WHERIFY WIRELESS, INC. PLACEMENT AGENT AGREEMENT
WHERIFY
WIRELESS, INC.
Dated
as
of: Xxxxx
00,
0000
Xxxxxxxxx
Securities Corporation
0000
Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Ladies
and Gentlemen:
The
undersigned, Wherify Wireless, Inc., a Delaware corporation (the “Company”),
hereby agrees with
Newbridge Securities Corporation (the “Placement
Agent”)
as
follows:
1. Offering
and Placement Agent Services.
The
Company hereby engages the Placement Agent to act as its exclusive placement
agent in connection with the Standby Equity Distribution Agreement (the
“Standby
Equity Distribution Agreement”)
dated
the date hereof between the Company and Cornell Capital Partners, LP (the
“Investor”),
pursuant to which the Company shall issue and sell to the Investor, from
time to
time, and the Investor shall purchase from the Company (the “Offering”)
up to
Forty Million Dollars ($40,000,000) (the “Commitment
Amount”)
of the
Company’s common stock, par value $0.01 per share (the “Common
Stock”),
at
price per share equal to the Purchase Price, as that term is defined in the
Standby Equity Distribution Agreement. The
Placement Agent shall provide consulting services to the Company in connection
with the Standby Equity Distribution Agreement and advise
the Company with
respect to those
terms.
The
Placement Agent shall be available to the Company for consultation in connection
with the Offering and the calculation of shares to be issued in the Offering.
All
capitalized terms used herein and not otherwise defined herein shall have
the
same meaning ascribed to them as in the Standby Equity Distribution Agreement.
The Investor will be granted certain registration rights with respect to
the
Common Stock as more fully set forth in the Registration Rights Agreement
between the Company and the Investor dated the date hereof (the “Registration
Rights Agreement”).
The
documents to be executed and delivered in connection with the Offering,
including, but not limited, to the
Company’s latest Quarterly Report on Form 10-QSB as filed with the United States
Securities and Exchange Commission, this
Agreement, the Standby Equity Distribution Agreement, and the Registration
Rights Agreement are referred to sometimes hereinafter collectively as the
“Offering
Materials.”
The
Company’s Common Stock
purchased by the Investor under
the
Standby Equity Distribution Agreement is sometimes referred to hereinafter
as
the “Securities.”
The
Placement Agent shall not be obligated to sell any Securities.
2. Compensation.
A. Upon
the
execution of this Agreement, the Company shall issue to the Placement Agent
or
its designee 7.092
shares
of the Company’s Common Stock (an amount worth Ten Thousand Dollars ($10,000))
(the “Placement
Agent’s Shares”).
The
Placement Agent shall be entitled to “piggy-back” registration rights with
respect to the Placement Agent’s Shares, which shall be triggered upon
registration of any shares of Common Stock by the Company pursuant to the
Registration Rights Agreement dated the date hereof.
1
3. Representations,
Warranties and Covenants of the Placement Agent.
A. The
Placement Agent represents, warrants and covenants as follows:
(i) The
Placement Agent has the necessary power to enter into this Agreement and
to
consummate the transactions contemplated hereby.
(ii) The
execution and delivery by the Placement Agent of this Agreement and the
consummation of the transactions contemplated herein will not result in any
violation of, or be in conflict with, or constitute a default under, any
agreement or instrument to which the Placement Agent is a party or by which
the
Placement Agent or its properties are bound, or any judgment, decree, order
or,
to the Placement Agent’s knowledge, any statute, rule or regulation applicable
to the Placement Agent. This Agreement when executed and delivered by the
Placement Agent, will constitute the legal, valid and binding obligations
of the
Placement Agent, enforceable in accordance with their respective terms, except
to the extent that (a) the enforceability hereof or thereof may be limited
by
bankruptcy, insolvency, reorganization, moratorium or similar laws from time
to
time in effect and affecting the rights of creditors generally, (b) the
enforceability hereof or thereof is subject to general principles of equity,
or
(c) the indemnification provisions hereof or thereof may be held to be in
violation of public policy.
(iii) Upon
receipt and execution of this Agreement, the Placement Agent will promptly
forward copies of this Agreement to the Company or its counsel and the Investor
or its counsel.
(iv) The
Placement Agent will not intentionally take any action that it reasonably
believes would cause the Offering to violate the provisions of the Securities
Act of 1933, as amended (the “1933
Act”),
the
Securities Exchange Act of 1934 (the “1934
Act”),
the
respective rules and regulations promulgated thereunder
(the
“Rules
and Regulations”)
or
applicable “Blue Sky” laws of any state or jurisdiction.
(v) The
Placement Agent is a member of the National Association of Securities Dealers,
Inc., and is a broker-dealer registered as such under the 1934 Act and under
the
securities laws of the states in which the Securities will be offered or
sold by
the Placement Agent unless an exemption for such state registration is available
to the Placement Agent. The Placement Agent is in material
compliance
with the
rules
and regulations applicable to the Placement Agent generally and applicable
to
the Placement Agent’s participation in the Offering.
2
4. Representations
and Warranties of the Company.
A. The
Company represents and warrants as follows:
(i) Organization
and Qualification.
The
Company is duly incorporated or organized and validly existing in the
jurisdiction of its incorporation or organization and has all requisite
corporate power to own its properties and to carry on its business as now
being
conducted. Each of the Company and its subsidiaries is duly qualified as
a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be
in
good standing would not have a Material Adverse Effect on the Company and
its
subsidiaries taken as a whole.
(ii) Authorization,
Enforcement, Compliance with Other Instruments.
(i) The
Company has the requisite corporate power and authority to enter into and
perform this Agreement, the Registration Rights Agreement, the Standby Equity
Distribution Agreement and any related agreements, in accordance with the
terms
hereof and thereof, (ii) the execution and delivery of this Agreement, the
Registration Rights Agreement, the Standby Equity Distribution Agreement
and any
related agreements by the Company and the consummation by it of the transactions
contemplated hereby and thereby, have been duly authorized by the Company’s
Board of Directors and no further consent or authorization is required by
the
Company, its Board of Directors or its stockholders, (iii) this Agreement,
the Registration Rights Agreement, the Standby Equity Distribution Agreement
and
any related agreements have been duly executed and delivered by the Company,
(iv) this Agreement, the Registration Rights Agreement, the Standby Equity
Distribution Agreement and assuming the execution and delivery thereof and
acceptance by the Placement Agent and any related agreements constitute the
valid and binding obligations of the Company enforceable against the Company
in
accordance with their terms, except as such enforceability may be limited
by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and
remedies.
(iii) Capitalization.
As of
the date hereof, the authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock,
(“Preferred
Stock”),
of
which 54,958,496 shares of Common Stock and no shares of Preferred Stock
are
issued and outstanding. All of such outstanding shares have been validly
issued
and are fully paid and nonassessable. Except as disclosed in the SEC Documents,
no shares of Common Stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company.
Except
as disclosed in the SEC Documents, as of the date hereof, (i) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by
which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries
or
options, warrants, scrip, rights to subscribe to, calls or commitments of
any
character whatsoever relating to, or securities or rights convertible into,
any
shares of capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities (iii) there
are no outstanding registration statements other than on Form S-8 and (iv)
there
are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of their securities
under
the Securities Act (except pursuant to the Registration Rights Agreement).
There
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by this Agreement or any related agreement or the
consummation of the transactions described herein or therein.
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(iv) No
Conflict.
The
execution, delivery and performance of this Agreement by the Company and
the
consummation by the Company of the transactions contemplated hereby will
not (i)
result in a violation of the Certificate of Incorporation, any certificate
of
designations of any outstanding series of preferred stock of the Company
or
By-laws or (ii) conflict with or constitute a default (or an event which
with
notice or lapse of time or both would become a default) under, or give to
others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations and the rules and regulations of the Principal Market on which
the
Common Stock is quoted) applicable to the Company or any of its subsidiaries
or
by which any material property or asset of the Company or any of its
subsidiaries is bound or affected and which would cause a Material Adverse
Effect. Except as disclosed in the SEC Documents, neither the Company nor
its
subsidiaries is in violation of any term of or in default under its Articles
of
Incorporation or By-laws or their organizational charter or by-laws,
respectively, or any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its subsidiaries. The business of
the
Company and its subsidiaries is not being conducted in violation of any material
law, ordinance, regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the Securities Act and
any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with,
any
court or governmental agency in order for it to execute, deliver or perform
any
of its obligations under or contemplated by this Agreement or the Registration
Rights Agreement in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected
on
or prior to the date hereof. The Company and its subsidiaries are unaware
of any
fact or circumstance which might give rise to any of the foregoing.
(v) SEC
Documents; Financial Statements.
The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC under the Exchange Act since January
1,
2003. The Company has delivered to the Placement Agent or its representatives,
or made available through the SEC’s website at xxxx://xxx.xxx.xxx, true and
complete copies of the SEC Documents. As of their respective dates, the
financial statements of the Company disclosed in the SEC Documents (the
“Financial
Statements”)
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed
or
summary statements) and, fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Placement Agent
which
is not included in the SEC Documents contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
4
(vi) 10b-5.
The SEC
Documents do not include any untrue statements of material fact, nor do they
omit to state any material fact required to be stated therein necessary to
make
the statements made, in light of the circumstances under which they were
made,
not misleading.
(vii) No
Default.
Except
as disclosed in the SEC Documents, the Company is not in default in the
performance or observance of any material obligation, agreement, covenant
or
condition contained in any indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it is or its property
is bound and neither the execution, nor the delivery by the Company, nor
the
performance by the Company of its obligations under this Agreement or any
of the
exhibits or attachments hereto will conflict with or result in the breach
or
violation of any of the terms or provisions of, or constitute a default or
result in the creation or imposition of any lien or charge on any assets
or
properties of the Company under its Certificate of Incorporation, By-Laws,
any
material indenture, mortgage, deed of trust or other material agreement
applicable to the Company or instrument to which the Company is a party or
by
which it is bound, or any statute, or any decree, judgment, order, rules
or
regulation of any court or governmental agency or body having jurisdiction
over
the Company or its properties, in each case which default, lien or charge
is
likely to cause a Material Adverse Effect on the Company’s business or financial
condition.
(viii) Absence
of Events of Default.
Except
for matters described in the SEC Documents and/or this Agreement, no Event
of
Default, as defined in the respective agreement to which the Company is a
party,
and no event which, with the giving of notice or the passage of time or both,
would become an Event of Default (as so defined), has occurred and is
continuing, which would have a Material Adverse Effect on the Company’s
business, properties, prospects, financial condition or results of
operations.
(ix) Intellectual
Property Rights.
The
Company and its subsidiaries own or possess adequate rights or licenses to
use
all material trademarks, trade names, service marks, service xxxx registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and rights necessary
to
conduct their respective businesses as now conducted. The Company and its
subsidiaries do not have any knowledge of any infringement by the Company
or its
subsidiaries of trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service xxxx
registrations, trade secret or other similar rights of others, and, to the
knowledge of the Company, there is no claim, action or proceeding being made
or
brought against, or to the Company’s knowledge, being threatened against, the
Company or its subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
xxxx registrations, trade secret or other infringement; and the Company and
its
subsidiaries are unaware of any facts or circumstances which might give rise
to
any of the foregoing.
5
(x) Employee
Relations.
Neither
the Company nor any of its subsidiaries is involved in any labor dispute
nor, to
the knowledge of the Company or any of its subsidiaries, is any such dispute
threatened. None of the Company’s or its subsidiaries’ employees is a member of
a union and the Company and its subsidiaries believe that their relations
with
their employees are good.
(xi) Environmental
Laws.
The
Company and its subsidiaries are (i) in compliance with any and all applicable
material foreign, federal, state and local laws and regulations relating
to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental
Laws”),
(ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii)
are in compliance with all terms and conditions of any such permit, license
or
approval.
(xii) Title.
Except
as set forth in the SEC Documents, the Company has good and marketable title
to
its properties and material assets owned by it, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest other than
such as are not material to the business of the Company. Any real property
and
facilities held under lease by the Company and its subsidiaries are held
by them
under valid, subsisting and enforceable leases with such exceptions as are
not
material and do not interfere with the use made and proposed to be made of
such
property and buildings by the Company and its subsidiaries.
(xiii) Insurance.
The
Company and each of its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its subsidiaries are engaged. Neither the Company
nor
any such subsidiary has been refused any insurance coverage sought or applied
for and neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and
when
such coverage expires or to obtain similar coverage from similar insurers
as may
be necessary to continue its business at a cost that would not materially
and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
(xiv) Regulatory
Permits.
The
Company and its subsidiaries possess all material certificates, authorizations
and permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and neither
the
Company nor any such subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization
or
permit.
(xv) Internal
Accounting Controls.
Except
as disclosed in the SEC Documents, the Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity
with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization and (iv) the recorded accountability for assets
is
compared with the existing assets at reasonable intervals and appropriate
action
is taken with respect to any differences.
6
(xvi) No
Material Adverse Breaches, etc.
Except
as set forth in the SEC Documents, neither the Company nor any of its
subsidiaries is subject to any charter, corporate or other legal restriction,
or
any judgment, decree, order, rule or regulation which in the judgment of
the
Company’s officers has or is expected in the future to have a Material Adverse
Effect on the business, properties, operations, financial condition, results
of
operations or prospects of the Company or its subsidiaries. Except as set
forth
in the SEC Documents, neither the Company nor any of its subsidiaries is
in
breach of any contract or agreement which breach, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect on the
business, properties, operations, financial condition, results of operations
or
prospects of the Company or its subsidiaries.
(xvii) Absence
of Litigation.
Except
as set forth in the SEC Documents, there is no action, suit, proceeding,
inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending against or affecting the Company,
the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable
decision, ruling or finding would (i) have a Material Adverse Effect on the
transactions contemplated hereby (ii) adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform
its
obligations under, this Agreement or any of the documents contemplated herein,
or (iii) except as expressly disclosed in the SEC Documents, have a Material
Adverse Effect on the business, operations, properties, financial condition
or
results of operation of the Company and its subsidiaries taken as a
whole.
(xviii) Subsidiaries.
Except
as disclosed in the SEC Documents, the Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
partnership, association or other business entity.
(xix) Tax
Status.
Except
as disclosed in the SEC Documents, the Company and each of its subsidiaries
has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith. To the best of
the
Company’s knowledge, there are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.
(xx) Certain
Transactions.
Except
as set forth in the SEC Documents none of the officers, directors, or employees
of the Company is presently a party to any transaction with the Company (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to
or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or,
to the
knowledge of the Company, any corporation, partnership, trust or other entity
in
which any officer, director, or any such employee has a substantial interest
or
is an officer, director, trustee or partner.
7
5. Certain
Covenants and Agreements of the Company.
The
Company covenants and agrees at its expense and without any expense to the
Placement Agent as follows:
A. To
advise
the Placement Agent of
any
material adverse change in the Company’s financial condition, prospects or
business or of any development materially affecting the Company or rendering
untrue or misleading any material statement in the Offering Materials (taken
as
a whole) occurring at any time as soon as the Company is either informed
or
becomes aware thereof.
B. To
use
its commercially reasonable efforts to cause the Common Stock issuable in
connection with the Standby Equity Distribution Agreement to be qualified
or
registered for sale on terms consistent with those stated in the Registration
Rights Agreement and under the securities laws of such jurisdictions as the
Placement Agent shall reasonably request. Qualification, registration and
exemption charges and fees shall be at the sole cost and expense of the
Company.
C. Upon
written request, to provide and continue to provide the Placement Agent copies
of all quarterly financial statements and audited annual financial statements
prepared by or on behalf of the Company, other reports prepared by or on
behalf
of the Company for public disclosure and all documents delivered to the
Company’s stockholders.
D. To
comply
with the terms of the Offering Materials.
E. To
ensure
that any transactions between or among the Company, or any of its officers,
directors and affiliates be on terms and conditions that are no less favorable
to the Company, than the terms and conditions that would be available in
an
“arm’s length” transaction with an independent third party.
F. Upon
the
effectiveness of a registration statement covering the Securities, the Company
shall promptly provide the Placement Agent with an opinion of Counsel to
the
Company, which opinion shall be in form and substance reasonably satisfactory
to
and the Placement Agent.
G. At
or
prior to the Closing, the Company shall have been furnished such documents,
certificates and opinions as it may reasonably require for the purpose of
enabling the Placement Agent to review or pass upon the matters referred
to in
this Agreement and the Offering Materials, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained.
8
6. Indemnification
and
Limitation of Liability.
A. The
Company hereby agrees that it will indemnify and hold the Placement Agent
and
each officer, director, shareholder, employee or representative of the Placement
Agent and each person controlling, controlled by or under common control
with
the Placement Agent within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act or the SEC’s Rules and Regulations promulgated thereunder
(the “Rules
and Regulations”),
harmless from and against any and all loss, claim, damage, liability, cost
or
expense whatsoever (including, but not limited to, any and all reasonable
legal
fees and other expenses and disbursements incurred in connection with
investigating, preparing to defend or defending any action, suit or proceeding,
including any inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in any
action, suit or proceeding, including any inquiry, investigation or pretrial
proceeding such as a deposition) to which the Placement Agent or such
indemnified person of the Placement Agent may become subject under the 1933
Act,
the 1934 Act, the Rules and Regulations, or any other federal or state law
or
regulation, common law or otherwise, arising out of or based upon (i) any
untrue
statement or alleged untrue statement of a material fact contained in (a)
Section 4 of this Agreement, (b) the Offering Materials (except those written
statements relating to the Placement Agent given by the
Placement Agent
for
inclusion therein), (c) any application or other document or written
communication executed by the Company or based upon written information
furnished by the Company filed in any jurisdiction in order to qualify the
Common Stock under the securities laws thereof, or any state securities
commission or agency; (ii) the omission or alleged omission from documents
described in clauses (a), (b) or (c) above of a material fact required to
be
stated therein or necessary to make the statements therein not misleading;
or
(iii) the breach of any representation, warranty, covenant or agreement made
by
the Company in this Agreement. The Company further agrees that upon demand
by an
indemnified person, at any time or from time to time, it will promptly reimburse
such indemnified person for any loss, claim, damage, liability, cost or expense
actually and reasonably paid by the indemnified person as to which the Company
has indemnified such person pursuant hereto. Notwithstanding the foregoing
provisions of this Paragraph 7(A), any such payment or reimbursement by the
Company of fees, expenses or disbursements incurred by an indemnified person
in
any proceeding in which a final judgment by a court of competent jurisdiction
(after all appeals or the expiration of time to appeal) is entered against
the
Placement Agent or such indemnified person based upon specific finding of
fact
that the Placement Agent or such indemnified person’s gross negligence or
willful misfeasance will be promptly repaid to the Company.
B. The
Placement Agent hereby agrees that it will indemnify and hold the Company
and
each officer, director, shareholder, employee or representative of the Company,
and each person controlling, controlled by or under common control with the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the
1934 Act or the Rules and Regulations, harmless from and against any and
all
loss, claim, damage, liability, cost or expense whatsoever (including, but
not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend
or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company
may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the material
breach of any representation, warranty, covenant or agreement made by the
Placement Agent in this Agreement, or (ii)
any
false or misleading information provided to the Company in
writing by
one of
the Placement Agent’s indemnified persons
specifically for inclusion in the Offering Materials.
9
C. Promptly
after receipt by an indemnified party of notice of commencement of any action
covered by Section 7(A) or (B), the party to be indemnified shall, within
five
(5) business days, notify the indemnifying party of the commencement thereof;
the omission by one (1) indemnified party to so notify the indemnifying
party shall not relieve the indemnifying party of its obligation to indemnify
any other indemnified party that has given such notice and shall not relieve
the
indemnifying party of any liability outside of this indemnification if not
materially prejudiced thereby. In the event that any action is brought against
the indemnified party, the indemnifying party will be entitled to participate
therein and, to the extent it may desire, to assume and control the defense
thereof with counsel chosen by it which is reasonably acceptable to the
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof, the indemnifying
party
will not be liable to such indemnified party under such Section 7(A) or (B),
for
any legal or other expenses subsequently incurred by such indemnified party
in
connection with the defense thereof, but the indemnified party may, at its
own
expense, participate in such defense by counsel chosen by it, without, however,
impairing the indemnifying party’s control of the defense. Subject to the
proviso of this sentence and notwithstanding any other statement to the contrary
contained herein, the indemnified party or parties shall have the right to
choose its or their own counsel and control the defense of any action, all
at
the expense of the indemnifying party if (i) the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such action at the expense of the indemnifying party,
or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in
any of
which events such fees and expenses of one additional counsel shall be borne
by
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one action or separate but substantially similar
or
related actions in the same jurisdiction arising out of the same general
allegations or circumstance, be liable for the reasonable fees and expenses
of
more than one separate firm of attorneys at any time for all such indemnified
parties. No settlement of any action or proceeding against an indemnified
party
shall be made without the consent of the indemnifying party.
D. In
order
to provide for just and equitable contribution in circumstances in which
the
indemnification provided for in Section 7(A) or 7(B) is due in accordance
with
its terms but is for any reason held by a court to be unavailable on grounds
of
policy or otherwise, the Company and the Placement Agent shall contribute
to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with the investigation or defense
of
same) which the other may incur in such proportion so that the Placement
Agent
shall be responsible for such percent of the aggregate of such losses, claims,
damages and liabilities as shall equal the percentage of the gross proceeds
paid
to the Placement Agent and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation
within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For
purposes of this Section 7(D), any person controlling, controlled by or under
common control with the Placement Agent, or any partner, director, officer,
employee, representative or any agent of any thereof, shall have the same
rights
to contribution as the Placement Agent and each person controlling, controlled
by or under common control with the Company within the meaning of Section
15 of
the 1933 Act or Section 20 of the 1934 Act and each officer of the Company
and
each director of the Company shall have the same rights to contribution as
the
Company. Any party entitled to contribution will, promptly after receipt
of
notice of commencement of any action, suit or proceeding against such party
in
respect of which a claim for contribution may be made against the other party
under this Section 7(D), notify such party from whom contribution may be
sought,
but the omission to so notify such party shall not relieve the party from
whom
contribution may be sought from any obligation they may have hereunder or
otherwise if the party from whom contribution may be sought is not materially
prejudiced thereby.
10
E. The
indemnity and contribution agreements contained in this Section 7 shall remain
operative and in full force and effect regardless of any investigation made
by
or on behalf of any indemnified person or any termination of this
Agreement.
F. The
Company hereby waives, to the fullest extent permitted by law, any right
to or
claim of any punitive, exemplary, incidental, indirect, special, consequential
or other damages (including, without limitation, loss of profits) against
the
Placement Agent and each officer, director, shareholder, employee or
representative of the placement agent and each person controlling, controlled
by
or under common control with the Placement Agent within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act or the Rules and Regulations
arising out of any cause whatsoever (whether such cause be based in contract,
negligence, strict liability, other tort or otherwise). Notwithstanding anything
to the contrary contained herein, the aggregate liability of the Placement
Agent
and each officer, director, shareholder, employee or representative of the
Placement Agent and each person controlling, controlled by or under common
control with the Placement Agent within the meaning of Section 15 of the
1933
Act or Section 20 of the 1934 Act or the Rules and Regulations shall not
exceed
the compensation received by the Placement Agent pursuant to Section 2 hereof.
This limitation of liability shall apply regardless of the cause of action,
whether contract, tort (including, without limitation, negligence) or breach
of
statute or any other legal or equitable obligation.
7. Payment
of Expenses.
The
Company hereby agrees to bear all of the expenses in connection with the
Offering, including, but not limited to the following: filing fees, printing
and
duplicating costs, advertisements, postage and mailing expenses with respect
to
the transmission of Offering Materials, registrar and transfer agent fees,
escrow agent fees and expenses, fees of the Company’s counsel and accountants,
issue and transfer taxes, if any.
8. Termination.
This
Agreement shall be co-terminus with, and terminate upon the same terms and
conditions as those set forth in the Standby Equity Distribution Agreement.
11
9. Miscellaneous.
A. This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original, but all which shall be deemed to be one and the
same
instrument.
B. Any
notice required or permitted to be given hereunder shall be given in writing
and
shall be deemed effective when deposited in the United States mail, postage
prepaid, or when received if personally delivered or faxed (upon confirmation
of
receipt received by the sending party), addressed as follows
to such
other address of which written notice is given to the others):
|
If
to Placement Agent, to:
|
Newbridge
Securities Corporation
|
|
0000
Xxxxxxx Xxxxx Xxxx, Xxxxx 000
|
|
|
Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
|
|
|
Attention: Xxxx
Xxxxxxxxx
|
|
|
Telephone: (000)
000-0000
|
|
|
Facsimile: (000)
000-0000
|
|
|
If
to the Company, to:
|
Wherify
Wireless, Inc.
|
|
0000
Xxxxxx Xxxxxxx, Xxxxx 000
|
|
|
Xxxxxxx
Xxxxxx, XX 00000
|
|
|
Attention: Chief
Executive Officer
|
|
|
Telephone: (000)
000-0000
|
|
|
Facsimile: (000)
000-0000
|
|
|
With
a copy to:
|
Xxxxx
Xxxxxxx Xxxx Xxxxxx & Xxxxxxx LLP
|
|
Three
Embarcadero Center, 12th
Floor
|
|
|
Xxx
Xxxxxxxxx, XX 00000
|
|
|
Attention:
D. Xxxxxxx Xxxxxxx
|
|
|
Telephone: (000)
000-0000
|
|
|
Facsimile: (000)
000-0000
|
|
C. This
Agreement shall be governed by and construed in all respects under the laws
of
the State of Delaware, without reference to its conflict of laws rules or
principles. Any suit, action, proceeding or litigation arising out of or
relating to this Agreement shall be brought and prosecuted in such federal
or
state court or courts located within the State of New Jersey as provided
by law.
The parties hereby irrevocably and unconditionally consent to the jurisdiction
of each such court or courts located within the State of New Jersey and to
service of process by registered or certified mail, return receipt requested,
or
by any other manner provided by applicable law, and hereby irrevocably and
unconditionally waive any right to claim that any suit, action, proceeding
or
litigation so commenced has been commenced in an inconvenient
forum.
D. This
Agreement and the other agreements referenced herein contain the entire
understanding between the parties hereto and may not be modified or amended
except by a writing duly signed by the party against whom enforcement of
the
modification or amendment is sought.
12
E. If
any
provision of this Agreement shall be held to be invalid or unenforceable,
such
invalidity or unenforceability shall not affect any other provision of this
Agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
13
IN
WITNESS WHEREOF,
the
parties hereto have executed this Placement Agent Agreement as of the date
first
written above.
|
Wherify
Wireless, Inc.
|
||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxx | |
|
Name: Xxxxxxx
X. Xxxxx
|
||
|
Title: Chief
Executive Officer
|
||
|
Newbridge
Securities Corporation
|
||
| |
|
|
| By: | /s/ Xxx X. Xxxxx | |
|
Name: Xxx
X. Xxxxx
|
||
|
Title: President
|
||
14
