EXHIBIT 10
Algiers Resources, Inc.
Balstron Corporation
Daliprint, Inc.
Hartscup Corporation
Mayall Partners, Inc.
PSLRA, Incorporated
Regal Acquisitions, Inc.
Spacial Corporation
Voyer One, Inc.
Voyer Two, Inc.
each a Delaware corporation
Offering of a Maximum of 2,250,000 Shares
of Common Stock, par value $0.001, at $0.25 per Share
PLACEMENT AGENT AGREEMENT
Dated as of December 16, 1998
Tradeway Securities Group, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Algiers Resources, Inc., Balstron Corporation, Daliprint, Inc., Hartscup
Corporation, Mayall Partners, Inc., PSLRA, Incorporated, Regal Acquisitions,
Inc., Spacial Corporation, Voyer One, Inc., Voyer Two, Inc. (each a "Company"
and collectively the "Companies") were each formed as shell corporations in
early 1998 for purposes of merging with a company with an operating business (a
"Merger"), all as more fully described in that certain Confidential Memorandum
dated November 1, 1998 (references to which shall be deemed to include any and
all supplements and amendments thereto and all financial statements and exhibits
that are included therein, referred collectively to herein as the "Memorandum").
Each Company desires to raise $56,250, through the offer and sale of up to
225,000 shares of Common Stock, par value $0.001 (the "Shares") of the Company,
as more fully described in the Memorandum, in a private offering (the
"Offering"). A maximum of 225,000 Shares of each Company (2,250,000 in the
aggregate) may be sold in the Offering ("Maximum Offering"). In addition, the
Companies, at the request of a Placement Agent may agree to allow the Placement
Agents, as defined below, to sell up to 225,000 additional Shares of each
Company to cover over-allotments. There is a minimum investment of 2,000 Shares
in each Company (20,000 in the aggregate). An equal investment must be made in
each Company.
The offer and sale of the Shares is being made in accordance with the
Memorandum. The Shares will not be registered under the Securities Act of 1933,
as amended (the "Securities Act") or any state securities or "blue sky" laws and
will be offered and sold in reliance upon the exemptions afforded by Section
4(2) and of the Securities Act and Rule 506 of Regulation D promulgated
thereunder and by similar exemptions afforded by or preempted from the state
securities or "blue sky" laws. The subscribers for the Shares each of whom will
be required to execute and deliver the Subscription Agreement and the
Subscription Supplement, Lock-up and Registration Rights Agreement that
accompanies the Memorandum (the "Subscription Documents") will be issued the
Shares (the "Investors").
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Subsequent to the Offering, each Company anticipates that it will file a
Form 10 in an attempt to register each Company as public company with the
Securities and Exchange Commission, under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Companies may file
one at a time or some or all at the same time. Some of the Companies may attempt
to file soon after the closing of the Offering, and some at a later date, even
possibly after a Merger. No assurance can be given that the registration will be
allowed by the regulatory authorities.
Subsequent to a Merger, each Company will use its best efforts to file a
Registration Statement ("Registration Statement") to register the Common Stock
of the Company under the Securities Act and to include all shares of Common
Stock of such Company sold in this offering in the Registration Statement.
However, holders of Common Stock purchased in the Offering should not depend on
such registration rights and may have to rely on Rule 144 of the Securities Act
to trade in the Common Stock (assuming a Merger has occurred and the Company is
a reporting Company in compliance under the Exchange Act, which cannot be
assured). Any liquidity at all is still subject to the risks related to
achievement of registration and a Merger as described in detail in this
Memorandum, especially the section entitled "Risk Factors." Any registration
rights of a holder of Common Stock purchased in the Offering will expire at such
time as all such holders' Common Stock (other than affiliates of the Company)
purchased in the Offering is saleable pursuant to Rule 144 without volume
limitations. Any and all shares of Common Stock registered in a Registration
Statement or otherwise eligible for sale under Rule 144 will still be subject to
the lock-up provisions set forth below.
Prior to (i) the registration of a Company (ii) consummation of a Merger
and (iii) either the expiration of the relevant holding period under Rule 144
promulgated pursuant to the Securities Act or registration of the Common Stock,
purchasers of the Common Stock in this Offering may not sell, pledge, assign or
otherwise transfer or hypothecate any shares of Common Stock of the Company sold
in this Offering. After such registration and Merger, subject to restrictions
under federal and state securities laws, fifty percent (50%) of all Common Stock
of the merged-Company purchased in this Offering by each holder may not be sold
pledged, assigned or otherwise transferred or hypothecated for a period of six
(6) months from the closing of a Merger, and the remaining fifty percent (50%)
of the Common Stock of the merged-Company purchased in this Offering by such
holder will be similarly restricted for a period of twelve (12) months from the
Closing of a Merger unless otherwise agreed to by the Company (the "Lock-up").
Xx. Xxxxxxxxx, the sole stockholder of each Company has agreed to restrict his
shares of Common Stock in each Company pursuant to the same provisions as the
Lock-up subject to pro-rate release. All shares underlying the Placement Agent
Warrants, as defined below, are also subject to the Lock-up on the same terms.
In order to release any stockholder from the terms of the Lock-up, all other
stockholders must be proportionately released.
All capitalized terms not defined in this Agreement shall have the meanings
ascribed to them in the Memorandum.
Section 1. Appointment of Placement Agent and Terms of Offering.
1.1 Appointment of Placement Agent. You are hereby invited to become a
Placement Agent ("Placement Agent") and by your confirmation of this Agreement
you agree to act in such capacity for the Offering during the term of the
Offering Period (as defined in Section 1.5 below) and to use your best efforts
to find purchasers for the Shares in accordance with the terms and conditions
set forth in this Agreement.
1.2 Co-Placement Agents. The Company may appoint one or more registered
broker- dealers who are members in good standing of the National Association of
Securities Dealers, Inc., ("NASD") or banks exempt from broker-dealer
registration to serve as co-Placement Agents with you.
1.3 Solicitation of Subscriptions. You hereby agree to solicit, as an
independent contractor and not as an agent of the Company, Investors acceptable
to the Company in accordance with the terms of the Memorandum and this
Agreement.
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1.4 Subscriptions.
1.4.1 Solicitation Procedures. Each person desiring to purchase Shares
in the Offering shall be required to execute and deliver to each Company
the applicable Subscription Documents and a check in the amount of $0.25
per Share for the amount purchased of each Company's Shares made payable to
each of "Algiers Resources, Inc.", "Balstron Corporation", "Daliprint,
Inc.", "Hartscup Corporation", "Mayall Partners, Inc.", "PSLRA,
Incorporated", "Regal Acquisitions, Inc.", "Spacial Corporation", "Voyer
One, Inc.", "Voyer Two, Inc." By way of example, if an Investor purchased
the minimum subscription of 2,000 Shares of each Company, the Investor must
make a check in the amount of $500 payable to each Company. You shall
transmit each investor's check and original Subscription Documents received
by you to the Companies care of the address listed on the Subscription
Documents, retaining a copy of each for your files. Each Company shall
deposit the checks directly in their respective corporate accounts.
1.4.2 Acceptance Standards and Procedures. The Companies will not
consider any proposed subscription until all Subscription Documents have
been completed, signed and delivered. After receipt of all required
Subscription Documents with respect to an Investor, the Companies will
determine whether they wish to accept the offered subscription. No
subscriptions shall be effective unless and until accepted by the
Companies. Subscriptions for Shares will be accepted only from subscribers
who meet the investor suitability standards set forth in the Memorandum.
The minimum required purchase by any Investor shall be 2,000 Shares per
Company (20,000 in the aggregate), subject to the right of the Companies in
their sole discretion to allow investment in a lesser amount. The Companies
reserve the right to reject any subscriptions and to allocate subscriptions
received in the event the Shares are oversubscribed.
1.4.3 Rejection. Subscriptions may be rejected in whole or in part by
the Companies, provided the Companies must notify the Placement Agent of
the rejection of any subscription and return the to the Placement Agent the
funds previously received from the person whose subscription was paid and
the original Subscription Documents, within ten (10) business days of the
receipt of completed Subscription Documents. Should the Companies determine
to reject a subscription, you will promptly return the Subscription
Documents directly to the prospective purchaser and as well as the funds
previously received upon receipt of such documents from the Companies.
1.5 Offering Period. The "Offering Period" shall mean that period during
which any Shares are offered for sale, commencing on the date upon which the
Memorandum is initially delivered to the Companies for distribution to Investors
and continuing until the earlier of (a) the date on which subscriptions for the
maximum number of Shares are accepted or (b) March 31, 1999, unless earlier
terminated by the Companies, or unless further extended for 120 days by mutual
agreement of the Companies and any of the Placement Agents, to time which the
Company may extend the Offering without further notice to the Investors (the
"Termination Date").
1.6 Closings.
1.6.1 Initial Closing. If at any time during the Offering Period, the
Companies have accepted any subscriptions, the subscribers may be admitted
as Investors in an initial closing (the "Initial Closing"). Upon the
Initial Closing, the Companies shall remit to the Placement Agent the
commissions then due to the Placement Agent and deliver to each Investor
the certificates representing the Shares purchased by each Investor.
1.6.2 Additional Closings. After the Initial Closing, the Offering
will continue, and the issuance of additional Shares to subscribers in one
or more additional closings ("Additional Closings") may occur upon
acceptance of subscriptions for additional Shares.
1.6.3 Final Closing. If at any time before the Termination Date,
subscriptions for the maximum number of Shares provided for herein have
been accepted (including subscriptions by the Companies, the Placement
Agent(s) or their affiliates), the subscribers shall be admitted to the
Company as Investors in a final closing (the "Final Closing"). The
Companies shall fix a date no later than ten days after the
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Termination Date on which the Final Closing will take place (or, if the
tenth day is not a business day, the next business day) (the "Final Closing
Date").
1.6.4 Closing Certificate. The Initial, Additional and Final Closings
will take place at the Companies' offices, or at such other place as shall
be mutually agreed upon by the Companies and you. At each of the Initial
Closing, any Additional Closing and the Final Closing, you agree to deliver
to the Companies if so requested by the Companies, a certificate stating
(i) the number of offerees in each of the jurisdictions designated on the
blue sky memorandum (the "Blue Sky Memorandum") delivered to you by the
Companies, and (ii) that your representations and warranties contained in
Section 4 are true and correct with the same effect as though expressly
then made and that you have complied with the covenants contained in
Section 5.
1.7 Due Diligence. You agree to conduct your own investigation to determine
that all material facts upon which each person who purchases the Shares might
rely in making this investment decision have been accurately and adequately
disclosed in the Memorandum to the extent you deem necessary.
1.8 Compensation to the Placement Agent. As compensation for your services
hereunder the Company agrees to cause the Company to pay to you, as a selling
commission, an amount equal to ten percent (10%) of the gross offering proceeds
for each Share sold through you, and reimbursement of certain of your out of
pocket expenses. All such compensation under this Agreement shall be payable not
later than ten (10) days following the closing in which the Investor purchases
the Shares. Also as compensation for your services hereunder the Company agrees
to cause the Company to pay to you, as a selling commission, Placement Agent
Warrants (the "Placement Agent Warrants") to purchase the number of shares of
Common Stock of each Company equal to 30% of the number of Shares of each
Company sold by you in the Offering at an exercise price of $0.255 per share,
not later than ten (10) days following the closing in which the Investor
purchasing the Shares is admitted to the Companies. The Placement Agent Warrants
shall be exercisable for seven years following the completion of the Offering.
The Placement Agent Warrants shall provide for cashless exercise pursuant to
which the holder of the Placement Agent Warrants will receive upon exercise the
number of Shares otherwise issuable upon such exercise, less the number of
Shares having an aggregate Current Market Price on the date of exercise equal to
the exercise price per share multiplied by the number of Shares for which the
Placement Agent Warrants are being exercised and/or by delivery to the Company
by the holder of the Placement Agent Warrants the number of Shares having an
aggregate Current Market Price on the date of exercise equal to the exercise
price multiplied by the number of Shares for which the Placement Agent Warrants
are being exercised. For purposes of the Placement Agent Warrants, the term
"Current Market Price" shall mean (a) if the Shares are traded on the Nasdaq
National Market ("NNM") or on a national securities exchange, the per share
closing price of the Shares on the date of exercise of the Placement Agent
Warrants or (b) if the Shares are traded in the over-the-counter market and not
in the NNM or a national securities exchange, the average of the per share
closing bid prices of the Shares during the thirty (30) consecutive trading days
immediately preceding the date in question, as reported by the Nasdaq SmallCap
Market (or an equivalent generally accepted reporting service if quotations are
not reported on the Nasdaq SmallCap Market). The closing price referred to in
clause (a) above shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case in the NNM or on the principal stock exchange
on which the Shares are then listed. For purposes of clause (b) above, if
trading in the Shares is not reported by the Nasdaq SmallCap Market, the bid
price referred to in said clause shall be the lowest bid price as reported in
the Nasdaq Electronic Bulletin Board or, if not reported thereon, as reported in
the "pink sheets" published by National Quotation Bureau, Incorporated, and if
the Shares are not so reported, shall be determined by the price of a Share
determined by the Company's Board of Directors in good faith. In the event that
the Placement Agent Warrants have been exercised or remain outstanding on the
effective date of any initial public offering by the Company, the Dealer Manager
shall not be eligible to receive underwriter warrants as compensation in
connection with such initial public offering.
Each Company shall use its best efforts to register the shares of Common
Stock underlying the Placement Agent Warrants of such Company in the
Registration Statement filed by such Company subsequent to a Merger; provided
however, the shares of Common Stock of each Company underlying the Placement
Agent Warrants will be subject to the terms of the Lock-up.
Payment of these commissions is subject to the following conditions:
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No commission will be payable with respect to any subscriptions for the
Shares which are rejected by the Companies; and
No commissions will be payable to you with respect to any sale of Shares
sold by you until such time as the Companies has received the total proceeds of
any such sale.
No commissions will be payable with respect to transactions in
jurisdictions where such payments may not legally be made. You may waive all
your compensation in connection with any sales of Shares to you, the Companies
and certain officers, directors, employees or affiliates of you or the
Companies, and you in your discretion may waive all or a portion of your
compensation in connection with any sales of Shares to other purchasers with
whom the Companies or their affiliates have a business relationship.
In no event will the value of the total compensation exceed the amount
allowable in connection with the Companies' obtaining the benefits of the
exemptions from the qualification requirements of state securities laws.
Section 2. Representations and Warranties of the Company.
The Company represents, warrants and agrees with you for your benefit that:
2.1 Power and Authority of the Company. Each Company has been duly
organized and is validly existing and in good standing under the laws of the
State of Delaware, with full power and authority to conduct business as
described in the Memorandum. Complete and correct copies of the Certificate of
Incorporation and the Bylaws of each Company and all amendments thereto have
been delivered to you, and no changes therein will be made subsequent to the
date hereof and prior to the Final Closing Date.
2.2 Validity of Issuance of Securities. The outstanding common stock of
each Company has been, and the Shares to be issued and sold by the Companies
pursuant to the Offering upon such issuance will be, when paid thereto for as
provided in the Memorandum and the Subscription Documents, and the execution of
all necessary or appropriate amendments or supplements to, or certificates in
connection with, duly authorized, validly issued, fully paid and non-assessable,
and will not be subject to any preemptive or similar rights. Subscribers for the
Shares shall have no liability in excess of their respective capital
contributions.
2.3 Adequacy of the Memorandum. The Companies will have prepared and
delivered to you the Memorandum. The Memorandum does not, and on any Closing
Date will not, 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 not misleading. Every contract or other document required by
the Securities Act or any regulations promulgated thereunder (the "Regulations")
to be described in or attached as an exhibit to the Memorandum or otherwise made
available to Investors has been so described, attached or made available.
2.4 Due Authorization and Enforceability of This Agreement. This Agreement
has been duly and validly authorized, executed and delivered by or on behalf of
each Company and constitutes the valid, binding and enforceable agreement of
such Company, except to the extent that (i) the enforceability of this Agreement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally or by general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law), and (ii) the indemnification provisions of this Agreement may
be held to violate public policy (under either state or federal law) in the
context of the offer or sale of securities.
2.5 No Material Adverse Change. Since the respective dates as of which
information is given in the Memorandum, there has not been any material adverse
change in the condition, financial or otherwise, of each Company or in the
earnings, affairs or business prospects of each Company.
2.6 Absence of Legal or Contractual Conflicts. The execution and delivery
of this Agreement by each Company, and the consummation of the transactions
contemplated in the Memorandum, will not, or with the passage of time or the
giving of notice would not, constitute a breach of, default under or
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violation of (i) any statute, indenture, mortgage, deed of trust, voting trust,
note, lease or other agreement or any instrument to which each Company is or
will be a party or by which any of them or their property is or will be bound,
or (ii) any order, rule or regulation applicable to each Company of any court or
any governmental body or administrative agency having jurisdiction over its
properties or businesses.
2.7 Governmental Consents. No consent, approval, authorization or order of
any court or governmental agency or body has been or is required for the
performance of this Agreement and the consummation of the transactions
contemplated in this Agreement or in the Memorandum by each Company, except such
as have been or are to be obtained under the state securities or "blue sky"
laws.
2.8 Adverse Claims. There is not pending, threatened or contemplated any
action, suit or proceeding before or by any court or other governmental body
against each Company and no default exists in the due performance and observance
of any material obligation, term, covenant or condition of any agreement or
instrument to which each Company is or may be a party, or by which it is bound
that is not referred to in the Memorandum and that might result in any material
adverse change in the condition (financial or otherwise), earnings, affairs or
business or prospects of each Company or might materially and adversely affect
any of the assets of each Company.
2.9 Legal Actions. There are no actions, suites or proceedings pending, or
to the Companies' knowledge, threatened against or affecting the Companies or
any of its respective officers in their capacity as such, before or by any
Federal or state court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding might materially and adversely affect the Companies or its
respective business, properties, business prospects, condition (financial or
otherwise) or results of operations taken as a whole.
2.10 Investment Company. On the date hereof and, each Closing Date, each
Company is not and will not be an investment company as that term is defined in
the Investment Company Act of 1940.
2.11 No Offers. No offer, offer to sell, offer for sale, sale or attempt to
dispose of any Shares to any person has been made prior to the Offering Period
upon the authority of each Company.
2.12 Accuracy of Representations. No statement, representation, warranty or
covenant made by the Companies in this Agreement or made in any certificate or
document required by this Agreement to be delivered to you was or will be, when
made, inaccurate, untrue or incorrect in any material respect.
Section 3. Covenants of the Companies.
The Companies covenant with you as follows:
3.1 Amendment of Memorandum. Promptly upon the occurrence of any event
which would cause the Memorandum to include during the Offering Period an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading, the Companies will promptly notify
you of the event. The Companies will within a reasonable period of time prepare
and furnish to you such number of copies as you may request of an amendment or
amendments of, or a supplement or supplements to, the Memorandum (in form and
substance satisfactory to you) which will amend or supplement the Memorandum so
that as amended or supplemented it shall not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading.
3.2 Compliance with Securities Laws. The Companies will use their best
efforts to cause the sale of the Shares to take place in a manner that will
permit reliance upon Regulation D promulgated under the Securities Act and will
file the required Form D in a timely fashion. The Companies will use its best
efforts to secure exemptions from qualification or registration of the Shares or
preemption under the securities or "blue sky" laws of such states in which it
advises you in writing that the Shares may be offered, and will make such
applications, file such documents, and furnish such information as may
reasonably be required for that purpose.
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3.3 Due Diligence Inquiry. Upon request by you, the Companies will make
reasonable effort to furnish you information necessary in your judgment, or in
the judgment of your counsel, to confirm the continued fairness, accuracy and
completeness of the Memorandum in all material respects during the Offering
Period.
3.4 Reports and Other Information. The Companies will, as long as any
Shares may remain outstanding, furnish directly to you one (1) copy of each
report furnished to Investors at the time such report is furnished to the
Investors.
3.5 Delivery of Sales Material. The Companies will deliver to you, from
time to time, all sales material (whether designated solely for broker-dealer
use or otherwise) proposed to be used or delivered in connection with the
offering of the Shares.
3.6 Limited Liability and Company Status. The Companies will take all steps
necessary to preserve, to the extent possible, the limited liability of the
Investors and their status as corporations.
3.7 Notification of Changes. The Companies will notify you promptly of any
change having or which is likely to have a material adverse change in the
condition (financial or otherwise), earnings, affairs or business or prospects
of each Company or might materially and adversely affect any of the assets of
each Company relating to any of the Companies' representations, warranties,
covenants or agreements contained herein that occurs at any time prior to the
Final Closing.
Section 4. Representations and Warranties of the Placement Agent.
You hereby represent, warrant and agree with the Companies for their
benefit that:
4.1 Corporate Power and Authority. You have been duly incorporated and are
validly existing as a corporation in good standing under the laws of the State
of your incorporation, with all requisite corporate power and authority to
conduct your business and to perform the obligations contemplated herein.
4.2 Due Authorization and Enforceability of this Agreement. This Agreement
has been duly and validly authorized, executed and delivered by you or on your
behalf and constitutes your valid, binding and enforceable agreement, except to
the extent that (i) the enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally or by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law), and
(ii) the indemnification provisions of this Agreement may be held to violate
public policy (under either state or federal law) in the context of the offer or
sale of securities.
4.3 Absence of Legal or Contractual Conflicts. Your execution and delivery
of this Agreement, and the performance of your obligations thereunder, will not
result in a violation of, be in conflict with or constitute a default under any
agreement or instrument to which you are a party or by which you or your
properties are bound, or any judgment, decree, order or, to your knowledge, any
statute, rule or regulation applicable to you.
4.4 Adequacy of the Memorandum. The information contained in the Memorandum
relating to you, if any, is complete and correct and does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading.
4.5 Broker-Dealer Qualifications. You are (and will continue to be during
the term of this Agreement) a member in good standing of the NASD and agree to
abide by the Rules of Fair Practice of such association. You are properly
registered or licensed as a broker or dealer under applicable federal and state
securities laws and regulations. You, your affiliates, and your or their
officers and directors (or any other person serving in a similar capacity) have
not taken or failed to take any act, and are not subject to any order or
proceedings, that would make unavailable any limited offering exemption from
registration or qualification requirements of state securities laws.
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4.6 No Disqualifications. Neither you nor any of your directors, officers,
predecessors or agents nor any beneficial owner of 10% or more of any class of
your equity securities, nor any of their respective affiliates (nor any other
person serving in a similar capacity):
Has been convicted within ten years prior to the date hereof of any crime
or offense involving the purchase or sale of any security, involving the making
of a false statement with the Securities and Exchange Commission (the "SEC"), or
arising out of such person's conduct as an underwriter, broker, dealer,
municipal securities dealer or investment adviser;
Is subject to any order, judgment or decree of any court of competent
jurisdiction temporarily or preliminarily enjoining or restraining, or is
subject to any order, judgment, or decree of any court of competent
jurisdiction, entered within five years prior to the date hereof, permanently
enjoining or restraining such person from engaging in or continuing any conduct
or practice in connection with the purchase or sale of any security, involving
the making of a false filing with the SEC, or arising out of the conduct of the
business of an underwriter, broker, dealer, municipal securities dealer or
investment adviser;
Is subject to an order of the SEC entered pursuant to section 15(b),
15B(a), or 15B(c) of the Exchange Act; or is subject to an order of the SEC
entered pursuant to section 203(e) or (f) of the Investment Advisers Act of
1940;
Is suspended or expelled from membership in, or suspended or barred from
association with a member of, an exchange registered as a national securities
exchange pursuant to section 6 of the Exchange Act, an association registered as
a national securities association under section 15A of the Exchange Act, or a
Canadian securities exchange or association for any act or omission constituting
conduct inconsistent with just and equitable principles of trade;
Is subject to a United States Postal Service false representation order
entered within five years prior to the date hereof; or is subject to a
restraining order or preliminary injunction entered under section 3007 of title
39, United States Code, with respect to any conduct alleged to constitute postal
fraud;
Has been or has been named as an underwriter of any securities covered by
any registration statement which is the subject of any pending proceeding or
examination under section 8 of the Securities Act, or is the subject of any
refusal order or stop order entered thereunder within five years prior to the
date hereof;
Has been or has been named as an underwriter of any securities covered by
any filing which is subject to any pending proceeding under Rule 261 or any
similar Rule adopted under section 3(b) of the Securities Act, or to an order
entered thereunder within five years prior to the date hereof;
Has taken or failed to take any other act, or are subject to any other
order or proceedings, that would make unavailable any limited offering exemption
from registration or qualification requirements of federal or state securities
laws;
Has filed a registration statement that is the subject of a currently
effective stop order entered pursuant to any state's securities law within five
years prior to the date hereof;
Has been convicted within five years prior to the date hereof of any felony
or misdemeanor in connection with the offer, purchase or sale of any security or
any felony involving fraud or deceit, including but not limited to forgery,
embezzlement, obtaining money under false pretenses, larceny or conspiracy to
defraud;
Is currently subject to any state administrative enforcement order or
judgment entered by that state's securities administrator within five years
prior to the date hereof or is subject to any state's administrative enforcement
order or judgment in which fraud or deceit, including but not limited to making
untrue statements of material facts and omitting to state material facts, was
found and the order or judgment was entered within five years prior to the date
hereof;
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Is subject to any state's administrative enforcement order or judgment that
prohibits, denies or revokes the use of any exemption from registration in
connection with the offer, purchase or sale of securities; or
Is currently subject to any order, judgment or decree of any court of
competent jurisdiction temporarily or preliminarily restraining or enjoining, or
is subject to any order, judgment or decree of any court of competent
jurisdiction permanently restraining or enjoining, such party from engaging in
or continuing any conduct or practice in connection with the purchase or sale of
any security or involving the making of any false filing with the state entered
within five years prior to the date hereof.
Section 5. Covenants of the Placement Agent.
You covenant with the Companies as follows:
5.1 Delivery of Offering Materials. You or a person acting on your behalf
shall furnish to each offeree, concurrently with making an offer to such offeree
(and its purchaser representative, if such a representative has been selected),
a numbered copy of the Memorandum, as it may have been amended or supplemented
by the Companies, and shall maintain adequate records of each person to whom a
Memorandum has been delivered. Neither you nor any of your agents will give any
information or make any representation with respect to the Companies or its
business or affairs other than the information or representations contained in
the Memorandum or any sales literature authorized for use in connection with the
Offering, or such other information as is specifically authorized by the
Companies.
5.2 Conduct of Solicitation. You or a person acting on your behalf will
cause each person interested in acquiring Shares to complete and execute the
Subscription Documents (copies of which is included in the Memorandum) in order
to enable the Companies to determine whether such person is qualified to acquire
Shares. You will not execute any Subscription Documents for any person and will
not invest in the Shares through any person's discretionary trading account
without the written approval of such person. You will abide by, and take
reasonable precautions to insure compliance with, all provisions contained in
the Memorandum and the Selling Agreement regulating the terms and manner of
conducting the Offering.
5.3 Compliance with Federal Securities Laws. You will comply with all
applicable requirements of the Securities Act and the rules and regulations
promulgated thereunder, including Regulation D. Specifically, but without
limitation, neither you nor any person acting on your behalf will offer the
Shares by means of any form of general solicitation or general advertising nor
to any person or entity unless you or your licensed personnel have a substantial
pre-existing business relationship with such person or entity. No advertisement,
article, notice or other communication regarding the Offering will be published
by you in any newspaper, magazine or similar medium or broadcast over television
or radio. Neither you nor any of your agents will sponsor, hold or participate
in any seminar or meeting regarding the Offering at which the persons attending
have been invited by any general solicitation or general advertising. You and
any person acting on your behalf will make offers of the Shares only to persons
whom you and your agents have reasonable grounds to believe and do believe: (a)
have such knowledge and experience in business and financial matters (either
alone or together with a purchaser representative) that they are capable of
evaluating the merits and risks of the prospective investment and of protecting
their own interests in connection with the transaction and (b) meet the investor
suitability requirements contained in the Memorandum. You and any person acting
on your behalf will cooperate with the Companies so that the Shares are sold
only to "accredited investors" as such term is defined in Rule 501 of Regulation
D and you and your agents will exercise reasonable care to ensure that a
purchaser is not an underwriter within the meaning of Section 2(11) of the
Securities Act.
5.4 Compliance with Blue Sky Laws. You will comply with all applicable
requirements of any state securities or "blue sky" law or rule or regulation
promulgated thereunder. You will not offer or sell any of the Shares in any
jurisdiction (i) prior to receiving written instructions from the Companies that
offers may be made in such jurisdiction and (ii) except in compliance with all
applicable securities or "blue sky" laws and in accordance with the Blue Sky
Memorandum. With respect to any state which limits the number of offers and
sales which may be made, you shall offer for sale no more than such number of
Shares as we may advise you may be offered and/or sold.
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5.5 Maintenance of Records. You will retain in your records and make
available to the Companies, for a period of at least five years, information
establishing that each person who purchases the Shares pursuant to a
Subscription Documents solicited by you is within the permitted class of
investors under the requirements, if any, of the jurisdiction in which such
purchaser is a resident and the suitability standards set forth in the
Memorandum and the Subscription Documents.
Section 6. Company's Certificates.
At the Final Closing Date and any Initial or Additional Closing Date, you
shall have received a certificate signed by an officer of each Company on behalf
of such Company to the effect that (i) the signer has carefully examined the
Memorandum and, in the signer's opinion, at all times from the time the
Memorandum was initially delivered to you for distribution to investors the
Memorandum did not contain any 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; (ii) since the
date the Memorandum was initially delivered to you for distribution to
investors, no event has occurred which should have been set forth in an
amendment of or supplement to the Memorandum but which has not been so set
forth; (iii) no proceedings have been instituted or threatened by the Commission
or any blue sky agency with respect to the Offering; and (iv) the
representations and warranties contained in Section 2 are true and correct with
the same effect as though expressly then made and the Company has complied with
the covenants contained in Section 3.
Section 7. Indemnification.
7.1 By the Company. The Companies will indemnify and hold harmless you and
each person, if any, who controls you within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
you or such controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Memorandum, or in any
related sales material (whether designated solely for broker-dealer use or
otherwise) which the Companies or any respective officer thereof authorizes in
writing for use by you or any Placement Agent, or arise out of or are based upon
the omission or alleged omission to state therein any material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that none of such persons will be liable to indemnify you or
such a controlling person thereof pursuant to this Section 7.1 to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
any of them by you specifically for use in the Memorandum or sales material; and
will reimburse you and each such controlling person for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such loss, claim, damage, liability or action. Notwithstanding the foregoing
provisions of this Section 7.1, the Companies shall not indemnify you or any
person, if any, who controls you within the meaning of the Securities Act, for
losses, liabilities or expenses arising from or out of an alleged violation of
federal or state securities laws unless (i) there has been a successful
adjudication on the merits of each count involving alleged securities law
violations by the particular indemnitee not caused by materials supplied by the
Companies or (ii) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction as to the particular indemnitee or (iii) a
court of competent jurisdiction approves the settlement of the claims against
the particular indemnitee. In any claim against a Company for indemnification
for federal or state securities law violations, the party seeking
indemnification shall place before the court the position of the SEC, the
Massachusetts Securities Division, the Tennessee Securities Division and any
other states that may require it with respect to the issue of indemnification
for securities law violations.
7.2 By the Placement Agent. You will indemnify and hold harmless each
Company and each other person who controls each Company within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Memorandum, or
any related sales material which the Companies authorize in writing for use by
you, or arise out of or are based upon the omission or the alleged omission to
state therein any material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent that such
untrue statement or
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alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Companies by
you specifically for use therein and (ii) any breach by you or any Placement
Agent of any representation, warranty or covenant contained in this Agreement,
provided that you or any Placement Agent shall be liable under this Section 7.2
only to the extent that such losses, claims, damages or liabilities result from
any action or inaction by you. You will reimburse any legal or other expenses
reasonably incurred by the Companies or any controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided that you shall reimburse any such legal or other expenses in
connection with investigating or defending any such loss, claim, damage,
liability or action only to the extent that such loss, claim, damage or
liability results from any action or inaction caused by you.
7.3 Notification. Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7. In case any such action is brought against any indemnified party
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Section 8. Termination of this Agreement.
8.1 Right of Termination. You or the Companies shall have the right to
terminate this Agreement at any time.
8.2 Notice. If you elect to terminate this Agreement as provided in this
Section 8, the Companies shall be notified promptly by you pursuant to Section 9
of this Agreement. If the Companies elect to terminate this Agreement as
provided in this Section 8, you shall be notified promptly by the Companies or
pursuant to Section 9 of this Agreement.
8.3 Liability of Parties. All representations, warranties and
indemnification agreements contained in this Agreement shall remain operative
and in full force and effect, regardless of any termination pursuant to Section
8.1, and shall survive the Final Closing Date.
Section 9. Miscellaneous Provisions.
9.1 Notices. All notices provided for by this Agreement shall be made in
writing either (i) by actual delivery of the notice to the parties thereunto
entitled or (ii) by the mailing of the notice in the United States mails to the
address, as stated below (or at such other address as may have been designated
by written notice), of the party entitled thereto, by certified or registered
mail, return receipt requested. The notice shall be deemed to have been received
in case (i) on the date of its actual receipt by the party entitled thereto and
in case (ii) on the date of deposit in the United States mail.
All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and, if sent to you, shall be mailed or delivered
to:
c/o Xxxxx X. Xxxxxxxxx
The Law Office of Xxxxx X. Xxxxxxxxx, Esq.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
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9.2 Parties. This Agreement shall inure to the benefit of and be binding
upon you, the Companies and each of your and the Companies' respective
successors and legal representatives. Except as otherwise set forth in this
Section, nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provision herein contained.
No purchaser of Shares will be deemed a successor because of such purchase.
9.3 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
9.4 Arbitration. You and the Companies agree that any controversy arising
out of or relating to this Agreement of the Offering contemplated hereby shall
be settled by arbitration in New York, New York, in accordance with the rules
then in effect for the NASD.
9.5 Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed to be an original, but all
of which constitute, collectively, one and the same Agreement; but in making
proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart.
9.6 Modification or Amendment. This Agreement may not be modified or
amended except by written agreement executed by the parties hereto.
9.7 Other Instruments. The parties hereto covenant and agree that they will
execute such other and further instruments and documents as are or may become
necessary or convenient to effectuate and carry out this Agreement.
9.8 Validity. Should any portion of this Agreement be declared invalid and
unenforceable, then such portion shall be deemed to be severable from this
Agreement and shall not affect the remainder of this Agreement.
9.9 Captions. The captions used in this Agreement are for convenience only
and shall not be construed in interpreting this Agreement.
9.10 Entire Agreement. This Agreement contains the entire understanding
between the parties and supersedes any prior understandings or written or oral
agreements between them respecting the subject matter hereof.
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If the foregoing is in accordance with our agreement, please sign and
return to us a counterpart hereof, whereupon this instrument along with all
counterparts will become a binding agreement among you and the Company in
accordance with its terms.
Very truly yours,
ALGIERS RESOURCES, INC.
By:\s\ Xxxxx X. Xxxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxxx, President
BALSTRON CORPORATION DALIPRINT, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
HARTSCUP CORPORATION MAYALL PARTNERS, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
PSLRA, INCORPORATED REGAL ACQUISITIONS, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
SPACIAL CORPORATION VOYER ONE, INC.
By:\s\ Xxxxx X. Xxxxxxxxx By:\s\ Xxxxx X. Xxxxxxxxx
----------------------------------- -------------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
VOYER TWO, INC.
By:\s\ Xxxxx X. Xxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxx, President
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Confirmed and Accepted as of the date first above written:
Tradeway Securities Group, Inc.
-----------------------------------------
Print Firm Name
By:\s\ Xxxxxx X. Guiltinar
-----------------------------------------
Xxxxxx X. Guiltinar
-----------------------------------------
Print Name
C.F.O./Secretary
-----------------------------------------
Print Title
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