EXHIBIT 10.16
MANAGING DEALER AGREEMENT
RAPTOR NETWORKS TECHNOLOGY, INC.
March 22, 0000
Xxxxxxx X. Xxxxxx, Xxxxxxxxx
Xxxxxxxxxxx Securities Corporation
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Dear Xx. Xxxxxx:
Raptor Networks Technology, Inc., a Colorado corporation (the
"Company") proposes to offer, issue and sell up to 3,250,000 units (the "Units")
(subject to certain limitations on the amount of Units which may be sold as set
forth in the Memorandum (defined below)) to accredited investors only at a
purchase price of $2.00 per Unit for total gross offering proceeds of up to
$6,500,000 (the "Offering"). Each Unit shall consist of four shares of the
Company's Common Stock (the "Shares") and one warrant to purchase a share of the
Company's Common Stock (the "Investor Warrants"). The Investor Warrants shall
have a term of five years and an exercise price of $2.50 per share, provided
however that the Company may call the Investor Warrants on the first day after
the Company's 30 trading day average price closing exceeds $3.50. The Company
hereby confirms its agreement with you which is set forth below. The Company
also confirms that all terms and provisions of the Term Sheet executed between
you and the Company on February 18, 2005 and attached hereto as Exhibit A, are
hereby incorporated herein by reference, except as superceded by this Agreement.
1. APPOINTMENT OF MANAGING DEALER. Brookstreet Securities Corporation
("Brookstreet") is hereby appointed as Managing Dealer for the Offering on an
exclusive basis. The Company shall not solicit any other broker/dealers to
participate in the Offering. The Company shall not solicit any other
broker/dealers to participate in the Offering and the Company will not sell any
Units directly to the public without Brookstreet's prior written consent.
Brookstreet shall be entitled to solicit the services of other broker/dealers or
reallow a portion of the compensation set forth in Section 7 hereof in
connection with performing its services hereunder and as permitted by applicable
law. In the event that 3,250,000 Units are sold in the Offering, Brookstreet, in
its sole discretion, shall have the right to increase the maximum number of
Units being sold in the Offering by up to 650,000 units, thereby increasing the
Offering to include up to 3,900,000 Units (the "Overallotment Option").
2. SOLICITATION. By accepting this Agreement, Brookstreet agrees to use
its best efforts to solicit and sell, or cause to be solicited and sold, as the
case may be, subscriptions for said Units in accordance with the terms and
conditions of this Agreement, the private placement memorandum, together with
any revisions, supplements or amendment thereof, all of which have received
Brookstreet's prior approval (the "Memorandum"), and the applicable federal and
state securities laws and regulations in connection with the Offering. The Units
are only being offered to an unlimited number of persons who are accredited
investors within the meaning of the requirements of Sections 4(2) and 4(6) of
the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated
under the Act. Brookstreet does not guarantee that any sales of Units will be
made through any of its efforts.
3. SOLICITATION MATERIAL. No sales literature may be used by
Brookstreet other than the Memorandum or other offering materials which have
been approved in writing by the Company and Brookstreet and their respective
counsel, nor shall Brookstreet publicly solicit in any manner offers to purchase
the Units. Before delivering any Memorandum to any prospective investor,
Brookstreet shall have reasonable grounds to believe and in fact believe that
each prospective investor is an "accredited investor" as defined under the Act
and Regulation D promulgated thereunder and that such investor is sophisticated
and otherwise qualified to invest in the Units. Brookstreet agrees that it shall
forward all proceeds and subscription agreements directly to the Escrow Agent
(as defined below).
4. SALE OF UNITS. The Company reserves the right to refuse to accept
any and all subscriptions secured by Brookstreet. No subscription will be deemed
to be accepted by the Company until all necessary documents relating to such
subscription have been received by the Company, appropriate blue sky filings
have been made with the state of residence of such investor and the Company has
indicated acceptance of the subscription. All prospective sales of Units are
subject to the sale of Units to other persons prior to the time when any
proposed sale is submitted to the Company for acceptance thereof. Subscription
proceeds will be held in an escrow account at City National Bank's Los Angeles
office (the "Escrow Agent") pending acceptance of such subscriptions by the
Company.
5. CLOSING OF OFFERING. Unless at least the minimum number of Units
("Minimum Offering") set forth in the Memorandum is sold within the offering
period set forth in the Memorandum (as potentially extended by the Company), the
Offering will terminate, none of the Units will be deemed to have been sold and
all proceeds received will be returned in full with any interest earned thereon
and no commissions shall be paid to Brookstreet pursuant to Section 7 of this
Agreement. If the Minimum Offering is sold, the subscription proceeds will be
released from escrow and deposited to the Company's account.
6. TIMING OF PAYMENT OF COMMISSIONS. If the Minimum Offering is sold
within the offering period set forth in the Memorandum, the Company shall
instruct the Escrow Agent to remit to Brookstreet concurrently upon the Company
receiving the proceeds from the sale of the Minimum Offering (the "Initial
Closing"), the amount of the commission to be paid to Brookstreet pursuant to
Section 7 of this Agreement. For closings occurring after the Initial Closing
("Interim Closings"), the Company shall instruct the Escrow Agent to remit to
Brookstreet the amount of commission to be paid to Brookstreet pursuant to
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Section 7 of this Agreement concurrently with the payment of the proceeds of the
Interim Closings to the Company. There shall be no minimum amount of Interim
Offerings once the Minimum Offering has been met.
7. AMOUNT OF SALES COMMISSIONS. Provided that the proceeds from the
sale of the Minimum Offering are received by the Company, the Company shall pay
Brookstreet:
(a) A retail sales commission equal to 6% of the gross
proceeds from the sale of Units in the Offering;
(b) A marketing allowance equal to 2% of the gross proceeds
from the sale of Units in the Offering;
(c) A non-accountable expense allowance equal to 4% of the
gross proceeds from the sale of Units in the Offering;
(d) a retail sales commission of 6% of the gross proceeds from
the exercise of Investor Warrants.
(e) A warrant (the "Brookstreet Warrants") to purchase a
number of shares of Company Common Stock equal to 10% of the aggregate number of
Shares sold in the Offering. The exercise price of the Brookstreet Warrants
shall be $0.50 per share. The Brookstreet Warrants will contain standard and
customary net issuance (i.e. cashless exercise) and anti-dilution provisions and
shall expire five years after their date of issuance, provided, however that
they shall terminate immediately upon a merger, acquisition, consolidation, sale
of voting control or sale of substantially all of the assets of the Company in
which the shareholders of the Company do not own a majority of the outstanding
shares of the surviving corporation (collectively, a "Change in Control.") The
shares underlying the Brookstreet Warrants will have registration rights
identical to those of the Shares. Brookstreet may distribute the Brookstreet
Warrants to affiliates, agents, and employees at its discretion and in
conformity with applicable law.
(f) A warrant (the "Broker Warrants") to purchase a number of
shares of Company Common Stock equal to 5% of the aggregate number of Shares
sold in the Offering. The exercise price of the Broker Warrants shall be $0.50
per share. The Broker Warrants will contain standard and customary net issuance
(i.e. cashless exercise) and anti-dilution provisions and shall expire five
years after their date of issuance, provided, however that they shall terminate
immediately upon a Change in Control. The shares underlying the Broker Warrants
will have registration rights identical to those of the Shares. Brookstreet may
distribute the Broker Warrants to affiliates, agents, and employees at its
discretion and in conformity with applicable law. The Brookstreet Warrants and
the Broker Warrants are collectively referred to herein as the "Placement Agent
Warrants."
(g) In addition to the Placement Agent Warrants, the Company
shall grant Brookstreet and/or its designees a warrant to purchase shares of the
Company's common stock equivalent to 7% of the common shares sold upon exercise
of the Investor Warrants (the "Exercise Warrants.") Pursuant to an agreement to
be executed between the Company and Brookstreet and/or its designees, the
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Exercise Warrants shall have a per share exercise price of $2.50 and shall vest
fully and immediately upon issuance. The Exercise Warrants will contain standard
and customary net issuance (i.e. cashless exercise) and anti-dilution provisions
and shall expire two years after their date of issuance, provided, however that
they shall terminate immediately upon a Change in Control. The shares underlying
the Exercise Warrants will have registration rights identical to those of the
Shares. Brookstreet may distribute the Exercise Warrants to Brookstreet to
affiliates, agents, and employees at its discretion and in conformity with
applicable law.
(h) In the event prospective investors or institutions who are
introduced to the Company by Brookstreet or other participating broker/dealers
during the Offering ultimately purchase common stock of the Company within a
period of twelve months from the date of this Agreement but after the conclusion
of the Offering, the Company shall deliver to Brookstreet the same compensation
which Brookstreet would have been entitled had such transactions been included
in the Offering.
8. EXPENSES OF THE OFFERING.
(a) The Company shall bear all costs, expenses and fees
incident to preparation of the Memorandum, due diligence, costs and counsel fees
for qualification of the Offering by Brookstreet' counsel under state securities
laws in such states as may be required at the flat rate of $500 per state and
the fees and reimbursements of counsel for Brookstreet, the fees and
reimbursements of counsel and the accountants for the Company, the cost of
printing the Memorandums and other Offering materials in such number as
Brookstreet may determine to be appropriate, fees of the Escrow Agent, state
filing fees, and all such other expenses directly attributable to the Offering.
(b) The Company shall reimburse Brookstreet for out of pocket
marketing and/or broker/dealer due diligence expenses incurred on the Company's
behalf, including for example attending the National Investment Banking
Association Conference, telephone charges, air travel , hotel (Hilton/Marriott
level), and other standard expenses.
(c) Any cost or expense incurred by Brookstreet pursuant to
this Section must have a verbal pre-approval from an officer (CEO or CFO) of the
Company if the individual cost or expense is expected to exceed $5,000. The
aggregate of the costs and expenses incurred by Brookstreet pursuant to this
Section including, without limitation, its due diligence and counsel's fees,
shall not exceed $100,000 and Brookstreet shall not be entitled to reimbursement
for any such costs or expenses exceeding $100,000 without written permission of
an officer (CEO or CFO) of the Company.
9. EFFECTIVENESS OF AGREEMENT. This Agreement will become effective as
of the date first set forth above.
10. INDEMNIFICATION AND CONTRIBUTION.
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(a) Brookstreet hereby indemnifies and holds harmless the
Company, its agents, employees, attorneys, officers, and directors, and each
person who controls the Company within the meaning of Section 15 of the Act
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation and counsel fees) caused by: (i) any breach by
Brookstreet of the representations, warranties or covenants by Brookstreet
contained in or made pursuant to this Agreement, (ii) the failure by Brookstreet
to give, deliver or send a copy of the Memorandum (as may be supplemented or
amended from time to time) as appropriate to any person to whom the Units are
offered or sold or to offer or sell the Units in accordance with the provisions
of and applicable rules, regulations and published administrative
interpretations under Section 4(2) of the Act and the securities or blue sky
laws of any jurisdiction in which the Units are offered or sold by or through
Brookstreet, (iii) any unauthorized representations made by Brookstreet or any
of its agents or representatives or (iv) any unauthorized conduct which
adversely affects the availability of exemption from registration under the Act
or the rules and regulations thereunder or any provisions of the laws of any
jurisdiction.
(b) The Company hereby indemnifies and holds harmless
Brookstreet, its agents, employees, attorneys, officers, and directors, and any
agents, employees, attorneys, officers, and directors of any broker/dealers
solicited by Brookstreet to participate in this Offering against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation and counsel fees) caused by: (i) any breach by the Company of the
representations, warranties or covenants by the Company contained in or made
pursuant to this Agreement, (ii) any untrue statement of a material fact
contained in the Memorandum or in any amendment or supplement thereto or (iii)
any omission to state in the Memorandum any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided, however, that
the Company shall not be responsible for, nor does the Company indemnify or hold
harmless Brookstreet or its controlling persons against any losses, claims,
damages, liabilities or expenses arising out of or resulting from the offer or
sale of the Units to any person who was not given, delivered or sent a copy of
the Memorandum as appropriate, or the failure by Brookstreet to offer and sell
the Units in accordance with the provisions of and applicable rules, regulations
and published administrative interpretations under Section 4(2) of the Act and
rules thereunder and the securities or blue sky laws of any jurisdiction in
which the Units are offered or sold by or through Brookstreet.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the extent that it
may wish, jointly with any other indemnifying party, similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party,
under joint control thereof over the defense in conjunction with the indemnified
party and after notice from the indemnifying party to such indemnified party, of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or other
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expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and the indemnified
party may, but shall not be obligated to, participate in the defense of its own
expense with its own counsel.
11. REPRESENTATIONS AND WARRANTIES OF MANAGING DEALER. In addition to
meeting any conditions specified elsewhere herein, Brookstreet represents and
warrants to the Company that:
(a) Brookstreet is duly registered pursuant to the provisions
of the Securities Exchange Act of 1934 as a dealer and/or under the Investment
Advisers Act of 1940 as an investment adviser and is duly registered as a
broker-dealer and/or investment adviser in those states where required and
Brookstreet agrees to comply with all statutes and other requirements applicable
to it as a broker-dealer and/or investment adviser pursuant to those
registrations and is legally authorized under all applicable laws to engage in
the activities contemplated hereby and receive compensation therefor as herein
contemplated;
(b) Brookstreet is a member in good standing of the National
Association of Securities Dealers, Inc.; and
(c) This Agreement, when accepted and approved by Brookstreet,
will be duly authorized, executed and delivered by Brookstreet and is a valid
and binding agreement on Brookstreet's part.
12. COVENANTS OF THE COMPANY.
(a) The Company will use all reasonable efforts to promptly
prepare the Memorandum in form and substance satisfactory to Brookstreet. In
connection with the Memorandum and other matters pertaining to the Offering, the
Company and its officers, accountants, and counsel shall furnish to Brookstreet
and Brookstreet's counsel such information and documents as may be reasonably
requested.
(b) There will be included in the Memorandum audited financial
statements of the Company for the fiscal year ended 2003 and current unaudited
comparative interim financial statements. The financial statements will present
fairly the financial condition of the Company and the results of its operations
and cash flows at the time and for the periods covered by such financial
statements, and such statements will be substantially as heretofore represented
to Brookstreet.
(c) The Company has prepared and delivered to Brookstreet its
most recent financial statements and projections constituting its best estimate
of revenues, earnings and cash flow and shall update such estimates upon a
material change.
(d) The Company has not dealt with or engaged any finder who
was not a registered broker/dealer in connection with the proposed Offering or
any other offer or sale of securities.
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(e) Effective immediately, Brookstreet shall have a right to
appoint a designee observer to the Board of Directors and related committee
meetings of the Company. Such observer will have the right to attend all
meetings of the Board of Directors except where prohibited by law; however, such
observer shall have no voting rights. Such observer shall have his/her primary
residence in Orange County, California, and be entitled to receive reimbursement
for all reasonable out-of-pocket expenses incurred in attending such meetings,
including, but not limited to food, lodging, and transportation. Brookstreet or
the observer shall be given notice of such meetings at the same time and in the
same manner as directors of the Company are informed. Brookstreet and the
observer shall be indemnified to the same extent as the other directors.
Brookstreet's notice and observation rights shall terminate upon the earlier of
(i) two years after the effective date of the Registration Statement (defined
below) or (ii) a Change in Control.
(f) Upon the closing of $3,000,000 in the Offering,
Brookstreet will be authorized to nominate one director to the board who will
have no interest in the Company and shall be deemed "independent" under NASDAQ
Marketplace Rule 4200(a)(15). The Company and its affiliates and board of
directors agree not to unreasonably reject said nominee. Upon the final closing
of the Offering (the "Final Closing") the authorization to nominate the
aforementioned director will be transferred from Brookstreet to the investors in
the Offering.
(g) Until the date of the Final Closing, the Company will
notify Brookstreet promptly of the occurrence of any event which might
materially affect the Offering or the status of the Company.
(h) The Company shall keep its books and records up to date
and remain current in its reporting requirements under the Securities Exchange
Act of 1934, as amended, for a period of two years following the conclusion of
the Offering.
(i) Not later than 60 calendar days following the Final
Closing, the Company shall file a registration statement (the "Registration
Statement") covering the public sale of Registrable Securities (defined below),
and the Company will cause such shares to be registered under the Securities Act
of 1933, as amended, (the "1933 Act") and continue to keep the Registration
Statement effective for a period of two years. For every day that the Company is
late in filing the Registration Statement beyond the deadline required by this
subsection, the Company will issue to the Investors on a pro rata basis
additional shares in whole share increments equal to 1% of shares purchased in
the Offering. "Registrable Securities" are defined as the Shares and all shares
of common stock underlying the Investor Warrants, the Placement Agent Warrants,
and the Exercise Warrants. Only common stock may be registered under the
Registration Statement. All shares issued to Brookstreet or its designees in
connection with the Offering including shares issuable upon exercise of the
Placement Agent Warrants and Exercise Warrants shall be registered in the
Registration Statement, but shall be subject to a lock up agreement whereby each
holder agrees not to sell or otherwise dispose of the shares for a period of 90
days following the effective date of the Registration Statement. The Company
shall bear the expenses in connection with the registration of the Registrable
Securities (exclusive of underwriting discounts and commissions), including the
reasonable fees and expenses of one counsel for the holders of Registrable
Securities not to exceed $25,000.
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(j) The Company shall not, without the prior written approval
of Brookstreet, issue any new securities, including debt securities, until the
Registration Statement has been declared effective, unless less than $3,000,000
is raised during the initial sixty days of the Offering. Additionally, all
officers, directors (except director Xxxxxx Xxxx) and affiliates of the Company,
or shareholders holding 10% or more of the Company's outstanding shares, shall
be subject to a lock up agreement whereby each such person agrees not to sell or
otherwise dispose of any securities of the Company for a period of 180 days
following the effective date of the Registration Statement.
(k) Proceeds from the Offering will be used for the purposes
disclosed in the Memorandum.
(l) In the event that the Company decides to offer additional
securities either through a debt or equity offering during the twelve months
commencing on the Final Closing, the Investors will have the first right of
refusal to participate in that offering. The right will be offered for a 30-day
period after the Investors are notified in writing and have been provided with
the documents for the offering. In the event that an Investor elects to
participate in such offering, the Company agrees to compensate Brookstreet with
a 7% commission and 7% warrant coverage for the number of securities purchased
(the "Preemptive Warrants") by such investors. The Preemptive Warrants shall be
priced at 100% of the offering price of the security in such offering and
expiration shall be no less than one year after the effective date of the
Registration Statement, or simultaneously upon a Change in Control. The
Preemptive Warrants will be cashless and can be exercisable on a net basis and
will have all the rights and privileges as all other warrants awarded to
Brookstreet.
(m) The Company agrees to provide to Brookstreet with a due
diligence report for the Offering and any other third party analysis that has
been completed in the past, of which the Company has a copy and is not
prohibited from disclosing to third parties.
(n) Subject to all applicable federal and state securities
laws, the Company shall facilitate, at the Company's expense, all transfers of
the Shares, the Placement Agent Warrants, the Share Warrants, the Preemptive
Warrants and any Common Stock issued on the exercise of these warrants.
(o) From the Effective Date of this Agreement until the
termination of the Offering, the Company and its officers, directors, and agents
shall not release or distribute any press release, statement to any media
representative, promotional material, public announcement, shareholder letter,
or any other communication intended for general distribution (including but not
limited to communications made by electronic mail or over the Internet)
(collectively, "Press Releases"), without the prior review and written consent
of Brookstreet.
(p) At no time shall the Company name Brookstreet in any Press
Releases or in any other written or oral communication without the express
written consent of Brookstreet.
(q) The Company has furnished a completed and executed a Due
Diligence Outline in the form presented to the Company by Brookstreet (the "Due
Diligence Outline") and all items requested by the Due Diligence Outline to
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Xxxxxxxxxxx except as otherwise brought to Brookstreet's attention in writing.
The Company represents that its responses to the Due Diligence Outline are
accurate. In the event any of the responses provided by the Company pursuant to
the Due Diligence Outline materially change prior to or during the Offering, the
Company will immediately notice Brookstreet in writing of the change together
with all material details and copies of relevant documents.
(r) The Company has furnished completed and executed due
diligence questionnaires in the form presented to the Company by Brookstreet
(the "D&O Questionnaires") from each officer, director and shareholder who
beneficially holds 10% or more of a class of the Company's stock. The Company
has reviewed all of the completed D&O Questionnaires and any attached materials
and warrants that they are accurate.
(s) The Board of Directors will not make any voluntary
executive officer changes during the Offering and for a period of six months
after the termination of the Offering without the prior written consent of
Brookstreet.
13. TERMINATION.
(a) This Agreement may be terminated by the Company for cause.
For purposes of this Agreement, the term "cause" shall include, but not be
limited to, the following: a material breach of or failure to perform any
covenant or obligation in this Agreement, dishonesty, neglect of duties,
unprofessional conduct, acts of moral turpitude, disappearance, felonious
conduct, or fraud. Company may terminate this Agreement for cause by giving
written notice of termination to Brookstreet. The notice of termination required
by this section shall specify the ground for termination and shall be supported
by a statement of all relevant facts known by the Company at such time. Upon
such termination, Brookstreet shall continue to have the right to receive
compensation hereunder for Shares previously sold by Brookstreet, for which
Brookstreet has not yet been compensated, and all other compensation as set
forth in this Agreement.
(b) The Offering may be terminated by Brookstreet if any of
the following conditions are not satisfied:
i. Brookstreet shall be reasonably satisfied with the
Company's corporate structure and capitalization, business affairs, contractual
regulations, any pending and threatened litigation and other matters affecting
the Company's prospects.
ii. The Company shall not have sustained a
substantial loss by fire, flood, accident or other calamity, whether or not
covered by insurance.
iii. There shall not have been any important and
material adverse change in market levels, or political, financial or economic
conditions or other circumstances, which, in Brookstreet' sole judgment, render
it undesirable, impractical or inadvisable to proceed with the offering.
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iv. There shall not have been a major catastrophe,
national calamity, Act of God, or other event which, in Brookstreet' sole
opinion, would materially adversely disrupt the financial markets.
v. Brookstreet shall be satisfied with the Company's
financial condition and operating results after a review of the audited and
interim financial statements of the Company prepared for inclusion in the
Memorandum, and shall have received, prior to the Initial Closing for the
Offering, letters satisfactory to Brookstreet and to its counsel from the
independent public accountants who certified such financial statement(s) to the
effect that: (i) such accountants are, in fact, independent pursuant to the
requirements, Rules and Regulations under the Act; (ii) the financial statements
included in the Memorandum and covered by their opinion and report thereon
comply in all material respects with tax basis reporting principals and the
Rules and Regulations under the Act; and (iii) subsequent to the dates of the
financial statements mentioned above, there shall not have been any material
adverse changes in the capitalization, working capital, income, or financial
condition or net worth of the Company. Such letters may contain such
qualifications and limitations as are usual and customary.
vi. Brookstreet shall have received, at each closing
date, an opinion of counsel for the Company, acceptable to Brookstreet as to
various matters relating to the Company and its affairs and to the Memorandum
and any additional offering materials, including, without limitation, the forms
and validity of the securities being offered, the legality and sufficiency of
the corporate proceedings and other matters incident to the issuance thereof,
the authority of the Company to sell the securities being offered and the form
and content and occurrence of the Memorandum and any offering materials
contained therein. Such opinions may contain such qualifications and limitations
as are usual and customary.
vii. A Memorandum relating to the Offering shall have
been reviewed and approved by both Brookstreet and the Company.
viii. The matters referred to in this section shall
have been approved by Brookstreet's counsel.
Upon such termination, Brookstreet shall continue to have the right to
receive compensation hereunder for Shares previously sold by Brookstreet for
which Brookstreet has not yet been compensated, and all other compensation as
set forth in this Agreement.
(c) Both Parties may terminate the Offering by mutual consent.
Upon such termination, Brookstreet shall continue to have the right to receive
compensation hereunder for Shares sold by Brookstreet, for which Brookstreet has
not yet been compensated, and all other compensation as set forth in this
Agreement.
(d) The Company may terminate the Offering in the event at
least $3,000,000 in gross proceeds have not been raised by the Offering within
three months of the date hereof. Upon such termination, Brookstreet shall
continue to have the right to receive compensation hereunder for Shares
previously sold by Brookstreet for which Brookstreet has not yet been
compensated, and all other compensation as set forth in this Agreement.
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14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
indemnities, agreements, representations, warranties, and other statements by
Brookstreet set forth in or made in writing pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company, or any controlling person and will survive delivery of
and payment for the Shares, and the Company, or any controlling person, as the
case may be, shall be entitled to the benefit of the indemnity agreements.
15. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of California.
16. JURISDICTION. Any dispute, claim, or any other legal proceedings in
relation to this Agreement shall be heard in the County of Orange, State of
California.
17. NOTICES. Any notice, request, instruction, or other document
required by the terms of this Agreement, or deemed by any of the parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by personal delivery, overnight delivery, or mailed by registered
or certified mail, postage prepaid, with return receipt requested, pursuant to
the following: if to Brookstreet, to the person and address first set forth
above; if to the Company, to Raptor Networks Technology, Inc., Attn: Xxxxxx
Xxxxxxxxxxxxxxx, 0000 X. Xxxx Xxxx, Xxxxx 000, Xxxxx Xxx, Xxxxxxxxxx 00000..
These persons and addressesmay be changed from time to time by a notice sent as
aforesaid. If notice is given by personal delivery or overnight delivery in
accordance with the provisions of this Section, said notice shall be
conclusively deemed given at the time of such delivery provided a receipt is
obtained from the recipient. If notice is given by mail in accordance with the
provisions of this Section, such notice shall be conclusively deemed given upon
receipt and delivery or refusal.
18. MODIFICATIONS AND WAIVERS. No modification or waiver of any term
hereof shall be effective unless in writing, signed by the party to be charged.
19. MULTIPLE COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement is
made, and may be executed, in multiple counterparts, each of which shall
constitute an original hereof. The parties hereto agree that this Agreement may
be executed by facsimile signatures and such signatures shall be deemed
originals.
20. ASSIGNABILITY. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs and successors but
shall not be assignable by a party without the prior written consent of the
other party.
21. ATTORNEYS' FEES. If either party files any action or brings any
proceeding against the other arising out of this Agreement, then the prevailing
party shall be entitled to reasonable attorneys' fees.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between us in accordance with its terms.
Very truly yours,
RAPTOR NETWORKS TECHNOLOGY, INC.,
a Colorado corporation
/S/ XXXXXX XXXXXXXXXXXXXXX
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BY: Xxxxxx Xxxxxxxxxxxxxxx
ITS: Chief Executive Officer
BROOKSTREET SECURITIES CORPORATION,
A CALIFORNIA CORPORATION
/S/ XXXXXXX X. XXXXXX
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BY: Xxxxxxx X. Xxxxxx
ITS: President
-12-
