Exhibit 10.46
PLACEMENT AGENT AGREEMENT
THIS PLACEMENT AGENT AGREEMENT ("AGREEMENT"), is made as of the 18th day of
August, 1999, by and between THE TRACKER CORPORATION OF AMERICA, INC., a
Delaware corporation (the "COMPANY"), and SOVEREIGN CAPITAL ADVISORS, LLC, a
Nevada limited liability company (the "AGENT").
BACKGROUND
The Company proposes to issue and sell Series 1 Secured Bridge Notes (the
"SECURITIES") resulting in gross proceeds to the Company of up to $3,000,000
(the "OFFERING") in a transaction not involving a public offering and without
registration under the Securities Act of 1933, as amended (the "ACT"), pursuant
to exemptions from the registration requirements of the Act under Section 4(2)
of the Act and Regulation D promulgated under the Act ("REGULATION D"). Agent
has offered to assist the Company to structure the Offering and the Securities,
and introduce the Company to prospective investors on a "best efforts basis."
The Company desires to secure the services of Agent on the terms and conditions
hereinafter set forth.
AGREEMENT
For and in consideration of the mutual covenants herein, and other good and
valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, the parties hereto agree:
SECTION 1. ENGAGEMENT OF AGENT.
SECTION 1.1 APPOINTMENT.
The Company hereby appoints Agent as its exclusive agent in connection with
the proposed issuance and sale by the Company of securities resulting in gross
proceeds to the Company of up to $3,000,000. Agent, on the basis of the
representations and warranties herein contained, and upon and subject to the
terms and conditions herein set forth, accepts such appointment. This
appointment shall be irrevocable for the period commencing July 19, 1999 and
ending February 18, 2000, which period maybe extended by the consent of the
Company and Agent (the "OFFERING PERIOD").
SECTION 1.2 COMPENSATION.
The Company shall pay Agent a finder's fee of ten percent (10%) of the
gross proceeds derived from the offer, sale, and issuance of the Securities or
any other securities issued by the Company issued by the Company during the
Offering Period (the "GROSS PROCEEDS") PLUS a non-accountable expense allowance
of three percent (3%) of the Gross Proceeds.
SECTION 1.3 REIMBURSEMENT OF EXPENSES.
The Company agrees to pay the out-of-pocket expenses of Agent including the
fees and expenses of counsel to Agent for the preparation of the Transaction
Agreements in accordance with Section 7.7 of the Purchase Agreement, and fees
and expenses of Escrow Agent in accordance with Section 13 of the Escrow
Agreement. The Company agrees that the amount of such fees and expenses shall
be deducted by Escrow Agent from the proceeds of the issuance and sale of the
Securities.
SECTION 1.4 LIMITED ROLE OF AGENT.
Agent has acted only as an advisor to the Company, Agent has advised the
Company on the structure of the Offering and Securities, and has identified
potential investors. The Company has offered the Securities to the investors
and has negotiated directly with the investors in the Offering. Agent will use
best efforts to introduce the Company only to "accredited investors" as defined
in Regulation D. Wherever possible Agent will introduce the Company to
prospective investors who are not "U.S. Persons," as defined in Regulation S.
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SECTION 1.5 RIGHT OF FIRST REFUSAL.
The Company hereby grants Agent a right of first refusal to act as
placement agent for any future private financings of the Company, whether of
equity securities, convertible debt securities, or securities or instruments
convertible into or exchangeable for debt or equity securities of the Company,
mergers, acquisitions, or similar transactions. The duration of Agent's right
of first refusal under this Section 1.5 shall be for a period of one (1) year
following the final Closing of the Offering. In the event that the Company
wishes to undertake a transaction described in this Section 1.5, the Company
shall send Agent a written notice of the proposed transaction (whether the
transaction is initiated by the Company or is offered to the Company by a third
party) in sufficient specificity to allow Agent to understand the proposed
transaction clearly. This notice must be delivered to Agent at least twenty
days prior to the proposed closing of the transaction. Agent shall have ten
days from receipt of that notice to determine whether or not it wishes to
exercise its right of first refusal with respect to that transaction. Agent
shall notify the Company in writing of its decision to exercise or waive its
right of first refusal with respect to the transaction described in the notice.
If Agent waives its right of first refusal with respect to a particular
transaction, the Company may proceed with that transaction, PROVIDED HOWEVER,
that if the terms of the transaction are changed in any material way from the
terms set forth in the notice to Agent, Agent's right of first refusal shall
commence again. Agent's waiver of its rights of first refusal with respect to
any specific transaction shall not act as a waiver of its rights with respect to
future transactions within the applicable time period.
SECTION 1.6 CONFIDENTIALITY.
The Company agrees to maintain the confidentiality of all prospective
investors identified to the Company by Agent, except as required by applicable
law. For a period of two (2) years from the Closing, the Company will not
solicit or enter into any financing transaction with such investors without the
written consent of Agent AND payment to Agent of compensation no less than the
compensation to be paid to Agent hereunder for raising a like amount.
SECTION 1.7 REMEDIES.
In the event that Company breaches Section 1.5 hereof or Section 1.6
hereof, Agent shall be entitled to receive compensation in respect of the
financing giving rise to the breach of this Agreement at the rates set forth in
Section 1.2 hereof.
SECTION 2. CONDUCT OF THE OFFERING.
SECTION 2.1 OFFERING DOCUMENTS.
The Company shall utilize a Series 1 Secured Bridge Note Purchase Agreement
(the "PURCHASE AGREEMENT"), a Series 1 Secured Bridge Note in the form of
EXHIBIT A to the Purchase Agreement (the "BRIDGE NOTES"), a Repricing Warrant to
be issued with each Bridge Note in the form of EXHIBIT B to the Purchase
Agreement (the "WARRANTS"), a Registration Rights Agreement in the form of
EXHIBIT C to the Purchase Agreement the ("REGISTRATION RIGHTS AGREEMENT"), an
Escrow Agreement in the form of EXHIBIT D to the Purchase Agreement (the "ESCROW
AGREEMENT"), a form of opinion of Company counsel in the form of EXHIBIT E to
the Purchase Agreement (the "COMPANY OPINION"), a Form of Irrevocable Transfer
Agent Instructions in the form of EXHIBIT _ to the Purchase Agreement (the
"TRANSFER AGENT INSTRUCTIONS"), a certificate of the Company's Secretary (the
"SECRETARY CERTIFICATE") and a certificate of the Company's chief executive
officer ("COMPLIANCE CERTIFICATE") (collectively, the Purchase Agreement and all
Exhibits thereto, the Secretary Certificate and the Compliance Certificate are
herein after referred to as the "TRANSACTION AGREEMENTS") in connection with the
Offering. The Company and its counsel have reviewed, commented upon, and
approved the Transaction Agreements.
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SECTION 2.2 PUBLIC INFORMATION.
The Company within a reasonable amount of time prior to any Closing, shall
provide each prospective investor with a copy of all information required by
Rule 502(b)(2)(ii) of Regulation D promulgated pursuant to the Securities Act
(collectively, "SEC DOCUMENTS"). The SEC Documents have been prepared in
conformity with the requirements (to the extent applicable) of the Securities
and Exchange Act of 1934, as amended (the "ACT") and the rules and regulations
("RULES AND REGULATIONS") of the Commission promulgated thereunder. As used in
this Agreement, the term "OFFERING DOCUMENTS" means collectively the SEC
Documents and the Transaction Agreements, and all amendments, exhibits, and
supplements thereto, together with any other documents which are provided to
Agent by, or approved for Agent's use by, the Company for this Offering.
SECTION 2.3 ACCURACY OF OFFERING DOCUMENTS.
The Offering Documents, at the time of delivery to Purchasers, conformed in
all material respects with the requirements, to the extent applicable, of the
Act and the applicable Rules and Regulations, and did not include any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein, or necessary, to make the statements therein, in light of the
circumstances under which they were made, not misleading. At each Closing, the
Offering Documents will contain all statements which are required to be stated
therein in accordance with the Act and the Rules and Regulations for the
purposes of the proposed Offering, and all statements of material fact contained
in the Offering memorandum will be true and correct, and the Offering Documents
will not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the Company does not make any
representations or warranties as to the information contained in or omitted from
the Offering Documents in reliance upon written information furnished on behalf
of Agent specifically for use therein. Agent has no responsibility for the
contents, accuracy, or adequacy of the Offering Documents, or for the compliance
of the Offering Documents, with the requirements of Rule 502(b)(2)(ii) of
Regulation D promulgated pursuant to the Securities Act.
SECTION 2.4 DUTY TO AMEND.
If, at any time during the Offering, or such longer period as the Offering
Documents are required to be delivered under the Act, any event occurs or any
event known to the Company relating to or affecting the Company shall occur as a
result of which the Offering Documents as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any time
after the date hereof to amend or supplement the Offering Documents to comply
with the Act or the applicable Rules and Regulations, the Company shall
forthwith notify Agent thereof and shall prepare such further amendment or
supplement to the Offering Documents as may be required and shall furnish and
deliver to Agent and to others, whose names and addresses are designated by
Agent, all at the cost of the Company, a reasonable number of copies of the
amendment or supplement or of the amended or supplemented Offering Documents
which, as so amended or supplemented, will not contain an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
Offering Documents not misleading in the light of the circumstances when it is
delivered to a purchaser or prospective purchaser, and which will comply in all
respects with the requirements (to the extent applicable) of the Act and the
applicable Rules and Regulations.
SECTION 2.5 ESCROW OF FUNDS.
Pursuant to the Escrow Agreement, executed by the Company, the person named
as escrow agent in the Escrow Agreement (the "ESCROW AGENT"), and the
prospective investors who have executed signature pages to the Purchase
Agreement, the Registration Rights Agreement, and the Escrow Agreement (the
"PURCHASERS"), the purchase price for the Securities to be purchased as
reflected on the Purchaser Signature Page to the Purchase Agreement shall be
wired to the Escrow Agent to be held by the Escrow Agent as provided in the
Escrow Agreement.
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SECTION 2.6 APPROVAL OF INVESTORS.
Prior to each closing, the Company shall have the right to approve each
Purchaser. If the Company withholds approval of any Purchaser, the purchase
price wired to Escrow Agent by such Purchaser shall be returned to such
Purchaser along with the Purchaser Signature Pages of such Purchaser to the
Purchase Agreement, the Registration Rights Agreement, and the Escrow Agreement.
The right to withhold approval of any Purchaser shall be deemed to have been
waived if the Company authorizes the Escrow Agent to disburse funds provided by
any Purchaser at any closing.
SECTION 2.7 DELIVERY OF SECURITIES.
Securities in such form that, subject to applicable transfer restrictions
as described in the Purchase Agreement, they can be negotiated by the holders
thereof (issued in such denominations and in such names as the Purchasers of the
Securities may request shall be delivered by the Company to the counsel for
Placement Agent, with copies made available to Agent for checking at least one
(1) full business day prior to the Closing Date, it being understood that the
directions from Agent to the Company shall be given at least two (2) full
business days prior to the Closing Date. The Securities shall be delivered at
the Initial Closing and at each Subsequent Closing.
SECTION 2.8 INITIAL CLOSING.
The Initial Closing (the "INITIAL CLOSING") shall occur at such time as (a)
Purchasers have delivered to the Company (care of Xxxxxxx Law Group LLC, counsel
for Agent) executed Purchaser Signature Pages to each of the Purchase Agreement,
the Registration Rights Agreement, and the Escrow Agreement, (b) the Company has
not withheld approval the Purchasers, and (c) all other conditions to the
obligation of the Purchasers and the Company to close the transactions
contemplated by the Purchase Agreement have been satisfied or waived.
SECTION 2.9 SUBSEQUENT CLOSINGS.
In the event that the Initial Closing shall be for an amount of Securities
that is less than the amount of the Offering, the Offering may be continued, and
additional Closings may be held (each a "SUBSEQUENT CLOSING") throughout the
Offering Period, PROVIDED THAT (a) Purchasers have delivered to the Company
(care of Xxxxxxx Law Group LLC, counsel for Agent) executed Purchaser Signature
Pages to each of the Purchase Agreement, the Registration Rights Agreement, and
the Escrow Agreement, (b) the Company has not withheld approval the Purchasers,
and (c) all other conditions to the obligation of the Purchasers and the Company
to close the transactions contemplated by the Purchase Agreement have been
satisfied or waived.
SECTION 2.10 DISBURSEMENTS AT CLOSING.
At each Closing, the Company shall execute a Release Notice that authorizes
the Escrow Agent to receive expenses of the Offering in the amounts specified,
and effect a wire transfer of the net proceeds of such Closing to the Company or
another entity designated therein by the Company. The authorization of the
Company to release the funds held by the Escrow Agent is the Company's
authorization to release the executed Transaction Agreements and Securities to
the Purchasers. One complete set of executed Transaction Documents will be
delivered to the Company.
SECTION 2.11 TIME AND PLACE OF CLOSINGS.
The Initial Closing and any Subsequent Closing shall be held at the offices
of Xxxxxxx Law Group LLC, 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, at
10:00 a.m. on such dates as are fixed in accordance with this Agreement and the
Purchase Agreement. The Closing Date may be changed by mutual agreement of
Agent and the Company. The Company agrees to rely on faxed signature pages from
the Purchasers, without the requirement of obtaining an originally signed
version of any of the Transactions Agreements to which a Purchaser is a Party.
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SECTION 3. CONDITIONS OF AGENT'S OBLIGATIONS.
Agent's obligations hereunder shall be subject to the accuracy, as of the
Closing Date, of the representations and warranties on the part of the Company
contained in this Agreement, to the fulfillment of or compliance by the Company
with all covenants and conditions hereof, and to the following additional
conditions:
(a) There shall be no outstanding objection to any Transaction
Agreement by the Company or its counsel or any Purchaser or its counsel.
(b) The Company shall not have disclosed that the Offering Documents,
or any amendment thereof or supplement thereto, contains an untrue
statement of fact, which, in the opinion of counsel to Agent, is material,
or omits to state a fact, which, in the opinion of such counsel, is
material and is required to be stated therein, or is necessary to make the
statements therein, under the circumstances in which they were made, not
misleading.
(c) Between the date hereof and the Closing Date, the Company shall
not have sustained any loss on account of fire, explosion, flood, accident,
calamity, or any other cause of such character as would materially
adversely affect its business or property considered as an entire entity,
whether or not such loss is covered by insurance.
(d) There shall be no litigation instituted or overtly threatened
against the Company, and there shall be no proceeding instituted or
threatened against the Company before or by any federal or state
commission, regulatory body, or administrative agency, or other
governmental body, domestic or foreign, wherein an unfavorable ruling,
decision, or finding would materially adversely affect the business,
franchises, license, permits, operations, or financial condition or income
of the Company considered as an entity.
(e) Except as contemplated herein or as set forth in the Offering
Documents, during the period subsequent to the most recent financial
statements contained in the Offering Documents, if any, and prior to the
Closing Date, the Company (i) shall have conducted its business in the
usual and ordinary manner as the same is being conducted as of the date
hereof and (ii) except in the ordinary course of business, the Company
shall not have incurred any liabilities or obligations (direct or
contingent) or disposed of any assets, or entered into any material
transaction, or suffered or experienced any substantially adverse change in
its condition, financial or otherwise. At the Closing Date, the equity
account of the Company shall be substantially the same as reflected in the
most recent balance sheet contained in the Offering Documents without
considering the proceeds from the sale of the Securities other than as may
be set forth in the Offering Documents.
(f) The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this Agreement
shall be reasonably satisfactory in all respects to Agent and its counsel.
(g) The Company shall have furnished Agent a copy of the Company
opinion with respect to the sufficiency of all corporate proceedings and
other legal matters relating to this Agreement as Agent may reasonably
require.
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(h) The Company shall have furnished to Agent the opinion, dated the
Initial Closing, addressed to Agent, from counsel to the Company, as
required by the Purchase Agreement.
(h) The Company shall have furnished to Agent a copy of the Compliance
Certificate and the Secretary Certificate each dated as of the Closing
Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
For the purpose of inducing Agent to enter into this and perform this
Agreement, the Company hereby represents and warrants to and agrees with Agent
as follows:
SECTION 4.1 CORPORATION CONDITION.
The Company's condition is as described in its Offering Documents, except
for changes in the ordinary course of business and normal year-end adjustments
that are not in the aggregate materially adverse to the Company. The Offering
Documents, taken as a whole, present fairly the business and financial position
of the Company as of the Closing Date.
SECTION 4.2 NO MATERIAL ADVERSE CHANGE.
Except as may be reflected in or contemplated by the Offering Documents,
subsequent to the dates as of which information is given in the Offering
Documents, and prior to the Closing Date, there shall not have been any material
adverse change in the condition, financial or otherwise, or in the results of
operations of the Company or in its business taken as a whole.
SECTION 4.3 NO DEFAULTS.
Except as disclosed in the Offering Documents or in writing to Agent, the
Company is not in default in any material respect in the performance of any
material obligation, agreement, or condition contained in any debenture, note,
or other evidence of indebtedness or any indenture or loan agreement of the
Company. The execution and delivery of this Agreement, and the consummation of
the transactions herein contemplated, and compliance with the terms of this
Agreement, will not conflict with, or result in, a breach of any of the terms,
conditions, or provisions of, or constitute a default under, the Certificate of
Incorporation or bylaws of the Company (in any respect that is material to the
Company), any material note, indenture, mortgage, deed of trust, or other
agreement or instrument to which the Company is a party or by which the Company
or any property of the Company is bound, or to the Company's knowledge, any
existing law, order, rule, regulation, writ, injunction, or decree of any
government, governmental instrumentality, agency, or body, arbitration tribunal
or court, domestic or foreign, having jurisdiction over the Company or any
property of the Company. The consent, approval, authorization, or order of any
court or governmental instrumentality, agency or body is not required for the
consummation of the transactions herein contemplated except such as may be
required under the Act or under the blue sky or securities laws of any state or
jurisdiction.
SECTION 4.4 INCORPORATION AND STANDING.
The Company is, and at the Closing Date will be, duly formed and validly
existing in good standing as a corporation under the laws of the State of
Delaware and with full power and authority (corporate and other) to own its
properties and conduct its business, present and proposed, as described in the
Offering Documents; the Company, has full power and authority to enter into this
Agreement; and the Company is duly qualified and in good standing as a foreign
entity in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the Company or its properties.
SECTION 4.5 LEGALITY OF SECURITIES.
Prior to the Closing Date, the Securities will have been duly and validly
authorized and issued, will be valid, binding and enforceable against the
Company in accordance with their terms, and will conform in all material
respects to the statements with regard thereto contained in the Offering
Documents.
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SECTION 4.6 LEGALITY OF CONVERSION SHARES.
The Common Stock into which the Securities are convertible, when converted
in accordance with the Securities will be duly and validly issued and
outstanding, fully paid, and non-assessable and conform in all material respects
to the statements with regard thereto contained in the Offering Documents.
SECTION 4.7 LITIGATION.
Except as set forth in the Offering Documents, there is now, and at the
Closing Date there will be, no action, suit, or proceeding before any court or
governmental agency, authority or body pending or, to the knowledge of the
Company, threatened, which might result in judgments against the Company not
adequately covered by insurance or which collectively might result in any
material adverse change in the condition (financial or otherwise) or business of
the Company or which would materially adversely affect the properties or assets
of the Company.
SECTION 4.8 FINDERS.
The Company does not know of any outstanding claims for services in the
nature of a finder's fee or origination fees with respect to the sale of the
Securities hereunder for which Agent may be responsible, and the Company will
indemnify Agent from any liability for such fees by any party who has a claim
for such compensation from the Company and for which person Agent is not legally
responsible.
SECTION 4.9 TAX RETURNS.
The Company has filed all federal and state tax returns which are required
to be filed, and has paid all taxes shown on such returns and on all assessments
received by it to the extent such taxes have become due. All taxes with respect
to which the Company is obligated have been paid or adequate accruals have been
set up to cover any such unpaid taxes.
SECTION 4.10 AUTHORITY.
The execution and delivery by the Company of this Agreement have been duly
authorized by all necessary action, and this Agreement is the valid, binding,
and legally enforceable obligation of the Company subject to standard
qualifications as to the availability of equitable remedies, the effect of
bankruptcy and other laws relating to the protection of debtors and public
policy opinions promulgated by the Commission with respect to indemnification
against liabilities under the Act.
SECTION 4.11 ACTIONS BY THE COMPANY.
The Company will not take any action which will impair the effectiveness of
the transactions contemplated by this Agreement.
SECTION 5. COVENANTS OF THE COMPANY.
The Company covenants and agrees with Agent that:
SECTION 5.1 RESTRICTIONS ON AMENDMENTS.
After the date hereof, the Company will not at any time, prepare and
distribute any amendment or supplement to the Offering Documents, of which
amendment or supplement Agent shall not previously have been advised and Agent
and its counsel furnished with a copy within a reasonable time period prior to
the proposed adoption thereof, or to which Agent shall have reasonable objected
in writing on the ground that it is not in compliance with the Act or the Rules
and Regulations (if applicable).
SECTION 5.2 EXPENSES OF OFFERING.
The Company will pay, whether or not the transactions contemplated by the
Transaction Agreements are consummated, all costs and expenses incident to the
Transaction Agreements, including all expenses incident to the authorization of
the Securities, their issue and delivery to the Escrow Agent, any original issue
taxes in connection therewith, all transfer taxes, if any, incident to the
initial sale of the Securities, the fees and expenses of Agent's and the
Company's counsel (except as provided below) and accountants, and the cost of
reproduction and furnishing to Agent copies of the Offering Documents as herein
provided, PROVIDED HOWEVER, that the Company shall not be responsible for the
payment of fees and expenses incurred by Agent's counsel, if Agent is unable to
procure Purchaser Signature Pages to the Transaction Agreements from a Purchaser
that the Company was willing to accept.
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SECTION 5.3 AVAILABILITY OF INFORMATION.
Prior to the Closing Date, the Company will cooperate with Agent in such
investigation as it may make or cause to be made of all of the properties,
business, and operations of the Company in connection with the Offering of the
Securities. The Company will make available to it in connection therewith such
information in its possession as Agent may reasonably request and will make
available to Agent such persons as Agent shall deem reasonably necessary and
appropriate in order to verify or substantiate any such information so supplied.
SECTION 5.4 REPORTS AND FILINGS.
The Company shall be responsible for making any and all filings required by
the blue sky authorities and filings required by the laws of the jurisdictions
in which the subscribers who are accepted for purchase of Securities are
located, if any. Agent shall assist Company in this respect, but such filings
shall be the responsibility of Company.
SECTION 5.5 NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS, OR
CIRCUMSTANCES.
The Company's condition is as described in its Offering Documents, except
for changes in the ordinary course of business and normal year-end adjustments
that are not individually or in the aggregate materially adverse to the Company.
The Offering Documents, taken as a whole, will present fairly the business and
financial position of the Company as of each Closing Date.
SECTION 5.6 NO MATERIAL ADVERSE CHANGE.
Except as may be reflected in or contemplated by the Offering Documents,
subsequent to the dates as of which information is given in the Offering
Documents, and prior to each Closing Date, there shall not have been any
material adverse change in the condition, financial, or otherwise, or in the
results of operations of the Company or in its business taken as a whole.
SECTION 6. INDEMNIFICATION.
SECTION 6.1 INDEMNIFICATION OF AGENT.
The Company agrees to indemnify and hold harmless Agent, each person who
controls Agent within the meaning of Section 15 of the Act and Agent's
employees, accountants, attorneys and agents (the "AGENT'S INDEMNITEES") against
any and all losses, claims, damages, or liabilities, joint or several, to which
they or any of them may become subject under the Act or any other statute or at
common law for any legal or other expenses (including the costs of any
investigation and preparation) incurred by them in connection with any
litigation, whether or not resulting in any liability, but only insofar as such
losses, claims, damages, liabilities, and litigation arise out of or are based
upon any untrue statement of material fact contained in the Offering Documents
or any amendment or supplement thereto or any application or other document
filed in any state or jurisdiction in order to qualify the Securities under the
Blue Sky or securities laws thereof, or the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
under the circumstances under which they were made, not misleading, all as of
the date of the Offering Documents or of such amendment as the case may be;
PROVIDED HOWEVER, that the indemnity agreement contained in this Section 6.1
shall not apply to amount paid in settlement of any such litigation, if such
settlements are made without the consent of the Company, nor shall it apply to
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Agent's Indemnitees in respect to any such losses, claims, damages, or
liabilities arising out of or based upon any such untrue statement or alleged
untrue statement or any such omission or alleged omission, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by Agent specifically for use in connection with the preparation of the
Offering Documents or any such amendment or supplement thereto or any
application or other document filed in any state or jurisdiction in order to
qualify the Securities under the Blue Sky or securities law thereof. This
indemnity agreement is in addition to any other liability which the Company may
otherwise have to Agent's Indemnitees. Agent's Indemnitees agree, within ten
(10) days after the receipt by them of written notice of the commencement of any
action against them in respect to which indemnity may be sought from the Company
under this Section 6.1, to notify the Company in writing of the commencement of
such action; PROVIDED HOWEVER, that the failure of Agent's Indemnitees to notify
the Company of any such action shall not relieve the Company from any liability
which it may have to Agent's Indemnitees on account of the indemnity agreement
contained in this Section 6.1, and further shall not relieve the Company from
any other liability which it may have to Agent's Indemnitees, and if Agent's
Indemnitees shall notify the Company of the commencement thereof, the Company
shall be entitled to participate in (and, to the extent that the Company shall
wish, to direct) the defense thereof at its own expense, but such defense shall
be conducted by counsel of recognized standing and reasonably satisfactory to
Agent's Indemnitees, defendant or defendants, in such litigation. The Company
agrees to notify Agent's Indemnitees promptly of the commencement of any
litigation or proceedings against the Company or any of the Company's officers
or directors of which the Company may be advised in connection with the issue
and sale of any of the Securities and to furnish to Agent's Indemnitees, at
their request, to provide copies of all pleadings therein and to permit the
Company's Indemnitees to be observers therein and apprise Agent's Indemnitees of
all developments therein, all at the Company's expense.
SECTION 6.2 INDEMNIFICATION OF COMPANY.
Agent agrees, in the same manner and to the same extent as set forth in
Section 6.1 above, to indemnify and hold harmless the Company, and the Company's
and Company's employees, accountants, attorneys, and agents (the "COMPANY'S
INDEMNITEES") with respect to (a) any statement in or omission from the Offering
Documents or any amendment or supplement thereto or any application or other
document filed in any state or jurisdiction in order to qualify the Securities
under the Blue Sky or securities laws thereof, or any information furnished
pursuant to Section 2.2 hereof, if such statement or omission was made in
reliance upon information furnished in writing to the Company by Agent on its
behalf specifically for use in connection with the preparation thereof or
supplement thereto, or (b) any untrue statement of a material fact made by Agent
or its agents not based on statements in the Offering Documents or authorized in
writing by the Company, or with respect to any misleading statement made by
Agent or its agents resulting from the omission of material facts which
misleading statement is not based upon the Offering Documents, or information
furnished in writing by the Company or, (c) any breach of any representation,
warranty, or covenant made by Agent in this Agreement. Agent's liability
hereunder shall be limited to the amount received by it for acting as Agent in
connection with the Offerings. Agent shall not be liable for amounts paid in
settlement of any such litigation if such settlement was effected without its
consent. In case of the commencement of any action in respect of which
indemnity may be sought from Agent, the Company's Indemnitees shall have the
same obligation to give notice as set forth in Section 6.1 above, subject to the
same loss of indemnity in the event such notice is not given, and Agent shall
have the same right to participate in (and, to the extent that it shall wish, to
direct) the defense of such action at its own expense, but such defense shall be
conducted by counsel of recognized standing reasonably satisfactory to the
Company. Agent agrees to notify the Company's Indemnitees and, at their
request, to provide copies of all pleadings therein and to permit the Company's
Indemnitees to be observers therein and apprise them of all the developments
therein, all at Agent's expense.
9
SECTION 7. TERMINATION.
SECTION 7.1 TERMINATION BY AGENT.
This Agreement may be terminated at any time during the Offering Period by
Agent by written notice to the Company, if the Company shall have failed or been
unable to comply with any of the terms, conditions, or provisions of the
Transaction Agreements to be performed, complied with, or fulfilled by the
Company within the respective times, if any, herein provided for, unless
compliance therewith or performance or satisfaction thereof shall have been
expressly waived by Agent in writing.
SECTION 7.2 TERMINATION BY COMPANY.
This Agreement may be terminated by the Company at the conclusion of the
Offering Period by notice to Agent if Agent shall have failed or been unable to
comply with any of the terms, conditions, or provisions of this Agreement to be
performed, complied with, or fulfilled by Agent within the respective times, if
any, herein provided for, unless compliance therewith or performance or
satisfaction thereof shall have been expressly waived by the Company in writing.
SECTION 7.3 TERMINATION FOR FORCE MAJEURE EVENTS.
This Agreement may be terminated by Agent by notice to the Company at any
time, if, in the reasonable, good faith judgment of Agent, payment for and
delivery of the Securities is rendered impracticable or inadvisable because:
(a) additional material governmental restrictions not in force and effect on the
date hereof shall have been imposed upon trading in securities generally; (b) a
war or other national calamity shall have occurred; or (c) the condition of the
market (either generally or with reference to the sale of the Securities to be
offered hereby) or the condition of any matter affecting the Company or any
other circumstance is such that it would be undesirable, impracticable or
inadvisable, in the judgment of Agent, to proceed with this Agreement or with
the Offering.
SECTION 7.4 TERMINATION WITHOUT LIABILITY.
Any termination of this Agreement pursuant to this Section 7 shall be
without liability of any character (including, but not limited to, loss of
anticipated profits or consequential damages) on the part of any party thereto,
except that the Company shall remain obligated to pay the costs and expenses
provided to be paid by it specified in Sections 1.3 and 5.2, and the Company and
Agent shall be obligated to pay, respectively, all losses, claims, damages, or
liabilities, joint or several, under Section 6.1 in the case of the Company and
Section 6.2 in the case of Agent.
SECTION 8. MISCELLANEOUS.
SECTION 8.1 NOTICES.
Whenever notice is required by the provisions of this Agreement to be
given, such notice shall be in writing, addressed:
If to Company:
The Tracker Corporation of America, Inc.
000 Xxxxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attn: Xxx X. Xxxxxxxx, President
Telephone: (000) 000-0000
Facsimile: (416) ___-____
with a copy (which shall not constitute notice) to:
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Xxxxx Xxxxxxx LLP
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
If to Agent:
Sovereign Capital Advisors, LLC
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxx Law Group LLC
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx XX, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
8.2 BENEFIT.
This Agreement is made solely for the benefit of Agent and the Company,
their respective officers and directors and any controlling person referred to
in Section 15 of the Act and their respective successors and assigns, and no
other person may acquire or have any right under or by virtue of this Agreement,
including, without limitation, the holders of any Securities. The term
"SUCCESSOR" or the term "SUCCESSORS AND ASSIGNS" as used in this Agreement shall
not include any purchasers, as such, of any of the Securities.
8.3 SURVIVAL.
The respective indemnities, agreements, representations, warranties,
covenants and other statements of the Company and Agent, or the officers,
directors or controlling persons of the Company and Agent as set forth in or
made pursuant to this Agreement and the indemnity agreements of the Company and
Agent contained in Section 6 hereof shall survive and remain in full force and
effect, regardless of (a) any investigation made by or on behalf of the Company
or Agent or any such officer, director or controlling person of the Company or
of Agent; (b) delivery of or payment for the Securities; or (c) the Closing
Date, and any successor of the Company or Agent or any controlling person,
officer or director thereof, as the case may be, shall be entitled to the
benefits hereof.
8.4 GOVERNING LAW.
The validity, interpretation, and construction of this Agreement will be
governed by the laws of the State of Georgia. Any dispute or controversy between
the parties arising in connection with this Agreement or the subject matter
contemplated by this Agreement shall be resolved by arbitration before a
three-member panel of the American Arbitration Association in accordance with
the commercial arbitration rules of said forum and the Federal Arbitration Act,
9 U.S.C. 1 et seq., with the resulting award being final and conclusive. Said
-- ---
arbitrators shall be empowered to award all forms of relief and damaged claimed,
11
including, but not limited to, attorney's fees, expenses of litigation and
arbitration, exemplary damages, and prejudgment interest. The parties further
agree that any arbitration action between them shall be heard in Atlanta,
Georgia, and expressly consent to the jurisdiction and venue of the Superior
Court of Xxxxxx County, Georgia, and the United States District Court for the
Northern District of Georgia, Atlanta Division for the adjudication of any civil
action asserted pursuant to this Paragraph.
8.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
may be deemed an original and all of which together will constitute one and the
same instrument.
8.6 CONFIDENTIAL INFORMATION.
All confidential financial or business information (except publicly
available or freely usable material otherwise obtained from another source)
respecting either party will be used solely by the other party in connection
with the within transactions, be revealed only to employees or contractors of
such other party who are necessary to the conduct of such transactions, and be
otherwise held in strict confidence.
8.7 PUBLIC ANNOUNCEMENTS.
Prior to the Closing Date, neither party hereto will issue any public
announcement concerning the within transactions without the approval of the
other party.
8.8 FINDERS.
The parties acknowledge that no person has acted as a finder in connection
with the transactions contemplated herein and each will agree to indemnify the
other with respect to any other claim for a finder's fee in connection with the
Offering.
8.9 RECITALS.
The recitals to this Agreement are a material part hereof, and each recital
is incorporated into this Agreement by reference and made apart of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be executed as of the day and year first above written.
[Signatures begin on the following page]
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COMPANY SIGNATURE PAGE
TO
PLACEMENT AGENT AGREEMENT
THE COMPANY:
THE TRACKER CORPORATION OF AMERICA, INC.
By: /s/ Xxx X. Xxxxxxxx
-----------------------------
Xxx X. Xxxxxxxx, President
13
AGENT SIGNATURE PAGE
TO
PLACEMENT AGENT AGREEMENT
AGENT:
SOVEREIGN CAPITAL ADVISORS, LLC
By:
---------------
Xxx Xxxx
By: /s/ Xxxx Xxxx
---------------
Xxxx Xxxx
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