Exhibit 10.1
April 20, 1999
Alexander, Wescott & Co., Inc.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Agency Agreement
Gentlemen:
Saf T Lok Incorporated. ("LOCK"), formed under the Laws of the State
of Florida (the "Company'), desires to offer and sell in an offering (the
"Offering") to be made through Xxxxxxxxx Xxxxxxx & Co., Inc. ("AWC"), and
pursuant to exemptions from the registration provisions of the Securities Act of
1933, as amended (the "Securities Act"), as set forth below, the Company's
Convertible 6% Debentures (The "Debentures"). The Offering shall consist of the
sale of a 6% Convertible Debenture due in two years, unless converted or upon
the sale of all or substantially all of the assets of the Company, or a merger,
consolidation, or acquisition in which the Company is not the survivor. The
interest shall be simple interest, paid annually, and paid either in cash or
stock at the sole discretion of the Company. The Company may redeem or prepay
the debenture prior to maturity as follows: The Company shall pay the face value
of the Debenture plus all accrued interest at the date of prepayment or
redemption and in the event the prepayment or redemption occurs within ninety
(90) days from the date of issuance of the Debenture then the Company shall also
pay the Debenture holder a premium of ten (10%) of the face value at time of
redemption or prepayment. In the event the prepayment or redemption occurs after
ninety days but within one hundred eighty (180) days from the date of issuance
of the debenture then the Company shall pay the Debenture holder a premium of
twenty (20%) of the face value at time of redemption or prepayment, plus all
accrued interest. The Debentures will be convertible at a 25% discount to the
market price at the time of conversion, with a provision providing a conversion
floor price of Fifty Cent ($0.50) and a ceiling conversion price of Two Dollars
($2.00). The securities underlying the Debentures shall be registered by an
appropriate registration statement filed no later than ninety (90) days from the
latter of (i) the date of the closing of the Offering contemplated herein or
(ii) June 29, 1999 if the offering contemplated herein is extended to such date,
with penalty for delay.
The Debentures are to be sold at the prices and in the amounts set
forth in Section 2 below. The offering will be limited to maximum gross proceeds
Agency Agreement Page 1
of $2,000,000.00 with a minimum of $l,000,000.00 to be sold by April 30, 1999.
The Offering period shall end April 30, 1999, unless extended 60 days to June
29, 1999 by Placement Agent in its sole discretion. It is understood that the
Offering will be conducted on a "best efforts" basis with AWC acting as
exclusive agent for the Company, and which offering shall be conducted under the
following terms and conditions:
SECTION 1. Type of Offering: Exemptions.
The Offering will be conducted as a private placement offering
exempt from the registration requirements of the Securities Act, pursuant to the
provisions of Regulation D, of the Securities and Exchange Commission ("SEC").
The Debentures will be offered and sold only to those persons or entities who
qualify as an accredited investor ("Accredited Investor") as such term is
defined in Rule 501 of Regulation D. Investors will be required to subscribe for
the Debentures by executing the appropriate subscription agreement (the
"Subscription Agreement") in the forms set forth as an exhibit hereto, as the
same may be supplemented or amended from time to time by agreement between the
parties.
SECTION 2. Appointment: Basic Terms.
On the basis of the representations, warranties and covenants herein
contained, but subject to the terms and conditions herein set forth:
(a) AWC is hereby appointed as the exclusive placement agent for the Company
during the period herein specified for the purpose of finding subscribers
for the Debentures.
(b) The Offering shall commence on the date hereof, and shall continue until
April 30, 1999, unless extended 60 days to June 29, 1999 by the Placement
Agent at its sole discretion (the "Offering Period").
(c) Subject to the performance by the Company of all of its obligations to be
performed hereunder and to the completeness and accuracy of all material
representations and warranties of the Company, AWC agrees, on the terms
and conditions herein set forth, to use its best efforts during the
Offering Period to find subscribers for the Shares. AWCs agency hereunder
is coupled with an interest, is not terminable by the Company prior to
April 30, 1999 without AWC's consent, and shall continue until the
termination of the Offering Period, except as may be otherwise provided
herein. AWC shall have the right to appoint one or more additional agents
and/or selected dealers (who shall be members of the National Association
of Securities Dealers, Inc.) to assist in finding subscribers for the
Debentures,
Agency Agreement Page 2
and any such additional agents or selected dealers may rely upon the
representations and warranties and covenants of the Company set forth in
this Agreement.
(d) The price of the Debentures to be sold to each Purchaser (as hereinafter
defined) in the Offering shall be $25,000.00 per Debenture.
(e) Funds received from subscribers in the Offering shall be deposited in an
account to be entitled Chase Manhattan Bank New York a/c #000-0-000000,
Escrow Incoming Wire Account Further Credit: SAF T LOK, INCORPORATED;
Attn: Xxxxx Xxxxxx, pursuant to the escrow agreement dated April 20, 1999.
SECTION 3. Representations and Warranties of the Company.
The Company represents and warrants to AWC, for AWC's benefit and
for the benefit of purchasers of the Debentures (the "Purchasers") that, except
as otherwise set forth in the offering materials (copies of which shall be
provided to each Purchaser):
(a) The Debentures to be sold in the Offering will be, when
issued, delivered and paid for in accordance with the terms of
the Offering, duly and validly issued, fully paid and
non-assessable; all presently outstanding shares of Common
Stock of the Company have been duly authorized, validly issued
and are fully paid and non-assessable; the holders of the
shares of Debentures offered herein are not and will not be
subject to personal liability by reason of being such holders;
the shares of Debentures being sold in the Offering are not
being issued in violation of the preemptive rights of any of
the Company's security holders; all action required to be
taken by the Company to authorize the issuance and sale of the
6% Convertible Debentures to qualified subscribers has been
or, prior to the sale thereof, will have been taken.
(b) The capitalization of the Company, including the outstanding
shares of the Company's capital stock and any warrants,
options or other rights to subscribe to or purchase shares of
capital stock is as represented to purchasers of the
Debentures.
(c) The Company is duly incorporated, validly existing and in good
standing as a corporation under the laws of its jurisdiction
of incorporation.
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(d) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in
which its activities or its ownership or leasing of property
requires such qualification, other than those jurisdictions in
which failure to so qualify would not have a material adverse
effect on the business, operations or prospects or condition
(financial or otherwise) of the Company.
(e) This Agreement has been duly and validly authorized and
executed and delivered by and on behalf of the Company and
constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
subject to any applicable bankruptcy, insolvency,
reorganization fraudulent transfer, moratorium and similar
laws of general applicability relating to or effecting
creditor's rights generally and to general principles of
equity and the enforceability of the indemnity provisions
contained in Section 10 or the contribution provisions
contained in Section 11 of this Agreement.
(f) The Company is not in violation of (i) any term or provision
of its charter or by-laws or (ii) any material term or
provision of any indenture, mortgage, deed of trust, note,
agreement, or other material agreement of instrument to which
the Company is a party or by which it is or may be bound or to
which any of its material assets, property or business is or
may be subject, or (iii) any material term of any significant
indebtedness, or (iv) of any statute or (v) to the best of the
Company's knowledge any material judgment, decree, order, rule
or regulation applicable to the Company of any court,
regulatory body or administrative agency or other federal,
state or other governmental body, domestic or foreign, having
jurisdiction over it or its material assets, property or
business, which violation or violations, either in any case or
in the aggregate, might result in any material adverse change,
financial or otherwise, in the assets, properties, condition,
business, earnings or prospects of the Company; and, to the
best of the Company's knowledge, the execution and delivery by
the Company of this Agreement, the consummation by the Company
of the transactions herein contemplated, and the compliance by
the Company with the term of this Agreement will not result in
any such material violation or violations. All material
licenses, approvals or permits from the federal or any
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state, local or foreign government or agency thereof having
jurisdiction over the Company reasonably required for the
conduct of the business or operations of the Company have been
obtained and are outstanding; and there are no proceedings
pending or to the Company's knowledge threatened, seeking to
cancel, terminate or limit such licenses, approvals or
permits.
(g) Other than reported on Forms 10KSB and 10QSB, there are no
actions, investigations, statutes, rules or regulations or
other proceedings of any nature in effect or pending or to the
Company's knowledge threatened, as the case may be, which,
either in any case or in the aggregate, if decided adversely,
might reasonably be expected to result in any material adverse
change, financial or otherwise, in the assets, properties,
condition, business, earnings or prospects of the Company or
which question the validity of the capital stock of the
Company, this Agreement or any action taken or to be taken by
the Company pursuant to or in connection with this Agreement.
(h) The Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions
herein contemplated except as described in this agreement or
in the Company's SEC filings.
(i) The Company has filed all of the required financial statements
with the Securities and Exchange Commission in the Form of 10
QSB's or 10 KSB's. The audited financial statements provided
to AWC present fairly the financial position of the Company as
of the respective dates thereof and the results of operations
and cash flows for the respective periods covered thereby.
Since the dates of the financial statements, there has been no
material adverse change, financial or otherwise, in the
assets, properties, condition, business, earnings or prospects
of the Company.
(j) The Company has filed each federal, state, local and foreign
tax return which is required to be filed, or has requested an
extension therefor and has paid or otherwise provided for all
taxes shown on such return and all related assessments to the
extent that the same have become due.
(k) All information contained in the written material concerning
the Company which has been or is being provided by the
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Company to AWC or to subscribers to the Offering and all
information from the Company which is included in the
Subscription Agreement (collectively, the "Offering
Materials") is accurate and complete in all material respects
and, to the best of the Company's knowledge, does not contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(l) The Company has not made and will not make, any offers or
sales of the Company's capital stock or any warrants, options
or other rights to subscribe to or purchase shares of the
Company's common stock in contravention of the requirements
for this Offering to qualify for an exemption from the
registration requirements of the Securities Act, pursuant to
the provisions of Regulation D, of the SEC.
(m) The representations and warranties made in this Agreement
shall be deemed repeated, and shall be true, at the time of
any closing provided for in this Agreement.
SECTION 3A. Representations and Warranties of AWC.
AWC represents and warrants to the Company, for the Company's
benefit, that:
(a) Except as set forth on a separate Schedule 3A(a) attached
hereto by the Placement Agent, it:
(i) is not and has not been the subject of any Investigation
by any Federal, State or local government agency during
any time within the five (5) years prior to the date of
this Agreement, or as of the date hereof, and to its
knowledge, no such investigation is currently
threatened, and
(ii) is not involved in any litigation involving the offer or
sale of securities.
(b) Except as set forth on a separate Schedule 3A(b) attached
hereto by the Placement Agent, it: is in compliance with all
laws, rules and regulations applicable to broker - dealers in
the jurisdictions in which it conducts business and with all
applicable requirements and rules of the National Association
of Securities Dealers, Inc.
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SECTION 4. Closing.
A minimum of $1,000,000 of Debentures is required to be sold under
this Agreement by April 30, 1999 or such later date as may be determined by the
Placement Agent pursuant to Section 2(b) of this Agreement. A closing
("Closing") for the sale of Debentures subscribed for in the Offering may be
held on one or more occasions prior to the end of the Offering Period, provided
the minimum in gross proceeds is reached and provided that such Subscriptions
are accepted by the Company. At each such Closing, payment of the proceeds of
the Offering shall be made by certified or bank check(s) or by wire transfer to
the order of the Company, against delivery of certificates for debentures, for
transmittal to the purchasers of the Debentures. AWC may deduct AWC's
commissions, expense allowance and any other amounts payable to AWC by the
Company from the net proceeds deliverable to the Company.
SECTION 5. Covenants of the Company.
The Company covenants with AWC that:
(a) From the commencement of the Offering Period through any
Closing pursuant to Section 4 hereof, any Offering Materials
will not contain any untrue statement of a material fact or
omit to state a material fact, to the extent known to the
Company, necessary in order to make the statements therein in
light of the circumstances under which they were made, not
misleading.
(b) Either directly or through AWC, the Company shall offer to
each subscriber, at a reasonable time prior to his purchase of
Debentures, the opportunity to ask questions and receive
answers concerning the terms and conditions of the Offering
and to obtain any additional information, which the Company
possesses or can acquire without unreasonable effort or
expense.
(c) During the Offering Period, the parties hereto will keep each
other generally informed of offers for sale and solicitations
of offers to buy Debentures being made.
(d) The Company shall use its best efforts, through counsel
performing services on behalf of the Company in connection
with the Offering, to qualify and register, or perfect the
exemption of the Debentures for offer and sale under the state
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or foreign securities laws of the jurisdictions in which
offers and sales are proposed to be made, and shall assist AWC
and such counsel in connection with the foregoing, provided
that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now qualified
or to take any action which would subject it to general
service of process in any jurisdiction where it is not now
subject.
(e) The Company shall, in a timely manner and as required, prepare
and file a Form D and any required amendments thereto with the
SEC pursuant to Regulation D. The Company will use its best
efforts to take all steps necessary to ensure that any and all
reports which may be required to be filed with the SEC under
federal securities laws are timely filed by the Company.
(f) For the period of time that Placement Agent's clients are
holders of stock of the Company and not to exceed two (2)
years, the Company will provide AWC with copies of any stock
reports of the Company's stock transfer agent if so requested,
but only while AWC's customers continue to hold stock in the
Company.
(g) The Company shall utilize the services of its current
accounting firm or another firm acceptable to AWC.
(h) For the period of time that Placement Agent's clients are
holders of Debentures of the Company and not to exceed two (2)
years, for a period of two (2) years after the Closing, the
Company will furnish AWC with copies of its annual and
quarterly financial statement and reports to shareholders. In
addition, during the Offering and for a period of two(2) years
after the Closing, the Company will provide AWC with all
information and documentation with respect to the Company's
business and financial condition, as reasonably requested by
AWC, and will provide to AWC during the Offering regular
access to the Company's officers, directors, auditors and
counsel to discuss any aspect of the Company's business as
reasonably requested by AWC. This paragraph shall cease to be
operative if, at any time, AWC ceases to have customers who
hold Debentures in the Company.
(i) Unless AWC shall otherwise agree in writing, the Company will
not issue any securities during the period from the date of
this
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Agreement until the expiration of the Offering Period, except
for securities issued pursuant to this Agreement and
pre-existing option and warrant commitments, or in the
ordinary course of business in which case the shares issued,
shall be subject to the same restrictions as provided for in
section 8e.
(j) To the extent the Company is duly authorized to do so, the
Company will reserve and set side, out of its authorized
capital stock, the number of shares of Additional Common Stock
(as hereinafter described) issuable to AWC under this
Agreement, if any. Such shares, when issued, paid for and
delivered upon exercise of such warrants, will be duly and
validly issued, fully paid and non-assessable, and will not
violate any preemptive rights of Company shareholders.
(k) The Company will keep confidential the identity of AWC's
clients and customers involved in this offering, except as may
be otherwise required by law. The Company will not solicit
such persons directly for the sale of securities or for other
financing proposals without the express written consent of
AWC, which consent may be given on the condition that the
Company agrees to compensate AWC on terms comparable to those
set forth in this Agreement for any sales made to such persons
for a period of two years after the closing.
SECTION 6. AWC's Covenants.
AWC covenants with the Company that:
(a) In offering the Debentures, AWC will deliver to each potential
subscriber contacted by it, prior to accepting any
subscription from such subscriber, the appropriate form of
Subscription Agreement together with a subscriber
questionnaire (included in the Offering Materials).
(b) AWC will make offers to sell Debentures to, or solicit offers
to subscribe for any Debentures from, persons in only those
jurisdictions where the Offering and the Debentures have been
qualified or where it has been determined that an exemption
from such qualification is, or may reasonably be anticipated
to be available, under applicable securities statutes. AWC
will accept subscriptions only from persons whom AWC
reasonably believes to be Accredited Investors.
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(c) AWC shall maintain a record of all information obtained by AWC
indicating that subscribers for Debentures sold through AWC
meet the criteria referred to in subsection (b) above. At the
Closing, AWC shall have no reason to believe that the
information with respect to, and the representations of, each
purchaser of Debentures as set forth in the appropriate
Subscription Agreement are not accurate.
SECTION 7. Compensation.
It is the Placement Agent's intent, immediately prior to the
commencement of the Proposed Offering, to enter into an Agency Agreement (the
"Agency Agreement") with the Company, which shall contain such terms and
conditions as are customarily contained in agreements of such character and,
among other things, provide for the following:
(a) The Company shall pay to the Placement Agent a commission of ten
percent (10%) of the gross proceeds of the Proposed offering, which shall be
payable to the Placement Agent at the initial Closing and each subsequent
closing with respect to the amounts raised as of such closing date;
(b) In order to reimburse the Placement Agent for those costs, fees
and expenses customarily incurred by a placement agent in connection with the
offering process, the Company will pay to the Placement Agent a three percent
(3%) of the gross proceeds of the amounts raised, non-accountable expense
allowance at closing and each subsequent dosing with respect to the amounts
raised as of such closing dates.
(c) In addition to the foregoing, the Company shall bear all the
Company's fees, disbursements and expenses in connection with the Proposed
Offering, including, without limitation, the Company's legal and accounting fees
and disbursements;
(d) The Placement Agent shall require the Company and Subscriber
and its principal officers and its directors to provide certain warranties and
representations against shorting or hedging of the Company's stock satisfactory
to the Placement Agent.
(e) In addition to the compensation set forth herein, the Company
shall issue to Placement Agent 100,000 shares of Common Stock with restrictive
legend on a pro rata basis for every $1,000,000 in gross proceeds raised by the
Placement Agent.
(f) Notwithstanding anything to the contrary in this Agreement, the
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Placement Agent agrees that its compensation pursuant to this agreement shall be
reduced to the extent required to comply with the applicable requirements of the
NASD and Nasdaq applicable to the Placement Agent and/or the Company as the case
may be. The Placement Agent agrees that it will repay to the Company any
compensation received by the Placement Agent pursuant to this Agreement upon
receipt of any notice of the NASD or Nasdaq requiring such reduction, such
repayment to be made promptly, but in any event within 10 days of the Placement
Agent's receipt of any such notice.
SECTION 8. Conditions of AWC's Obligations.
AWC's obligation to offer and sell the Debentures is subject to the
accuracy of and compliance with the representations and warranties of the
Company made in Section 3 hereof, to the performance by the Company of its
obligations under this Agreement and to the following further conditions:
(a) At such Closing, AWCs counsel shall have been furnished with
such documents as AWC or they may reasonably require in order
to evidence the accuracy or completeness of each of the
representations or warranties and the compliance with each of
the covenants or satisfaction of any of the conditions herein
contained; and all actions taken by the Company in connection
with the sale of the Debentures as herein contemplated shall
be reasonably satisfactory in form and substance to AWC and
AWCs counsel.
(b) At such Closing, AWC shall receive an opinion from counsel to
the Company, in form and substance reasonably satisfactory to
AWC's counsel, with respect to the matters set forth in
Section 3 and 5 above.
(c) As soon as practicable alter the date hereof and immediately
prior to such Closing and with respect to any sale of
Debentures pursuant to a private placement under Regulation D,
AWC shall receive a blue sky survey or memorandum and a
supplement thereto addressed to AWC and the Company as
prepared by Placement Agent's counsel satisfactory to AWC and
relating to the securities laws of certain jurisdictions
designated by the Company and AWC, indicating the conditions
under which offers and sale of the Shares may be made in the
Offering in compliance with such securities laws and advising
that the appropriate action, if any, was taken in each such
jurisdiction.
(d) The representations arid warranties of the Company set forth
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in Section 3 hereof shall be true and correct as of the
Closing, to the best knowledge of the Company, and the Company
shall have complied with all applicable terms and conditions
of this Agreement.
(e) The Company will, prior to the completion of the initial
closing of the Offering, cause each officer and director of
the Company who holds 200,000 or more shares of Common Stock
(either individually or together with members of his family or
together with any affiliate) to enter into an agreement under
which each such person agrees not to sell in any given weekly
period, more than an amount equal to five (5%) of the weekly
trading volume of the stock, for a period of (6) months from
the final closing of the Offering, without the prior written
consent of AWC.
(g) If any of the conditions specified in this Section 8 shall not
have been fulfilled when and as required by this Agreement,
then this Agreement and all of AWC's obligations hereunder may
be canceled by AWC by notifying the Company of such
cancellation in writing at any time at or prior to the subject
Closing, and any such cancellation shall be without liability
of any party to any other party except as may otherwise be
provided in this Agreement.
SECTION 9. Conditions of the Obligations of the Company.
The obligations of the Company hereunder are subject to the accuracy
of and compliance with AWC's representations and warranties and any other firm
that participates in the Offering, to the performance by AWC of AWCs obligations
hereunder, and to the following further conditions:
(a) At the Closing, the Company shall receive a certificate from
AWC as to the number and identity of persons from whom
subscriptions for Shares shall have been received and
accepted, which certificate shall further be to the effect
that:
(i) Executed Subscription Agreements have been received and
accepted only from persons who, to the best of AWC's
knowledge and belief meet the requirements for
subscribers referred to in Section 6(b) hereof and are
acting for themselves and not on behalf of any other
person; and
(ii) AWC has complied with all applicable broker-dealer
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registration requirements with respect to the Offering
(but no reference need be made as to other agents or
dealers involved in the Offering).
(iii) The representations and warranties of the Placement
Agent shall be true and correct as of the Closing, to
the best knowledge of the Placement Agent, and the
Placement Agent shall have complied with all applicable
terms and conditions of this Agreement.
(b) if any of the conditions specified in this Section 9 shall not
have been fulfilled when and as required by this Agreement, or
if the minimum amount of $1,000,000 of Debentures is not sold
by the completion of the Offering Period, then this Agreement
may be canceled by the Company by notifying AWC of such
cancellation in writing at any time at or prior to the subject
Closing.
(c) Notwithstanding anything to the contrary in this Agreement,
the Company will not be required to sell and issue any
securities to the extent that the issuance of any shares
underlying such securities would prevent the Company from
complying with Nasdaq requirements (as they apply to the
Company) and the Company's charter and by-laws.
SECTION 10. Indemnification,
(a) The Company agrees to indemnify and hold harmless AWC, each of
AWC's officers, directors, representatives, employees and each person, if any,
who controls AWC, against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses whatsoever,
including attorney fees, reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever) arising out of (i) any untrue statement of a material fact contained
in the Offering Materials or the omission therefrom of a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, unless such untrue statement or
information was made in reliance upon and in conformity with information
furnished to the Company by AWC or any Subscriber in writing expressly for use
in the Offering Materials and (ii) any misrepresentation with respect to, or any
violation of, the representations and warranties of the Company set forth in
this Agreement, whether arising, in any instance, under the Securities Act or
otherwise. In no case shall the Company be liable under this indemnity
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agreement with respect to any claim made against AWC or any persons named above
unless the Company shall be notified in writing of the nature of the claim
within thirty (30) days after AWC's receipt of written notice thereof, but
failure to so notify the Company shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. The Company
shall be entitled to participate in the defense of such action at its own
expense upon receipt of such notice, and to assume the defense, which defense
shall be conducted by counsel chosen by it and reasonably satisfactory to AWC or
the person or persons, defendant or defendants named in the action; AWC or such
persons or defendants shall bear the fees and expenses of any additional counsel
thereafter retained by AWC or them, respectively. The Company agrees to notify
AWC within twenty (20) days of the receipt of written notice of the assertion of
any claim against it in connection with the sale of the Debentures.
b) AWC agrees to indemnify and hold harmless the Company, each of
its officers, directors and employees and each person, if any, who controls the
Company, to the same extent as provided in subsection (a) of the foregoing
indemnity to AWC from the Company, but only with respect to statements in or
omissions from the Offering Materials made In reliance upon and in conformity
with written information furnished to the Company by AWC expressly for use in
the Offering Materials. In no event shall the assistance in the drafting of all
or any portion of the Offering Materials and any exhibits thereto by AWC's
counsel constitute the furnishing of such information. In ease any action shall
be brought against the Company or any person so indemnified, based upon the
Offering Materials and in respect of which indemnity may be sought against AWC,
AWC shall have the rights and duties given to the Company, and the Company and
each person so indemnified shall have the rights and duties given to AWC, by the
provisions of subsection (a) of this Section 10.
SECTION 11. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 10 hereof
is for any reason held to be unavailable to AWC, the Company and AWC, at AWC's
election, shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by said indemnity agreement incurred by
the Company or AWC, or both, in such proportions that AWC shall be responsible
for that portion represented by the percentage that the selling commissions paid
to AWC bear to the gross offering price of the total Debentures sold and the
Company shall be responsible for the balance; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of "Section 11(f)" of
the Securities Act) or negligent or willful failure to perform its obligations
under the Act or under this Agreement shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation or negligent or
willful failure.
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For purposes of this Section 11, each person, if any, who controls AWC within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as AWC, and the Company and each officer of the Company and each
person, if any, who controls the Company shall have the same rights to
contribution as the Company.
SECTION 12. Registration Rights for Agent's Restricted Stock.
The Company shall include in any registration, at its own expense,
all of the restricted Common Stock paid AWC as compensation as set forth herein
in Section 7(e) provided that if the registration statement pertains to an
underwritten offering, the inclusion of any such shares shall be subject to an
underwriter's cutback if the underwriter determines, in good faith, that the
inclusion of such shares will adversely affect the offering by the Company with
such cutback to be accomplished on a pro-rata basis among all selling
shareholders or as shall be otherwise required by such underwriter.
SECTION 13. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or contained in certificates submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of AWC or by or on behalf of the Company, and shall survive any
Closing.
SECTION 14. Notices.
All notices required or permitted under this Agreement shall be in
writing and shall be sent by certified or registered first class mail, return
receipt requested, or shall be personally delivered, or sent by an overnight
delivery service such as Federal Express, or shall be transmitted by telefax
(provided such telefax message is confirmed by telephone acknowledgment of
receipt or by sending via other authorized means a confirmation copy of such
notice) addressed to the parties as follows, or at such other address as a party
shall specify in compliance with this Section 14:
To the Company; SAF T LOK INCORPORATED
0000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Agency Agreement Page 15
To AWC: Alexander, Wescott & Co., Inc.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: President
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon AWC
and the Company and on the Company's and AWC's successors, this Agreement and
the conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of the parties hereto and their respective successors and
assigns and for the benefit of no other person. This Agreement may not be
assigned without the written consent of both parties.
SECTION 16. Governing Law.
This Agreement shall be governed by the laws of the State of New
York, without regard to choice of law provisions, except with respect to any
matter governed by applicable federal securities laws. The parties agree that
any dispute under this Agreement will be resolved in a federal or state court
located in the County, City and State of New York, or City of Xxxx Xxxx Xxxxx,
Xxxx Xxxxx Xxxxxx, Xxxxx xx Xxxxxxx, and will submit to the jurisdiction of such
court for such purpose.
SECTION 17. Waiver.
Any party hereto may waive compliance by the other with any of the
terms, provisions and conditions set forth herein; provided, however, that any
such waiver shall be in writing specifically setting forth those provisions
waived thereby. No such waiver shall be deemed to constitute or imply waiver of
any other term, provision or condition of this agreement.
SECTION 18. Entire Agreement.
This Agreement contains the entire agreement between the parties
hereto and is intended to supersede any and all prior agreements between the
parties hereto relating to the same subject matter. This Agreement may be
executed in multiple counterparts which shall be deemed one instrument.
If the foregoing is in accordance with AWC's understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, together with all counterparts, will become a binding agreement in
accordance with its terms.
Agency Agreement Page 16
Sincerely,
SAF T LOK INCORPORATED
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------
President
Confirmed, accepted and agreed to as
of the date first above written:
XXXXXXXXX XXXXXXX & CO., INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Secretary/Treasurer
Agency Agreement Page 17
