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Exhibit 10.38
VENTURI TECHNOLOGIES, INC.
0000 Xxxxx Xxxxx Xxxxxx
Xxxx, XX 00000
SOLICITING DEALER AGREEMENT
August 9, 1996
Dominion Capital
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Re: 10% Cumulative Convertible Series A Preferred Stock
To Whom it May Concern:
Relative to the offer and the sale (the "Offering") by you of the above
captioned securities (the "Securities"), we wish to confirm the terms and
conditions upon which the Offering will be made, the nature of the services that
you will render in connection with the Offering and our respective obligations
with respect to the Offering. In certain instances herein, you will be referred
to as "Dealer" and we will be referred to as the "Company."
1. APPOINTMENT
(a) Subject to the terms and conditions and on the basis of the
representations, warranties and covenants herein set forth, Dealer is hereby
authorized on a nonexclusive basis to effect sales of the Securities during the
period commencing with the date of the Private Offering Memorandum and ending at
the final Closing Date as defined in the Private Offering Memorandum. By your
confirmation thereof you hereby accept such appointment and agree to use your
best efforts to find purchasers for the Securities in accordance with the terms
and conditions of this Agreement. Dealer further agrees that it is bound by the
terms and conditions of the Escrow Agreement entered into by the Company and
Zions First National Bank for purposes of holding subscriber funds until the
minimum proceeds are raised for the Offering.
2. NATURE OF THE OFFERING
(a) Purchase Price. The Securities will be offered for sale at a
purchase price of $10.00 per share payable as shall be set forth in the Offering
Materials to be prepared pursuant to subparagraph 4(a) below.
(b) Registration of the Securities. The Securities will not be
registered under the Securities Act of 1933, as amended (the "1933 Act"), or
under the securities laws of any state, but will be offered and sold in reliance
on the exemption provided by Section 4(2) of the 1933 Act and the applicable
rules and regulations thereunder and on appropriate exemptions from the
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registration requirements of the states in which it is mutually determined to
offer and sell the Securities.
(c) Subscription Agreements. Subscription Agreements, together with
checks payable to the Venturi Technologies Preferred Stock Account as set forth
in the Subscription Agreement, shall be sent to Venturi Technologies, Inc., 0000
Xxxxx Xxxxx Xxxxxx, Xxxx, XX 00000 (the "Company") by the end of the next
business day following receipt by the Dealer.
(d) Acceptance by Company. Upon receipt of the Subscription Agreement,
the Company will determine promptly whether it wishes to accept the proposed
purchaser as a shareholder, it being understood that the Company reserves the
right to reject the tender of any Subscription Agreement. Deposit of a check
shall not constitute acceptance. Should the Company determine to reject the
tender, it will notify in writing the prospective purchaser and Dealer within
ten (10) business days following receipt by the Company of the Subscription
Agreement and the Company Escrow Agent will promptly return to the prospective
purchaser the tendered Subscription Agreement and a check equal to the amount
tendered for the shares.
3. COMPENSATION
As a compensation for the services rendered by Dealer in soliciting and
obtaining purchasers for the Securities, the Company shall pay the following:
(a) A cash commission in the amount of $0.80 per share (8% of each
share) plus a non accountable allowance for due diligence in the amount of $0.05
per share (0.5% of each share) will be paid to Dealers selling shares.
(b) In addition to the cash commission set forth above, Dealer shall be
granted warrants to purchase up to a total of 12,500 shares of Venturi common
stock upon the same terms and conditions as the warrants granted to purchasers
of Preferred Stock. The warrants (two of which can purchase one whole share of
common stock) shall be earned by Dealer as follows:
Gross Proceeds Raised Number of Warrants
--------------------- ------------------
$ 500,000--599,999 2,500
600,000--699,999 5,000
700,000--799,999 7,500
800,000--899,999 10,000
9000,000-999,999 12,500
1,000,000--1,099,999 17,500
1,100,000--1,199,999 20,000
1,200,000--1,299,999 22,500
1,300,000--1,500,000 25,000
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(b) No Dealer shall be entitled to a selling commission with respect to
any tendered Subscription Agreement which is rejected by the Company or in any
case in which it is determined that the solicitation or obtaining of purchasers
by such Dealer was made in violation of the securities laws of the United states
or any state.
4. COVENANTS OF THE COMPANY
The Company hereby warrants, covenants and agrees as follows:
(a) Preparation of Offering Materials in Accordance With Applicable
Law. The Company shall provide a private offering memorandum and certain other
documents to be used in connection with the offering and sale of the securities
(the "Offering Materials") prepared in conformity with the requirements of
Section 4(2) of the 1933 Act and the applicable rules and regulations thereunder
as well as the provisions of the securities or blue sky laws of all applicable
jurisdictions.
(b) Amendments to Offering Materials as Required. The Company shall
promptly advise Dealer if the Company becomes aware of any event which happens
prior to the Final Closing Date which makes any statement in the Offering
Materials untrue or misleading in any material respect or which requires any
change in the Offering Materials in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading. Without
limiting the foregoing, if, prior to the Final Closing Date, any event shall
occur which, in the judgment of the Company or Dealer or their respective
counsel, should be set forth in the Offering Materials in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading, or if it is necessary to amend or supplement the Offering
Materials to comply with law, the Company shall forthwith prepare an appropriate
amendment or supplement thereto.
(c) Copies of Offering Materials to be Provided to Dealer. Until the
Final Closing Date, the Company shall deliver to Dealer without charge as many
copies of the Offering Materials (and of any amendments and supplements thereto)
as dealer may reasonably request.
(d) Requests for Amendment or Issuance of Stop Orders. Int he event the
Company is advised or obtains knowledge thereof, it shall advise Dealer of (i)
any request made by the Securities and exchange Commission or any state
securities agency for an amendment of or supplement to the Offering Materials or
for additional information, or (ii) the issuance by the Securities and Exchange
Commission or any state securities agency of any stop order preventing
proceedings for that purpose. Without limiting the foregoing, the company shall
use its best efforts to prevent the issuance of any such order and, if any such
order is issued, to obtain the lifting thereof as promptly as possible.
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(e) Qualification of the Securities Under State Law. The Company shall
(i) qualify the Securities for offer and sale under the securities or blue sky
laws of such jurisdictions in which the Company and Dealer mutually determine to
offer and sell the Securities and (ii) make such applications, file such
documents and furnish such information as may reasonably be required for that
purpose.
(f) Payment of Expenses by the Company. The Company shall pay all costs
and expenses incurred in connection with the Offering (other than the fees and
expenses of counsel to Dealer or expenses incurred by Dealer on its own behalf)
including but not limited to all accounting, legal, printing and other costs in
respect of (i) the preparation of the Offering Materials and the exhibits
thereto prepared in connection with the Offering, as amended or supplemented
from time to time, and (ii) the compliance with the securities or blue sky laws
of those jurisdictions in which the Securities are to be sold.
(g) Representations and Warranties. The Company represents and warrants
as of the date hereof and as of the final Closing Date to the effect that:
(i) Status and Authority. Prior to the initial closing date,
the Company will be a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas, with full power
and authority to conduct its business as being conducted, and to the
extent appropriate as it is to be conducted, as described int he
Offering Materials.
(ii) Status of Securities. When issued the shares shall be
duly authorized and issued shares and shall be fully paid and
nonassessable.
(iii) Authorization. This Agreement has been duly authorized,
executed and delivered by the Company.
(iv) Offering Materials True and Correct. The Offering
Materials and each amendment and supplement thereto conform in all
material respects with the requirements of the 1933 Act and the
applicable rules land regulations thereunder and the provisions of the
securities or blue sky laws of all applicable jurisdictions. None of
the Offering Materials and any amendments or supplements thereto
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 the light of the circumstances under which they
are made, not misleading.
(v) Absence of Stop Orders. Neither the Securities and
exchange Commission nor any state securities agency as (A) made any
requests for an amendment of or supplement to the Offering Materials or
for additional information or (B) issued any other preventing or
suspending the Offering or the use of the Offering Materials or
instituted proceedings for that purpose.
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(vi) Absence of Material Adverse Change. Since the date of the
Private Offering Memorandum no event has occurred, including any
material adverse change in the financial condition of the Company the
incurring of any material liability or obligation, direct or
contingent, the entering into of any material transaction, or the
institution of any legal or administrative proceeding against the
Company which would have a material adverse effect upon the Company.
(vii) Actions Affecting Securities Compliance. The Company has
not taken any action which adversely affects the availability of the
exemption from registration under the 1933 Act provided by Section 4(2)
thereof or the applicable rules and regulations thereunder or any
provisions of the securities or blue sky laws of any applicable
jurisdiction.
(viii) Litigation. There are no actions, suits, proceedings or
other litigation pending or, to the knowledge of the Company threatened
against or affecting the Company at law or in equity or before or by
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality which. if
determined adversely to the Company would individually or in the
aggregate have a materially adverse effect on the business, assets,
properties operation or prospects of the Company or on its condition,
financial, or otherwise.
(ix) Compliance With Law and Other Regulations. The Company is
not subject to and has not been threatened with any material fine,
penalty or disability as the result of its failure to comply with any
requirements of federal, state, local or foreign law or regulation or
any requirements of any governmental body or agency having jurisdiction
over it, the conduct of its business, the use of its assets and
properties, or any premises occupied by it.
(x) Accuracy of Statements. Neither this Agreement nor any
statement, list, certificate or other information furnished by the
Company to Dealer in connection with this Agreement or any of the
transactions contemplated hereby contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances
in which they are made not misleading.
(xi) Survival of Representation. At all times subsequent to
the date of this Agreement and up to and including the Final Closing
Date, the representations and warranties made in this paragraph 4 will
be true and correct with the same effect as if they had been made on
and as of such date.
5. COVENANTS OF DEALER
Dealer hereby warrants, covenants and agrees as follows:
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(a) Best Efforts. Dealer shall use its best efforts to find purchasers
for the Securities who are acceptable to the Company.
(b) Manner of the Offering. Dealer shall use its best efforts to offer
and sell the Securities on behalf of the Company in accordance with the
provisions of and applicable rules, regulations and published administrative
interpretations under Section 4(2) of the 1933 Act and the provisions of the
securities or blue sky laws of any jurisdictions in which the company and Dealer
mutually determine to offer and sell the Securities. Dealer shall comply with
all the following:
(i) Dealer agrees to offer the Securities only to accredited
investors as defined in Regulation D promulgated under the Securities
Act of 1933, and only to investors in those states in which the Company
has authorized it to make offers and sales and in which Dealer is
qualified to make offers and sales of the Shares.
(ii) Dealer shall use reasonable efforts to select investors
it reasonably believes meet the investor suitability requirements set
forth in the Subscription agreement, which is an exhibit to the
Offering Materials, and such additional requirements as are specified
in the Subscription Agreement.
(iii) Dealer shall maintain a list of the persons to whom
Securities are offered and sold and such other records as may be
necessary to document Dealer's compliance with restrictions on
solicitation.
(iv) Dealer shall not give any information or make any
representation in connection with the Offering other than those
contained in the Offering Materials provided by the Company for use in
connection with the Offering.
(v) Dealer shall not publish, circulate or otherwise use any
other solicitation material without the prior written approval of the
Company.
(vi) Dealer shall accept subscriptions only from investors who
have received a copy of the Offering Materials, including any required
supplements, and who have executed a Subscription Agreement.
(vii) Dealer shall not purchase any Shares for resale.
(viii) Dealer agrees to affix copies of any supplements to the
Offering Materials upon receipt. dealer shall return to the Company any
and all unused copies of the Offering Materials supplied by the Company
to Dealer in connection with the Offering.
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(ix) Dealer shall supply copies of pertinent documents and
otherwise cooperate with the Company in complying with requests or
inquiries of any regulatory authorities relating to the Offering.
(x) Dealer is not authorized to act as an agent of the
Company, and Dealer agrees not to act as such agent and not to purport
to do so without the prior written approval of the Company.
(xi) Dealer shall not re-allow commissions to any other
broker/dealer.
(c) Representations and Warranties. Dealer represents and warrants as
of the date hereof and as of the Final Closing date to the effect that:
(i) Status and Authority. Dealer is a corporation duly
organized and validly existing under the laws of the state of its
incorporation and is in good standing under the laws of such state and
in each other state in which the Offering is made by Dealer.
(ii) Authorization. This Agreement has been duly authorized,
executed and delivered by Dealer.
(iii) Registration as Broker/Dealer. Dealer is a member of the
National Association of Securities Dealers, Inc. and is registered or
exempt from registration as a broker/dealer under the Securities
Exchange act of 1934 and the securities or blue sky laws of each
jurisdiction in which the Offering is made by Dealer.
(d) Survival of Representations. At all times subsequent to the date of
this Agreement and up to and including the Final Closing Date, the
representations and warranties made in this paragraph 5 will be true and correct
with the same effect as if they had been made on and as of such time.
6. INDEMNIFICATION
(a) Indemnity by Dealer. Dealer hereby indemnities and holds harmless
the Company and each person who controls the Company (within the meaning of
Section 15 of 1933 Act) against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs and investigation and counsel fees)
arising out of or based upon:
(i) any breach by Dealer of the representations, warranties or
covenants by it contained in or made pursuant to this Agreement;
(ii) the failure by Dealer to give, deliver or send a copy of
the Offering Materials as appropriate to any person to whom the
Securities are offered or sold
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or to offer or sell the Securities in accordance with the provisions of
an applicable rules, regulations and published administrative
interpretations under Section 4(2) of the 1933 Act and the securities
or blue sky laws of any jurisdiction in which the Securities are
offered or sold by or through Dealer, including any solicitation by
Dealer of any subscription other than in accordance with the terms of
this Agreement and the Offering Materials, any representation made by
dealer other than as set forth in the Offering Materials furnished by
the Company specifically for use in connection with the Offering or any
other misleading statement by specifically for use in connection with
the Offering or any other misleading statement by Dealer or failure by
dealer to correct a misleading statement by Dealer in order to make
such statement conform to the information contained in the Offering
Materials. This indemnity agreement shall be in addition to any
liability which Dealer may otherwise have.
(b) Indemnity by the Company. The Company hereby indemnifies and holds
harmless Dealer and each person who controls Dealer (within the meaning of
Section 15 of the 0000 Xxx) against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
counsel fees) arising out of or based upon:
(i) any breach by the Company of the representations,
warranties or covenants by it contained in or made pursuant to this
Agreement;
(ii) any untrue statement or alleged untrue statement of a
material fact contained in the Offering Materials or in any amendment
or supplement thereto or in any blue sky application or document,
except for information relating to Dealer furnished in writing by
Dealer, or on its behalf, expressly for use in connection with the
Offering Materials or in any amendment or supplement thereto or in any
blue sky application or document; or
(iii) any omission or alleged omission to state in the
Offering Materials 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, excepting information
relating directly or indirectly to Dealer; provided, however, that the
Company shall not be responsible for, no does the Company indemnify or
hold harmless Dealer or its controlling persons against, any losses,
claims, damages, liabilities or expenses arising out of or resulting
from the offer or sale of the Securities to any person who was not
given, delivered or sent a copy of the Offering Materials as
appropriate, or the failure by dealer to offer and sell the Securities
in accordance with the provisions of and applicable rules, regulations
and published administrative interpretations under Section 4(2) of the
1933 Act and rules thereunder and the securities or blue sky laws of
any jurisdiction in which the Securities are offered or sold by or
through Dealer. This indemnity will be in addition to any liability
which the may otherwise have.
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(c) Actions Relating to Indemnity. If any action or claim shall be
brought or asserted against party entitled to indemnification hereunder (the
"Indemnified Party") or any person controlling such party and in respect of
which indemnity may be sought from the party obligated to indemnify the
Indemnified Party pursuant to paragraphs 7(a) and (b) hereof (the "Indemnifying
Party"), the Indemnified Party shall promptly notify the Indemnifying Party in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel and the payment of all expenses. The Indemnified Party
or any such controlling person shall have the right to employ separate counsel
in any such action and participate in the defense thereof and to be indemnified
for the reasonable fees and expenses thereof. This paragraph shall survive any
termination of this Agreement.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
(a) Obligation of Dealer. The obligations of Dealer hereunder shall be
subject to the following conditions precedent, any one or more of which may be
waived by Dealer:
(i) Performance of Obligations. The Company shall have
performed all of its covenants and agreements as set forth herein on or
prior to the Final Closing Date.
(ii) Absence of Material Adverse Change. There shall not have
been a material adverse change between the date hereof and the final
Closing Date in the business, properties, assets, financial condition,
results of operations or prospects of the Company.
(b) Obligations of the Company. Except for the obligation of the
Company to pay the costs and expenses of the Offering as provided above, the
obligations of the Company hereunder shall be subject to the following condition
precedent, which may be waived by the Company:
(i) Performance of Obligations. Dealer shall have performed
all of its covenants and agreements as set forth herein on or prior to
the final Closing Date.
8. GENERAL
(a) Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement, shall be governed by and
construed in accordance with the laws of the State of Texas notwithstanding any
conflict of law provisions to the contrary.
(b) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received when delivered against receipt
or when deposited in the United States mails, first class postage prepaid,
addressed as set forth below:
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If to Dealer: Dominion Capital
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
If to Company: Venturi Technologies, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxxx
Xxxxxx & Xxxxxxxxx
000 Xx. Xxxxx Xxxxxx, Xxxxxxx floor
Salt Lake City, Utah 84111
(c) Binding, Nature of Agreement: No Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither party may assign or
transfer its rights or obligations under this Agreement without the prior
written consent of the other party hereto.
(d) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
This Agreement may not be modified or amended other than by an agreement in
writing.
(e) Paragraph Headings. The paragraph headings in this Agreement are
for convenience only; they form no part of this Agreement and shall not affect
its interpretation.
(f) Gender. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.
If the foregoing accurately sets forth the basis of our understanding,
please sign and return to the undersigned the extra copy of this letter, which
will thereupon constitute a contract between us.
VENTURI TECHNOLOGIES, INC.,
a Texas corporation
By:_______________________________
Its:
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AGREED AND ACCEPTED:
DOMINION CAPITAL
By:_______________________________
Its:
Date:_____________________________
