NON-EXCLUSIVE FINDER'S AGREEMENT
NON-EXCLUSIVE
FINDER'S AGREEMENT
This
Non-Exclusive Finder's Agreement (this "Agreement") is made as of December _____
2007, between Global Automotive Supply, Inc., a Nevada corporation (the
"Company"), and Empire Financial Group, Inc., a Florida corporation (the
"Exclusive Finder"). The Non-Exclusive Finder and the Company
agree:
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1.
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Engagement
of Finder: The Company hereby engages the Finder, and
the Finder hereby accepts such engagement, to act as the Company's
non-exclusive Finder with respect to sales by the Company in a private
placement transaction (the “Offering”) up to 3 million aggregate principal
amount of Equity or Equity-Related Securities (the “Securities”) of the
Company to the investors during the term of this Agreement as set forth in
Section 5.
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2.
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Offering
Procedures: The Finder will introduce the Company to
investors who the Finder reasonably believes to be "accredited investors,"
as that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the “1933 Act”),
with whom the Finder has a pre-existing substantive relationship (the
“Offerees”).
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3.
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Finder's
Compensation: In consideration for the services rendered
by the Finder hereunder, the Company shall pay to the Finder, or cause the
Finder to be paid, compensation as provided in this section within 3 days
of the Company's receipt of funds from the
Offerees.
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(a)
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Cash Compensation: The
Company shall pay to the Finder cash compensation equal to eight percent
(8%) of the gross Offering funds raised by Empire
Financial.
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(b)
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Warrants: The
Finder shall receive eight percent (8%) warrant compensation on funds
raised by Empire Financial. The warrant calculation translates
to 80,000 warrants per $1 million raised for either a Registered Offering
or a Private Offering. The warrants shall have an exercise
price, an expiration date and registration rights of any warrants sold to
Offerees in the Offering, and if the Offering does not provide for the
issuance of warrants, then the warrants issued to the Finder shall have a
strike price equal to the Offering price of any Equity or Equity-Related
Securities sold, have a five-year term and cashless exercise after one
year if the underlying shares are not then registered. The
warrant shares shall be subject to equitable adjustment for stock splits,
stock dividends and similar events. The warrant shares shall
have “piggyback” registration rights in any Private Offering, and will be
backed by registered shares for any Registered
Offering.
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(c)
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If,
at any time prior to one year following the end of the Offering (the
“Term”) the Company directly or indirectly sells, in a private
transaction, any type of security to an investor that is a participant in
said transaction that was directly placed into the transaction placed by
Empire Financial Group. During the Term, the Company shall pay
the Finder the compensation to which it would be entitled under paragraph
3 if the transaction had occurred during the
Term.
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4.
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For
purposes of determining the Finder’s compensation under this Section 3,
the gross offering funds placed by Empire Financial Group in the offering
shall include any amounts paid to the Company by investors in respect to
an exercise or conversion of any of the Securities or Warrants, from said
Empire Financial group of investors, including the value allocated to any
securities not issued pursuant to a “cashless exercise” or similar
provision, whenever actually received by the Company. This only
applies to funds that Empire Financial placed in the
transaction.
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Certain
Matters Relating to Finder’s Duties:
(a)
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The
Finder’s responsibilities shall be limited to introducing potential
investors to the Company, and the Finder shall not have authority to offer
or sell the Securities to any potential investor. Finder shall not use any
general solicitation or general advertising within the meaning of the
applicable securities laws in connection with any offering. The
Finder shall have no responsibility to participate or assist in any
negotiations between any potential investor and the Company. The Finder
will have no responsibility to act, and the parties contemplate that the
Finder will not act, as a broker or dealer with respect to the offer or
sale of the Securities. Further, the Finder shall have no responsibility
for fulfilling any SEC reporting or filing requirements as relates to the
Company provided however, Finder agrees to provide Company with reasonable
assistance related to any registration, qualification or other
requirements of applicable securities laws and other regulatory matters,
upon request of the Company.
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(b)
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The
Finder agrees to introduce the Company to Offerees only in states in which
the Finder has been advised by the Company that offers and sales of
Securities can be legally made by the
Company.
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2
(c)
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The
Finder shall perform its duties under this Agreement in a manner
consistent with the instructions of the Company. Such performance shall
include, but not be limited to, the delivery to each Offeree a current
copy of the Private Placement Memorandum, Subscription Agreement and any
Offering Questionnaire and/or similar documents provided to the Finder by
the Company, as such documents may be amended from time to time by the
Company and delivered to the Finder. The Finder shall consecutively number
each copy of the Private Placement Memorandum (which will include the
first letter of the Finder’s name or other identifying xxxx sufficient to
designate an Offeree introduced by the Finder); keep a log of when and to
whom each copy of the Private Placement Memorandum is given, with the
Private Placement Memorandum numbers; maintain a copy of any written
information the Finder obtains regarding the suitability of each Offeree;
and only use the Private Placement Memorandum in introducing Offerees to
the Company. The Finder shall provide this log and all such written
information to the Company at any time and promptly upon request of the
Company at the termination of this Agreement. The Company shall, promptly
following execution of this Agreement, provide the Finder with a written
list of prospective Offerees that the Company does not want the Finder to
contact. The Finder agrees to not contact the persons on such list, and
the Finder shall not be entitled to the compensation set forth in Section
3 with respect to any investment made by such person in the Company’s
Securities.
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(d)
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The
Finder is and will hereafter act as an independent contractor and not as
an employee of the Company and nothing in this Agreement shall be
interpreted or construed to create any employment, partnership, joint
venture, or other relationship between the Finder and the Company. The
Finder will not hold itself out as having, and will not state to any
person that the Finder has, any relationship with the Company other than
as an independent contractor. The Finder shall have no right or power to
find or create any liability or obligation for or in the name of the
Company or to sign any documents on behalf of the
Company.
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5.
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Right
of First Refusal. In consideration for the Finder acting
as the finder in connection with the proposed offering, the Company hereby
grants the Finder a right of first refusal to serve as the Company’s
placement agent and investment banker in connection with a capital raise
for a period of 1 year from the closing of the
transaction. This only applies to the capital amount of Empire
Financial Group’s contribution to the capital
raise.
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3
6.
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Termination
of Agreement. Either party may terminate this Agreement by
notifying the other party in writing upon a material breach by that other
party, unless such breach is curable and is in fact cured within 15 days
after such notice. This Agreement will otherwise terminate upon
completion or termination of the Offering. The Company may terminate this
Agreement following ninety (90) days after the date hereof upon written
notice. Notwithstanding the foregoing, all provisions of this
Agreement other than section 1, 2 and 3 shall survive the termination of
this Agreement with respect to Offerees to the Company prior to any
termination with respect to the Offering. The Finder shall be entitled to
compensation under section 3 based on investments made by such Offerees
prior to the termination of this Agreement or at any time within one year
thereafter.
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7.
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Indemnification.
The Company and the Finder each shall indemnify and defend the other and
the other’s affiliates, directors, officers, employees, agents,
consultants, attorneys, accountants and other representatives (each an
“Indemnified
Person”) and shall hold each Indemnified Person harmless, to the
fullest extent permitted by law, from and against any and all claims,
liabilities, losses, damages and expenses (including reasonable attorney’s
fees and costs), as they are incurred, in connection with the Offering,
resulting from the indemnifying party’s negligence, bad faith or willful
misconduct in connection with the Offering, any violation by the
indemnifying party (not caused by an Indemnified Person) of Federal or
state securities laws in connection with the Offering, or any breach by
the indemnifying party of this Agreement. In case any litigation or
proceeding shall be brought against any Indemnified Person under this
section, the indemnifying party shall be entitled to assume the defense of
such litigation or proceeding with counsel of the indemnifying party’s
choice at its expense (in which case the indemnifying party shall not be
responsible for the fees and expenses of any separate counsel retained by
such Indemnified Person, except in the limited circumstances described
below in this section); provided, however, that such counsel shall be
reasonably satisfactory to the Indemnified Person. Notwithstanding the
indemnifying party’s election to assume the defense of such litigation or
proceeding (a) such Indemnified Person shall have the right to employ
separate counsel and to participate in the defense of such litigation or
proceeding, and (b) the indemnifying party shall bear the reasonable fees,
costs and expenses of separate counsel if (but only if) the use of counsel
selected by the indemnifying party to represent such Indemnified Person
would present such counsel with a conflict of interest under applicable
laws or rules of professional
conduct.
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8.
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Confidentiality
of Offeree Information. The Company acknowledges that the identity
of the Offerees, and all confidential information about Offerees received
by the Company from an Offeree or the Finder, is confidential information
of the Finder and may not be shared with any other person without the
consent of the Finder.
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9.
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Notices.
Any notice, consent, authorization or other communication to be given
hereunder shall be in writing and shall be deemed duly given and received
when delivered personally, when transmitted by fax, three days after being
mailed by first class mail, or one day after being sent by a nationally
recognized overnight delivery service, charges and postage prepaid,
properly addressed to the party to receive such notice, at the following
address or fax number for such party (or at such other address or fax
number as shall hereafter be specified by such party by like
notice):
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(a)
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If
to the Company,
to:
Xxx
XxXxxxxxxxx
President
and CEO.
Global
Automotive Supply, Inc.
0000
Xxxxxxx Xx., Xxx. 000
Xxxxxxx,
Xx. 00000.
Phone: (000)
000-0000.
E-Mail: xxxxxxxxxxxxxx@xxxxx.xxx
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(b) |
If
to the Finder,
to:
Xxxx
Xxxxxxx
Managing
Director
000
Xxxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Phone: (000)
000-0000
Fax: (000)
000-0000
E-Mail: xxxxxxxx@xxxxxxxxx.xxx
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10.
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Company
to Control Transactions. The prices,
terms and conditions under which the Company shall offer or sell any
Securities shall be determined by the Company in its sole
discretion. The Company shall have the authority to control all
discussions and negotiations regarding any proposed or actual offering or
sale of Securities. Nothing in this Agreement shall obligate
the Company to actually offer or sell any Securities or consummate any
transaction. The Company may terminate any negotiations or
discussions at any time and reserves the right not to proceed with any
offering or sale of Securities. Compensation pursuant to this
Agreement shall only be paid to the Finder in the event of an actual
Closing of the Offering to an Offeree introduced by
Finder.
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11.
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Confidentiality
of Company Information. The Finder, and its officers, directors,
employees and agents shall maintain in strict confidence and not copy,
disclose or transfer to any other party (1) all confidential business and
financial information regarding the Company and its affiliates, including
without limitation, projections, business plans, marketing plans, product
development plans, pricing, costs, customer, vendor and supplier lists and
identification, channels of distribution, and terms of identification of
proposed or actual contracts and (2) all confidential technology of the
Company. In furtherance of the foregoing, the Finder agrees that it shall
not transfer, transmit, distribute, download or communicate, in any
electronic, digitized or other form or media, any of the confidential
technology of the Company. The foregoing is not intended to preclude the
Finder from utilizing, subject to the terms and conditions of this
Agreement, the Private Placement Memorandum and/or other documents
prepared or approved by the Company for use in the
Offering.
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All
communications regarding any possible transactions, requests for due diligence
or other information, requests for facility tours, product demonstrations or
management meetings, will be submitted or directed to the Company, and the
Finder shall not contact any employees, customers, suppliers or contractors of
the Company or its affiliates without express permission. Nothing in
this Agreement shall constitute a grant of authority to the Finder or any
representatives thereof to remove, examine or copy any particular document or
types of information regarding the Company, and the Company shall retain control
over the particular documents or items to be provided, examined or copied. If
the Offering is not consummated, or if at any time the Company so requests, the
Finder and its representatives will return to the Company all copies of
information regarding the Company in their possession.
The
provisions of this Section shall survive any termination of this
Agreement.
12.
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Press
Releases, Etc. The Company shall control all press releases or
announcements to the public, the media or the industry regarding any
offering, placement, transaction or business relationship involving the
Company or its affiliates. Except for communication to Offerees in
furtherance of this Agreement and the provision of the Private Placement
Memorandum, the Finder will not disclose the fact that discussions or
negotiations are taking place concerning a possible transaction involving
the Company, or the status or terms and conditions thereof. Notwithstanding the
foregoing, the Company agrees to issue a press release prior to the
opening of the market on the business day following the Company’s receipt
of executed agreements binding Offerees to purchase Securities in at least
the amount of the minimum Offering (if there is any such minimum) setting
forth the material terms of the
Offering.
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13.
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Due
Diligence:
Neither the Company, nor any of its directors, officers or
shareholders, should, in any way rely on the Finder to perform any due
diligence with respect to the Company. It is expressly
understood and agreed that to the extent due diligence is conducted; it
will be conducted by the investors.
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14.
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Expenses,
Etc. The compensation described in Section 3 of this Agreement
shall be the Finder’s sole compensation for all of its services and
efforts to the Company and its affiliates, in connection with any offering
or placement of Securities. However, while the Finder shall pay all of its
own costs and expenses exceeding ten thousand ($10,000) in carrying out
its activities hereunder; the Company will reimburse the Finder for the
first $10,000 of aforementioned expenses after they have been incurred by
the Finder, and an itemized accounting has been provided to the Company.
The Company further agrees to reimburse for legal expenses not to exceed
$15,000. The Finder shall be responsible for any compensation,
fees, commissions or payments of its employees, agents representatives,
co- Finders or other persons or entities utilized by it in connection with
its activities on behalf of the Company, and the Finder will indemnify and
hold harmless the Company and its affiliates from the claims of any such
persons or entities.
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15.
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Compliance
with Laws. The Finder represents and warrants that it is a duly
registered broker/dealer and in good standing with the SEC, NASD and the
State of California and has and shall maintain such registrations as well
as all other necessary licenses and permits to conduct its activities
under this Agreement, which it shall conduct in compliance with applicable
federal and state laws relating to a private placement under Regulation D
of the 1933 Act. The Finder represents that it is not a party to any other
agreement, which would conflict with or interfere with the terms and
conditions of this Agreement.
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16.
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Assignment
Prohibited. No assignment of this Agreement shall be
made without the prior written consent of the other
party.
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17.
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Amendments. Neither
party may amend this Agreement or rescind any of its existing provisions
without the prior written consent of the other
party.
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18.
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Governing
Law. This Agreement shall be deemed to have been made in
the State of California and shall be construed, and the rights and
liabilities determined, in accordance with the law of the State of
California, without regard to the conflicts of laws rules of such
jurisdiction.
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19.
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Waiver. Neither
Finder’s nor the Company’s failure to insist at any time upon strict
compliance with this Agreement or any of its terms nor any continued
course of such conduct on their part shall constitute or be considered a
waiver by Finder or the Company of any of their respective rights or
privileges under this Agreement.
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20.
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Severability.
If any provision herein is or should become inconsistent with any present
or future law, rule or regulation of any sovereign government or
regulatory body having jurisdiction over the subject matter of this
Agreement, such provision shall be deemed to be rescinded or modified in
accordance with such law, rule or regulation. In all other
respects, this Agreement shall continue to remain in full force and
effect.
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21.
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Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, and will become effective and binding upon the
parties at such time as all of the signatories hereto have signed a
counterpart of this Agreement. All counterparts so executed
shall constitute one Agreement binding on all of the parties hereto,
notwithstanding that all of the parties are not signatory to the same
counterpart. Each of the parties hereto shall sign a sufficient
number of counterparts so that each party will receive a fully executed
original of this Agreement.
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22.
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Entire
Agreement. This Agreement and all other agreements and
documents referred herein constitutes the entire agreement between the
Company and the Finder. No other agreements, covenants,
representations or warranties, express or implied, oral or written, have
been made by any party hereto to any other party concerning the subject
matter hereof. All prior and contemporaneous conversations,
negotiations, possible and alleged agreements, representations, covenants
and warranties concerning the subject matter hereof are merged
herein. This is an integrated
Agreement.
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23.
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Arbitration. The parties
agree that this Agreement and all controversies which may arise between
the Finder and the Company, whether occurring prior, on or subsequent to
the date of this Agreement, will be determined by
arbitration. The parties understand
that:
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(a)
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Arbitration
is final and binding on the
parties.
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(b)
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The
parties are waiving their right to seek remedies in court, including the
right to a jury trial.
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(c)
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Pre-arbitration
discovery is generally more limited than and different from court
proceedings.
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(d)
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The
arbitrators’ award is not required to include factual findings or legal
reasoning and any party’s right to appeal or to seek modification or
rulings by the arbitrators is strictly
limited.
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(e)
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The
panel of arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities
industry.
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The
parties agree that any arbitration under this Agreement will be held at the
facilities of and before an Arbitration Panel appointed by the National
Association of Securities Dealers, Inc. (“NASD”), or if the NASD refuses to
accept jurisdiction, then before JAMS/ENDISPUTE in San Francisco,
California. The award of the arbitrators, or of the majority of them,
will be final, and judgments upon the award may be entered in any court, state
or federal, having jurisdiction. The parties hereby submit themselves
and their personal representatives to the jurisdiction of any state or federal
court for the purpose of such arbitration and entering such
judgment.
Any
forbearance to enforce an agreement to arbitrate will not constitute a waiver of
any rights under this Agreement except to the extent stated herein.
THIS
AGREEMENT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE CONTAINED IN PARAGRAPH
23 OF THIS AGREEMENT
Empire Financial Group, Inc. (the “Finder”) | |
By: | /s/ Xxxx Xxxxxxx |
Xxxx
Xxxxxxx
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Title: | Managing Director |
Global Automotive Supply, Inc. (the “Company”) | |
By: | /s/ Xxxxxx XxXxxxxxxxx |
Xxx XxXxxxxxxxx | |
Title: | President and CEO |