EXHIBIT 10.1
PLACEMENT AGENCY AGREEMENT
COMMON STOCK: Up to 1,145,000 Shares
This Placement Agency Agreement (the "AGREEMENT") is entered into by any
between Access Integrated Technologies, Inc., a Delaware corporation (the
"COMPANY"), and Xxxxx-Xxxxxx Capital Group LLC (the "AGENT"), effective as of
January 17, 2006.
1. ENGAGEMENT AND SERVICES.
1.1 ENGAGEMENT. The Company hereby engages the Agent exclusively to
act as placement agent to the Company concerning a potential offering (the
"OFFERING") of up to 1,145,000 shares of the Company's Class A Common Stock (the
"SECURITIES"). The final terms of the Offering, however, will be negotiated
between the Company and the investors who purchase the Securities in the
Offering. The Agent hereby accepts such engagement on a "best efforts" basis
upon the terms and conditions set forth in this Agreement. This Agreement shall
not give rise to any commitment by the Agent to purchase or sell any of the
Securities, and the Agent shall have no authority to bind the Company.
1.2 SERVICES. In undertaking this assignment, the Agent will, among
other things, provide the following services to the Company:
(a) identify investors, which in the opinion of the Agent, are the
most likely to invest in the Company and use "best efforts" to arrange
sales of the Securities to such investors;
(b) formulate a strategy for soliciting interest from investors that
may have an interest in investing in the Company, and the development
of procedures and timetables for marketing the Company to the
potential investors;
(c) introduce the Company to such investors (the "POTENTIAL
INVESTORS"), and coordinate due diligence investigations of the
Company by Potential Investors; and
(d) along with the Company, evaluate proposals from interested parties
regarding an Offering, formulate negotiation strategies, and assist in
all negotiations and closing of a transaction.
2. FEES AND EXPENSES.
2.1 AGENT'S FEES. The Company hereby agrees to pay the Agent, as
compensation for its services hereunder, a fee (the "AGENT FEE") in the amount
of 7.0% of the gross proceeds received from any Potential Investors, if during
the Term the Offering is consummated. The Agent Fee shall be paid in cash to the
Agent in its entirety by wire transfer simultaneously with the closing of the
Offering (the "CLOSING") with wiring instructions provided in advance of the
Closing by the Agent.
2.2 EXPENSES. In addition to any fees that may be payable hereunder
and regardless of whether the Offering is consummated, the Company hereby agrees
to reimburse the Agent for all reasonable travel, legal and other out-of-pocket
expenses incurred in performing the services described herein, not to exceed
$15,000, except with written consent of the Company (including reasonable fees
and disbursements of the Agent's legal counsel) upon the presentation of
reasonable documentation therefor.
3. TERM. The term of this Agreement shall run from the date of this
Agreement through January 31, 2006, and may be extended by mutual consent of the
parties (the "TERM").
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Agent as follows:
4.1 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement has been taken. The Company has the
requisite corporate power to enter into this Agreement and carry out and perform
its obligations under the terms of this Agreement. At the Closing, the Company
will have the requisite corporate power to issue and sell the Securities. This
Agreement has been duly authorized, executed and delivered by the Company and,
upon due execution and delivery by the Agent, this Agreement will be a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by equitable principles.
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4.2 NO CONFLICT WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement, the issuance and sale of the Securities to be
sold by the Company in the Offering and the consummation of the actions
contemplated by this Agreement (which for all purposes herein shall include the
Offering) will not (a) result in any violation of, be in conflict with, or
constitute a default under, with or without the passage of time or the giving of
notice: (i) any provision of the Company's or its subsidiaries' certificates of
incorporation or bylaws as in effect on the date hereof or the date of Closing
(the "CLOSING Date"); (ii) any provision of any judgment, arbitration ruling,
decree or order to which the Company or its subsidiaries are a party or by which
they are bound; (iii) any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, mortgage, indenture, deed of trust, loan
agreement, joint venture or other agreement, instrument or commitment to which
the Company or any subsidiary is a party or by which they or their respective
properties are bound; or (iv) any statute, rule, law or governmental regulation
applicable to the Company; or (b) result in the creation or imposition of any
lien, encumbrance, claim, security interest or restriction whatsoever upon any
of the properties or assets of the Company or any subsidiary or any acceleration
of indebtedness pursuant to any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or any
indenture, mortgage, deed of trust or any other agreement or instrument to which
the Company or any subsidiary are a party or by which they are bound or to which
any of the property or assets of the Company or any subsidiary is subject. No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body is required for the execution and delivery of this
Agreement by the Company and the valid issuance or sale of the Securities by the
Company pursuant to this Agreement, other than such as have been made or
obtained and that remain in full force and effect.
4.3 CERTIFICATE OF INCORPORATION; BYLAWS. The form of certificate of
incorporation and bylaws of the Company filed as an exhibit to the Company's
most recent annual report on Form 10-K are true, correct and complete copies of
the certificate of incorporation and bylaws of the Company, as in effect on the
date hereof.
4.4 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted. The Company has full power and authority
to own, operate and occupy its properties and to conduct its business as
presently conducted and is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on the Company's or its subsidiaries' business,
financial condition, properties, operations, prospects or assets, taken as a
whole, or its ability to perform its obligations under this Agreement (a
"MATERIAL ADVERSE EFFECT").
4.5 SEC FILINGS. The consolidated financial statements contained in
each report, registration statement and definitive proxy statement filed by the
Company with the Securities and Exchange Commission (the "SEC," and all
documents filed with the SEC, the "COMPANY SEC DOCUMENTS"): (i) complied as to
form in all material respects with the published rules and regulations of the
SEC applicable thereto and were timely filed; (ii) the information contained
therein as of the respective dates thereof was accurate and complete in all
material respects and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances under which they were made
not misleading; (iii) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered, except as may be indicated in the notes to such financial statements
and (in the case of unaudited statements) as permitted by Form 10-Q of the SEC,
and except that unaudited financial statements may not contain footnotes and are
subject to year-end audit adjustments; and (iv) fairly present the consolidated
financial position of the Company and its subsidiaries as of the respective
dates thereof and the consolidated results of operations, cash flows and the
changes in stockholders' equity of the Company and its subsidiaries for the
periods covered thereby. Except as set forth in the Company SEC Documents,
neither the Company nor its subsidiaries has any liabilities, contingent or
otherwise, other than liabilities incurred in the ordinary course of business
subsequent to September 30, 2005, and liabilities of the type not required under
generally accepted accounting principles to be reflected in such financial
statements. Such liabilities incurred subsequent to September 30, 2005, are not,
in the aggregate, material to the financial condition or operating results of
the Company and its subsidiaries, taken as a whole.
4.6 CAPITALIZATION. The authorized capital stock of the Company
consists of (i) 80,000,000 shares of common stock, (A) 40,000,000 shares of
which are designated Class A Common Stock, of which (I) 14,610,128 shares were
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issued and outstanding as of the date of this Agreement, and (II) 2,341,246
shares were reserved for issuance upon the exercise or conversion, as the case
may be, of outstanding options, warrants or other convertible securities as of
the date of this Agreement, (B) 15,000,000 shares of which are designated Class
B Common Stock, of which (I) 925,811 shares were issued and outstanding as of
the date of this Agreement, and (II) no shares were reserved for issuance upon
the exercise or conversion, as the case may be, of outstanding options, warrants
or other convertible securities as of the date of this Agreement, and (C)
25,000,000 shares of which are undesignated, none of which, as of the date of
this Agreement, are outstanding or reserved for issuance upon the exercise or
conversion, as the case may be, of outstanding options, warrants or other
convertible securities; and (ii) 15,000,000 shares of preferred stock, none of
which, as of the date of this Agreement, are outstanding or reserved for
issuance upon the exercise or conversion, as the case may be, of outstanding
options, warrants or other convertible securities. All issued and outstanding
shares of common stock have been duly authorized and validly issued, are fully
paid and nonassessable, have been issued and sold in compliance with the
registration requirements of federal and state securities laws or the applicable
statutes of limitation have expired, and were not issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities.
Except as set forth herein or the Company SEC Documents, there are no (i)
outstanding rights (including, without limitation, preemptive rights), warrants
or options to acquire, or instruments convertible into or exchangeable for, any
unissued shares of capital stock or other equity interest in the Company, or any
contract, commitment, agreement, understanding or arrangement of any kind to
which the Company or any subsidiary is a party and relating to the issuance or
sale of any capital stock or convertible or exchangeable security of the Company
or any subsidiary, other than 1,100,000 options granted to directors and
employees of the Company pursuant to its 2000 Stock Option Plan and a commitment
to grant options to purchase an additional 154,247 shares of Class A common
stock to A. Xxxx Xxxx upon approval by the Company's stockholders of an increase
in the number of shares authorized to be issued under the 2000 Stock Option
Plan; or (ii) obligations of the Company to purchase redeem or otherwise acquire
any of its outstanding capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof. Except as disclosed
in the Company SEC Documents, there are no anti-dilution or price adjustment
provisions, co-sale rights, registration rights, rights of first refusal or
other similar rights contained in the terms governing any outstanding security
of the Company that will be triggered by the issuance of the Securities.
4.7 SUBSIDIARIES. Except as set forth on SCHEDULE A hereto, the
Company does not presently own or control, directly or indirectly, and has no
stock or other interest as owner or principal in, any other corporation or
partnership, joint venture, association or other business venture or entity
(each a "SUBSIDIARY"). Each subsidiary is duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite power and authority to carry
on its business as now conducted. Each subsidiary is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a Material Adverse Effect on the Company's business or
properties. All of the outstanding capital stock or other voting securities of
each subsidiary is owned by the Company, directly or indirectly, free and clear
of any liens, claims, or encumbrances.
4.8 VALID ISSUANCE OF SECURITIES. The Securities are duly authorized
and, when issued, sold, delivered and paid for in accordance with the terms of
the Offering, will be duly and validly authorized and issued, fully paid and
nonassessable, free from all taxes, liens, claims, encumbrances and charges with
respect to the issue thereof. The issuance, sale and delivery of the Securities
will not be subject to preemptive rights of stockholders of the Company. The
Securities, when delivered to the purchasers thereof and when such purchasers
have paid for the Securities, will conform to all statements in relation thereto
contained in the prospectus pursuant to which they are issued.
4.9 OFFERING. At the Closing, the offer, issue and sale of the
Securities will be registered under the Securities Act of 1933 (the "SECURITIES
ACT") and will be registered or qualified (or will be exempt from registration
and qualification) under the registration, permit or qualification requirements
of all applicable state securities laws. At the Closing, the Securities will
have been approved for listing on the American Stock Exchange (the "PRINCIPAL
MARKET") upon official notice of issuance. Other than the Company SEC Documents,
the Company has not distributed and will not distribute prior to the Closing any
offering material in connection with the offering and sale of the Securities,
unless such offering materials are provided to the Agent prior to or
simultaneously with such delivery to the offerees of the Securities. The Company
agrees that no Offering Documents (as hereinafter defined) or materials
presented or distributed to the Potential Investors, including the Company SEC
Documents, shall contain an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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4.10 LITIGATION. Except as set forth in the Company SEC Documents,
there is no action, suit, proceeding nor investigation pending or, to the
Company's knowledge, currently threatened against the Company or any of its
subsidiaries that (a) if adversely determined would reasonably be expected to
have a Material Adverse Effect on the Company or (b) would be required to be
disclosed in the Company's Annual Report on Form 10-K under the requirements of
Item 103 of Regulation S-K. The foregoing includes, without limitation, any
action, suit, proceeding or investigation, pending or threatened, that questions
the validity of this Agreement or the right of the Company to enter into such
Agreement and perform its obligations hereunder. Neither the Company nor any
subsidiary is subject to any injunction, judgment, decree or order of any court,
regulatory body, arbitral panel, administrative agency or other government body
that could reasonably be expected to have a Material Adverse Effect.
4.11 GOVERNMENTAL CONSENTS. Assuming the accuracy of the Agent's
representations and warranties contained herein, no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except as have been obtained or
accomplished as of the date hereof and except as contemplated herein.
4.12 NO BROKERS. Except for any fees payable to the Agent, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based on arrangements made by the Company.
4.13 COMPLIANCE. The Company is not in violation of its certificate of
incorporation or bylaws. Neither the Company nor the subsidiaries have been
advised or have reason to believe, that it is not conducting its business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, including, without limitation, all
applicable local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not have a Material Adverse Effect.
Each of the Company and the subsidiaries has all necessary franchises, licenses,
certificates and other authorizations from any foreign, federal, state or local
government or governmental agency, department or body that are currently
necessary for the operation of the business of the Company and its subsidiaries
as currently conducted, except where the failure to currently possess such
franchises, licenses, certificates and other authorizations would not reasonably
be expected to have a Material Adverse Effect.
4.14 NO MATERIAL ADVERSE CHANGES. Except as disclosed in the Offering
Documents or in any Company SEC Documents, since September 30, 2005, there has
been no adverse change in the financial condition, prospects or results of
operations of the Company and its subsidiaries, taken as a whole, other than
changes occurring in the ordinary course of business, that in the aggregate have
had a Material Adverse Effect. Since September 30, 2005, the Company has not
declared or paid any dividend or distribution on its capital stock.
4.15 CONTRACTS. Except for matters that are not reasonably likely to
have a Material Adverse Effect and those contracts that are substantially or
fully performed or expired by their terms, the contracts listed as exhibits to
or described in the Company SEC Documents that are material to the Company and
all amendments thereto, are in full force and effect on the date hereof, and
neither the Company nor, to the Company's actual knowledge, any other party to
such contracts is in breach of or default under any of such contracts. The
Company has no contracts or agreements that would constitute a material contract
as such term is defined in Item 601(b) of Regulation S-K, except for such
contracts or agreements that are filed as exhibits to or described in the
Company SEC Documents.
4.16 INTELLECTUAL PROPERTY.
(a) The Company has ownership or license or legal right to use
all patent, copyright, trade secret, know-how, trademark, trade name, customer
lists, designs, manufacturing or other processes, computer software, systems,
data compilation, research results or other proprietary rights used in the
business of the Company (collectively "INTELLECTUAL Property"). All of such
patents, registered trademarks and registered copyrights have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office, the United States Register of Copyrights or the corresponding offices of
other jurisdictions and have been maintained and renewed in accordance with all
applicable provisions of law and administrative regulations in the United States
and all such jurisdictions.
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(b) The Company believes it has taken all reasonable steps
required in accordance with sound business practice and business judgment to
establish and preserve its and its subsidiaries' ownership of all material
Intellectual Property with respect to their products and technology.
(c) To the knowledge of the Company, the present business,
activities and products of the Company and its subsidiaries do not infringe any
intellectual property of any other person, except where such infringement would
not have a Material Adverse Effect. To the knowledge of the Company, no
proceeding charging the Company with infringement of any adversely held
Intellectual Property has been filed.
(d) No proceedings are pending or, to the knowledge of the
Company, threatened, which challenge the rights of the Company to the use of the
Intellectual Property. The Company has the right to use, free and clear of
material claims or rights of other persons, all of its customer lists, designs,
computer software, systems, data compilations, and other information that are
required for its products or its business as presently conducted. Neither the
Company nor any subsidiary is making unauthorized use of any confidential
information or trade secrets of any person. To the knowledge of the Company, the
activities of any of the employees on behalf of the Company or of any subsidiary
do not violate any agreements or arrangements between such employees and third
parties that are related to confidential information or trade secrets of third
parties or that restrict any such employee's engagement in business activity of
any nature.
(e) All licenses or other agreements under which (i) the Company
or any subsidiary employs rights in Intellectual Property, or (ii) the Company
or any subsidiary has granted rights to others in Intellectual Property owned or
licensed by the Company or any subsidiary are in full force and effect, and
there is no default (and there exists no condition which, with the passage of
time or otherwise, would constitute a default by the Company or such subsidiary)
by the Company or any subsidiary with respect thereto.
4.17 EXCHANGE COMPLIANCE. The Company's Class A Common Stock is
registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the
"EXCHANGE ACT") and is listed on the Principal Market, and the Company has taken
no action designed to, or likely to have the effect of, terminating the
registration of the Class A Common Stock under the Exchange Act or delisting the
Class A Common Stock from the Principal Market (though, in the future, the
Company may choose to list its securities on another market or exchange). The
Company is in compliance with all of the presently applicable requirements for
continued listing of the Class A Common Stock on the Principal Market. The
issuance of the Securities does not require stockholder approval including,
without limitation, pursuant to the rules and regulations of the Principal
Market.
4.18 COMPLIANCE WITH FORM S-3 ELIGIBILITY REQUIREMENTS. The Company is
eligible to register the Offering on Form S-3. The Company also complies with
the standards for using Form S-3 as in place prior to October 21, 1992, namely,
as of a date within 30 days prior to the date of this Agreement, the aggregate
market value of the voting and non-voting common equity of the Company held by
non-affiliates of the Company exceeded $100,000,000 (as calculated by reference
to the closing price of the Company's Class A Common Stock on the Principal
Market) and non-affiliates of the Company held more than 3,000,000 shares of the
Company's Class A Common Stock on such date.
4.19 ACCOUNTANTS. PricewaterhouseCoopers LLP and Xxxxxx LLP, who each
expressed their opinion with respect to the consolidated financial statements
contained in the Company's Annual Report on Form 10-K for the year ended March
31, 2005, which are incorporated by reference into the Registration Statement on
Form S-3 pursuant to which the Securities will be issued and sold in the
Offering (the "REGISTRATION STATEMENT") and the Statutory Prospectus (as
hereinafter defined), have advised the Company that they are, and to the
knowledge of the Company they are, independent accountants as required by the
Securities Act and the rules and regulations promulgated thereunder.
4.20 TAXES. The Company has filed all necessary federal, state and
local income tax returns and has paid or accrued all taxes shown as due thereon,
and the Company has no knowledge of a tax deficiency which has been or might be
asserted or threatened against it by any taxing jurisdiction.
4.21 INSURANCE. The Company maintains and will continue to maintain
insurance of the types and in the amounts that the Company reasonably believes
is adequate for its business.
4.22 TRANSFER TAXES. On the Closing Date, all stock transfer or other
taxes (other than income taxes) that are required to be paid by the Company in
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connection with the sale and transfer of the Securities hereunder will be, or
will have been, fully paid or provided for by the Company and the Company will
have complied with all laws imposing such taxes.
4.23 INVESTMENT COMPANY. The Company (including its subsidiaries) is
not an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for an investment company, within the meaning of the
Investment Company Act of 1940 and will not be deemed an "investment company" as
a result of the transactions contemplated by this Agreement.
4.24 RELATED PARTY TRANSACTIONS. To the knowledge of the Company and
except as set forth in the Company SEC Documents, no transaction has occurred
between or among the Company or any of its affiliates (including, without
limitation, any of its subsidiaries), officers or directors or any affiliate
that with the passage of time will be required to be disclosed pursuant to
Section 13, 14 or 15(d) of the Exchange Act other than those transactions that
have already been so disclosed.
4.25 BOOKS AND RECORDS. The books, records and accounts of the Company
and its subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions and dispositions of the assets of the Company and its subsidiaries.
4.26 DISCLOSURE CONTROLS AND INTERNAL CONTROLS.
(a) The Company has established and maintains disclosure controls
and procedures (as defined in Rules 13a-14 and 15d-14 under the Exchange Act)
and such controls and procedures are effective in ensuring that material
information relating to the Company, including its subsidiaries, is made known
to the principal executive officer and the principal financial officer of the
Company. The Company has utilized such controls and procedures in preparing and
evaluating the disclosures in the Registration Statement, in the Time of Sale
Disclosure Package (as hereinafter defined) and in the Statutory Prospectus.
(b) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Registration Statement, in the Time of
Sale Disclosure Package and in the Statutory Prospectus, since September 30,
2005, there has been no change in the Company's internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
4.27 FOREIGN CORRUPT PRACTICES. Neither the Company nor any director,
officer, agent, employee or other person acting on behalf of the Company has, in
the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee. Neither the
Company nor any of its affiliates is presently doing business with the
government of Cuba or with any person or affiliate located in Cuba.
4.28 XXXXXXXX-XXXXX ACT. The Company is in substantial compliance with
any and all applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are
effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the SEC thereunder that are effective as of the date
hereof, except where such noncompliance would not have, individually or in the
aggregate, a Material Adverse Effect.
4.29 EMPLOYEE RELATIONS. The Company is not a party to any collective
bargaining agreement. The Company believes that its relations with its employees
are good. No executive officer of the Company (as defined in Rule 501(f) of the
Securities Act) has notified the Company that such officer intends to leave the
Company or otherwise terminate such officer's employment with the Company. No
executive officer of the Company, to the knowledge of the Company, is, or is now
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expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company to any liability with respect to any of the foregoing
matters.
The Company is in compliance with all federal, state, local and foreign
laws and regulations respecting labor, employment and employment practices and
benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. The Company has
no defined benefit pension plan or other plan promulgated pursuant to, or which
is intended to comply with the provisions of, the Employee Retirement Income
Security Act of 1974, except as disclosed in the Company SEC Documents.
4.30 ENVIRONMENTAL LAWS. The Company (i) is in compliance with any and
all Environmental Laws (as hereinafter defined), (ii) has received all permits,
licenses or other approvals required of it under applicable Environmental Laws
to conduct its business and (iii) is in compliance with all terms and conditions
of any such permit, license or approval where, in each of the foregoing clauses
(i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. The term
"ENVIRONMENTAL LAWS" means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic
or hazardous substances or wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
4.31 REAL PROPERTY. The Company and its subsidiaries have good and
marketable title to all property (whether real or personal) described in the
Company SEC Documents as being owned by them, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects except such as
are described in the Company SEC Documents. The property held under lease by the
Company and its subsidiaries is held by them under valid, subsisting and
enforceable leases with only such exceptions with respect to any particular
lease as do not interfere in any material respect with the conduct of the
business of the Company or its subsidiaries.
4.32 NO MANIPULATION; DISCLOSURE OF INFORMATION. The Company has not
taken and will not take any action designed to or that might reasonably be
expected to cause or result in an unlawful manipulation of the price of the
Common Stock to facilitate the sale or resale of the Securities. All written
disclosures provided to the Agent regarding the Company, its business and the
transactions contemplated hereby, including the exhibits to this Agreement,
furnished by the Company are true and correct in all material respects and do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. Notwithstanding
the foregoing, with respect to projections and other forward-looking information
provided to the Agent, if any, contained in any document other than the
Registration Statement, the Statutory Prospectus and the Issuer-Represented Free
Writing Prospectus (as hereinafter defined), the Company represents only that
such projections and other forward-looking information were prepared in good
faith, that the Company believes it has a reasonable basis for the projections
and other forward-looking information and the assumptions on which they are
based, that the projections represent management's estimate of possible results
of operations, that the Company is not aware of any change in its circumstances
or other fact that has occurred that would cause it to believe that it will be
unable to meet the forecasts set forth in such disclosure.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees as
follows:
5.1 The Company will promptly deliver to the Agent and its counsel
copies of any and all filings with the SEC and each amendment or supplement
thereto (including the Registration Statement), as well as all Statutory
Prospectuses and Issuer-Represented Free Writing Prospectuses (each as
hereinafter defined). The Agent is authorized on behalf of the Company to use
and distribute copies of any documents provided to the Agent or Potential
Investors in connection with the Offering, including any Statutory Prospectus or
Issuer-Represented Free Writing Prospectus (the "OFFERING DOCUMENTS") in
connection with the sale of the Securities as, and to the extent, permitted by
federal and applicable state securities laws. "STATUTORY PROSPECTUS" as of any
7
time means the prospectus that is included in the Registration Statement
immediately prior to that time. For purposes of this definition, information
contained in a form of prospectus that is deemed retroactively to be a part of
the Registration Statement pursuant to Rule 430B shall be considered to be
included in the Statutory Prospectus as of the actual time that form of
prospectus is filed with the SEC pursuant to Rule 424(b). "ISSUER-REPRESENTED
FREE WRITING PROSPECTUS" means any "issuer free writing prospectus," as defined
in Rule 433 under the Securities Act, relating to the Securities that (A) is
required to be filed with the SEC by the Company, or (B) is exempt from filing
pursuant to Rule 433(d)(5)(i) under the Securities Act because it contains a
description of the Securities or of the offering that does not reflect the final
terms or pursuant to Rule 433(d)(8)(ii) because it is a "bona fide electronic
road show," as defined in Rule 433 that is made available without restriction,
in each case in the form filed or required to be filed with the SEC or, if not
required to be filed, in the form retained in the Company's records pursuant to
Rule 433(g) under the Securities Act.
The Company proposes to file with the Commission pursuant to Rule 424 under
the Securities Act a final prospectus supplement relating to the Securities to a
form of prospectus included in the Registration Statement relating to the
Securities in the form heretofore delivered to the Agent. Such prospectus in the
form in which it appears in the Registration Statement is hereinafter called the
"BASE PROSPECTUS." Such supplemental form of prospectus, in the form in which it
shall be filed with the Commission pursuant to Rule 424(b)(including the Base
Prospectus as so supplemented) is hereinafter called the "PROSPECTUS." Any
preliminary form of Prospectus which is filed or used prior to filing of the
Prospectus is hereinafter called a "PRELIMINARY PROSPECTUS." Any reference
herein to the Base Prospectus, any Preliminary Prospectus or the Prospectus
shall be deemed to include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such
prospectus.
For purposes of this Agreement, all references to the Registration
Statement, the Base Prospectus, any Preliminary Prospectus, the Prospectus or
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX"). All references in this Agreement to
amendments or supplements to the Registration Statement, the Base Prospectus,
any Preliminary Prospectus or the Prospectus shall be deemed to mean and include
the subsequent filing of any document under the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT") which is deemed to be incorporated therein by
reference therein or otherwise deemed by the Rules and Regulations to be a part
thereof.
5.2 The Issuer-Represented Free Writing Prospectuses issued at or
prior to 7:00 p.m. (Eastern time) on the date of this Agreement (the "TIME OF
SALE"), the Statutory Prospectus, and the information set forth in SCHEDULE B to
this Agreement, all considered together (collectively, the "TIME OF SALE
DISCLOSURE PACKAGE"), will not include as of the Time of Sale or the Closing
Date any untrue statement of a material fact or omit as of the Time of Sale or
the Closing Date to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from any Statutory Prospectus included in the Registration Statement
or any Issuer-Represented Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by the Agent specifically for
use therein, of which there is none.
5.3 The financial statements of the Company, together with the related
notes, set forth in the Registration Statement and the Time of Sale Disclosure
Package will comply in all material respects with the requirements of the
Securities Act and fairly present the financial condition of the Company as of
the dates indicated and the results of operations and changes in cash flows for
the periods therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved; and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. No other financial statements or
schedules are required to be included in the Registration Statement or the Time
of Sale Disclosure Package or the Prospectus.
5.4 The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the Offering and the
sale of the Securities other than any preliminary prospectus and the Time of
Sale Disclosure Package or other materials permitted by the Securities Act to be
distributed by the Company; provided, however, that the Company has not made and
will not make any offer relating to the Securities that would constitute a "free
writing prospectus" as defined in Rule 405 under the Securities Act, except in
accordance with the provisions of this Agreement.
5.5 If the Registration Statement has not already been declared
effective by the SEC, the Company will use its best efforts to cause the
Registration Statement and any post-effective amendments thereto to become
effective as promptly as possible; the Company will notify the Agent promptly of
the time when the Registration Statement or any post-effective amendment to the
Registration Statement has become effective or any supplement to the Statutory
Prospectus has been filed and of any request by the SEC for any amendment or
8
supplement to the Registration Statement or Statutory Prospectus or additional
information; if the Company has elected to rely on Rule 430B, the Company will
prepare and file a prospectus containing the information omitted therefrom
pursuant to Rule 430B with the SEC within the time period required by, and
otherwise in accordance with the provisions of, Rules 424(b) and 430B.
5.6 The Company will advise the Agent, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or preventing or suspending the use of any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or
any Issuer-Represented Free Writing Prospectus, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceeding for any such purpose; and the
Company will promptly use its reasonable efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such a stop order should be issued.
Additionally, the Company agrees that it shall comply with the provisions of
Rules 424(b), 430B and 430A, as applicable, under the Act and will use its
reasonable efforts to confirm that any filings made by the Company under Rule
424(b), Rule 433 or Rule 462 were received in a timely manner by the Commission.
5.7 Within the time during which a prospectus (or in lieu thereof the
notice referred to in Rule 173(a)) relating to the Securities is required to be
delivered under the Securities Act, the Company will comply as far as it is able
with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the rules and regulations promulgated thereunder, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Securities as contemplated by the provisions hereof
and the Time of Sale Disclosure Package. If during such period any event occurs
as a result of which the Statutory Prospectus (or if the Statutory Prospectus is
not yet available to prospective purchasers, the Time of Sale Disclosure
Package) would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the Statutory
Prospectus (or if the Statutory Prospectus is not yet available to prospective
investors, the Time of Sale Disclosure Package) to comply with the Securities
Act, the Company will promptly notify the Agent and will amend the Registration
Statement or supplement the Statutory Prospectus (or, if the Statutory
Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package) (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
5.8 If at any time following issuance of an Issuer-Represented Free
Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer-Represented Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement relating
to the Securities or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances prevailing at
that subsequent time, not misleading, the Company will promptly notify the Agent
and will, if required, amend or supplement, at its own expense, such
Issuer-Represented Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
5.9 There are no statutes, regulations, contracts or documents that
will be required to be described in the Registration Statement or in the Time of
Sale Disclosure Package or be filed as exhibits to the Registration Statement by
the Securities Act or by the rules and regulations promulgated thereunder that
will not be so described or filed.
5.10 The Company will apply the net proceeds from the sale of the
Securities substantially in the manner set forth in the Offering Documents.
5.11 On the Closing Date, the Company will permit the Agent to rely on
any representations and warranties made by the Company to the investors and will
cause its counsel to permit the Company to rely upon any opinion furnished to
the investors.
5.12 On the Closing Date, the Company will provide the Agent with a
legal opinion of the Company's counsel in the form attached as EXHIBIT C.
5.13 On the Closing Date, the Company will ensure that the Agent shall
have received a comfort letter from Xxxxxx LLP, the Company's independent
accountants, dated as of the Closing Date and addressed to the Agent, in form
and substance satisfactory to the Agent, containing statements and information
of the type ordinarily included in accountant's "comfort letters" to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement and the Statutory Prospectus.
9
5.14 The Company will make available to the Agent on a confidential
basis all information concerning the business, assets, operations and financial
condition of the Company, which the Agent reasonably requests in connection with
the performance of its obligations hereunder and the due diligence investigation
deemed appropriate by Agent. The Company shall make members of management and
other employees available to the Company and Potential Investors for purposes of
satisfying such parties' due diligence requirements and consummating an
Offering, and shall commit such time and other resources as are necessary or
appropriate to secure reasonable and timely success of a transaction. The
Company shall inform the Agent of any material events or developments concerning
prospective material events that may come to the attention of the Company at any
point during the Term. The Agent will be relying, without independent
verification, on the accuracy and completeness of all financial and other
information that is and will be furnished to it by the Company
5.15 On the Closing Date, the Company shall deliver to the Agent a
certificate of the chief executive officer and chief financial officer of the
Company, stating on behalf of the Company that the representations and
warranties contained in Section 4 are true and correct in all respects as of the
Closing Date, that the Company has performed all of its agreements and
obligations to be performed under this Agreement and that the appropriate
Offering Documents, as of the Closing Date, contain all material statements that
are required to be made therein, do not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. On the Closing Date,
the Company will also deliver to the Agent any additional documents or
instruments reasonably requested by the Agent.
5.16 If in connection with the Offering, the Agent determines that it
would be required to make a filing with the National Association of Securities
Dealers, Inc. ("NASD") pursuant to Rule 2710 to enable the Agent to act as agent
in the Offering, the Company will do the following:
(a) The Company will reasonably cooperate with the Agent with
respect to all NASD filings that the Agent may be required to make and
provide all information and documentation necessary to permit the
Agent to make the filings in a timely manner.
(b) The Company will pay all expenses related to all NASD filings
that the Agent may be required to make, including, but not limited to
all printing costs related to all documents required or that the Agent
may reasonably deem necessary, to comply with NASD Rule 2710; any NASD
filing fees; postage and express charges; and all other expenses
incurred in making the NASD filings.
5.17 The Company agrees and understands that this Agreement and the
services set forth in Section 1.2 in no way constitute a guarantee that an
Offering will be successful.
6. REPRESENTATIONS WARRANTIES AND AGREEMENTS OF AGENT. The Agent hereby
represents and warrants to the Company as follows:
6.1 The Agent is a member in good standing of the NASD and is subject
to no statutory disqualification provisions including, but not limited to, those
contained in NASD Regulation Section 230.262.
6.2 The Agent is a duly registered broker-dealer under the Exchange
Act and the rules and regulations promulgated thereunder and is in good standing
as a registered broker-dealer.
6.3 The Agent will only contact potential investors that are
institutional investors and are approved in advance by the Company and will not
disclose any non-public information to potential investors without the Company's
express written consent and in such manner as the Company shall determine.
6.4 The Agent will not use any written sales material other than the
Offering Documents and publicly available information and will not represent to
any person acquiring Securities in the offering any non-public material facts
relating to the Offering, the Securities, the Company or the business of the
Company, including its future prospects, except as expressly permitted herein.
6.5 Assuming the accuracy of the Company's representations and
warranties contained herein, the Agent is not required to make a filing with the
NASD pursuant to Rule 2710 to enable the Agent to act as agent in the Offering.
6.6 The Agent agrees to use its best efforts to solicit offers to
purchase the Securities from the Company on the terms and subject to the
conditions set forth in the Statutory Prospectus. However, the Agent shall have
10
no liability in the event a purchase is not consummated by a Potential Investor
for any reason. Under no circumstances will the Agent be obligated to purchase
any Securities for its own account.
6.7 The Agent is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Minnesota and has
all company power and authority to execute this Agreement and complete the
transactions contemplated hereby.
6.8 The execution, delivery, and performance of this Agreement has
been duly authorized by all requisite company action on behalf of the Agent, and
this Agreement has been duly executed and delivered and constitutes the valid
and binding obligation of the Agent enforceable in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights, to general principles of equity and to the extent that rights
to indemnify thereunder may be limited under applicable laws.
6.9 Assuming the accuracy of the Company's representations and
warranties contained herein, the execution and delivery by the Agent of this
Agreement, the performance by the Agent of this Agreement and the completion of
the transactions herein contemplated will not conflict with or result in a
breach of the terms of, or constitute a default under or violation of, any law
or regulation of any governmental authority, domestic or foreign, or the charter
or operating agreement of the Agent.
6.10 There is no pending litigation, regulatory proceeding or order,
disciplinary proceeding or claim of violation against the Company, or to the
best knowledge of the Agent, any threatened litigation, regulatory proceeding or
order, disciplinary proceeding or claim of violation against the Company, that
could materially adversely affect the ability of the Agent to carry out its
functions as the Agent contemplated by this Agreement.
7. DISCLOSURE. The Company agrees that, except as required by applicable
law or the rules and regulations of the SEC or as permitted herein, any advice
to be provided by the Agent under this Agreement shall not be disclosed publicly
or made available to third parties without the prior approval of the Agent,
which approval shall not be unreasonably withheld. The Agent agrees that, except
as required by applicable law or the rules and regulations of the SEC or as
permitted herein, that it shall not disclose any material, non-public
information provided to it by the Company to third parties without the prior
written consent of the Company
8. PUBLICITY. The Company and the Agent acknowledge and agree that the
Agent may, subsequent to the closing of an Offering, make public its involvement
with the Company.
9. INDEMNIFICATION.
9.1 The Company agrees to indemnify and hold harmless the Agent and
its officers, directors, members, agents, employees and each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act
(collectively, the "AGENT INDEMNITEES"), against any losses, claims, damages or
liabilities to which an Agent Indemnitee may become subject, under the
Securities Act or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (a) an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the information
deemed to be a part of the Registration Statement at the time of effectiveness
and at any subsequent time pursuant to Rules 430A and 430B of the rules and
regulations of the SEC, if applicable, any preliminary prospectus, the Time of
Sale Disclosure Package and the Statutory Prospectus, or any amendment or
supplement thereto (including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Statutory Prospectus), any
Issuer-Represented Free Writing Prospectus, blue sky materials or in any
materials or information provided to investors by, or with the approval of, the
Company in connection with the marketing of the Offering or the Securities
("MARKETING MATERIALS"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically) or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Agent Indemnitees for any legal
or other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action; or (b) in whole
11
or in part upon any inaccuracy in the representations and warranties of the
Company contained herein; or (c) in whole or in part upon any failure of the
Company to perform its obligations hereunder or under law; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Marketing Materials, in reliance upon and in conformity with written
information furnished to the Company by the Agent specifically for use in the
preparation thereof. The Company agrees that no information was furnished by the
Agent for use in the Marketing Materials.
In addition to its other obligations under this Section 9.1, the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 9.1, it will reimburse the Agent Indemnitees on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Agent Indemnitees for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Agent Indemnitees shall promptly return it to the Company,
together with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by Xxxxx Fargo Bank, N.A. (the "PRIME
RATE"). Any such interim reimbursement payments that are not made to the Agent
Indemnitees within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity agreement shall be
in addition to any liabilities which the Company may otherwise have.
9.2 The Agent will indemnify and hold harmless the Company, its
directors, officers, employees, agents and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act (collectively,
the "COMPANY INDEMNITEES"), against any losses, claims, damages or liabilities
to which the Company Indemnitees may become subject, under the Securities Act or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Agent), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Marketing Materials, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Marketing Materials in reliance upon and in conformity with written information
furnished to the Company by the Agent specifically for use in the preparation
thereof (which information is described in Section 9.1), and will reimburse the
Company Indemnitees for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against any such loss,
claim, damage, liability or action.
9.3 Promptly after receipt by an indemnified party under Section 9.1
or 9.2 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability that it may have to any
indemnified party except to the extent such indemnifying party has been
materially prejudiced by such failure. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
if, in the reasonable judgment of the indemnified parties, it is advisable for
the indemnified party to be represented by separate counsel, the indemnified
parties shall have the right to employ a single counsel to represent the
indemnified parties in any claim in respect of which indemnity may be sought by
the indemnified parties under Section 9.1 or 9.2, in which event the reasonable
fees and expenses of such separate counsel shall be borne by the indemnifying
party and reimbursed to the indemnified parties as incurred (in accordance with
the provisions of the Sections 9.1 and 9.2).
The indemnifying party under this Section 9.3 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified parties against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by this Section 9.3, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
12
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified parties, effect any settlement, compromise or consent to the
entry of judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (a) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (b) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
9.4 If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9.1or 9.2 above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in Section 9.1 or 9.2, (a) in such proportion
as is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other from the offering
of the Securities or (b) if the allocation provided by clause (a) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (a) above but also the relative
fault of the indemnifying party on the one hand and the indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total commissions received by the
Agent, in each case as set forth in Section 2.1 of this Agreement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Agent and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Agent agree that it would not be just and equitable if
contributions pursuant to this Section 9.4 were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this Section
9.4. The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this Section 9.4
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending against any
action or claim which is the subject of this Section 9.4. Notwithstanding the
provisions of this Section 9.4, the Agent shall not be required to contribute
any amount in excess of the amount by which the total price at which the
Securities were offered to the public exceeds the amount of any damages that the
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
10. SURVIVAL. The respective covenants, agreements, representations and
warranties of the Company and the Agent hereunder, as set forth in, or made
pursuant to this Agreement, shall remain in full force and effect regardless of
any investigation made by or on behalf of any such party or any of its directors
or officers or any controlling person, and shall survive delivery of and payment
for the Securities. The expense payment provisions contained in Section 2 and
the indemnification and contribution agreements contained in Section 9 and this
Section 10 shall also survive any termination or expiration of this Agreement.
11. COMPLETE AGREEMENT. This Agreement incorporates the entire
understanding of the parties with respect to the subject matter of this
Agreement.
12. AMENDMENTS; ARBITRATION. This Agreement may not be amended or modified
except in writing and shall be governed by and construed in accordance with the
laws of the State of New York. Any dispute or controversy arising out of this
agreement shall be determined by arbitration conducted in accordance with the
rules of the NASD then in effect. Any arbitration award shall be final and
binding upon the Company and the Agent, and judgment on the award may be entered
in any court having jurisdiction.
13. NOTICE. All notices and other communications required hereunder shall
be in writing and shall be deemed effectively given upon personal delivery; upon
confirmed transmission by telecopy or telex; or upon deposit with the United
States Post Office, by first-class mail, postage prepaid, or otherwise delivered
13
by hand or by messenger, addressed (i) if to the Company, at the Company's
address set forth on the signature page hereto or at such other address as the
Company shall have furnished to Agent or (ii) if to the Agent, to the address
set forth on the signature page hereto, or at such other address as the Agent
shall have furnished to the Company.
14. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees
that: (a) the Agent has been retained solely to act as a placement agent in
connection with the sale of the Securities and that no fiduciary, advisory or
underwriter relationship between the Company and the Agent has been created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Agent has advised or is advising the Company on other matters;
(b) the price and other terms of the Securities will be established by the
Company following discussions and arms-length negotiations with the purchasers
of the Securities and the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (c) it has been advised that the Agent and its
affiliates are engaged in a broad range of transactions that may involve
interests that differ from those of the Company and that the Agent has no
obligation to disclose such interests and transactions to the Company by virtue
of any fiduciary, advisory or agency relationship.
15. MISCELLANEOUS. This Agreement shall inure to the benefit of and be
binding upon the successors of the Agent and of the Company. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person or corporation, other than the parties hereto and their successors, and
the controlling persons and directors and officers referred to in Section 9, any
legal or equitable right, remedy or claim under or in respect to this Agreement
or any provision hereof. The term "successors" shall not include any purchaser
of the Securities merely by reason of such purchase. No subrogee of a benefited
party shall be entitled to any benefits hereunder.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK- SIGNATURE PAGE FOLLOWS]
14
In witness whereof, the parties have executed this Agreement as of the date
first written above.
ACCESS INTEGRATED TECHNOLOGIES, INC.
By /S/ A. XXXX XXXX
------------------------------------
A. XXXX XXXX
------------------------------------
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT
Address: 00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: A. Xxxx Xxxx,
Chief Executive Officer and President
with a copy to: Xxxxxx, Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
XXXXX-XXXXXX CAPITAL GROUP LLC
By /S/ XXXXXXXXXXX
------------------------------------
Name: XXXXXXXX X. XXXXXXXXXXX
------------------------------------
MANAGING PARTNER
Address: 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxxx,
Managing Partner and General Counsel
with a copy to: Faegre & Xxxxxx LLP
2200 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: W. Xxxxxx Xxxxx
and Xxxxxxxx X. Xxxxxxxxx
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