EXHIBIT 10.1
February 7, 2005
Xx. Xxxx Xxxxxxx
Chief Financial Officer
Eagle Broadband, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Dear Xx. Xxxxxxx:
This is to confirm the Agreement ("Agreement") between The Keystone
Equities Group ("TKEG") and Eagle Broadband, Inc. ("Eagle Broadband" or the
"Company") as follows:
1. Services to be Rendered. Except as provided herein, during the Term, the
Company hereby retains TKEG as the Company's exclusive advisor and placement
agent in connection with a best efforts Private Placement ("Placement") of up to
20.0 million shares of the Company's common stock ("Shares"), for a maximum
gross capital raise of up to $9.0 million dollars. TKEG agrees that it will use
its best efforts to find purchasers of the Shares (the "Investors"). It is
understood that the decision to proceed with, and the final terms of, the
Placement will depend on satisfactory results of TKEG's due diligence
investigation (including reviews of legal, accounting, operational issues and
final approval by TKEG's commitment committee). TKEG disclaims any agreement,
expressed or implied, in this Agreement or otherwise, that it will be successful
in placing the Shares.
2. Information. In connection with TKEG's engagement, the Company will
furnish, or cause to be furnished, to TKEG all data, material and other
information requested by TKEG for the purposes of performing the services
contemplated hereunder as mutually agreed to by TKEG and the Company; that being
the same general information available to all potential investors. The Company
represents and warrants to TKEG that any such information, any reports required
by it to be filed by it with any state or federal authority (collectively
"Reports") and any other information (whether written or oral) supplied to TKEG
or Investors by or on behalf of the Company in connection with the Placement or
the performance of TKEG's services hereunder will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading. The Company agrees to use its best
efforts to cooperate with TKEG in connection with the offering of the Shares,
including making appropriate officers or principals of the Company available to
TKEG for meetings with prospective purchasers of the Shares.
3. Expiration of Engagement. The engagement of TKEG as placement agent
shall begin as of the above date and expire on February 11, 2005 ("Term"),
unless extended by mutual agreement of TKEG and the Company. Either party may
terminate this agreement at any time after the expiration of the Term. Upon
successful completion by TKEG of this Placement of 20.0 million shares, the
company shall provide TKEG the first right of refusal for a 90 day period from
the date of successful completion to sell the remaining portion of the 30.0
million shares registered with the Securities and Exchange Commission via form
S-3 (File No. 333-122217) as filed January 21, 2005, at an agency fee of $0.01
per share with minimum number of shares sold per placement of no less than 1.0
million shares. If TKEG does not successfully place 20.0 million shares in this
Placement, TKEG agrees to forfeit its right of first refusal to sell the
remaining portion of the 30.0 million shares registered with the Securities and
Exchange Commission via form S-3 as filed January 21, 2005. .
Xx. Xxxx Xxxxxxx
Eagle Broadband, Inc.
Page 2 of 6
February 7, 2005
4. Offering Memorandum. The Company shall prepare disclosure documents to
be provided to potential purchasers of the Common as offering materials (the
"Offering Materials"). The Company represents and warrants to the best of its
knowledge that the Offering Materials will not, as of the Closing Date of the
Placement, contain any untrue statement of material fact or omit to state any
material fact required to be stated therein, or necessary to make the statements
contained therein, not misleading (other than information relating to or
furnished by TKEG provided in writing by TKEG expressly for use in the Offering
Materials as to which the Company makes no representation or warranty). The
Company agrees to cooperate with TKEG in connection with the Placement,
including making appropriate officers or principals of the Company available to
TKEG for meetings with prospective purchasers. The Company will not offer the
Shares sold in the Placement to prospective investors, or accept any
subscriptions from prospective investors to invest in the Shares, except through
TKEG. TKEG recognizes and acknowledges that it is not authorized to make any
representations and statements to any potential purchaser other than and to the
extent that such representations and statements are contained in the Offering
Materials.
5. Proposed Placement Offering Terms. TKEG proposes the following Placement
Offering Terms: the Company shall sell up to 20.0 million Shares of Common Stock
at a price of $0.45 per Share.
6. Placement Agent Fee. In consideration for the services rendered by TKEG
hereunder, the Company agrees to pay TKEG on the Closing Date of this Placement
a cash fee (the "Placement Agent Fee") of eight percent (8.0%) of the gross
proceeds of the sale of the Shares in this Placement.
7. Obligations Limited. TKEG shall be under no obligation hereunder to make
an independent appraisal of assets or investigation or inquiry as to any
information regarding, or any representations of, Company and shall have no
liability hereunder in regard thereto.
8. Indemnification. Notwithstanding any other provision of this Agreement,
in the event that TKEG, its partners, affiliates, officers or directors becomes
involved in any capacity in any claim, suit, action, proceeding, investigation
or inquiry (including, without limitation, any shareholder or derivative action
or arbitration proceeding) (collectively, a "Proceeding") in connection with any
matter in any way relating to, or referred to in this Agreement or arising out
of the matters contemplated by this Agreement, Company will reimburse TKEG, its
partners, affiliates, officers or directors for their legal and other expenses
(including the cost of any investigation and preparation). Company also agrees
Xx. Xxxx Xxxxxxx
Eagle Broadband, Inc.
Page 3 of 6
February 7, 2005
to indemnify, defend and hold TKEG, its partners, affiliates, officers and
directors harmless, to the fullest extent permitted by law, from and against any
losses, claims, damages, liabilities and expenses in connection with any matter
in any way relating to or referred to in this Agreement or arising out of the
matters contemplated by this Agreement, except to the extent that it shall be
determined by a court of competent jurisdiction in a judgment that has become
final in that it is no longer subject to appeal or other review that such
losses, claims, damages, liabilities and expenses resulted from TKEG's gross
negligence or willful misconduct. Company shall, if requested by TKEG, assume
the defense of any such Proceeding, including the employment of counsel
reasonably satisfactory to TKEG. If such indemnification were for any reason not
to be available or sufficient to hold TKEG, its partners, affiliates, officers
or directors harmless, Company agrees to contribute to the losses, claims,
damages, liabilities and expenses involved (i) in the proportion appropriate to
reflect the relative benefits paid or received or sought to be paid or received
by TKEG and its partners, stockholders and affiliates and other constituencies,
on the one hand, and the party entitled to contribution, on the other hand, in
the matters contemplated by this Agreement or (ii) if (but only if and to the
extent) the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of
Company and its partners, stockholders and affiliates and other constituencies,
on the one hand, and the party entitled to contribution, on the other hand, as
well as any other relevant equitable considerations. Company agrees that for
purposes of this Paragraph 8 the relative benefits paid or received, or sought
to be paid or received, by Company and its stockholders and affiliates and other
constituencies, on the one hand, and the party entitled to contribution, on the
other hand, in the matters contemplated by this Agreement shall be deemed to be
in the same proportion that the total value paid or received or contemplated to
be paid or received by Company or its partners, stockholders or affiliates or
other constituencies, as the case may be, as a result of or in connection with
the Placement for which TKEG has been retained to perform services bears to the
fees paid to TKEG under this Agreement; provided, that in no event shall Company
contribute less than the amount necessary to assure that the party entitled to
contribution is not liable for losses, claims, damages, liabilities and expenses
in excess of the amount of fees actually received by TKEG pursuant to this
Agreement. Relative fault shall be determined by reference to, among other
things, whether any alleged untrue statement or omission or any other alleged
conduct relates to information provided by Company or other conduct by Company
(or its employees or other agents), on the one hand, or by TKEG, on the other
hand. Company will not settle any Proceeding in respect of which indemnity may
be sought hereunder, whether or not TKEG is an actual or potential party to such
Proceeding, without TKEG's prior written consent. The foregoing indemnity and
contribution agreement shall be in addition to any rights that TKEG or any
indemnified party may have at common law or otherwise.
9. No Liability. Company agrees that neither TKEG nor any of its partners,
affiliates, directors, agents, employees or controlling persons shall have any
liability to Company or any person asserting claims on behalf of or in right of
Company in connection with or as a result of either TKEG's engagement under this
Agreement or any matter referred to in this Agreement, except to the extent that
any losses, claims, damages, liabilities or expenses incurred by Company are
determined by a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of TKEG in performing the services that
are the subject of this Agreement.
Xx. Xxxx Xxxxxxx
Eagle Broadband, Inc.
Page 4 of 6
February 7, 2005
10. Independent Contractor. Company acknowledges and agrees that the
engagement of TKEG hereunder is not intended to confer rights upon any person
(including shareholders, employees or creditors of TKEG) not a party hereto as
against Company or its affiliates, or their respective directors, officers,
employees or agents, successors or assigns. TKEG shall act as an independent
contractor under this Agreement, and any duties arising out of its engagement
shall be owed solely to Company. TKEG shall have no restrictions to on its
ability to provide services to companies other than the Company, except as
stated herein. TKEG shall have no authority to accept any order or to bind or
obligate the Company in any way or to renew any debt or obligation for or on
account of the Company without the Company's prior written consent. As an
independent contractor, TKEG will be solely responsible for its income and all
other applicable taxes.
11. Publicity. TKEG may, at its own expense, place customary tombstone
announcements or advertisements in financial newspapers and journals describing
its services hereunder upon the completion of the Offering.
12. Assignment: Neither party, without the explicit written consent of the
other may assign in whole nor in part the rights and obligations imposed upon
the parties by this agreement.
13. Entire Agreement and Governing Law. This Agreement sets forth the
entire understanding of the parties and supersedes any prior communications,
understanding and agreements between the parties with regard to the Placement.
This Agreement cannot be changed, nor can any of its provisions be waived,
except by the written agreement of all parties. This Agreement shall be governed
by the laws of the State of Texas without regard to its conflict of laws
provisions. Any action or proceeding brought by either party against the other
party arising out of or related to this Agreement shall be brought exclusively
in the courts of the State of Texas located in Xxxxxx County, Texas or in the
United States District Court for the Eastern District of Texas, which courts
shall have exclusive jurisdiction over the adjudication of such matters, and the
Company and TKEG consent to the jurisdiction of such courts and personal service
with respect thereto. The Company hereby consents to personal jurisdiction,
service and venue in any court in which any claim arising out of or in any way
relating to this Agreement is brought by any third party against TKEG or any
indemnified party. The Company agrees that a final judgment in any such
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
14. Representations. Each party hereto represents, warrants and covenants
to the other party that (a) it has the power and authority to enter into this
Agreement and to perform its respective obligations hereunder, (b) it will
comply with all applicable laws, rules and regulations and (c) that it has all
licenses and memberships required to perform obligations and services hereunder.
In addition to the foregoing, TKEG has not taken and will not take any action,
Xx. Xxxx Xxxxxxx
Eagle Broadband, Inc.
Page 5 of 6
February 7, 2005
directly or indirectly, that may cause any Private Placement transaction to fail
to be entitled to exemption from registration under United States federal
securities laws, or applicable state securities or "blue sky" laws, or the
applicable laws of the foreign countries in which the securities will be offered
or sold. TKEG further represents that it will comply with all federal and state
laws in connection with the performance of its obligations under this Agreement.
The Company shall be responsible for any costs and expenses associated with
filings, applications or registrations with any governmental or regulatory body,
including, without limitation, those associated with any sales pursuant to
Regulation D under the 1933 Act, "blue sky" laws, and the laws of the foreign
countries in which the securities will be offered or sold that are required to
be made by the Company.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
Xx. Xxxx Xxxxxxx
Eagle Broadband, Inc.
Page 6 of 6
February 7, 2005
15. Notices. This Agreement supersedes and makes null and void all and any
previous written or oral agreements between TKEG and the Company with regard to
the Placement. Any notice, consent or other communication given pursuant to this
Agreement shall be in writing and shall be effective when (i) delivered
personally, (ii) sent by telex or telecopier (with receipt confirmed), provided
that a copy is mailed registered mail, return receipt requested, or (iii) when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested), in each case to the appropriate
addressee set forth below:
If to TKEG: Xx. Xxxxxxx X. Xxxxxx
The Keystone Equities Group
0000 Xxxxx Xx, Xxx 0000
Xxxx, Xxxxxxxxxxxx 00000-0000
If to the Company: Xx. Xxxx Xxxxxxx
Eagle Broadband, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxx 00000
If the foregoing correctly sets forth your understanding, please so
indicate by signing and returning to us the enclosed copy of this letter.
Sincerely,
The Keystone Equities Group
By: //s// XXXXXXX X XXXXXX By: //s// XXXXX X. XXXXX
----------------------- ---------------------
Xxxxxxx X Xxxxxx Xxxxx X. Xxxxx
Chairman Managing Director
Confirmed and Agreed to:
Eagle Broadband, Inc.
By: //s// XXXX XXXXXXX Date: February 7, 2005
-----------------------
Xxxx Xxxxxxx
Chief Financial Officer
