a broker or dealer with respect to the offer or
sale of the Securities. Further, the finder shall have
no responsibly for fulfilling any SEC reporting or
filing requirements as relates to the Company provided
however, Finder agrees to provide Company with
reasonable assistance related to any registration,
qualification or other requirements of applicable
securities laws and other regulatory matters, upon
request of the Company.
b. The Finder agrees to introduce the Company to Offerees
only in states in which the Finder has been advised by
the Company that offers and sales of Securities can be
legally made by the Company.
c. The Finder shall perform its duties under this Agreement
in a manner consistent with the instructions of the
Company. Such performance shall include, but not be
limited to, the delivery to each Offeree a current copy
of the Private Placement Memorandum, Subscription
Agreement and any Offering Questionnaire and/or similar
documents provided to the Finder by the Company, as such
documents may be amended from time to time by the
Company and delivered to the Finder. The finder shall
consecutively number each copy of the Private Placement
Memorandum (which will include the first letter of the
Finder's name or other identifying xxxx sufficient to
designate an Offeree introduced by the Finder); keep a
log of when and to whom each copy of the Private
Placement Memorandum is given, with the Private
Placement Memorandum, numbers; maintain a copy of any
written information the Finder obtains regarding the
suitability of each Offeree; and only use the Private
Placement Memorandum in introducing Offerees to the
Company. The finder shall provide this log and all such
written information to the Company at any time and
promptly upon request of the Company at the termination
of this Agreement. The Company shall, promptly following
execution of this Agreement and from time to time during
the term of this Agreement, provide the Finder with a
written list of prospective Offerees which the Company
does not want the Finder to contact. The Finder agrees
to not contact the persons on such list, as supplemented
from time to time and the Finder shall not be entitled
to the compensation set forth in Section 3 with respect
to any investment made by such person in the Company's
Securities.
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d. The Finder is and will hereafter act a an independent
contractor and not as an employee of the Company and
nothing in this Agreement shall be interpreted or
construed to create any employment, partnership, joint
venture, or other relationship between the Finder and
the Company. The Finder will not hold itself out as
having, and will not state to any person that the Finder
has, any relationship with the Company other than as an
independent contractor. The Finder shall have no right
or power to find or create any liability or obligation
for or in the name of the Company or to sign any
documents on behalf of the Company.
5. Termination of Agreement. Either party may terminate this Agreement
by notifying the other party in writing upon a material breach by
the other party, unless such breach is curable and is in fact cured
within 15 days after such notice. This Agreement will otherwise
terminate upon completion or termination of the Offering. The
Company may terminate this Agreement following ninety (90) days
after the date hereof upon written notice. Notwithstanding the
foregoing, all provisions of this Agreement other than section 1, 2
and 4 shall survive the termination of this Agreement with respect
to Offerees who the Finder introduces to the Company prior to any
termination with respect to the Offering. The Finder shall be
entitled to compensation under section 3 based on investments made
by such Offerees prior to the termination of this Agreement or at
any time within one year thereafter.
6. Indemnification. The Company and the Finder each shall indemnify and
defend the other and the other's affiliates, directors, officers,
employees, agents, consultants, attorneys, accountants and other
representatives (each an "Indemnified Persons") and shall hold each
Indemnified Person harmless, to the fullest extent permitted by law,
from and against any and all claims, liabilities, losses, damages
and expenses (including reasonable attorney's fees and costs), as
they are incurred, in connection with the Offering, resulting from
the indemnifying party's negligence, bad faith or willful misconduct
in connection with the Offering, any violation by the indemnifying
party (not caused by an Indemnified Person) of Federal or state
securities laws in connection with the Offering, or any breach by
the indemnifying party of this Agreement. In case any litigation or
proceeding shall be brought against any Indemnified Person under
this section, the indemnifying party shall be entitled to assume the
defense of such litigation or proceeding with counsel of the
indemnifying party's choice at its expense (in which case the
indemnifying party shall not be responsible for the fees and
expenses of any separate counsel retained by such Indemnified
Person, except in the limited circumstances described below in this
section); provided, however, that such counsel shall be reasonably
satisfactory to the Indemnified Person. Notwithstanding the
indemnifying party's election to assume the defense of such
litigation or proceeding (a) such Indemnified Person shall have the
right to employ separate counsel and to participate in the defense
of such litigation or proceeding, and (b) the indemnifying party
shall bear the reasonable fees, costs and expenses of separate
counsel if (but only if) the use of counsel selected by the
indemnifying party to represent such Indemnified Person would
present such counsel with a conflict of interest under applicable
laws or rules of professional conduct.
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7. Confidentiality of Offeree Information. The Company acknowledges
that the identity of the Offerees, and all confidential information
about Offerees received by the Company from an Offeree or the
Finder, is confidential information of the Finder and may not be
shared with any other person without the consent of the Finder.
8. Notices. Any notice, consent, authorization or other communication
to be given hereunder shall be in writing and shall be deemed duly
given and received when delivered personally, when transmitted by
fax, three days after being mailed by first class mail, or one day
after being sent by a nationally recognized overnight delivery
service, charges and postage prepaid, properly addressed to the
party to receive such notice, at the following address or fax number
for such party (or such other address or fax number as shall
hereafter be specified by such party by like notice):
a. If to the Company, to:
Xxxx Xxx Xxxxx
Chairman and CEO
0 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxx, XX 00000
Phone: (000)000-0000
E-Mail: xxxx.xxxxx@xxxxxxx.xxx
b. If to the Finder, to:
Xxxx Xxxxxxx
CEO
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Phone: (000)000-0000
Fax: (000)000-0000
E-Mail: xxxxxxxx@xxxxxxx.xxx
9. Company to Control Transactions. The prices, terms and conditions
under which the Company shall offer or sell any Securities shall be
determined by the Company in its sole discretion. The Company shall
have the authority to control all discussions and negotiations
regarding any proposed or actual offering or sale of Securities.
Nothing in this Agreement shall obligate the Company to actually
offer or sell any Securities or consummate any transaction. The
Company may terminate any negotiations or discussions at any time
and reserve the right not to proceed with any offering or sale of
Securities. Compensation pursuant to this Agreement shall only be
paid to the Finder in the event of an actual Closing of Offering to
an Offeree introduced by Finder.
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10. Confidentiality of Company Information. The Finder, and its
officers, directors, employees and agents shall maintain in strict
confidence and not copy, disclose or transfer to any other party (1)
all confidential business and financial information regarding the
Company and its affiliates, including without limitation,
projections, business plans, marketing plans, product development
plans, pricing, costs, customer, vendor and supplier lists and
identification, channels of distribution, and terms of
identification or proposed or actual contracts and (2) all
confidential technology of the Company. In furtherance of the
foregoing, the Finder agrees that it shall not transfer, transmit,
distribute, download or communicate, in any electronic, digitized or
other form or media, any of the confidential technology of the
Company. The foregoing is not intended to preclude the Finder from
utilizing, subject to the terms and conditions of this Agreement,
the Private Placement Memorandum and/or other documents prepared or
approved by the Company for use in the Offering.
All communications regarding any possible transactions, requests for
due diligence or other information, requests for facility tours,
product demonstrations or management meetings, will be submitted or
directed to the Company, and the Finder shall not contact any
employees, customers, suppliers or contractors of the Company or its
affiliates without express permission. Nothing in this Agreement
shall constitute a grant of authority to the Finder or any
representatives thereof to remove, examine or copy any particular
document or types of information regarding the Company, and the
Company shall retain control over the particular documents or items
to be provided, examined or copied. If the Offering is not
consummated, or if at any time the Company so requests, the Finder
and its representatives will return to the Company all copies of
information regarding the Company in their possession.
The provisions of this Section shall survive any termination of this
Agreement.
11. Press Releases, Etc. The Company shall control all press releases or
announcements to the public, the media or the industry regarding any
offering, placements, transaction or business relationship involving
the Company or its affiliates. Except for communication to Offerees
in furtherance of this Agreement and the provision of the Private
Placement Memorandum, the Finder will not disclose the fact that
discussions or negotiations are taking place concerning a possible
transaction involving the Company, or the status or terms and
conditions thereof. Notwithstanding the foregoing, the Company
agrees to issue a press release prior to the opening of the market
on the business day following the Company's receipt of executed
agreements binding Offerees to purchase Securities in at least the
amount of the minimum Offering (if there is any such minimum)
setting forth the material terms of the Offering.
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12. Due Diligence: Neither the Company, nor any of its directors,
officers or shareholders, should, in any way rely on the Finder to
perform any due diligence with respect to the Company. It is
expressly understood and agreed that to the extent due diligence is
conducted; it will be conducted by the investors.
13. Expenses, Etc. The compensation described in Section 3 of this
Agreement shall be the Finder's sole compensation for all of its
services and efforts to the Company and its affiliates, in
connection with ay offering or placement of Securities. However,
while the Finder shall pay all of its own costs and expenses
exceeding ten thousand ($10,000) in carrying out its activities
hereunder; the Company will reimburse the Finder for the first
$10,000 of aforementioned expenses after they have been incurred by
the Finder, and an itemized accounting has been provided to the
Company. The Company further agrees to reimburse the Finder a flat
fee of $25,000 for legal expenses. The Finder shall be exclusively
responsible for any compensation, fees, commissions or payments of
its employees, agents, representatives, co-finders or other persons
or entities of utilized by it in connection with it's activities on
behalf of the Company, and the Finder will indemnify and hold
harmless the Company and its affiliates from the claims of any such
persons or entities.
14. Compliance with Laws. The Finder represents and warrants that it is
a duly registered broker/dealer and in good standing with the SEC,
NASD and the State of California and has and shall maintain such
registrations as well as all other necessary licenses and permits to
conduct its activities under this Agreement, which is shall conduct
in compliance with applicable federal and state laws relating to a
private placement under Regulation D of the 1933 Act. The Finder
represents that it is not a party to any other agreement which would
conflict with or interfere with the terms and conditions of this
Agreement.
15. Assignment Prohibited. No assignment of this Agreement shall be made
without the prior written consent of the other party.
16. Amendments. Neither party may amend this Agreement or rescind any of
its existing provisions without the prior written consent of the
other party.
17. Governing Law. This Agreement shall be deemed to have been made in
the State of California and shall be construed and the rights and
liabilities determined, in accordance with the law of the State of
California, without regard to the conflicts of laws rules of such
jurisdiction.
18. Waiver. Neither Finder's nor the Company's failure to insist at any
time upon strict compliance with this Agreement or any of its terms
nor any continued course of such conduct on their part shall
constitute or be considered a waiver by Finder or the Company of any
of their respective rights or privileges under this Agreement.
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19. Severability. If any provision herein is or should become
inconsistent with any present or future law, rule or regulation of
any sovereign government or regulatory body having jurisdiction over
the subject matter of this Agreement, such provision shall be deemed
to be rescinded or modified in accordance with such law, rule or
regulation. In all other respects, this Agreement shall continue to
remain in full force and effect.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and will
become effective and binding upon the parties at such time as all of
the signatories hereto have signed a counterpart of this Agreement.
All counterparts so executed shall constitute one Agreement binding
on all of the parties hereto, notwithstanding that all the parties
are not signatory to the same counterpart. Each of the parties
hereto shall sign a sufficient number of counterparts so that each
party will receive a fully executed original of this Agreement.
21. Entire Agreement. This Agreement and all other agreements and
documents referred herein constitutes the entire agreement between
Company and the Finder. No other agreements, covenants,
representations or warranties, express or implied, oral or written,
have been made by any party hereto to any other party concerning the
subject matter hereof. All prior and contemporaneous conversations,
negotiations, possible and alleged agreements, representations,
covenants and warranties concerning the subject matter hereof are
merged herein. This is an integrated Agreement.
22. Arbitration. The parties agree that this Agreement and all
controversies which may arise between the Finder and the Company,
whether occurring prior, on or subsequent to the date of this
Agreement, will be determined by arbitration. The parties understand
that:
a. Arbitration is final and binding on the parties
b. The parties are waiving their right to seek remedies in
court, including the right to a jury trial
c. Pre-arbitration discovery is generally more limited than
a different from court proceedings.
d. The arbitrators' award is not required to include
factual findings or legal reasoning and any party's
right to appeal or to seek modification or rulings by
the arbitrators is strictly limited.
e. The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated with
the securities industry.
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The parties agree that any arbitration under this Agreement will be
held at the facilities of and before Arbitration Panel appointed by
the National Association of Securities Dealers, Inc. ("NASD"), or if
the NASD refuses to accept jurisdiction, then before JAMS/ENDISPUTE
in San Francisco, California. The award of the arbitrators, or of
the majority of them, will be final, and judgments upon the award
may be entered in any court, state or federal, having jurisdiction.
The parties hereby submit themselves and their personal
representatives to the jurisdiction of any state or federal court
for the purpose of such arbitration and entering such judgment.
Any forbearance to enforce an agreement to arbitrate will not
constitute a waiver of any rights under this Agreement except to the
extent stated herein.
THIS AGREEMENT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE
CONTAINTED IN PARAGRAPH 22 OF THIS AGREEMENT
The Shemano Group, Inc. (the "Finder")
By:
-----------------------------------
Xxxx Xxxxxxx
Title: CEO
VitroTech Corporation (the "Company")
By:
-----------------------------------
Xxxx Xxx Xxxxx
Title: Chairman and CEO
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