PROTON LABS, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: November 28, 2005
The undersigned, Proton Labs, Inc., a Washington corporation (the "COMPANY"),
hereby agrees with US EURO Securities, Inc. (the "PLACEMENT AGENT") and Dutchess
Private Equities Fund, L.P., a Delaware Limited Partnership (the "INVESTOR") as
follows:
1. OFFERING. The Company hereby engages the Placement Agent to act as its
exclusive placement agent in connection with the Investment Agreement dated
November 28, 2005 (the "INVESTMENT AGREEMENT") pursuant to which the
Company shall issue and sell to the Investor, from time to time, and the
Investor shall purchase from the Company (the "OFFERING") up to Ten Million
Dollars ($10,000,000) of the Company's Class A Voting Common Stock (the
"COMMITMENT AMOUNT"), par value $0.0001 per share (the "COMMON STOCK"), at
price per share equal to the Purchase Price, as that term is defined in the
Investment Agreement. Pursuant to the terms hereof, the Placement Agent
shall render consulting services to the Company with respect to the
Investment Agreement and shall be available for consultation in connection
with the advances to be requested by the Company pursuant to the Investment
Agreement. All capitalized terms used herein and not otherwise defined
herein shall have the same meaning ascribed to them as in the Investment
Agreement. The Investor will be granted certain registration rights with
respect to the Common Stock as more fully set forth in a Registration
Rights Agreement between the Company and the Investor dated November 28,
2005 (the "REGISTRATION RIGHTS AGREEMENT"). The documents to be executed
and delivered in connection with the Offering, including, but not limited,
to this Agreement, the Investment Agreement, and the Registration Rights
Agreement, and any Prospectus or other disclosure document ( including all
amendments and supplements ) utilized in connection with the Offering are
referred to sometimes hereinafter collectively as the "OFFERING MATERIALS."
The Company's Common Stock is sometimes referred to hereinafter as the
"SECURITIES." The Placement Agent shall not be obligated to sell any
Securities and this Offering by the Placement Agent shall be solely on a
"best efforts basis."
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLACEMENT AGENT.
The Placement Agent represents warrants and covenants as follows:
(i) The Placement Agent has the necessary authority to enter into
this Agreement and to consummate the transactions contemplated
hereby.
(ii) The execution and delivery by the Placement Agent of this
Agreement and the consummation of the transactions contemplated
herein will not result in any violation of, or be in conflict
with, or constitute a default under, any agreement or instrument
to which the Placement Agent is a party or by which the Placement
Agent or its properties are bound, or any judgment, decree, order
or, to the Placement Agent's knowledge, any statute, rule or
regulation applicable to the Placement Agent. This Agreement when
executed and delivered by the Placement Agent, will constitute
the legal, valid and binding obligations of the Placement Agent,
enforceable in accordance with their respective terms, except to
the extent that (a) the enforceability hereof or thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights
of creditors generally, (b) the enforceability hereof or thereof
is subject to general principles of equity, or (c) the
indemnification provisions hereof or thereof may be held to be in
violation of public policy.
(iii) Upon receipt and execution of this Agreement the Placement Agent
will promptly forward copies of this Agreement to the Company or
its counsel and the Investor or its counsel.
(iv) The Placement Agent will not take any action that it reasonably
believes would cause the Offering to violate the provisions of
the Securities Act of 1933, as amended (the "1933 ACT"), the
Securities Exchange Act of 1934 (the "1934 ACT"), the respective
rules and regulations promulgated there under (the "RULES AND
REGULATIONS") or applicable "Blue Sky" laws of any state or
jurisdiction.
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(v) The Placement Agent will use all reasonable efforts to determine
(a) whether the Investor is an Accredited Investor and (b) that
any information furnished by the Investor is true and accurate.
The Placement Agent shall have no obligation to insure that (x)
any check, note, draft or other means of payment for the Common
Stock will be honored, paid or enforceable against the Investor
in accordance with its terms, or (y) subject to the performance
of the Placement Agent's obligations and the accuracy of the
Placement Agent's representations and warranties hereunder, (1)
the Offering is exempt from the registration requirements of the
1933 Act or any applicable state "Blue Sky" law or (2) the
Investor is an Accredited Investor.
(vi) The Placement Agent is a member of the National Association of
Securities Dealers, Inc., and is a broker-dealer registered as
such under the 1934 Act and under the securities laws of the
states in which the Securities will be offered or sold by the
Placement Agent unless an exemption for such state registration
is available to the Placement Agent. The Placement Agent is in
compliance with all material rules and regulations applicable to
the Placement Agent generally and applicable to the Placement
Agent's participation in the Offering.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company makes to the Placement Agent all the representations and
warranties it makes to the Investor in the Investment Agreement and, in
addition, represents and warrants as follows:
(i) The execution, delivery and performance of each of this
Agreement, the Investment Agreement and the Registration Rights
Agreement has been or will be duly and validly authorized by the
Company and is, and with respect to this Agreement, the
Investment Agreement and the Registration Rights Agreement will
each be, a valid and binding agreement of the Company,
enforceable in accordance with its respective terms, except to
the extent that (a) the enforceability hereof or thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights
of creditors generally, (b) the enforceability hereof or thereof
is subject to general principles of equity or (c) the
indemnification provisions hereof or thereof may be held to be in
violation of public policy. The Securities to be issued pursuant
to the transactions contemplated by this Agreement and the
Investment Agreement have been duly authorized and, when issued
and paid for in accordance with (x) this Agreement, the
Investment Agreement and the certificates/instruments
representing such Securities, (y) will be valid and binding
obligations of the Company, enforceable in accordance with their
respective terms, except to the extent that (1) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, and (2)
the enforceability thereof is subject to general principles of
equity. All corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly
and validly taken by the Company.
(ii) The Company has a duly authorized, issued and outstanding
capitalization as set forth herein and in the Investment
Agreement. The Company is not a party to or bound by any
instrument, agreement or other arrangement providing for it to
issue any capital stock, rights, warrants, options or other
securities, except for this Agreement, the agreements described
herein and as described in the Investment Agreement, dated the
date hereof and the agreements described therein. All issued and
outstanding securities of the Company, have been duly authorized
and validly issued and are fully paid and non-assessable; the
holders thereof have no rights of rescission or preemptive rights
with respect thereto and are not subject to personal liability
solely by reason of being security holders; and none of such
securities were issued in violation of the preemptive rights of
any holders of any security of the Company. As of the date
hereof, the authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, par value $0.0001 per share,
of which 14,270,100 shares of Common Stock are issued and
outstanding. The Company also has 20,000,000 shares of Preferred
Stock, par value $0.0001 per share, of which 19,600,000 shares of
Preferred Stock are undesignated; and 400,000 shares of Preferred
Stock are designated as Series A Preferred Stock of which 8,000
shares are issued and outstanding.
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(iii) The Common Stock to be issued in accordance with this Agreement
and the Investment Agreement has been duly authorized and when
issued and paid for in accordance with this Agreement, the
Investment Agreement and the certificates/instruments
representing such Common Stock, will be validly issued,
fully-paid and non-assessable; the holders thereof will not be
subject to personal liability solely by reason of being such
holders; such Securities are not and will not be subject to the
preemptive rights of any holder of any security of the Company.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
The Investor makes to the Placement Agent all the representations and
warranties it makes to the Company in the Investment Agreement and, in
addition represents, warrants and covenants as follows:
(i) The Investor has the necessary power to enter into this Agreement
and to consummate the transactions contemplated hereby.
(ii) The execution and delivery by the Investor of this Agreement and
the consummation of the transactions contemplated herein will not
result in any violation of, or be in conflict with, or constitute
a default under, any agreement or instrument to which the
Investor is a party or by which the Investor or its properties
are bound, or any judgment, decree, order or, to the Investor's
knowledge, any statute, rule or regulation applicable to the
Investor. This Agreement when executed and delivered by the
Investor, will constitute the legal, valid and binding
obligations of the Investor, enforceable in accordance with their
respective terms, except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time
to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to
general principles of equity, or (c) the indemnification
provisions hereof or thereof may be held to be in violation of
public policy.
(iii) The Investor is not, and will not be, as a result of the
transactions contemplated by the Offering Materials a "dealer"
within the meaning of the Securities Exchange Act of 1934 and
applicable federal and state securities laws and regulations. The
Investor covenants that in this respect it is and will remain in
compliance with the requirements of applicable "no action"
rulings of the U.S. Securities Exchange Commission.
(iv) The Investor will promptly forward copies of any and all due
diligence questionnaires compiled by the Investor to the
Placement Agent.
(v) The Investor acknowledges that the Company has agreed to pay the
Placement Agent fees for its services from each advance or Put
and that Company has instructed the Investor to pay this fee
directly to Placement Agent at the time of disbursement of such
funds; Investor agrees to notify Placement Agent at the time of
each such advance or draw down by Company and to pay the fee
directly to Placement Agent.
5. CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY.
The Company covenants and agrees at its expense and without any expense to
the Placement Agent as follows:
A. To advise the Placement Agent of any material adverse change in the
Company's financial condition, prospects or business or of any
development materially affecting the Company or rendering untrue or
misleading any material statement in the Offering Materials occurring
at any time as soon as the Company is either informed or becomes aware
thereof.
B. To use its commercially reasonable efforts to cause the Common Stock
issuable in connection with the Equity Line of Credit to be qualified
or registered for sale on terms consistent with those stated in the
Registration Rights Agreement and under the securities laws of such
jurisdictions as the Placement Agent and the Investor shall reasonably
request. Qualification, registration and exemption charges and fees
shall be at the sole cost and expense of the Company.
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C. Upon written request, to provide and continue to provide the Placement
Agent and the Investor copies of all quarterly financial statements
and audited annual financial statements prepared by or on behalf of
the Company, other reports prepared by or on behalf of the Company for
public disclosure and all documents delivered to the Company's
stockholders.
D. To deliver, during the registration period of the Investment
Agreement, to the Placement Agent upon the Placement Agent's request,
(i) within forty five (45) days, a statement of its income for each
such quarterly period, and its balance sheet and a statement of
changes in stockholders' equity as of the end of such quarterly
period, all in reasonable detail, certified by its principal
financial or accounting officer;
(ii) within ninety (90) days after the close of each fiscal year, its
balance sheet as of the close of such fiscal year, together with
a statement of income, a statement of changes in stockholders'
equity and a statement of cash flow for such fiscal year, such
balance sheet, statement of income, statement of changes in
stockholders' equity and statement of cash flow to be in
reasonable detail and accompanied by a copy of the certificate or
report thereon of independent auditors if audited financial
statements are prepared; and
(iii) a copy of all documents, reports and information furnished to
its stockholders at the time that such documents, reports and
information are furnished to its stockholders.
(iv) a copy of all documents, reports and information furnished to the
Investor at the time that such documents, reports and information
are furnished to the Investor.
E. To comply with the terms of the Offering Materials.
F. To ensure that any transactions between or among the Company, or any
of its officers, directors and affiliates be on terms and conditions
that are no less favorable to the Company, than the terms and
conditions that would be available in an "arm's length" transaction
with an independent third party.
G. The Company acknowledges that the Company has agreed to pay the
Placement Agent fees for its services from each advance or Put and
that Company has instructed the Investor to pay these fees directly to
Placement Agent at the time of disbursement of such funds; Company
agrees to notify Placement Agent at the time of each such advance or
draw down by Company and to cooperate with the process of fees being
paid directly to Placement Agent, until all fees due are paid.
6. INDEMNIFICATION.
A. The Company hereby agrees that it will indemnify and hold the
Placement Agent and each officer, director, shareholder, employee or
representative of the Placement Agent and each person controlling,
controlled by or under common control with the Placement Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act or the SEC's Rules and Regulations promulgated there under (the
"Rules and Regulations"), harmless from and against any and all loss,
claim, damage, liability, cost or expense whatsoever (including, but
not limited to, any and all reasonable legal fees and other expenses
and disbursements incurred in connection with investigating, preparing
to defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in
any action, suit or proceeding, including any inquiry, investigation
or pretrial proceeding such as a deposition) to which the Placement
Agent or such indemnified person of the Placement Agent may become
subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
or any other federal or state law or regulation, common law or
otherwise, arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in (a) Section 4
of this Agreement, (b) the Offering Materials (except those written
statements relating to the Placement Agent given by an indemnified
person for inclusion therein), (c) any application or other document
or written communication executed by the Company or based upon written
information furnished by the Company filed in any jurisdiction in
order to qualify the Common Stock under the securities laws thereof,
or any state securities commission or agency; (ii) the omission or
alleged omission from documents described in clauses (a), (b) or (c)
above of a material fact required to
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be stated therein or necessary to make the statements therein not
misleading; or (iii) the breach of any representation, warranty,
covenant or agreement made by the Company in this Agreement. The
Company further agrees that upon demand by an indemnified person, at
any time or from time to time, it will promptly reimburse such
indemnified person for any loss, claim, damage, liability, cost or
expense actually and reasonably paid by the indemnified person as to
which the Company has indemnified such person pursuant hereto.
Notwithstanding the foregoing provisions of this Paragraph 6(A), any
such payment or reimbursement by the Company of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all
appeals or the expiration of time to appeal) is entered against the
Placement Agent or such indemnified person based upon specific finding
of fact as to the Placement Agent or such indemnified person's gross
negligence or willful misfeasance will be promptly repaid to the
Company.
B. The Placement Agent hereby agrees that it will indemnify and hold the
Company and each officer, director, shareholder, employee or
representative of the Company, and each person controlling, controlled
by or under common control with the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and Regulations, harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to
defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in
any action, suit or proceeding, including any inquiry, investigation
or pretrial proceeding such as a deposition) to which the Company or
such indemnified person of the Company may become subject under the
1933 Act, the 1934 Act, the Rules and Regulations, or any other
federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of the Placement Agent or its
officers, employees or representatives in willful violation of any of
such laws and regulations while acting as Placement Agent for the
Offering or (ii) the material breach of any representation, warranty,
covenant or agreement made by the Placement Agent in this Agreement
(iii) any false or misleading information provided to the Company by
one of the Placement Agent's indemnified persons. Notwithstanding the
foregoing provisions of this Paragraph 6(B), any such payment or
reimbursement by the Placement Agent of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all
appeals or the expiration of time to appeal) is entered against such
indemnified person based upon specific finding of fact as to such
indemnified person's gross negligence or willful misfeasance will be
promptly repaid to the Placement Agent. Placement Agent shall not be
responsible for any such indemnity payment, loss, claim, damage or
liability beyond what amount of the gross proceeds was paid to them.
C. The Investor hereby agrees that it will indemnify and hold the
Placement Agent and each officer, director, shareholder, employee or
representative of the Placement Agent, and each person controlling,
controlled by or under common control with the Placement Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act or the Rules and Regulations, harmless from and against any and
all loss, claim, damage, liability, cost or expense whatsoever
(including, but not limited to, any and all reasonable legal fees and
other expenses and disbursements incurred in connection with
investigating, preparing to defend or defending any action, suit or
proceeding, including any inquiry or investigation, commenced or
threatened, or any claim whatsoever or in appearing or preparing for
appearance as a witness in any action, suit or proceeding, including
any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Placement Agent or such indemnified person of
the Placement Agent may become subject under the 1933 Act, the 1934
Act, the Rules and Regulations, or any other federal or state law or
regulation, common law or otherwise, arising out of or based upon (i)
the conduct of the Investor or its officers, employees or
representatives in its acting as the Investor for the Offering or (ii)
the material breach of any representation, warranty, covenant or
agreement made by the Investor in the Offering Materials (iii) any
false or misleading information provided to the Placement Agent by the
Investor or one of the Investor's indemnified persons.
D. The Placement Agent hereby agrees that it will indemnify and hold the
Investor and each officer, director, shareholder, employee or
representative of the Investor, and each person controlling,
controlled by or
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under common control with the Investor within the meaning of section
15 of the 1933 Act or Section 20 of the 1934 Act or the Rules and
Regulations, harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to
defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in
any action, suit or proceeding, including any inquiry, investigation
or pretrial proceeding such as a deposition) to which the Investor or
such indemnified person of the Investor may become subject under the
1933 Act, the 1934 Act, the Rules and Regulations, or any other
federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of the Placement Agent or its
officers, employees or representatives in willful violation of any of
such laws and regulations while acting as the Placement Agent for the
Offering or (ii) the material breach of any representation, warranty,
covenant or agreement made by the Placement Agent in this Agreement
(iii) any false or misleading information provided to the Investor by
one of the Placement Agent's indemnified persons. Notwithstanding the
foregoing provisions of this Paragraph 6(D), any such payment or
reimbursement by the Placement Agent of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all
appeals or the expiration of time to appeal) is entered against such
indemnified person based upon specific finding of fact as to such
indemnified person's gross negligence or willful misfeasance will be
promptly repaid to the Placement Agent. Placement Agent shall not be
responsible for any such indemnity payment, loss, claim, damage or
liability beyond what amount of the gross proceeds was paid to them.
E. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 6(A), (B), (C) or (D),
the party to be indemnified shall, within five (5) business days,
notify the indemnifying party of the commencement thereof; the
omission by one (1) indemnified party to so notify the indemnifying
party shall not relieve the indemnifying party of its obligation to
indemnify any other indemnified party that has given such notice and
shall not relieve the indemnifying party of any liability outside of
this indemnification if not materially prejudiced thereby. In the
event that any action is brought against the indemnified party, the
indemnifying party will be entitled to participate therein and, to the
extent it may desire, to assume and control the defense thereof with
counsel chosen by it which is reasonably acceptable to the indemnified
party. After notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
such Section 6(A), (B), (C), or (D) for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, but the indemnified party may, at its own expense,
participate in such defense by counsel chosen by it, without, however,
impairing the indemnifying party's control of the defense. Subject to
the proviso of this sentence and notwithstanding any other statement
to the contrary contained herein, the indemnified party or parties
shall have the right to choose its or their own counsel and control
the defense of any action, all at the expense of the indemnifying
party if, (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the
defense of such action at the expense of the indemnifying party, or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense
of such action within a reasonable time after notice of commencement
of the action, or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to one
or all of the indemnifying parties (in which case the indemnifying
parties shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party
shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstance, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No settlement
of any action or proceeding against an indemnified party shall be made
without the consent of the indemnifying party.
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F. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6
is due in accordance with its terms but is for any reason held by a
court to be unavailable on grounds of policy or otherwise, the Company
and the Placement Agent and the Investor shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with the
investigation or defense of same) which the other may incur in such
proportion so that the Company, the Placement Agent and the Investor
shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the
gross proceeds paid to each of them.; provided, however, that no
person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the 1933 Act shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 6(F), any person controlling, controlled
by or under common control with the Placement Agent, or any partner,
director, officer, employee, representative or any agent of any
thereof, shall have the same rights to contribution as the Placement
Agent and each person controlling, controlled by or under common
control with the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act and each officer of the Company and
each director of the Company shall have the same rights to
contribution as the Company and each person controlling, controlled by
or under common control with the Investor within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
member of the general partner of the Investor shall have the same
rights to contribution as the Company. Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which
a claim for contribution may be made against the other party under
this Section 6(F), notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the
party from whom contribution may be sought from any obligation they
may have hereunder or otherwise if the party from whom contribution
may be sought is not materially prejudiced thereby. The indemnity and
contribution agreements contained in this Section 6 shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified person or any termination of
this Agreement.
7. FEES. The Company hereby agrees to pay the Placement Agent $2,000 upon the
execution of this agreement and $4,000 from the gross proceeds from each
Put with a maximum of ten thousand dollars ($10,000.) The Company agrees to
instruct the investor to pay the Placement Agent fees directly to Placement
Agent.
8. PAYMENT OF EXPENSES. The Company hereby agrees to bear all of the expenses
in connection with the Offering, including, but not limited to the
following: filing fees, printing and duplicating costs, advertisements,
postage and mailing expenses with respect to the transmission of Offering
Materials, registrar and transfer agent fees, and expenses, fees of the
Company's counsel and accountants, issue and transfer taxes, if any.
9. CONDITIONS OF CLOSING. The Closing shall be held at the offices of the
Investor or its counsel. The obligations of the Placement Agent hereunder
shall be subject to the continuing accuracy of the representations and
warranties of the Company herein as of the date hereof and as of the Date
of Closing (the "Closing Date") with respect to the Company as if it had
been made on and as of such Closing Date; the accuracy on and as of the
Closing Date of the statements of the officers of the Company made pursuant
to the provisions hereof; and the performance by the Company on and as of
the Closing Date of its covenants and obligations hereunder and to the
following further conditions:
A. Upon the effectiveness of a registration statement in accordance with
the Investment Agreement, the Placement Agent shall receive the
opinions of Counsel to the Company and of the Investor, dated as of
the date thereof, which opinion shall be in form and substance
reasonably satisfactory to the Investor, the Company, their counsel
and the Placement Agent.
B. At or prior to the Closing, the Placement Agent shall have been
furnished such documents, certificates and opinions as it may
reasonably require for the purpose of enabling them to review or pass
upon the matters referred to in this Agreement and the Offering
Materials, or in order to evidence the accuracy, completeness or
satisfaction of any of the representations, warranties or conditions
herein contained.
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C. At and prior to the Closing, (i) there shall have been no material
adverse change nor development involving a prospective change in the
condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such
condition is set forth in the Offering Materials; (ii) there shall
have been no transaction, not in the ordinary course of business
except the transactions pursuant to the Investment Agreement entered
into by the Company which has not been disclosed in the Offering
Materials or to the Placement Agent in writing; (iii) except as set
forth in the Offering Materials, the Company shall not be in default
under any provision of any instrument relating to any outstanding
indebtedness for which a waiver or extension has not been otherwise
received; (iv) except as set forth in the Offering Materials, the
Company shall not have issued any securities (other than those to be
issued as provided in the Offering Materials) or declared or paid any
dividend or made any distribution of its capital stock of any class
and there shall not have been any change in the indebtedness (long or
short term) or liabilities or obligations of the Company (contingent
or otherwise) and trade payable debt; (v) no material amount of the
assets of the Company shall have been pledged or mortgaged, except as
indicated in the Offering Materials; and (v) no action, suit or
proceeding, at law or in equity, against the Company or affecting any
of its properties or businesses shall be pending or threatened before
or by any court or federal or state commission, board or other
administrative agency, domestic or foreign, wherein an unfavorable
decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company,
except as set forth in the Offering Materials.
D. At Closing, the Placement Agent shall receive a certificate of the
Company signed by an executive officer and chief financial officer,
dated as of the applicable Closing, to the effect that the conditions
set forth in subparagraph (C) above have been satisfied and that, as
of the applicable closing, the representations and warranties of the
Company set forth herein are true and correct.
10. TERMINATION. This Agreement shall be co-terminus with, and terminate upon
the same terms and conditions as those set forth in, the Investment
Agreement. The rights of the Investor and the obligations of the Company
under the Registration Rights Agreement, and the rights of the Placement
Agent and the obligations of the Company shall survive the termination of
this Agreement unabridged for a period of twenty-four (24) months after the
Closing Date.
11. MISCELLANEOUS.
A. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all which shall be deemed
to be one and the same instrument.
B. Any notice required or permitted to be given hereunder shall be given
in writing and shall be deemed effective when deposited in the United
States mail, postage prepaid, or when received if personally delivered
or faxed (upon confirmation of receipt received by the sending party),
addressed as follows:
If to Placement Agent, to:
US EURO Securities, Inc
Corporate Finance Department
000 Xxxxxxx Xxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
With a copy to:
Xxxxxxx Xxx Xxxxxx
US EURO Securities, Inc.
00000 Xxxxxxx Xxx Xx., Xxxxx XX-0
Xxxxxxx Xxx, XX 00000
If to the Company, to:
Proton Labs, Inc.
Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Page 0 xx 00
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxx Xxxxxxx, Esq.
Attorney At Law
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Tel: (713) 461- 2627 ext. 210
Fax: (000) 000-0000
If to the Investor:
Dutchess Private Equities fund, LP
00 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
or to such other address of which written notice is given to the
others.
C. This Agreement shall be governed by and construed in all respects
under the laws of the State of Delaware, without reference to its
conflict of laws rules or principles. Any suit, action, proceeding or
litigation arising out of or relating to this Agreement shall be
brought and prosecuted in such federal or state court or courts
located within the Commonwealth of Massachusetts as provided by law.
The parties hereby irrevocably and unconditionally consent to the
jurisdiction of each such court or courts located within the
Commonwealth of Massachusetts and to service of process by registered
or certified mail, return receipt requested, or by any other manner
provided by applicable law, and hereby irrevocably and unconditionally
waive any right to claim that any suit, action, proceeding or
litigation so commenced has been commenced in an inconvenient forum.
D. This Agreement and the other agreements referenced herein contain the
entire understanding between the parties hereto and may not be
modified or amended except by a writing duly signed by the party
against whom enforcement of the modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Page 9 of 10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above. COMPANY:
By:
-----------------------------------
Name:
Title: President and/or CEO
PLACEMENT AGENT: PLACEMENT AGENT:
By: By:
----------------------------------- -----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx Xxxxxxx Xxx Xxxxxx
Title: CEO/Compliance Department Corporate Finance Department
INVESTOR:
DUTCHESS PRIVATE EQUITIES FUND, L.P.
BY ITS GENERAL PARTNER DUTCHESS
CAPITAL MANAGEMENT, LLC
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: A Managing Member
Page 10 of 10
