EXHIBIT 10.11
PLACEMENT AGREEMENT/EQUITY LINE
Dated as of: December 29 , 2000
May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Ladies and Gentlemen:
The undersigned, Forefront Inc., (the "Company"), hereby agrees with May Xxxxx
Group, Inc. ("May Xxxxx") as follows:
1. Offering. The Company hereby engages May Xxxxx to act as its exclusive
placement agent in connection with the Credit Agreement (as defined herein) for
the issuance and sale by the Company (the "Offering") of the Company's Common
Stock, $0.001 par value per share (the "Common Stock"), at a price per share
equal to the Purchase Price, as that term is defined in the Equity Line of
Credit Agreement dated the date hereof between the Company and the investor
named therein ( the "Credit Agreement"), for an aggregate price of up to
$10,000,000. All capitalized terms used herein and not otherwise defined shall
have the same meaning ascribed to them as in the Credit Agreement. The Investor
will be granted certain registration rights with respect to the Common Stock as
more fully set forth in the Registration Rights Agreement between the Company
and the Investor dated the date hereof, and May Xxxxx will be granted common
stock of the Company described herein. The documents to be executed and
delivered in connection with the Offering, including but not limited to this
Agreement, the Credit Agreement, the Registration Rights Agreement, the Escrow
Agreement, (as hereinafter defined) are referred to sometimes hereinafter
collectively as the "Offering Materials." The Company's Common Stock and there
are sometimes referred to hereinafter collectively as the "Securities." May
Xxxxx shall not be obligated to sell any Securities and this Offering by May
Xxxxx shall be solely on a "best efforts basis."
2. Information.
A. Upon the occurrence of each Closing, the funds received in respect of the
shares of Common Stock purchased by the Investor will be disbursed in accordance
with the terms of the Credit Agreement, net of (i) legal fees and other expenses
related thereto due at the initial Closing to May Xxxxx'x counsel, Xxxxxx
Xxxxxxxx LLP, in the amount of Twelve Thousand Dollars ($12,000), which shall be
payable in two installments of Six Thousand Dollars ($6,000) from each of the
first two Closings. In the event the Investor does not perform as required by
the Equity Credit Line Agreement a the legal fees may be returned to the
Company.
B. In addition to the foregoing compensation, the Company shall pay to May Xxxxx
upon the execution of the Credit Agreement the following: (i) warrants to
purchase five million (5,000,000) shares of the Company's Common Stock common
stock at an exercise price of one hundred and ten percent (110%) of the Closing
Bid Price of the Company's Common Stock on the day of Closing. The exercise
price will be reset six (6) months from the Closing Date to 110% of the then
current Closing Bid Price if the Stock on that day is below its price on the
Closing Date. May Xxxxx shall be entitled to certain demand registration rights
with respect to the shares of Common Stock issuable upon exercise of the
Warrants and the shares of Common Stock pursuant to a registration rights
agreement in substantially the same form annexed hereto (the "Registration
Rights Agreement");(ii) May Xxxxx shall receive as cash compensation an amount
equal to four and one half percent (4.5%) of the gross proceeds of each advance
to the Company pursuant to the Credit Agreement; and (iii) upon Closing the
Company shall issue to May Xxxxx restricted shares of the Company's Common Stock
equal to the value of the Equity Line of Credit Agreement.
3. Representations, Warranties and Covenants of May Xxxxx.
A. May Xxxxx represents, warrants and covenants as follows:
(i) May Xxxxx has the necessary power to enter into this Agreement, the
Registration Rights Agreement and to consummate the transactions contemplated
hereby and thereby.
(ii) The execution and delivery by May Xxxxx of this Agreement, and the
consummation of the transactions contemplated herein and therein will not result
in any violation of, or be in conflict with, or constitute a default under, any
agreement or instrument to which May Xxxxx is a party or by which May Xxxxx or
its properties are bound, or any judgment, decree, order or, to May Xxxxx'x
knowledge, any statute, rule or regulation applicable to May Xxxxx. This
Agreement, executed and delivered by May Xxxxx, xxxx constitute the legal, valid
and binding obligations of May Xxxxx, enforceable in accordance with their
respective terms, except to the extent that (a) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity, or (c) the indemnification provisions hereof or thereof
may be held to be violative of public policy.
(iii) Upon receipt of an executed Credit Agreement, a Registration Rights
Agreement and Escrow Agreement and the documents related thereto, May Xxxxx
will, through the Escrow Agent, promptly forward copies of the Credit Agreement,
Registration Rights Agreement and Escrow Agreement and the documents related
thereto to the Company or its counsel.
(iv) May Xxxxx will not deliver any documents related to the Offering to any
person it does not reasonably believe to be an Accredited Investor.
(v) May Xxxxx will not intentionally take any action that it reasonably believes
would cause the Offering to violate the provisions of the 1933 Act, the 1934
Act, the respective rules and regulations promulgated there under (the "Rules
and Regulations") or applicable "Blue Sky" laws of any state or jurisdiction.
(vi) May Xxxxx shall use all reasonable efforts to determine (a) whether the
Investor is an Accredited Investor and (b) that any information furnished by the
Investor is true and accurate. May Xxxxx shall have no obligation to insure that
(x) any check, note, draft or other means of payment for the Common Stock will
be honored, paid or enforceable against the Investor in accordance with its
terms, or (y) subject to the performance of May Xxxxx'x obligations and the
accuracy of May Xxxxx'x representations and warranties hereunder, (1) the
Offering is exempt from the registration requirements of the 1933 Act or any
applicable state "Blue Sky" law or (2) the Investor is an Accredited Investor.
(vii) May Xxxxx is a member of the National Association of Securities Dealers,
Inc., and is a broker-dealer registered as such under the 1934 Act and under the
securities laws of the states in which the Securities will be offered or sold by
May Xxxxx, unless an exemption for such state registration is available to May
Xxxxx. May Xxxxx is in compliance with all material rules and regulations
applicable to May Xxxxx generally and applicable to May Xxxxx'x participation in
the Offering.
4. Representations and Warranties of the Company.
A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of each of this Agreement, the
Credit Agreement, the Escrow Agreement, and the Investor's Registration Rights
Agreement has been or will be duly and validly authorized by the Company and is,
or with respect to this Agreement, the Credit Agreement, the Escrow Agreement,
and the Investor's Registration Rights Agreement will be, a valid and binding
agreement of the Company, enforceable in accordance with its respective terms,
except to the extent that (a) the enforceability hereof or thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles of equity
or (c) the indemnification provisions hereof or thereof may be held to be
violative of public policy. The Securities to be issued pursuant to the
transactions contemplated by this Agreement, the Credit Agreement have been duly
authorized and, when issued and paid for in accordance with (x) this Agreement,
the Credit Agreement and the certificates/instruments representing such
Securities, (y) will be valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except to the extent that
(1) the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect and
affecting the rights of creditors generally, and (2) the enforceability thereof
is subject to general principles of equity. All corporate action required to be
taken for the authorization, issuance and sale of the Securities has been duly
and validly taken by the Company.
(ii) The Company has a duly authorized, issued and outstanding capitalization as
set forth in the Credit Agreement. The Company is not a party to or bound by any
instrument, agreement or other arrangement providing for it to issue any capital
stock, rights, warrants, options or other securities, except for this Agreement
and the agreements described herein and as described in the Credit Agreement.
All issued and outstanding securities of the Company, have been duly authorized
and validly issued and are fully paid and non-assessable; the holders thereof
have no rights of rescission or preemptive rights with respect thereto and are
not subject to personal liability solely by reason of being security holders;
and none of such securities was issued in violation of the preemptive rights of
any holders of any security of the Company. The Company has 160,000,000 shares
of authorized Common Stock, approximately 116,000,000 of which will be issued
and outstanding as of the date hereof.
(iii) The Common Stock to be issued in accordance with Credit Agreement has been
duly authorized and when issued and paid for in accordance with the this
Agreement, the Credit Agreement, and the certificates/instruments representing
such Common Stock, will be validly issued, fully-paid and non-assessable; the
holders thereof will not be subject to personal liability solely by reason of
being such holders; such securities are not and will not be subject to the
preemptive rights of any holder of any security of the Company.
(iv) The Company has good and marketable title to, or valid and enforceable
leasehold estates in, all items of real and personal property necessary to
conduct its business (including, without limitation any real or personal
property stated in the Offering Materials to be owned or leased by the Company),
free and clear of all liens, encumbrances, claims, security interests and
defects of any material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.
(v) There is no litigation or governmental proceeding pending or, to the best of
the Company's knowledge, threatened against, or involving the properties or
business of the Company, except as set forth in the Offering Materials.
(vi) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada. Except as
set forth in the Offering Materials, the Company does not own or control,
directly or indirectly, an interest in any other corporation, partnership,
trust, joint venture or other business entity. The Company is duly qualified or
licensed and in good standing as a foreign corporation in each jurisdiction in
which the character of its operations requires such qualification or licensing
and where failure to so qualify would have a material adverse effect on the
Company. The Company has all requisite corporate power and authority, and all
material and necessary authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and bodies
(domestic and foreign) to conduct its businesses (and proposed business) as
described in the Offering Materials. Any disclosures in the Offering Materials
concerning the effects of foreign, federal, state and local regulation on the
Company's businesses as currently conducted and as contemplated are correct in
all material respects and do not omit to state a material fact. The Company has
all corporate power and authority to enter into this Agreement, the Credit
Agreement, the Registration Rights Agreement, the Escrow Agreement, to carry out
the provisions and conditions hereof and thereof, and all consents,
authorizations, approvals and orders required in connection herewith and
therewith have been obtained. No consent, authorization or order of, and no
filing with, any court, government agency or other body is required by the
Company for the issuance of the Securities or execution and delivery of the
Credit Agreement, Registration Rights Agreement, the Escrow Agreement, except
for applicable federal and state securities laws. The Company, since its
inception, has not incurred any liability arising under or as a result of the
application of any of the provisions of the 1933 Act, the 1934 Act or the Rules
and Regulations.
(vii) There has been no material adverse change in the condition or prospects of
the Company, financial or otherwise, from the latest dates as of which such
condition or prospects, respectively, are set forth in the Offering Materials,
and the outstanding debt, the property and the business of the Company conform
in all material respects to the descriptions thereof contained in the Offering
Materials.
(viii) Except as set forth in the Offering Materials, the Company is not in
breach of, or in default under, any term or provision of any material indenture,
mortgage, deed of trust, lease, note, loan or credit agreement or any other
material agreement or instrument evidencing an obligation for borrowed money, or
any other material agreement or instrument to which it is a party or by which it
or any of its properties may be bound or affected. The Company is not in
violation of any provision of its charter or by-laws or in violation of any
franchise, license, permit, judgment, decree or order, or in violation of any
material statute, rule or regulation. Neither the execution and delivery of this
Agreement, the Credit Agreement, the Registration Rights Agreement, the Escrow
Agreement, nor the issuance and sale or delivery of the Securities, nor the
consummation of any of the transactions contemplated herein or in the Credit
Agreement, the Registration Rights Agreement, the Escrow Agreement, nor the
compliance by the Company with the terms and provisions hereof or thereof, has
conflicted with or will conflict with, or has resulted in or will result in a
breach of, any of the terms and provisions of, or has constituted or will
constitute a default under, or has resulted in or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or pursuant to the terms of any indenture, mortgage, deed of trust,
note, loan or credit agreement or any other agreement or instrument evidencing
an obligation for borrowed money, or any other agreement or instrument to which
the Company may be bound or to which any of the property or assets of the
Company is subject except (a) where such default, lien, charge or encumbrance
would not have a material adverse effect on the Company and (b) as described in
the Offering Materials; nor will such action result in any violation of the
provisions of the charter or the by-laws of the Company or, assuming the due
performance by May Xxxxx of its obligations hereunder, any material statute or
any material order, rule or regulation applicable to the Company of any court or
of any foreign, federal, state or other regulatory authority or other government
body having jurisdiction over the Company.
(ix) Subsequent to the dates as of which information is given in the Offering
Materials, and except as may otherwise be indicated or contemplated herein or
therein, the Company has not (a) issued any securities or incurred any liability
or obligation, direct or contingent, for borrowed money, or (b) entered into any
transaction other than in the ordinary course of business, or (c) declared or
paid any dividend or made any other distribution on or in respect of its capital
stock. Except as described in the Offering Materials, the Company has no
outstanding obligations to any officer or director of the Company.
(x) There are no claims for services in the nature of a finder's or origination
fee with respect to the sale of the Common Stock or any other arrangements,
agreements or understandings that may affect May Xxxxx'x compensation, as
determined by the National Association of Securities Dealers, Inc.
(xi) The Company owns or possesses, free and clear of all liens or encumbrances
and rights thereto or therein by third parties, the requisite licenses or other
rights to use all trademarks, service marks, copyrights, service names, trade
names, patents, patent applications and licenses necessary to conduct its
business (including, without limitation, any such licenses or rights described
in the Offering Materials as being owned or possessed by the Company) and,
except as set forth in the Offering Materials, there is no claim or action by
any person pertaining to, or proceeding, pending or threatened, which challenges
the exclusive rights of the Company with respect to any trademarks, service
marks, copyrights, service names, trade names, patents, patent applications and
licenses used in the conduct of the Company's businesses (including, without
limitation, any such licenses or rights described in the Offering Materials as
being owned or possessed by the Company) except any claim or action that would
not have a material adverse effect on the Company; the Company's current
products, services or processes do not infringe or will not infringe on the
patents currently held by any third party.
(xii) Except as described in the Offering Materials, the Company is not under
any obligation to pay royalties or fees of any kind whatsoever to any third
party with respect to any trademarks, service marks, copyrights, service names,
trade names, patents, patent applications, licenses or technology it has
developed, uses, employs or intends to use or employ, other than to their
respective licensors.
(xiii) Subject to the performance by May Xxxxx of its obligations hereunder, the
Credit Agreement and the offer and sale of the Securities comply, and will
continue to comply, up to the Commitment Period (as defined in the Credit
Agreement) in all material respects with the requirements of Rule 506 of
Regulation D promulgated by the SEC pursuant to the 1933 Act and any other
applicable federal and state laws, rules, regulations and executive orders.
Neither the Offering Materials nor any amendment or supplement thereto nor any
documents prepared by the Company in connection with the Offering will contain
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. All
statements of material facts in the Offering Materials are true and correct as
of the date of the Offering Materials and will be true and correct on the date
of the Closing.
(xiv) All material taxes which are due and payable from the Company have been
paid in full or adequate provision has been made for such taxes on the books of
the Company except for those taxes disputed in good faith the Company does not
have any tax deficiency or claim outstanding assessed or proposed against it.
(xv) None of the Company nor any of its officers, directors, employees or
agents, nor any other person acting on behalf of the Company, has, directly or
indirectly, given or agreed to give any money, gift or similar benefit (other
than legal price concessions to customers in the ordinary course of business) to
any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who is or may be in a position to help or hinder the
business of the Company (or assist it in connection with any actual or proposed
transaction) which (A) might subject the Company to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, or (B) if not given in
the past, might have had a materially adverse effect on the assets, business or
operations of the Company as reflected in any of the financial statements
contained in the Offering Materials, or (C) if not continued in the future,
might adversely affect the assets, business, operations or prospects of the
Company in the future.
5. Certain Covenants and Agreements of the Company.
The Company covenants and agrees at its expense and without any expense to May
Xxxxx as follows:
A. To advise May Xxxxx of any material adverse change in the Company's financial
condition, prospects or business or of any development materially affecting the
Company or rendering untrue or misleading any material statement in the Offering
Materials occurring at any time prior to any Advance Date as soon as the Company
is either informed or becomes aware thereof.
B. To use its best efforts to cause the Common Stock issuable in connection with
the Credit Agreement to be qualified or registered for sale on terms consistent
with those stated in the Investor's Registration Rights Agreement, and under the
securities laws of such jurisdictions as May Xxxxx and the Investor shall
reasonably request, provided that such states and jurisdictions do not require
the Company to qualify as a foreign corporation. Qualification, registration and
exemption charges and fees shall be at the sole cost and expense of the Company.
C. Upon written request, to provide and continue to provide the to each holder
of Securities, copies of all quarterly financial statements and audited annual
financial statements prepared by or on behalf of the Company, other reports
prepared by or on behalf of the Company for public disclosure and all documents
delivered to the Company's stockholders.
D. To deliver, during the Commitment Period, to May Xxxxx, upon May Xxxxx'x
request, in the manner provided in Section 10(B) of this Agreement, within forty
five (45) days after the end of each of the first three quarters of each fiscal
year of the Company, commencing with the first quarter ending after the
Commitment Period, a statement of its income for each such quarterly period, and
its balance sheet and a statement of changes in stockholders' equity as of the
end of such quarterly period, all in reasonable detail, certified by its
principal financial or accounting officer; (ii) within ninety (90) days after
the close of each fiscal year, its balance sheet as of the close of such fiscal
year, together with a statement of income, a statement of changes in
stockholders' equity and a statement of cash flow for such fiscal year, such
balance sheet, statement of income, statement of changes in stockholders' equity
and statement of cash flow to be in reasonable detail and accompanied by a copy
of the certificate or report thereon of independent auditors if audited
financial statements are prepared; and (iii) a copy of all documents, reports
and information furnished to its stockholders at the time that such documents,
reports and information are furnished to its stockholders.
E. To comply with the terms of the Credit Agreement, the Registration Rights
Agreement, and the Escrow Agreement.
F. To issue to May Xxxxx, or May Xxxxx'x designee, upon the execution of the
Credit Agreement, warrants to purchase 5,000,000 shares of Common Stock in the
form substantially as annexed hereto, and 400,000 restricted Shares of the
Company's Common Stock.
G. To ensure that any transactions between or among the Company, or any of its
officers, directors and affiliates be on terms and conditions that are no less
favorable to the Company, than the terms and conditions that would be available
in an "arm's length" transaction with an independent third party.
6. Indemnification.
A. The Company hereby agrees that it will indemnify and hold May Xxxxx and each
officer, director, shareholder, employee or representative of May Xxxxx, and
each person controlling, controlled by or under common control with May Xxxxx
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
or the SEC's rules and regulations promulgated there under (the "Rules and
Regulations"), harmless from and against any and all loss, claim, damage,
liability, cost or expense whatsoever (including, but not limited to, any and
all reasonable legal fees and other expenses and disbursements incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation, commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action, suit or proceeding, including any inquiry, investigation or
pretrial proceeding such as a deposition) to which May Xxxxx or such indemnified
person of May Xxxxx may become subject under the 1933 Act, the 1934 Act, the
Rules and Regulations, or any other federal or state law or regulation, common
law or otherwise, arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in (a) Section 4 of this
Agreement, (b) the Offering Materials (except those written statements relating
to May Xxxxx given by an indemnified person for inclusion therein), (c) any
application or other document or written communication executed by the Company
or based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Common Stock under the securities laws
thereof, or any state securities commission or agency; (ii) the omission or
alleged omission from documents described in clauses (a), (b) or (c) above of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (iii) the breach of any representation, warranty,
covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an indemnified person, at any time or from time to
time, it will promptly reimburse such indemnified person for any loss, claim,
damage, liability, cost or expense actually and reasonably paid by the
indemnified person as to which the Company has indemnified such person pursuant
hereto. Notwithstanding the foregoing provisions of this Paragraph 6(A), any
such payment or reimbursement by the Company of fees, expenses or disbursements
incurred by an indemnified person in any proceeding in which a final judgment by
a court of competent jurisdiction (after all appeals or the expiration of time
to appeal) is entered against May Xxxxx or such indemnified person as a direct
result of May Xxxxx or such person's gross negligence or willful misfeasance
will be promptly repaid to the Company.
B. May Xxxxx hereby agrees that it will indemnify and hold the Company and each
officer, director, shareholder, employee or representative of the Company, and
each person controlling, controlled by or under common control with the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
or the Rules and Regulations, harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not limited to,
any and all reasonable legal fees and other expenses and disbursements incurred
in connection with investigating, preparing to defend or defending any action,
suit or proceeding, including any inquiry or investigation, commenced or
threatened, or any claim whatsoever or in appearing or preparing for appearance
as a witness in any action, suit or proceeding, including any inquiry,
investigation or pretrial proceeding such as a deposition) to which the Company
or such indemnified person of the Company may become subject under the 1933 Act,
the 1934 Act, the Rules and Regulations, or any other federal or state law or
regulation, common law or otherwise, arising out of or based upon (i) the
conduct of May Xxxxx or its officers, employees or representatives in its acting
as Placement Agent for the Offering or (ii) the breach of any representation,
warranty, covenant or agreement made by May Xxxxx in this Agreement (iii) any
false or misleading information provided to the Company by one of the May Xxxxx
indemnified persons.
C. Promptly after receipt by an indemnified party of notice of commencement of
any action covered by Section 6(A) or 6(B), the party to be indemnified shall,
within five (5) business days, notify the indemnifying party of the commencement
thereof; the omission by one indemnified party to so notify the indemnifying
party shall not relieve the indemnifying party of its obligation to indemnify
any other indemnified party that has given such notice and shall not relieve the
indemnifying party of any liability outside of this indemnification if not
materially prejudiced thereby. In the event that any action is brought against
the indemnified party, the indemnifying party will be entitled to participate
therein and, to the extent it may desire, to assume and control the defense
thereof with counsel chosen by it which is reasonably acceptable to the
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under such Section 6(A) or 6(B) for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, but the indemnified party may, at its own
expense, participate in such defense by counsel chosen by it, without, however,
impairing the indemnifying party's control of the defense. Subject to the
proviso of this sentence and notwithstanding any other statement to the contrary
contained herein, the indemnified party or parties shall have the right to
choose its or their own counsel and control the defense of any action, all at
the expense of the indemnifying party if, (i) the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such action at the expense of the indemnifying party, or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses of one additional counsel shall be borne by
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstance, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties. No settlement of any action or proceeding against an indemnified party
shall be made without the consent of the indemnifying party.
D. In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in Section 6(A) or 6(B) is due in
accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company and May Xxxxx shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that May
Xxxxx shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the gross
proceeds paid to May Xxxxx and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(D), any person controlling, controlled by or under
common control with May Xxxxx, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights to
contribution as May Xxxxx and each person controlling, controlled by or under
common control with the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and each officer of the Company and each director
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against the other party under this
Section 6(D), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any obligation they may have hereunder or
otherwise if the party from whom contribution may be sought is not materially
prejudiced thereby. The indemnity and contribution agreements contained in this
Section 6 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified person or any termination
of this Agreement.
7. Payment of Expenses.
The Company hereby agrees to bear all of the expenses in connection with the
Offering, including, but not limited to the following: filing fees, printing and
duplicating costs, advertisements, postage and mailing expenses with respect to
the transmission of Offering Materials, registrar and transfer agent fees,
Escrow Agent fees and expenses, fees of the Company's counsel and accountants,
issue and transfer taxes, if any.
8. Conditions of Each Closing
Each Closing shall be held at the offices of May Xxxxx or its counsel. The
obligations of May Xxxxx hereunder shall be subject to the continuing accuracy
of the representations and warranties of the Company herein as of the date
hereof and as of each Advance Date with respect to the Company as if it had been
made on and as of such Advance Date; the accuracy on and as of each Advance Date
of the statements of the officers of the Company made pursuant to the provisions
hereof; and the performance by the Company on and as of each Closing of its
covenants and obligations hereunder and to the following further conditions:
A. At each Closing, May Xxxxx shall receive the opinion of counsel, Xx. Xxxxx,
dated as of the date of the Closing, which opinion shall be in form and
substance reasonably satisfactory to counsel for May Xxxxx.
B. At or prior to each Closing, counsel for May Xxxxx shall have been furnished
such documents, certificates and opinions as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Agreement and the Offering Materials, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained.
C. At and prior to each Closing, (i) there shall have been no material adverse
change nor development involving a prospective change in the condition or
prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Offering
Materials; (ii) there shall have been no transaction, not in the ordinary course
of business, entered into by the Company which has not been disclosed in the
Offering Materials or to May Xxxxx in writing; (iii) except as set forth in the
Offering Materials, the Company shall not be in default under any provision of
any instrument relating to any outstanding indebtedness for which a waiver or
extension has not been otherwise received; (iv) except as set forth in the
Offering Materials, the Company shall not have issued any securities (other than
those to be issued as provided in the Offering Materials) or declared or paid
any dividend or made any distribution of its capital stock of any class and
there shall not have been any change in the indebtedness (long or short term) or
liabilities or obligations of the Company (contingent or otherwise); (v) no
material amount of the assets of the Company shall have been pledged or
mortgaged, except as indicated in the Offering Materials; and (v) no action,
suit or proceeding, at law or in equity, against the Company or affecting any of
its properties or businesses shall be pending or threatened before or by any
court or federal or state commission, board or other administrative agency,
domestic or foreign, wherein an unfavorable decision, ruling or finding could
materially adversely affect the businesses, prospects or financial condition or
income of the Company, except as set forth in the Offering Materials.
D. At each Closing, May Xxxxx shall have received a certificate of the Company
signed by an executive officer and chief financial officer, dated as of the
applicable Advance Date, to the effect that the conditions set forth in
subparagraph (C) above have been satisfied and that, as of the applicable
Advance Date, the representations and warranties of the Company set forth herein
are true and correct.
E. At the initial Closing, the Company shall have duly executed and delivered to
May Xxxxx, or its designees, a Warrant to purchase the Company's common stock,
in the names and denominations specified by May Xxxxx.
9. Termination.
This Agreement shall be co-terminus with, and terminate upon the same terms and
conditions as those set forth in, the Credit Agreement. The rights of the
Investor and the obligations of the Company under the Registration Rights
Agreement, and the rights of May Xxxxx and the obligations of the Company under
the Placement Agent's Warrants and the Placement Agent's Registration Rights
Agreement shall survive the termination of this Agreement unabridged.
10. Miscellaneous.
A. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all which shall be deemed to be one and
the same instrument.
B. Any notice required or permitted to be given hereunder shall be given in
writing and shall be deemed effective when deposited in the United States mail,
postage prepaid, or when received if personally delivered or faxed ( upon
confirmation of receipt received by the sending party), addressed as follows:
To May Xxxxx:
May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx
Xxxxx #0
Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
To the Company:
Forefront, Inc.
Attention Xxxxx Xxxxxxx
0000 X. Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
or to such other address of which written notice is given to the others.
C. This Agreement shall be governed by and construed in all respects under the
laws of the State of New York, without reference to its conflict of laws rules
or principles. Any suit, action, proceeding or litigation arising out of or
relating to this Agreement shall be brought and prosecuted in such federal or
state court or courts located within the State of New York as provided by law.
The parties hereby irrevocably and unconditionally consent to the jurisdiction
of each such court or courts located within the State of New York and to service
of process by registered or certified mail, return receipt requested, or by any
other manner provided by applicable law, and hereby irrevocably and
unconditionally waive any right to claim that any suit, action, proceeding or
litigation so commenced has been commenced in an inconvenient forum.
D. This Agreement and the other agreements referenced herein contain the entire
understanding between the parties hereto and may not be modified or amended
except by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
FOREFRONT INC.
By:_______________________________
Name: Xxxxx Xxxxxxx
Title: President
MAY XXXXX GROUP, INC.
By:________________________
Name: Xxxxxxx Xxxxxx
Title:ManagingDirector
SCHEDULE A
WARRANT HOLDER AMOUNT
The May Xxxxx Group, Inc. all
EXHIBIT 21
LIST OF SUBSIDIARIES
A. Forefront Technologies, Inc., a Florida corporation.
