PLACEMENT AGENCY AGREEMENT
THIS AGREEMENT ("AGREEMENT"), made as of the 14th day of August,
2000, by and between 0-Xxxxxxxx.xxx, Inc., a Colorado corporation ("COMPANY"),
and X.X. Xxxxx Securities, Inc., a Georgia corporation (the "AGENT").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell its Series A
Preferred Stock (the "SECURITIES") resulting in gross proceeds to the Company
of up to $3,000,000 (the "OFFERING") not involving a public offering and
without registration under the Securities Act of 1933, as amended (the "Act"),
pursuant to exemptions from the registration requirements of the Act under
Regulation D promulgated under the Act ("REGULATION D"), as described below;
and
WHEREAS, the Agent has offered to assist the Company in placing the
Securities on a "best efforts basis" with respect to the Securities and on a
"best efforts" basis with respect to sales of Securities thereafter up to the
Maximum Securities (as defined below), and the Company desires to secure the
services of the Agent on the terms and conditions hereinafter set forth;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises, conditions and covenants herein contained, the parties hereto do
hereby agree as follows:
1. ENGAGEMENT OF AGENT. The Company hereby appoints the Agent
as its placement agent for the Offering, to sell up to of $3,000,000 of Series
A Preferred Stock, no par value, (the "MAXIMUM SHARES") on a "best efforts
basis," resulting in gross proceeds to the Company of up to $3,000,000 (the
"MAXIMUM AMOUNT"). The Agent, on the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein
set forth, accepts such appointment and agrees to use its best efforts to find
purchasers for the Securities. This appointment shall be irrevocable for the
period commencing as of the date hereof and ending as further described in
Section 5 herein, which period maybe extended by the consent of the Company
and the Agent (the "OFFERING PERIOD").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In order to
induce the Agent to enter into this Agreement, the Company hereby represents
and warrants to and agrees with the Agent as follows:
2.1 OFFERING DOCUMENTS. The Company and the Placement Agent have
prepared a Securities Purchase Agreement, certain exhibits thereto,
Registration Rights Agreement, and the Securities, which documents have been
or will be sent to proposed investors. In addition, proposed investors have
received or will receive prior to closing copies of the Company's Report on
10-QSB for the period ended March 31, 2000, and possibly other documents that
are to be filed with the SEC ("SEC DOCUMENTS"). The SEC Documents were
prepared in conformity with the requirements (to the extent applicable) of the
Securities and Exchange Act of 1934, as amended (the "ACT") and the rules and
regulations ("RULES AND REGULATIONS") of the Commission promulgated
thereunder. As used in this Agreement, the term "Offering Documents" refers to
and means the SEC Documents, the Securities Purchase Agreement and all
amendments, exhibits and supplements thereto, together with any other
documents which are provided to the Agent by, or approved for Agent's use by,
the Company for the purpose of this Offering.
2.2 PROVISION OF OFFERING DOCUMENTS. The Company shall deliver
to the Agent, without charge,
as many copies of the Offering Documents as the Agent may reasonably require
for the purposes contemplated by this Agreement. The Company authorizes the
Agent, in connection with the Offering of the Securities, to use the Offering
Documents as from time to time amended or supplemented in connection with the
offering and sale of the Securities and in accordance with the applicable
provisions of the Act and Regulation D. The Company consents to the Agent's
distribution of the Offering Documents to prospective subscribers as a
disclosure document about the Company, its business, prospects, financial
condition and other matters.
2.3 ACCURACY OF OFFERING DOCUMENTS. The Offering Documents, at
the time of delivery to subscribers for the Securities, conformed in all
material respects with the requirements, to the extent applicable, of the Act
and the applicable Rules and Regulations and did not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. On the Closing Date
(as hereinafter defined), the Offering Documents will contain all statements
which are required to be stated therein in accordance with the Act and the
Rules and Regulations for the purposes of the proposed Offering, and all
statements of material fact contained in the Offering memorandum will be true
and correct, and the Offering Documents will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; PROVIDED, however,
that the Company does not make any representations or warranties as to the
information contained in or omitted from the Offering Documents in reliance
upon written information furnished on behalf of the Agent specifically for use
therein.
2.4 DUTY TO AMEND. If during such period of time as in the
opinion of the Agent or its counsel any Offering Documents relating to this
offering are required to be delivered under the Act, any event occurs or any
event known to the Company relating to or affecting the Company shall occur as
a result of which the Offering Documents as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any time
after the date hereof to amend or supplement the Offering Documents to comply
with the Act or the applicable Rules and Regulations, the Company shall
forthwith notify the Agent thereof and shall prepare such further amendment or
supplement to the Offering Documents as may be required and shall furnish and
deliver to the Agent and to others, whose names and addresses are designated
by the Agent, all at the cost of the Company, a reasonable number of copies of
the amendment or supplement or of the amended or supplemented Offering
Documents which, as so amended or supplemented, will not contain an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the Offering Documents not misleading in the light of the
circumstances when it is delivered to a purchaser or prospective purchaser,
and which will comply in all respects with the requirements (to the extent
applicable) of the Act and the applicable Rules and Regulations.
2.5 CORPORATION CONDITION. The Company's condition is as
described in its Offering Documents, except for changes in the ordinary course
of business and normal year-end adjustments that are not in the aggregate
materially adverse to the Company. The Offering Documents, taken as a whole,
present fairly the business and financial position of the Company as of the
Closing Date.
2.6 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in or
contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to the Closing Date,
there shall not have been any material adverse change in the condition,
financial or otherwise, or in the results of operations of the Company or in
its business taken as a whole.
2.7 NO DEFAULTS. Except as disclosed in the Offering Documents
or in writing to the Agent, the Company is not in default in any material
respect in the performance of any obligation, agreement or condition contained
in any material debenture, note or other evidence of indebtedness or any
material indenture or loan agreement of the Company. The execution and
delivery of this Agreement, and the consummation of the
transactions herein contemplated, and compliance with the terms of this
Agreement will not conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, the Articles of
Incorporation or Bylaws of the Company (in any respect that is material to the
Company), any material note, indenture, mortgage, deed of trust, or other
agreement or instrument to which the Company is a party or by which the
Company or any property of the Company is bound, or to the Company's
knowledge, any existing law, order, rule, regulation, writ, injunction or
decree of any government, governmental instrumentality, agency or body,
arbitration tribunal or court, domestic or foreign, having jurisdiction over
the Company or any property of the Company. The consent, approval,
authorization or order of any court or governmental instrumentality, agency or
body is not required for the consummation of the transactions herein
contemplated except such as may be required under the Act or under the Blue
Sky or securities laws of any state or jurisdiction.
2.8 INCORPORATION AND STANDING. The Company is, and at the
Closing Date will be, duly formed and validly existing in good standing as a
corporation under the laws of the State of Nevada and with full power and
authority (corporate and other) to own its properties and conduct its
business, present and proposed, as described in the Offering Documents; the
Company, has full power and authority to enter into this Agreement; and the
Company is duly qualified and in good standing as a foreign entity in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on the Company or its properties.
2.9 LEGALITY OF OUTSTANDING SECURITIES. Prior to the Closing
Date, the outstanding securities of the Company have been duly and validly
authorized and issued, fully paid and non-assessable and conform in all
material respects to the statements with regard thereto contained in the
Offering Documents.
2.10 LEGALITY OF SECURITIES. The Securities, when sold and
delivered, will constitute legal, valid and binding obligations of the
Company, enforceable in accordance with the terms thereof, and shall be duly
and validly issued and outstanding, fully paid and nonassessable. The
Securities to be delivered at the Closing shall be duly and validly issued and
outstanding, fully paid and non-assessable.
2.11 LITIGATION. Except as set forth in the Offering Documents,
there is now, and at the Closing Date there will be, no action, suit or
proceeding before any court or governmental agency, authority or body pending
or, to the knowledge of the Company, threatened, which might result in
judgements against the Company not adequately covered by insurance or which
collectively might result in any material adverse change in the condition
(financial or otherwise) or business of the Company or which would materially
adversely affect the properties or assets of the Company.
2.12 FINDERS. The Company does not know of any outstanding claims
for services in the nature of a finder's fee or origination- fees with respect
to the sale of the Securities hereunder for which the Agent may be
responsible, and the Company will indemnify the Agent from any liability for
such fees by any party who has a claim for such compensation from the Company
and for which person the Agent is not legally responsible.
2.13 TAX RETURNS. The Company has filed all federal and state tax
returns which are required to be filed, and has paid all taxes shown on such
returns and on all assessments received by it to the extent such taxes have
become due. All taxes with respect to which the Company is obligated have been
paid or adequate accruals have been set up to cover any such unpaid taxes.
2.14 AUTHORITY. The execution and delivery by the Company of this
Agreement have been duly authorized by all necessary action, and this
Agreement is the valid, binding and legally enforceable obligation of the
Company subject to standard qualifications as to the availability of equitable
remedies, the effect of bankruptcy and other laws relating to the protection
of debtors and public policy opinions promulgated by the Commission with
respect to indemnification against liabilities under the Act.
2.15 ACTIONS BY THE COMPANY. The Company will not take any action
which will impair the effectiveness of the transactions contemplated by this
Agreement.
3. ISSUE, SALE AND DELIVERY OF THE SECURITIES.
3.1 DELIVERIES OF SECURITIES. Certificates in such form that,
subject to applicable transfer restrictions as described in the Securities
Purchase Agreement, they can be negotiated by the purchasers thereof (issued
in such denominations and in such names as the Agent may direct the Company to
issue) for the Securities, and warrants representing the Agent's warrant
compensation described in Section 3.6 below ("WARRANTS"), shall be delivered
by the Company to 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 and at each Subsequent Closing (as defined hereinafter).
3.2 ESCROW OF FUNDS. Pursuant to the Escrow Agreement, a copy of
which is attached hereto as Exhibit "A" (the "ESCROW AGREEMENT"), executed by
the Company, the Agent and the escrow agent (the "ESCROW AGENT"), the
subscribers shall place all funds for purchase of Securities for each Closing
in an escrow account set up by the Company. The Company shall have the right
to approve or object the subscriptions of each subscriber, as described in the
Subscription Agreement. At such time as subscribers subscribing for the Shares
delivered to the Agent their signed subscription documents, those subscribers
have been approved by the Company and all other Closing conditions have been
met, Escrow Agent shall release the subscription funds to the Company and
counsel to the Agent shall release the certificates representing the
Securities to the subscribers (the "CLOSING"). In the event that the Initial
Closing shall be for an amount of Securities less than the Maximum Amount, the
Offering may be continued, and additional Closings may be held (each a
"SUBSEQUENT CLOSING") throughout the Offering Period.
3.3 CLOSING DATE. The Initial Closing and any Subsequent Closing
shall take place at the offices of Xxxx Xxxx Xxxxx & Xxxxx LLP, 000 Xxxxxxxxx
Xxxx Xxxxxx, Xxxxx 000, 0000 Xxxxxxxxx Xxxx, XX, Xxxxxxx, Xxxxxxx 00000 at
such time and date ("CLOSING DATE") as will be fixed either orally or in
writing by notice to be given by the Agent to the Company after consultation
with the Company, such Closing Date to be not less than one (1) full business
day after the date on which such notice shall have been given. The Closing
Date may be changed by mutual agreement of the Agent and the Company.
3.4 AGENT'S COMPENSATION. The Company shall pay the Agent:
(a) A commission of ten percent (10%) of the gross
subscription proceeds of the Initial Offering and any subsequent
Offerings (the "GROSS PROCEEDS"); and
(b) In addition to the fees and reimbursement of costs
set forth in Sections 3.4 and 3.5 of this Agreement, the Company shall
issue to the Agent warrants to purchase shares of the Company's common
stock, in an amount equal to 200,000 for every $1,000,000 raised. The
Warrants shall have cashless exercise provisions. The term of the
Warrant shall be five years. The shares of common stock issuable upon
exercise of the Warrants shall have registration rights as described in
the Registration Rights Agreement, set forth as an exhibit to the
Subscription Agreement; it being understood that, if the SEC requires
removal of the Warrants from any registration statement in which the
Warrants have a right by contract to be included, the removal of the
Warrants shall not constitute a breach of contract by the Company, and
the Company will use best efforts to include the Warrants (or
underlying shares) in a registration statement in a manner acceptable
to the SEC. The Warrants shall be delivered by the Company to the Agent
simultaneous with the respective Closing.
3.5 PAYMENT OF FEES. The Escrow Agent shall be instructed to pay
all reasonable fees (including, but not limited to the legal fees of Agent's
counsel, Xxxx Xxxx Xxxxx & Xxxxx LLP) and cost reimbursements and Warrants
pursuant to section 3.4 of this Agreement, directly to the Agent from the
proceeds of the Closing and all Subsequent Closing, simultaneous with the
transfer of proceeds to the Company.
4. OFFERING OF THE SECURITIES ON BEHALF OF THE COMPANY.
4.1 In offering the Securities for sale, the Agent shall offer
them solely as an agent for the Company, and such offer shall be made upon the
terms and subject to the conditions set forth in the Offering Documents. The
Agent shall commence making such offer as an agent for the Company as soon as
possible following delivery of the Offering Documents.
4.2 The Agent will not make offers to sell the Securities to, or
solicit offers to subscribe for any Securities from, persons or entities that
are not "accredited investors" as defined in Regulation D.
5. 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.
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 Securities Purchase
Agreement, of which amendment or supplement the Agent shall not previously
have been advised and the Agent and its counsel furnished with a copy within a
reasonable time period prior to the proposed adoption thereof, or to which the
Agent shall have reasonable objected in writing on the ground that it is not
in compliance with the Act or the Rules and Regulations (if applicable).
6.2 The Company will pay, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective or is terminated, all costs and expenses incident to the
performance of its obligations under this Agreement, including all expenses
incident to the authorization of the Securities and their issue and delivery
to the Agent, any original issue taxes in connection therewith, all transfer
taxes, if any, incident to the initial sale of the Securities, the fees and
expenses of the Company's counsel (except as provided below) and accountants,
the cost of reproduction and furnishing to the Agent copies of the Offering
Documents as herein provided.
6.3 As a condition precedent to the Initial Closing, the Company
will deliver to the Agent a true and correct copy of the Articles of
Incorporation of the Company, and all amendments and certificates of
designation of preferences of preferred stock, including without limitation
the Articles of Amendment of preferences regarding the Securities, certified
by the Secretary of State of Colorado.
6.4 Prior to the Closing Date, the Company will cooperate with
the Agent in such investigation as it may make or cause to be made of all of
the properties, business and operations of the Company in connection with the
Offering of the Securities. The Company will make available to it in
connection therewith such information in its possession as the Agent may
reasonably request and will make available to the Agent such persons as the
Agent shall deem reasonably necessary and appropriate in order to verify or
substantiate any such information so supplied.
6.5 The Company shall be responsible for making any and all
filings required by the Blue Sky authorities and filings required by the laws
of the jurisdictions in which the subscribers who are accepted for purchase of
Securities are located, if any. Agent shall assist Company in this respect,
but such filings shall be the responsibility of Company.
6.6 CORPORATION CONDITION. The Company's condition is as
described in its Offering Documents, except for changes in the ordinary course
of business and normal year-end adjustments that are not individually or in
the aggregate materially adverse to the Company. The Offering Documents, taken
as a whole, will present fairly the business and financial position of the
Company as of each Closing Date.
6.7 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in or
contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to each Closing
Date, there shall not have been any material adverse change in the condition,
financial, or otherwise, or in the results of operations of the Company or in
its business taken as a whole.
7. INDEMNIFICATION.
7.1 The Company agrees to indemnify and hold harmless the Agent,
each person who controls the Agent within the meaning of Section 15 of the Act
and the Agent's employees, accountants, attorneys and agents (the "AGENT'S
INDEMNITEES") against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Act or any other statute or at common law for any legal or other expenses
(including the costs of any investigation and preparation) incurred by them in
connection with any litigation, whether or not resulting in any liability, but
only insofar as such losses, claims, damages, liabilities and litigation arise
out of or are based upon any untrue statement of material fact contained in
the Offering Documents or any amendment or supplement thereto or any
application or other document filed in any state or jurisdiction in order to
qualify the Securities under the Blue Sky or securities laws thereof, or the
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, under the circumstances under which
they were made, not misleading, all as of the date of the Offering Documents
or of such amendment as the case may be; PROVIDED, however, that the indemnity
agreement contained in this Section 7.1 shall not apply to amount paid in
settlement of any such litigation, if such settlements are made without the
consent of the Company, nor shall it apply to the Agent's Indemnitees in
respect to any such losses, claims, damages or liabilities arising out of or
based upon any such untrue statement or alleged untrue statement or any such
omission or alleged omission, if such statement or omission was made in
reliance upon information furnished in writing to the Company by the Agent
specifically for use in connection with the preparation of the Offering
Documents or any such amendment or supplement thereto or any application or
other document filed in any state or jurisdiction in order to qualify the
Securities under the Blue Sky or securities law thereof. This indemnity
agreement is in addition to any other liability which the Company may
otherwise have to the Agent's Indemnitees. The Agent's Indemnitees agree,
within ten (10) days after the receipt by them of written notice of the
commencement of any action against them in respect to which indemnity may be
sought from the Company under this Section 7.1, to notify the Company in
writing of the commencement of such action; PROVIDED, however, that the
failure of the Agent's Indemnitees to notify the Company of any such action
shall not relieve the Company from any liability which it may have to the
Agent's Indemnitees on account of the indemnity agreement contained in this
Section 7.1, and further shall not relieve the Company from any other
liability which it may have to the Agent's Indemnitees, and if the Agent's
Indemnitees shall notify the Company of the commencement thereof, the Company
shall be entitled to participate in (and, to the extent that the Company shall
wish, to direct) the defense thereof at its own expense, but such defense
shall be conducted by counsel of recognized standing and reasonably
satisfactory to the Agent's Indemnitees, defendant or defendants, in such
litigation. The Company agrees to notify the Agent's Indemnitees promptly of
the commencement of any litigation or proceedings against the Company or any
of the Company's officers or directors of which the Company may be advised in
connection with the issue and sale of any of the Securities and to furnish to
the Agent's Indemnitees, at their request, to provide copies of all pleadings
therein and to permit the Company's Indemnitees to be observers therein and
apprise the Agent's Indemnitees of all developments therein, all at the
Company's expense.
7.2 The Agent agrees, in the same manner and to the same extent
as set forth in Section 7.1 above, to indemnify and hold harmless the Company,
and the Company's and Company's employees, accountants, attorneys and agents
(the "COMPANY'S INDEMNITEES") with respect to (i) any statement in or omission
from the Offering Documents or any amendment or supplement thereto or any
application or other document filed in any state or jurisdiction in order to
qualify the Securities under the Blue Sky or securities laws thereof, or any
information furnished pursuant to Section 3.4 hereof, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by the Agent on its behalf specifically for use in connection with the
preparation thereof or supplement thereto, or (ii) any untrue statement of a
material fact made by the Agent or its agents not based on statements in the
Offering Documents or authorized in writing by the Company, or with respect to
any misleading statement made by the Agent or its agents resulting from the
omission of material facts which misleading statement is not based upon the
Offering Documents, or information furnished in writing by the Company or,
(iii) any breach of any representation, warranty or covenant made by the Agent
in this Agreement. The Agent's liability hereunder shall be limited to the
amount received by it for acting as Agent in connection with the Offerings.
The Agent shall not be liable for amounts paid in settlement of any such
litigation if such settlement was effected without its consent. In case of the
commencement of any action in respect of which indemnity may be sought from
the Agent, the Company's Indemnitees shall have the same obligation to give
notice as set forth in Section 7.1 above, subject to the same loss of
indemnity in the event such notice is not given, and the Agent shall have the
same right to participate in (and, to the extent that it shall wish, to
direct) the defense of such action at its own expense, but such defense shall
be conducted by counsel of recognized standing reasonably satisfactory to the
Company. The Agent agrees to notify the Company's Indemnitees and, at their
request, to provide copies of all pleadings therein and to permit the
Company's Indemnitees to be observers therein and apprise them of all the
developments therein, all at the Agent's expense.
8. EFFECTIVENESS OF AGREEMENT. This Agreement shall become
effective (i) at 9:00 A.M., Atlanta, Georgia time, on the date hereof or (ii)
upon release by the Agent of the Securities for offering after the date
hereof, whichever shall last occur. The Agent agrees to notify the Company
immediately after the Agent shall have taken any action by such release or
otherwise wherein this Agreement shall have become effective. This Agreement
shall, nevertheless, become effective at such time earlier than the time
specified above after the date hereof as the Agent may determine by notice to
the Company.
9. CONDITIONS OF THE AGENT'S OBLIGATIONS. The Agent's
obligations to act as agent of the Company hereunder and to find purchasers
for the Securities shall be subject to the accuracy, as of the Closing Date,
of the representations and warranties on the part of the Company herein
contained, to the fulfillment of or compliance by the Company with all
covenants and conditions hereof, and to the following additional conditions:
9.1 Counsel to the Agent shall not have objected in writing or
shall not have failed to give his consent to the Offering Documents (which
objection or failure to give consent shall not have been done unreasonably).
9.2 The Agent shall not have disclosed to the Company that the
Offering Documents, or any amendment thereof or supplement thereto, contains
an untrue statement of fact, which, in the opinion of counsel to the Agent, is
material, or omits to state a fact, which, in the opinion of such counsel, is
material and is required to be stated therein, or is necessary to make the
statements therein, under the circumstances in which they were made, not
misleading.
9.3 Between the date hereof and the Closing Date, the Company
shall not have sustained any loss on account of fire, explosion, flood,
accident, calamity or any other cause of such character as would materially
adversely affect its business or property considered as an entire entity,
whether or not such loss is covered by insurance.
9.4 Between the date hereof and the Closing Date, there shall be
no litigation instituted or threatened against the Company, and there shall be
no proceeding instituted or threatened against the Company before or by any
federal or state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding would materially adversely affect the business,
franchises, license, permits, operations or financial condition or income of
the Company considered as an entity.
9.5 Except as contemplated herein or as set forth in the
Offering Documents, during the period subsequent to the most recent financial
statements contained in the Offering Documents, if any, and prior to the
Closing Date, the Company (i) shall have conducted its business in the usual
and ordinary manner as the same is being conducted as of the date hereof and
(ii) except in the ordinary course of business, the Company shall not have
incurred any liabilities or obligations (direct or contingent) or disposed of
any assets, or entered into any material transaction or suffered or
experienced any substantially adverse change in its condition, financial or
otherwise. At the Closing Date, the equity account of the Company shall be
substantially the same as reflected in the most recent balance sheet contained
in the Offering Documents without considering the proceeds from the sale of
the Securities other than as may be set forth in the Offering Documents.
9.6 The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this Agreement
shall be reasonably satisfactory in all respects to counsel to the Agent, who
shall have furnished the Agent on the Closing Date with such favorable opinion
with respect to the sufficiency of all corporate proceedings and other legal
matters relating to this Agreement as the Agent may reasonably require, and
the Company shall have furnished such counsel such documents as he may have
requested to enable him to pass upon the matters referred to in this
subparagraph.
9.7 The Company shall have furnished to the Agent the opinion,
dated the Closing Date, addressed to the Agent, from counsel to the Company,
as required by the Subscription Agreement.
9.8 The Company shall have furnished to the Agent a certificate
of the Chief Executive Officer and the Chief Financial Officer of the Company,
dated as of the Closing Date, to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects at and as
of the Closing Date (other than representations and warranties which by
their terms are specifically limited to a date other than the Closing
Date), and the Company has complied with all the agreements and has
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date; and
(ii) the respective signers have each carefully examined
the Offering Documents, and any amendments and supplements thereto,
and, to the best of their knowledge, in the Offering memorandum, and
any amendments and supplements thereto, all statements contained in the
Offering Documents are true and correct, and neither the Offering
Documents, nor any amendment or supplement thereto, includes any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein under the circumstances in which they were made not
misleading, and since the date hereof, there has occurred no event
required to be set forth in an amended or supplemented Offering
Documents, which has not been set forth; except as set forth in the
Offering Documents, since the respective dates as of which or the
periods for which the information is given in the Offering Documents
and prior to the date of such certificate, (a) there has not been any
substantially adverse change, financial and otherwise, in the affairs
of condition in the Company, and (b) the Company has not incurred any
material liabilities, direct or contingent, or entered into any
material transactions, otherwise than in the ordinary course of
business.
10. TERMINATION.
10.1 This Agreement may be terminated by the Agent by notice to
the Company in the event that the Company shall have failed or been unable to
comply with any of the terms, conditions or provisions of this Agreement on
the part of the Company to be performed, complied with or fulfilled within the
respective times, if any, herein provided for, unless compliance therewith or
performance or satisfaction thereof shall have been expressly waived by the
Agent in writing.
10.2 This Agreement may be terminated by the Company by notice to
the Agent in the event that the Agent shall have failed or been unable to
comply with any of the terms, conditions or provisions of this Agreement on
the part of the Agent to be performed, complied with or fulfilled within the
respective times, if any, herein provided for, unless compliance therewith or
performance or satisfaction thereof shall have been expressly waived by the
Company in writing.
10.3 This Agreement may be terminated by the Agent by notice to
the Company at any time, if, in the reasonable, good faith judgment of the
Agent, payment for and delivery of the Securities is rendered impracticable or
inadvisable because: (i) additional material governmental restrictions not in
force and effect on the date hereof shall have been imposed upon trading in
securities generally; (ii) a war or other national calamity shall have
occurred; or (iii) the condition of the market (either generally or with
reference to the sale of the Securities to be offered hereby) or the condition
of any matter affecting the Company or any other circumstance is such that it
would be undesirable, impracticable or inadvisable, in the judgment of the
Agent, to proceed with this Agreement or with the Offering.
10.4 Any termination of this Agreement pursuant to this Section
shall be without liability of any character (including, but not limited to,
loss of anticipated profits or consequential damages) on the part of any party
thereto, except that the Company shall remain obligated to pay the costs and
expenses provided to be paid by it specified in Sections 3, 5, and 6; and the
Company and the Agent shall be obligated to pay, respectively, all losses,
claims, damages or liabilities, joint or several, under Section 7.1 in the
case of the Company and Section 7.2 in the case of the Agent.
11. AGENT'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. The
Agent represents and warrants to and agrees with the Company that:
11.1 Agent is a corporation duly incorporated and existing under
the laws of the state of Georgia. Agent is registered with the Securities
Exchange Commission and the NASD.
11.2 Agent understands and acknowledges that the Securities are
not being registered under the Act, and that the Offering is to be conducted
pursuant to Regulation D. Accordingly, in conducting its activities under this
Agreement, Agent shall offer Securities only to "accredited investors," as
defined in Regulation D.
11.3 All corporate actions by Agent required for the execution,
delivery and performance of this
Agreement have been taken. This Agreement constitutes a valid and binding
agreement of Agent, enforceable in accordance with its terms.
11.4 Agent's representations and warranties under this Section
shall be true and correct as of the Closing, and shall survive the Closing for
a period of six months.
12. NOTICES. Except as otherwise expressly provided in this
Agreement:
12.1 Whenever notice is required by the provisions of this
Agreement to be given to the Company, such notice shall be in writing,
addressed to the Company, at:
If to Company: 0-Xxxxxxxx.xxx, Inc.
0000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
12.2 Whenever notice is required by the provisions of this
Agreement to be given to the Agent, such notice shall be given in writing,
addressed to the Agent, at:
If to the Agent: X.X. Xxxxx Securities, Inc.
Atlanta Financial Center, East Tower
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx
With a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxx Moss Kline & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
12.3 Any notice instructing the Escrow Agent to distribute monies
or Securities held in Escrow must be signed by authorized agents of both the
Company and the Agent in order to be valid.
13. MISCELLANEOUS.
13.1 BENEFIT. This Agreement is made solely for the benefit of
the Agent and the Company, their respective officers and directors and any
controlling person referred to in Section 15 of the Act and their respective
successors and assigns, and no other person may acquire or have any right
under or by virtue of this Agreement, including, without limitation, the
holders of any Securities. The term "successor" or the term "successors and
assigns" as used in this Agreement shall not include any purchasers, as such,
of any of the Securities.
13.2 SURVIVAL. The respective indemnities, agreements,
representations, warranties, covenants and other statements of the Company and
the Agent, or the officers, directors or controlling persons of the Company
and the Agent as set forth in or made pursuant to this Agreement and the
indemnity agreements of the Company and the Agent contained in Section 7
hereof shall survive and remain in full force and effect, regardless of (i)
any investigation made by or on behalf of the Company or the Agent or any such
officer, director or controlling person of the Company or of the Agent; (ii)
delivery of or payment for the Securities; or (iii) the Closing Date, and any
successor of the Company or the Agent or any controlling person, officer or
director thereof, as the case may be, shall be entitled to the benefits hereof.
13.3 GOVERNING LAW. The validity, interpretation, and
construction of this Agreement will be governed by the Laws of the State of
Georgia. The parties further agree that any action between them shall be heard
in Atlanta, Georgia, and expressly consent to the jurisdiction and venue of
the Superior Court of Xxxxxx County, Georgia, and the United States District
Court for the Northern District of Georgia, Atlanta Division for the
adjudication of any civil action asserted pursuant to this Paragraph.
13.4 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which may be deemed an original and all of which
together will constitute one and the same instrument.
13.5 CONFIDENTIAL INFORMATION. All confidential financial or
business information (except publicly available or freely usable material
otherwise obtained from another source) respecting either party will be used
solely by the other party in connection with the within transactions, be
revealed only to employees or contractors of such other party who are
necessary to the conduct of such transactions, and be otherwise held in strict
confidence.
13.6 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, neither
party hereto will issue any public announcement concerning the within
transactions without the approval of the other party.
13.7 FINDERS. The parties acknowledge that no person has acted as
a finder in connection with the transactions contemplated herein and each will
agree to indemnify the other with respect to any other claim for a finder's
fee in connection with the offering.
13.8 FINANCIAL ADVISERS. The parties acknowledge that the Company
has or may retain financial and other advisors in connection with this
transaction (the "Advisors"), and the Company agrees to indemnify and hold the
Placement Agent harmless for any fees and expenses of the Advisors.
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.
IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be executed as of the day and year first above written.
"THE COMPANY"
0-XXXXXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman of the Board, Chief Executive
Officer and President
"THE AGENT"
X.X. XXXXX SECURITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Investment Manager
