Broker-Dealer Agreement
Exhibit 1.1
This
agreement (together with exhibits and schedules, the
“Agreement”) is entered
into by and between Bitzumi, Inc. (“Client”) a Delaware
Corporation, and Sageworks Capital LLC., a Pennsylvania Limited
Liability Company (“Sageworks”). Client and
Sageworks agree to be bound by the terms of this Agreement,
effective of October 24, 2017 (the “Effective
Date”):
Whereas, Sageworks is a registered
broker-dealer providing technology and services in the equity and
debt securities market, including offerings conducted via SEC
approved exemptions such as Reg D 506(b), 506(c), Regulation A+,
Reg CF and others;
Whereas, Client is offering securities
directly to the public in an offering exempt from registration
under Regulation A+ (the “Offering”);
and
Whereas, Client recognizes the benefit
of having Sageworks as a service provider for investors who
participate in the Offering (“Investors”).
Now, Therefore, in consideration of the
mutual promises and covenants contained herein and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
1. Appointment,
Term, and Termination
a. Client hereby
engages and retains Sageworks to provide technology and compliance
services at Client’s discretion.
b. The Agreement will commence on the
Effective Date and will remain in effect for a period of six (6)
months and will renew upon notice by Client, and acceptance by
Sageworks for successive renewal terms of six (6) months
each. If Client defaults in
performing the obligations under this Agreement, the Agreement may
be terminated (i) upon sixty (60) days written notice if
Client
fails to perform or observe
any material term, covenant or condition to be performed or
observed by it under this Agreement and such failure continues to
be unremedied, (ii) upon written notice, if any material
representation or warranty made by either Provider or Client proves
to be incorrect at any time in any material respect, (iii) in order
to comply with a Legal Requirement, if compliance cannot be timely
achieved using commercially reasonable efforts, after providing as
much notice as practicable, or (iv) upon thirty (30)
days’ written notice if Client or Sageworks commences a
voluntary proceeding seeking liquidation, reorganization or other
relief, or is adjudged bankrupt or insolvent or has entered against
it a final and unappeable order for relief, under any bankruptcy,
insolvency or other similar law, or either party executes and
delivers a general assignment for the benefit of its
creditors. The
description in this section of specific remedies will not exclude
the availability of any other remedies. Any delay or failure by
Client to exercise any right, power, remedy or privilege will not
be construed to be a waiver of such right, power, remedy or
privilege or to limit the exercise of such right, power, remedy or
privilege. No single, partial or other exercise of any such right,
power, remedy or privilege will preclude the further exercise
thereof or the exercise of any other right, power, remedy or
privilege. All terms of the Agreement, which should
reasonably survive termination, shall so survive, including,
without limitation, limitations of liability and indemnities, and
the obligation to pay Fees relating to Services provided prior to
termination.
-1-
2. Services.
Sageworks will perform the
services listed on Exhibit A
attached hereto and made a
part hereof, in connection with the Offering (the
“Services”).
Unless otherwise agreed to in writing
by the parties.
3. Compensation. As compensation for the
Services, Client shall pay to Sageworks a fee equal to fifty (50)
basis points on the aggregate amount raised by the Client from
Investors.
There
will also be a one time set up fee of $8,000. Fee is due and
payable no later than by the initial submission of the
Client’s 1-A submission to the SEC.
4. Regulatory
Compliance
a. Client
and all its third party providers shall at all times (i) comply
with direct requests of Sageworks; (ii) maintain all required
registrations and licenses, including foreign qualification, if
necessary; and (iii) pay all related fees and expenses (including
the FINRA Corporate Filing Fee), in each case that are necessary or
appropriate to perform their respective obligations under this
Agreement. Client shall comply with and adhere to all Sageworks
policies and procedures.
FINRA
Corporate Filing Fee for this $10,000,000 best efforts offering
will be approximately $1,750 and will be a pass through fee payable
to SWC who will then forward it to FINRA as payment for the
filing.
b. Client
and Sageworks will have the shared responsibility for the review of
all documentation related to the Transaction but the ultimate
discretion about accepting a client will be the sole decision of
the Client. Each Investor will be considered to be that of the
Client’s and NOT Sageworks.
c. Client
and Sageworks will each be responsible for supervising the
activities and training of their respective sales employees, as
well as all of their other respective employees in the performance
of functions specifically allocated to them pursuant to the terms
of this Agreement.
d. Client and
Sageworks agree to promptly notify the other concerning any
material communications from or with any Governmental Authority or
Self Regulatory Organization with respect to this Agreement or the
performance of its obligations, unless such notification is
expressly prohibited by the applicable Governmental
Authority.
5. Role of
Sageworks. Client
acknowledges and agrees that Client will rely on Client’s own
judgment in using Sageworks’ Services. Sageworks (i) makes no
representations with respect to the quality of any investment
opportunity or of any issuer; (ii) does not guarantee the
performance to and of any Investor; (iii) will make commercially
reasonable efforts to perform the Services in accordance with its
specifications; (iv) does not guarantee the performance of any
party or facility which provides connectivity to Sageworks; and (v)
is not an investment adviser, does not provide investment advice
and does not recommend securities transactions and any display of
data or other information about an investment opportunity, does not
constitute a recommendation as to the appropriateness, suitability,
legality, validity or profitability of any transaction. Nothing in
this Agreement should be construed to create a partnership, joint
venture, or employer-employee relationship of any
kind.
6. Indemnification.
a. Indemnification by Client.
Client shall indemnify and hold Sageworks, its affiliates and their
representatives and agents harmless from, any and all actual or
direct losses, liabilities, judgments, arbitration awards,
settlements, damages and costs (collectively, “Losses”), resulting from
or arising out of any third party suits, actions, claims, demands
or similar proceedings (collectively, “Proceedings”) to the
extent they are based upon (i) a breach of this Agreement by
Client, (ii) the wrongful acts or omissions of Client, or (iii) the
Offering.
-2-
b. Indemnification by Sageworks.
Sageworks shall indemnify and hold Client, Client’s
affiliates and Client’s representatives and agents harmless
from any Losses resulting from or arising out of Proceedings to the
extent they are based upon a breach of this Agreement by
Sageworks.
c. Indemnification Procedure. If
any Proceeding is commenced against a party entitled to
indemnification under this section, prompt notice of the Proceeding
shall be given to the party obligated to provide such
indemnification. The indemnifying party shall be entitled to take
control of the defense, investigation or settlement of the
Proceeding and the indemnified party agrees to reasonably
cooperate, at the indemnifying party's cost in the ensuing
investigations, defense or settlement.
7. Notices. Any
notices required by this Agreement shall be in writing and shall be
addressed, and delivered or mailed postage prepaid, or faxed or
emailed to the other parties hereto at such addresses as such other
parties may designate from time to time for the receipt of such
notices. Until further notice, the address of each party to this
Agreement for this purpose shall be the following:
If to the Client:
Bitzumi,, Inc.
00 0xx
Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxx, CEO
If to the Sageworks:
Sageworks Capital, LLC.
000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Tel: 000-000-0000
Attn: Xxxx Xxxxxxx, CEO
8. Confidentiality
and Mutual Non-Disclosure:
a. Confidentiality.
i. Included
Information. For purposes of this Agreement, the term
“Confidential Information” means all confidential and
proprietary information of a party, including but not limited to
(i) financial information, (ii) business and marketing plans, (iii)
the names of employees and owners, (iv) the names and other
personally-identifiable information of users of the Portal, (v)
security codes, and (vi) all documentation provided by Client or
Investor.
-3-
ii. Excluded Information. For purposes of
this Agreement, the term “confidential and proprietary
information” shall not include (i) information already known
or independently developed by the recipient without the use of any
confidential and proprietary information, or (ii) information known
to the public through no wrongful act of the
recipient
.
iii. Confidentiality
Obligations. During the Term and at all times thereafter, neither
party shall disclose Confidential Information of the other party or
use such Confidential Information for any purpose
without the prior written
consent of such other party. Without limiting the preceding
sentence, each party shall use at least the same degree of care in
safeguarding the other party’s Confidential Information as it
uses to safeguard its own Confidential Information. Notwithstanding
the foregoing, a party may disclose Confidential
Information (i) if required to do by order of a court of competent
jurisdiction,
provided that such party shall notify the other party
in writing promptly upon
receipt of knowledge of such order so that such other party may attempt to
prevent such disclosure or seek a protective order; or (ii) to any
applicable governmental authority as required by applicable law. Nothing contained herein shall be
construed to prohibit the SEC, FINRA, or other government official
or entities from obtaining, reviewing, and auditing any
information, records, or data. Issuer acknowledges that regulatory
record-keeping requirements, as well as securities industry best
practices, require Provider to maintain copies of practically all
data, including communications and materials, regardless of any
termination of this Agreement.
9. Miscellaneous.
a. ANY
DISPUTE OR CONTROVERSY BETWEEN THE CLIENT AND PROVIDER RELATING TO
OR ARISING OUT OF THIS AGREEMENT WILL BE SETTLED BY ARBITRATION
BEFORE AND UNDER THE RULES OF THE ARBITRATION COMMITIEE OF
FINRA.
b. This Agreement is
non-exclusive and shall not be construed to prevent either party
from engaging in any other business activities
c. This Agreement will be binding upon all
successors, assigns or transferees of Client. No assignment of this
Agreement by either party will be valid unless the other party
consents to such an assignment in writing. Either party may
freely assign this Agreement to any person or entity that acquires
all or substantially all of its business or assets. Any assignment by the either party to
any subsidiary that it may create or to a company affiliated with
or controlled directly or indirectly by it will be deemed valid and
enforceable in the absence of any consent from the other
party.
d. Neither
party will, without prior written approval of the other party,
place or agree to place any advertisement in any website,
newspaper, publication, periodical or any other media or
communicate with the public in any manner whatsoever if such
advertisement or communication in any manner makes reference to the
other party, to any person or entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by,
or is under common control, with the other party and to the
clearing arrangements and/or any of the Services embodied in this
Agreement. Client and Sageworks will work together to authorize and
approve co-branded notifications and client facing communication
materials regarding the representations in this Agreement.
Notwithstanding any provisions to the contrary within, Client
agrees that Sageworks may make reference in marketing or other
materials to any transactions completed during the term of this
Agreement, provided no personal data or Confidential Information is
disclosed in such materials.
-4-
e. THE CONSTRUCTION AND EFFECT OF EVERY
PROVISION OF THIS AGREEMENT, THE RIGHTS OF THE PARTIES UNDER THIS
AGREEMENT AND ANY QUESTIONS ARISING OUT OF THE AGREEMENT, WILL BE
SUBJECT TO THE STATUTORY AND COMMON LAW OF THE STATE OF
PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
The language used in this Agreement shall be deemed to be the
language chosen by the parties to express their mutual intent, and
no rule of strict construction will be applied against any
party
f. If
any provision or condition of this Agreement will be held to be
invalid or unenforceable by any court, or regulatory or
self-regulatory agency or body, the validity of the remaining
provisions and conditions will not be affected and this Agreement
will be carried out as if any such invalid or unenforceable
provision or condition were not included in the
Agreement.
g. This Agreement sets
forth the entire agreement between the parties with respect to the
subject matter hereof and supersedes any prior agreement relating
to the subject matter herein. The Agreement may not be modified or
amended except by written agreement.
h. This Agreement may
be executed in multiple counterparts and by facsimile or electronic
means, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
[SIGNATURES
APPEAR ON FOLLOWING PAGE(S)]
-5-
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
|
|
CLIENT:
Bitzumi, Inc.
|
|
|
By: /s/ Xxxx
Xxxxx
|
|
|
Name:
Xxxx
Xxxxx
|
|
|
Its:
CEO
|
|
|
|
|
|
SAGEWORK
CAPITAL, LLC:
|
|
|
|
|
|
By: /s/ Xxxx
Xxxxxxx
|
|
|
Name: Xxxx
Xxxxxxx
|
|
|
Its:
CEO
|
|
|
|
-6-
Exhibit
A
Services:
a.
Sageworks Responsibilities –
Sageworks agrees to:
i.
Review investor
information, including KYC (Know Your Customer) data, perform AML
(Anti-Money Laundering) and other compliance background checks, and
provide a recommendation to Client whether or not to accept
investor as a customer of the Client (it’s the sole
discretion of the Client as to whether to accept the
Investor);
ii.
Provide escrow
services, if necessary, through a third party qualified Escrow
Agent:
iii.
Provide technology
and payment processing services through Sageworks’ third
party relationships;
iv.
Review each
investors subscription agreement to confirm such Investors
participation in the offering, and provide a determination to
Client whether or not to accept the use of the subscription
agreement for the Investors participation;
v.
Contact and/or
notify the issuer, if needed, to gather additional information or
clarification on an investor;
vi.
Not provide any
investment advice nor any investment recommendations to any
investor;
vii.
Keep investor
details and data confidential and not disclose to any third-party
except as required by regulators or in our performance under this
Agreement (e.g. as needed for AML and background
checks);
viii.
Perform all
standard AML, PATRIOT Act, Bad Actor, and other background checks
on both the issuer and its associated persons.
-7-
