PICK - UPS PLUS, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: March 29, 2001
May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Ladies and Gentlemen:
The undersigned, Pick - Ups Plus, Inc., (the "Company"), hereby agrees with
May Xxxxx Group, Inc. ("May Xxxxx") as follows:
1. Offering.
--------
The Company hereby engages May Xxxxx to act as its exclusive placement
agent in connection with the Securities Purchase Agreement (as defined herein)
for the issuance and sale by the Company (the "Offering") of convertible
debentures (the "Convertible Debentures") which shall be convertible into the
Company's Common Stock, $0.001 par value per share (the "Common Stock"), at a
price per share equal to the Conversion Price, as that term is defined in the
Convertible Debentures . All capitalized terms used herein and not otherwise
defined shall have the same meaning ascribed to them as in the Securities
Purchase Agreement. The Investors will be granted certain registration rights
with respect to the Common Stock as more fully set forth in the Registration
Rights Agreement between the Company and the Investors (the "Investors'
Registration Rights Agreement") dated the date hereof. The documents to be
executed and delivered in connection with the Offering, including, but not
limited, to this Agreement, the Securities Purchase Agreement dated the date
hereof between the Company and the Investors named therein (the "Securities
Purchase Agreement"), the Investors' Registration Rights Agreement, the Escrow
Agreement with First Union National Bank (the "Escrow Agreement") the Warrants
(as defined herein) and the Placement Agent's Registration Rights Agreement (as
defined herein), are referred to sometimes hereinafter collectively as the
"Offering Materials." The Company's Common Stock and the Convertible Debentures
are sometimes collectively referred to hereinafter as the "Securities". May
Xxxxx shall not be obligated to sell any Securities and this Offering by May
Xxxxx shall be solely on a "best efforts basis."
2. Information.
-----------
A. Upon the occurrence of each Closing, the funds received in respect of
the Convertible Debentures purchased by the Investor(s) will be disbursed in
accordance with the terms of the Securities Purchase Agreement, net of (i) the
commission payable to May Xxxxx, equal to ten percent (10%) of the gross
proceeds from the sale of the Convertible Debentures , (ii) legal fees and other
expenses related thereto due to May Xxxxx'x counsel, Xxxxxx Xxxxxxxx LLP, an
amount not to exceed Twenty Five Thousand Dollars ($25,000) to be paid directly
from the gross proceeds of the sale of Convertible Debentures ($10,000 for legal
fees for the transactions contemplated herein which shall be payable upon the
Secondary Closing as the term is defined in the Securities Purchase Agreement
and $15,000 for legal fees for the Equity Line of Credit transaction which shall
be payable upon the Initial Closing as the term is defined in the Securities
Purchase Agreement); and (iii) legal fees and expenses of the Company's counsel
pursuant to the retainer agreement between the Company and Xxxx X. Xxxxxxx, P.C.
3. Representations, Warranties and Covenants of May Xxxxx.
------------------------------------------------------
A. May Xxxxx represents, warrants and covenants as follows:
(i) May Xxxxx has the necessary power to enter into this Agreement,
and the Escrow Agreement and to consummate the transactions contemplated hereby
and thereby.
(ii) The execution and delivery by May Xxxxx of this Agreement, the
Escrow Agreement, and the consummation of the transactions contemplated herein
and therein will not result in any violation of, or be in conflict with, or
constitute a default under, any agreement or instrument to which May Xxxxx is a
party or by which May Xxxxx or its properties are bound, or any judgment,
decree, order or, to May Xxxxx'x knowledge, any statute, rule or regulation
applicable to May Xxxxx. This Agreement, and the Escrow Agreement when executed
and delivered by May Xxxxx, xxxx constitute the legal, valid and binding
obligations of May Xxxxx, enforceable in accordance with their respective terms,
except to the extent that (a) the enforceability hereof or thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles of equity,
or (c) the indemnification provisions hereof or thereof may be held to be
violative of public policy.
(iii) Upon receipt of an executed Securities Purchase Agreement, the
Investors' Registration Rights Agreement, Escrow Agreement, the Warrants, and
the documents related thereto, May Xxxxx will, through the Escrow Agent,
promptly forward copies of the Securities Purchase Agreement, Registration
Rights Agreement and Escrow Agreement and the documents related thereto to the
Company or its counsel.
(iv) May Xxxxx will not deliver any documents related to the Offering
to any person it does not reasonably believe to be an Accredited Investor as
defined in Rule 501 (a) (3) of Regulation D.
(v) May Xxxxx will not intentionally take any action that it
reasonably believes would cause the Offering to violate the provisions of the
1933 Act, the 1934 Act, the respective rules and regulations promulgated there
under (the "Rules and Regulations") or applicable "Blue Sky" laws of any state
or jurisdiction.
(vi) May Xxxxx shall use all reasonable efforts to determine (a)
whether the Investor is an Accredited Investor and (b) that any information
furnished by the Investor is true and accurate. May Xxxxx shall have no
obligation to insure that (x) any check, note, draft or other means of payment
for the Convertible Debentures will be honored, paid or enforceable against the
Investors in accordance with its terms, or (y) subject to the performance of May
Xxxxx'x obligations and the accuracy of May Xxxxx'x representations and
2
warranties hereunder, (1) the Offering is exempt from the registration
requirements of the 1933 Act or any applicable state "Blue Sky" law or (2)
whether each Investor is an Accredited Investor.
(vii) May Xxxxx is a member of the National Association of Securities
Dealers, Inc., and is a broker-dealer registered as such under the 1934 Act and
under the securities laws of the states in which the Securities will be offered
or sold by May Xxxxx, unless an exemption for such state registration is
available to May Xxxxx. May Xxxxx is in compliance with all material rules and
regulations applicable to May Xxxxx generally and applicable to May Xxxxx'x
participation in the Offering.
4. Representations and Warranties of the Company.
---------------------------------------------
A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of each of this
Agreement, the Securities Purchase Agreement, the Convertible Debentures, the
Escrow Agreement, the Investors Registration Rights Agreement, has been or will
be duly and validly authorized by the Company and is, or with respect to this
Agreement, the Securities Purchase Agreement, the Convertible Debentures, the
Escrow Agreement, and the Investors' Registration Rights Agreement will be, a
valid and binding agreement of the Company, enforceable in accordance with its
respective terms, except to the extent that (a) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity or (c) the indemnification provisions hereof or thereof may
be held to be violative of public policy. The Securities to be issued pursuant
to the transactions contemplated by this Agreement and the Securities Purchase
Agreement have been duly authorized and, when issued and paid for in accordance
with (x) this Agreement, the Securities Purchase Agreement and the
certificates/instruments representing such Securities, (y) will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except to the extent that (1) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, and
(2) the enforceability thereof is subject to general principles of equity. All
corporate action required to be taken for the authorization, issuance and sale
of the Securities has been duly and validly taken by the Company.
(ii) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Securities Purchase Agreement. The Company is
not a party to or bound by any instrument, agreement or other arrangement
providing for it to issue any capital stock, rights, warrants, options or other
securities, except for this Agreement and the agreements described herein and as
described in the Securities Purchase Agreement. All issued and outstanding
securities of the Company, have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights of rescission
or preemptive rights with respect thereto and are not subject to personal
liability solely by reason of being security holders; and none of such
securities was issued in violation of the preemptive rights of any holders of
any security of the Company.
(iii) The Common Stock to be issued in accordance with Securities
Purchase Agreement has been duly authorized and when issued and paid for in
accordance with the this Agreement, the Securities Purchase Agreement and the
certificates/instruments representing such Common Stock, will be validly issued,
3
fully-paid and non-assessable; the holders thereof will not be subject to
personal liability solely by reason of being such holders; such Securities are
not and will not be subject to the preemptive rights of any holder of any
security of the Company.
(iv) The Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal property
necessary to conduct its business (including, without limitation, any real or
personal property stated in the Offering Materials to be owned or leased by the
Company), free and clear of all liens, encumbrances, claims, security interests
and defects of any material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.
(v) There is no litigation or governmental proceeding pending or, to
the best of the Company's knowledge, threatened against, or involving the
properties or business of the Company, except as set forth in the Offering
Materials and/or disclosed to May Xxxxx and it's employees.
(vi) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware. Except as
set forth in the Offering Materials, the Company does not own or control,
directly or indirectly, an interest in any other corporation, partnership,
trust, joint venture or other business entity. The Company is or will apply to
be duly qualified or licensed and in good standing as a foreign corporation in
each jurisdiction in which the character of its operations requires such
qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite corporate power and
authority, and all material and necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies (domestic and foreign) to conduct its businesses (and
proposed business) as described in the Offering Materials. Any disclosures in
the Offering Materials concerning the effects of foreign, federal, state and
local regulation on the Company's businesses as currently conducted and as
contemplated are correct in all material respects and do not omit to state a
material fact. The Company has all corporate power and authority to enter into
this Agreement, the Securities Purchase Agreement, the Registration Rights
Agreement, and the Escrow Agreement, to carry out the provisions and conditions
hereof and thereof, and all consents, authorizations, approvals and orders
required in connection herewith and therewith have been obtained. No consent,
authorization or order of, and no filing with, any court, government agency or
other body is required by the Company for the issuance of the Securities or
execution and delivery of the Securities Purchase Agreement, the Investors
Registration Rights Agreement, and the Escrow Agreement, except for applicable
federal and state securities laws. The Company, since its inception, has not
incurred any liability arising under or as a result of the application of any of
the provisions of the 1933 Act, the 1934 Act or the Rules and Regulations.
(vii) There has been no material adverse change in the condition or
prospects of the Company, financial or otherwise, from the latest dates as of
which such condition or prospects, respectively, are set forth in the Offering
Materials, and the outstanding debt, the property and the business of the
Company conform in all material respects to the descriptions thereof contained
in the Offering Materials.
(viii) To the best of the Company's knowledge and except as set forth
in the Offering Materials, the Company is not in breach of, or in default under,
any term or provision of any material indenture, mortgage, deed of trust, lease,
4
note, loan or Securities Purchase Agreement or any other material agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which it is a party or by which it or any of its
properties may be bound or affected. The Company is not in violation of any
provision of its charter or by-laws or in violation of any franchise, license,
permit, judgment, decree or order, or in violation of any material statute, rule
or regulation. To the best of the Company's knowledge neither the execution and
delivery of this Agreement, the Securities Purchase Agreement, the Investor's
Registration Rights Agreement, and the Escrow Agreement, nor the issuance and
sale or delivery of the Securities, nor the consummation of any of the
transactions contemplated herein or in the Securities Purchase Agreement, the
Investor's Registration Rights Agreement, and the Escrow Agreement, nor the
compliance by the Company with the terms and provisions hereof or thereof, has
conflicted with or will conflict with, or has resulted in or will result in a
breach of, any of the terms and provisions of, or has constituted or will
constitute a default under, or has resulted in or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or pursuant to the terms of any indenture, mortgage, deed of trust,
note, loan or Securities Purchase Agreement or any other agreement or instrument
evidencing an obligation for borrowed money, or any other agreement or
instrument to which the Company may be bound or to which any of the property or
assets of the Company is subject except (a) where such default, lien, charge or
encumbrance would not have a material adverse effect on the Company and (b) as
described in the Offering Materials; nor will such action result in any
violation of the provisions of the charter or the by-laws of the Company or,
assuming the due performance by May Xxxxx of its obligations hereunder, any
material statute or any material order, rule or regulation applicable to the
Company of any court or of any foreign, federal, state or other regulatory
authority or other government body having jurisdiction over the Company.
(ix) Subsequent to the dates as of which information is given in the
Offering Materials, and except for the documents related to the Company's Equity
Line of Credit Agreement with Cornell Capital Partners, L.P., dated March 29,
2001, or as may otherwise be indicated or contemplated herein or therein, the
Company has not (a) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, or (b) entered into any
transaction other than in the ordinary course of business, or (c) declared or
paid any dividend or made any other distribution on or in respect of its capital
stock. Except as described in the Offering Materials, the Company has no
outstanding obligations to any officer or director of the Company.
(x) There are no claims for services in the nature of a finder's or
origination fee with respect to the sale of the Common Stock or any other
arrangements, agreements or understandings that may affect May Xxxxx'x
compensation, as determined by the National Association of Securities Dealers,
Inc.
(xi) The Company owns or possesses, free and clear of all liens or
encumbrances and rights thereto or therein by third parties, the requisite
licenses or other rights to use all trademarks, service marks, copyrights,
service names, trade names, patents, patent applications and licenses necessary
to conduct its business (including, without limitation, any such licenses or
rights described in the Offering Materials as being owned or possessed by the
Company) and, except as set forth in the Offering Materials, there is no claim
or action by any person pertaining to, or proceeding, pending or threatened,
which challenges the exclusive rights of the Company with respect to any
trademarks, service marks, copyrights, service names, trade names, patents,
patent applications and licenses used in the conduct of the Company's businesses
5
(including, without limitation, any such licenses or rights described in the
Offering Materials as being owned or possessed by the Company) except any claim
or action that would not have a material adverse effect on the Company; the
Company's current products, services or processes do not infringe or will not
infringe on the patents currently held by any third party.
(xii) Except as described in the Offering Materials, the Company is
not under any obligation to pay royalties or fees of any kind whatsoever to any
third party with respect to any trademarks, service marks, copyrights, service
names, trade names, patents, patent applications, licenses or technology it has
developed, uses, employs or intends to use or employ, other than to their
respective licensors.
(xiii) Subject to the performance by May Xxxxx of its obligations
hereunder, the Securities Purchase Agreement and the offer and sale of the
Securities comply, and will continue to comply, up to the Registration Period
(as defined in the Securities Purchase Agreement) in all material respects with
the requirements of Rule 506 of Regulation D promulgated by the SEC pursuant to
the 1933 Act and any other applicable federal and state laws, rules, regulations
and executive orders. Neither the Offering Materials nor any amendment or
supplement thereto nor any documents prepared by the Company in connection with
the Offering will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. All statements of material facts in the Offering Materials are
true and correct as of the date of the Offering Materials and will be true and
correct on the date of the Closing.
(xiv) All material taxes which are due and payable from the Company
have been paid in full or adequate provision has been made for such taxes on the
books of the Company except for those taxes disputed in good faith the Company
does not have any tax deficiency or claim outstanding assessed or proposed
against it.
(xv) None of the Company nor any of its officers, directors,
employees or agents, nor any other person acting on behalf of the Company, has,
directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who is or may be in a position to
help or hinder the business of the Company (or assist it in connection with any
actual or proposed transaction) which (A) might subject the Company to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, or (B) if not given in the past, might have had a materially adverse
effect on the assets, business or operations of the Company as reflected in any
of the financial statements contained in the Offering Materials, or (C) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company in the future.
5. Certain Covenants and Agreements of the Company.
-----------------------------------------------
The Company covenants and agrees at its expense and without any expense to
May Xxxxx as follows:
A. To advise May Xxxxx of any material adverse change in the Company's
financial condition, prospects or business or of any development materially
affecting the Company or rendering untrue or misleading any material statement
in the Offering Materials occurring at any time as soon as the Company is either
informed or becomes aware thereof.
6
B. To use its commercially reasonable efforts to cause the Common Stock
issuable upon exercise of the Convertible Debentures to be qualified or
registered for sale on terms consistent with those stated in the Investors'
Registration Rights Agreementand under the securities laws of such jurisdictions
as May Xxxxx and the Investor shall reasonably request, provided that such
states and jurisdictions do not require the Company to qualify as a foreign
corporation. Qualification, registration and exemption charges and fees shall be
at the sole cost and expense of the Company.
C. Upon written request, to provide and continue to provide the each
holder of Securities, copies of all quarterly financial statements and audited
annual financial statements prepared by or on behalf of the Company, other
reports prepared by or on behalf of the Company for public disclosure and all
documents delivered to the Company's stockholders.
D. To deliver, during the Registration Period, to May Xxxxx, upon May
Xxxxx'x request, within forty five (45) days after each fiscal quarter, a
statement of its income for each such quarterly period, and its balance sheet
and a statement of changes in stockholders' equity as of the end of such
quarterly period, all in reasonable detail, certified by its principal financial
or accounting officer; (ii) within ninety (90) days after the close of each
fiscal year, its balance sheet as of the close of such fiscal year, together
with a statement of income, a statement of changes in stockholders' equity and a
statement of cash flow for such fiscal year, such balance sheet, statement of
income, statement of changes in stockholders' equity and statement of cash flow
to be in reasonable detail and accompanied by a copy of the certificate or
report thereon of independent auditors if audited financial statements are
prepared; and (iii) a copy of all documents, reports and information furnished
to its stockholders at the time that such documents, reports and information are
furnished to its stockholders.
E. To comply with the terms of the Securities Purchase Agreement, the
Investors' Registration Rights Agreement, and the Escrow Agreement.
F. To ensure that any transactions between or among the Company, or any of
its officers, directors and affiliates be on terms and conditions that are no
less favorable to the Company, than the terms and conditions that would be
available in an "arm's length" transaction with an independent third party.
6. Indemnification.
---------------
A. The Company hereby agrees that it will indemnify and hold May Xxxxx and
each officer, director, shareholder, legal counsel, employee or representative
of May Xxxxx, and each person controlling, controlled by or under common control
with May Xxxxx within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act or the SEC's Rules and Regulations promulgated there under (the
"Rules and Regulations"), harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not limited to,
any and all reasonable legal fees and other expenses and disbursements incurred
in connection with investigating, preparing to defend or defending any action,
suit or proceeding, including any inquiry or investigation, commenced or
threatened, or any claim whatsoever or in appearing or preparing for appearance
as a witness in any action, suit or proceeding, including any inquiry,
investigation or pretrial proceeding such as a deposition) to which May Xxxxx or
such indemnified person of May Xxxxx may become subject under the 1933 Act, the
1934 Act, the Rules and Regulations, or any other federal or state law or
7
regulation, common law or otherwise, arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in (a)
Section 4 of this Agreement, (b) the Offering Materials (except those written
statements relating to May Xxxxx given by an indemnified person for inclusion
therein), (c) any application or other document or written communication
executed by the Company or based upon written information furnished by the
Company filed in any jurisdiction in order to qualify the Common Stock under the
securities laws thereof, or any state securities commission or agency; (ii) the
omission or alleged omission from documents described in clauses (a), (b) or (c)
above of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (iii) the breach of any representation,
warranty, covenant or agreement made by the Company in this Agreement. The
Company further agrees that upon demand by an indemnified person, at any time or
from time to time, it will promptly reimburse such indemnified person for any
loss, claim, damage, liability, cost or expense actually and reasonably paid by
the indemnified person as to which the Company has indemnified such person
pursuant hereto. Notwithstanding the foregoing provisions of this Paragraph
6(A), any such payment or reimbursement by the Company of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in which a
final judgment by a court of competent jurisdiction (after all appeals or the
expiration of time to appeal) is entered against May Xxxxx or such indemnified
person as a direct result of May Xxxxx or such person's gross negligence or
willful misfeasance will be promptly repaid to the Company.
B. May Xxxxx hereby agrees that it will indemnify and hold the Company and
each officer, director, shareholder, employee or representative of the Company,
and each person controlling, controlled by or under common control with the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act or the Rules and Regulations, harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of May Xxxxx or its officers, employees or
representatives in its acting as Placement Agent for the Offering or (ii) the
breach of any representation, warranty, covenant or agreement made by May Xxxxx
in this Agreement (iii) any false or misleading information provided to the
Company by one of the May Xxxxx indemnified persons.
C. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 6(A) or 6(B), the party to be
indemnified shall, within five (5) business days, notify the indemnifying party
of the commencement thereof; the omission by one (1) indemnified party to so
notify the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other indemnified party that has given such notice
and shall not relieve the indemnifying party of any liability outside of this
indemnification if not materially prejudiced thereby. In the event that any
action is brought against the indemnified party, the indemnifying party will be
entitled to participate therein and, to the extent it may desire, to assume and
8
control the defense thereof with counsel chosen by it which is reasonably
acceptable to the indemnified party. After notice from the indemnifying party to
such indemnified party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under such
Section 6(A) or 6(B) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, but the
indemnified party may, at its own expense, participate in such defense by
counsel chosen by it, without, however, impairing the indemnifying party's
control of the defense. Subject to the proviso of this sentence and
notwithstanding any other statement to the contrary contained herein, the
indemnified party or parties shall have the right to choose its or their own
counsel and control the defense of any action, all at the expense of the
indemnifying party if, (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action at the expense of the indemnifying party, or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstance, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such indemnified parties. No
settlement of any action or proceeding against an indemnified party shall be
made without the consent of the indemnifying party.
D. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6(A) or 6(B)
is due in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company and May Xxxxx shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that May
Xxxxx shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the gross
proceeds paid to May Xxxxx 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 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(D), any person controlling, controlled by or under
common control with May Xxxxx, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights to
contribution as May Xxxxx and each person controlling, controlled by or under
common control with the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and each officer of the Company and each director
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against the other party under this
Section 6(D), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
9
contribution may be sought from any obligation they may have hereunder or
otherwise if the party from whom contribution may be sought is not materially
prejudiced thereby. The indemnity and contribution agreements contained in this
Section 6 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified person or any termination
of this Agreement.
7. Payment of Expenses.
-------------------
The Company hereby agrees to bear all of the expenses in connection with
the Offering, including, but not limited to the following: filing fees, printing
and duplicating costs, advertisements, postage and mailing expenses with respect
to the transmission of Offering Materials, registrar and transfer agent fees,
Escrow Agent fees and expenses, fees of the Company's counsel and accountants,
issue and transfer taxes, if any.
8. Conditions of Closing.
---------------------
The Closings (as the term is defined in the Securities Purchase Agreement)
shall be held at the offices of May Xxxxx or its counsel. The obligations of May
Xxxxx hereunder shall be subject to the continuing accuracy of the
representations and warranties of the Company herein as of the date hereof and
as of the Closing Dates (as the term is defined in the Securities Purchase
Agreement ) with respect to the Company as if it had been made on and as of such
Closing Dates; the accuracy on and as of the Closing Dates of the statements of
the officers of the Company made pursuant to the provisions hereof; and the
performance by the Company on and as of the Closing Dates of its covenants and
obligations hereunder and to the following further conditions:
A. At the Initial Closing (as the term is defined in the Securities
Purchase Agreement) May Xxxxx shall receive the opinion of Xxxx X. Xxxxxxx P.C.,
dated as of the date of the Initial Closing, which opinion shall be in form and
substance reasonably satisfactory to counsel for May Xxxxx.
B. At or prior to the Initial Closing, counsel for May Xxxxx shall have
been furnished such documents, certificates and opinions as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Agreement and the Offering Materials, or in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
C. At and prior to the Closings (as the term is defined in the Securities
Purchase Agreement), (i) there shall have been no material adverse change nor
development involving a prospective change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Offering Materials; (ii)
there shall have been no transaction, not in the ordinary course of business,
entered into by the Company other than the documents relating to the Company's
Equity Line of Credit Agreement with Cornell Capital Partners, L.P. which has
not been disclosed in the Offering Materials or to May Xxxxx in writing; (iii)
except as set forth in the Offering Materials, the Company shall not be in
default under any provision of any instrument relating to any outstanding
indebtedness for which a waiver or extension has not been otherwise received;
(iv) except as set forth in the Offering Materials, the Company shall not have
issued any securities (other than those to be issued as provided in the Offering
Materials) or declared or paid any dividend or made any distribution of its
10
capital stock of any class and there shall not have been any change in the
indebtedness (long or short term) or liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material amount of the
assets of the Company shall have been pledged or mortgaged, except as indicated
in the Offering Materials; and (v) no action, suit or proceeding, at law or in
equity, against the Company or affecting any of its properties or businesses
shall be pending or threatened before or by any court or federal or state
commission, board or other administrative agency, domestic or foreign, wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.
D. At Closings, May Xxxxx shall receive a certificate of the Company
signed by an executive officer and chief financial officer, dated as of the
applicable Closings, to the effect that the conditions set forth in subparagraph
(C) above have been satisfied and that, as of the applicable closing, the
representations and warranties of the Company set forth herein are true and
correct.
9. Termination.
-----------
This Agreement shall be co-terminus with, and terminate upon the same terms
and conditions as those set forth in, the Securities Purchase Agreement. The
rights of the Investor and the obligations of the Company under the Registration
Rights Agreement, and the rights of May Xxxxx and the obligations of the Company
shall survive the termination of this Agreement unabridged.
10. Miscellaneous.
-------------
A. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all which shall be deemed to be one
and the same instrument.
B. Any notice required or permitted to be given hereunder shall be given
in writing and shall be deemed effective when deposited in the United States
mail, postage prepaid, or when received if personally delivered or faxed ( upon
confirmation of receipt received by the sending party), addressed as follows:
If to Placement Agent, to: The May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000)000-0000
Facsimile: (000) 000-0000
With Copy to: Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to: Pick - Ups Plus, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11
With a copy to: Xxxx X. Xxxxxxx P.C.
000-00 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address of which written notice is given to the others.
C. This Agreement shall be governed by and construed in all respects under
the laws of the State of New York, without reference to its conflict of laws
rules or principles. Any suit, action, proceeding or litigation arising out of
or relating to this Agreement shall be brought and prosecuted in such federal or
state court or courts located within the State of New York as provided by law.
The parties hereby irrevocably and unconditionally consent to the jurisdiction
of each such court or courts located within the State of New York and to service
of process by registered or certified mail, return receipt requested, or by any
other manner provided by applicable law, and hereby irrevocably and
unconditionally waive any right to claim that any suit, action, proceeding or
litigation so commenced has been commenced in an inconvenient forum.
D. This Agreement and the other agreements referenced herein contain the
entire understanding between the parties hereto and may not be modified or
amended except by a writing duly signed by the party against whom enforcement of
the modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
PICK - UPS PLUS, INC.
By: /s/ XXXX XXXXXXXXXX
-----------------------
Xxxx Xxxxxxxxxx
Title: President
MAY XXXXX GROUP, INC.
By: /s/ XXXXXXX XXXXXX
-----------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
13
