SENTINEL FINANCING LTD., L.P.
1,500,000 of 12% Secured Notes Due 2003
(Par Value $1,000 Per Note)
Agency Agreement
March 19, 1998
XXXXXXXXX, XXXXXX & XXXXX
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
Sentinel Acceptance Corporation, a Florida corporation (the "Company"), the
general partner of Sentinel Financing Ltd., L.P. ("SFL") hereby confirms its
agreement with XXXXXXXXX, XXXXXX & XXXXX (the "Agent"), as follows:
1. GENERAL. SFL proposes to offer, through the Agent on an exclusive,
"best-efforts" basis, up to $15,000,000 aggregate principal amount
of 12% Secured Notes due 2003 (the "Notes"), to be offered to the public
in multiples of $1,000, subject to a minimum purchase requirement of
$2,000 (the "Offering").
SFL has filed a Registration Statement on Form SB-2 (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC")
pursuant to which SFL will register the Notes for sale to the public.
On terms and conditions specified in this Agency Agreement (the
"Agreement"), the Agent, for the compensation specified below, will
provide the services specified in this Agreement to assist the Company
in the Offering.
2. The Offering.
2.1 SERVICES TO BE RENDERED. Subject to the terms and conditions hereof
and upon the basis of the representations, warranties and agreements
herein set forth, the Company hereby appoints the Agent as its agent
to sell the Notes on an exclusive, best efforts basis. The Agent
hereby accepts such appointment and agrees to use its best efforts to
find purchasers for the Notes. The Company and the Agent agree that
the Notes shall be offered to the investing public in Georgia, Florida
and any other state or states where the Company deems it appropriate
to offer the Notes, all in compliance with the Securities Act of 1933
(the "Securities Act"), the Securities Exchange Act of 1934 (the
"Exchange Act"), and the securities or "blue sky" laws of any
applicable jurisdiction.
2.2 EXCLUSIVE ENGAGEMENT. The Company shall not engage any other person
other than the Agent to solicit offers or Sales of Notes during the
offering period (as such term is herein defined). However, the Agent
may hire such other broker dealers to assist in the sale of the Notes
as the Agent deems necessary or advisable.
2.3 COMPENSATION. The Company agrees to pay to the Agent for the Agent's
services in connection with the Offering a commission on all Notes
sold by the Agent in the Offering as follows: solely in the event
that a minimum of $1,000,000 of Notes (the "Minimum Offering") are
sold on or before the date which is 120 days from and after the
Effective Date (herein defined), (a) a
commission equal to 7.5% of the sale price for each Note sold by the
Agent, PLUS (b) an investment banking and marketing fee equal to 1%
of the sale price for each Note sold by the Agent. IF THE MINIMUM
OFFERING IS NOT OBTAINED AND THE OFFERING IS TERMINATED, THE AGENT
SHALL BE REIMBURSED ONLY FOR ITS ACTUAL ACCOUNTABLE OUT-OF-POCKET
EXPENSES.
2.4 PAYMENT OF EXPENSES. The Company will pay all expenses in connection
with the Offering including, but not limited to, attorneys' fees,
expenses for auditing and accounting services, advertising fees, all
securities registration and NASD filing fees, postage, and document
reproduction expenses, and the engraving, issuance, transfer and
delivery of the Notes. The Company shall reimburse Agent for its
reasonable attorneys' fees incurred in the negotiation and execution
of this Agreement and in connection with filings made with the NASD in
connection with the Offering UP TO A MAXIMUM OF $5,000. Solely in the
event the Minimum Offering is achieved, in addition to the foregoing
expenses, the Company shall pay the Agent, as a non-accountable
expense allowance, an amount equal to 1% of the sale price of each
Note sold by the Agent.
2.5 BLUE SKY. The Company contemplates that the Offering will be made in
those states listed in Exhibit A attached hereto. The Company shall,
at its sole expense, take or cause to be taken all necessary action
and shall furnish to whomever the Agent may direct such information as
may be required to qualify the Notes for sale under the laws of such
jurisdictions and any other jurisdictions where the Company may
hereafter elect that Notes shall be offered and shall continue such
qualifications in effect for as long as may be necessary for the
distribution of the Notes. At the request of the Agent the Company
shall cause its counsel to prepare and furnish to the Agent "Blue Sky"
memoranda concerning the requirements for qualification of the Notes
for sale under the law of such jurisdictions, and the Agent shall be
entitled to rely on such memoranda in carrying out its obligations
under this Agreement.
2.6 SALE AND DELIVERY OF THE NOTES. The Notes will be offered on a best
efforts, $1,000,000 minimum offering basis. All proceeds from the
sale of Notes will be immediately deposited in an escrow account at
Greater Bay Trust Company (the "Escrow Account"), and no funds will
be released to the Company therefrom unless and until the Company has
achieved the Minimum Offering. Upon sale of the Minimum Offering, the
Notes shall be released to purchasers of the Notes (the
"Noteholders") bearing an issue date equal to the date the purchase
price therefor was deposited into the Escrow Account. If the Minimum
Offering is not sold by 120 days after the effective date, all monies
received will be refunded to investors, together with any net
investment earnings thereon from the investment of such monies by the
Escrow Account. In the event of any such return of funds, the
investors shall not be entitled to receive the stated interest rate
on the Notes. Subscribers for the Notes shall have no right to
withdraw any funds from the Escrow Account. Throughout the Offering
Period, the Company will review the offers to purchase received and
will have the right to reject any such offers. Investors must
satisfy certain suitability standards prior to purchasing any Notes.
2.7 OFFERING PERIOD. The Notes will be offered for sale during the
period (the "Offering Period") commencing with the date that the
Registration Statement is declared effective by the SEC (the
"Effective Date" of the Offering) until the earlier to occur of
(a) the date that all Notes have been sold, (b) 24 months from and
after the Effective Date, or (c) the termination of the Offering by
the Company. The Company may, upon written notice to the Agent,
elect to extend the Offering Period, and as used herein, the term
"Offering Period" shall include any such extension.
2.8 CLOSING. Provided that the Escrow Agent is authorized and empowered
in accordance with the terms of the Escrow Agreement to release the
proceeds of the Offering from escrow as described in the Escrow
Agreement, and provided further that this Agreement shall not have
been terminated pursuant to the terms hereof, payment for the Notes
shall be made at a closing (the "Closing") to be held at the offices
of the Company's counsel (or such other place as the parties hereto
may agree), at 10:00 a.m., Atlanta time on the fifth (5th) business
day after the date on which the
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Minimum Offering is achieved, as determined by the Escrow Agent, or
on such other date and time as agreed to in writing by the parties
hereto.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company,
for itself and on behalf of SFL, hereby represents and warrants to, and
agrees with, the Agent that:
(a) The prospectus, including any amendments or supplements thereto (the
"Prospectus") when made available to prospective purchasers throughout
the Offering Period, will comply in all material respects with federal
statutes, regulations and policy statements applicable thereto,
including, without limitation, the applicable rules, regulations and
policy statements of the SEC. At all times during the Offering
Period, the Prospectus will contain all information including
financial statements that are required to be included therein in
accordance with applicable regulations (including interpretations
thereof), and policy statements of the SEC and the Prospectus will not
include any untrue statement of 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 are
made, not misleading; provided, however, that no representations or
warranties are made to the Agent with respect to statements or
omissions made in reliance upon, or in conformity with, written
information furnished to the Company with respect to the Agent, by the
Agent, or on its behalf expressly for use in the Prospectus.
(b) The Company is, and at all times during the Offering Period will be, a
corporation duly incorporated and organized and is, and will be,
validly existing and in good standing under the laws of the State of
Florida. The Company has, and at all times during the Offering Period
will have, full power and authority to own or lease all of its
properties and conduct all of its business as described in the
Prospectus.
(c) SFL is, and at all times during the Offering Period will be, a limited
partnership duly incorporated and organized and is, and will be,
validly existing and in good standing under the laws of the State of
Florida. SFL has, and at all times during the Offering Period will
have, full power and authority to own or lease all of its properties
and conduct all of its business as described in the Prospectus.
(d) The Company is, and at all times during the Offering Period will be,
duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification.
(e) SFL is, and at all times during the Offering Period will be, duly
qualified to do business and in good standing in each jurisdiction
where the ownership or leasing of its properties or the conduct of its
business requires such qualification.
(f) The financial statements contained in the Prospectus present fairly
and accurately the financial position of the Company and SFL as the
respective dates thereof in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
entire periods involved.
(g) At all times during the Offering Period except as set forth in or
contemplated by the Prospectus: (i) the Company and SFL will not have
incurred and will not incur any material liabilities or obligations,
direct or contingent, except for liabilities or obligations entered
into in the ordinary course of business, and will not have entered
into and will not enter into any material transactions; and (ii) there
will have been no, and there will be no, material adverse change, or
any development relating to the Company or SFL which the Company has
cause to believe would involve a prospective material adverse change
in or affecting the business, business prospects, general affairs,
management, financial position, net worth, results of operations, or
properties of the Company, or the value of the assets of the Company
or SFL.
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(h) Except as set forth in or contemplated by the Prospectus, to the best
of its knowledge, neither the Company nor SFL have or will not have
during the Offering Period any material contingent liabilities or
obligations.
(i) There are no actions, suits or proceedings pending or, to the best
of its knowledge, threatened against the Company or SFL or their
respective or business, business prospects, financial condition,
results of operations or properties, or against any of their
respective principal officers, before or by any federal or state
court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling
or decision or finding would materially and adversely affect the
business, business prospects, financial condition, results of
operations, or properties of the Company or SFL.
(j) At all times during the offering Period, the Company and SFL each will
have title to all properties and assets described in the Prospectus as
being owned by it, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Prospectus or
which are not material to its business. At all times during the
Offering Period, the Company and SFL each will have valid, existing
and enforceable leases to the properties and equipment described in
the Prospectus as being leased by it, with such exceptions as are not
material and do not materially interfere with the uses made, and
proposed to be made, of such properties by the Company or SFL.
(k) The Company and SFL have each filed all federal and state income tax
returns which are required to be filed by it and has paid all taxes
shown on such returns and on all assessments received by it to the
extent such taxes have become due. To the best of its knowledge, all
taxes with respect to which the Company or SFL is obligated have been
paid or adequate accruals have been established to cover any such
unpaid taxes.
(l) Each of the Company and SFL is not, and at all times during the
Offering Period will not be, in violation of its articles of
incorporation, bylaws or agreement of limited partnership or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness or in any contract, indenture, mortgage, loan
agreement or other agreement or instrument to which it is a party or
by which it or any of its properties is bound, and each of the Company
and SFL is not, and at all times during the Offering Period will not
be, in violation of any law, order, rule, regulation, writ, injunction
or decree of any government, governmental instrumentality or court,
domestic or foreign, of which it has knowledge. Neither the Company
nor SFL, nor any employee or agent thereof, has made any payment of
funds of the Company or SFL or received or retained any funds in
violation of any law, rule or regulation which payment, receipt or
retention of funds is not fully disclosed in the Prospectus.
(m) At all times during the Offering Period, there will be no document or
contract of the character required to be described in the Prospectus
which is not described as required, and the descriptions in the
Prospectus are accurate and complete and fairly present the
information required to be shown.
(n) No statement, representation, warranty or covenant made by the Company
or SFL in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Agent was or will
be, when made, inaccurate, untrue or incorrect in any material
respect.
(o) The Company has full right, power and authority, for itself and on
behalf of SFL, to enter into this Agreement and this Agreement has
been duly authorized, executed and delivered by the Company and will
be, upon acceptance by the Agent, a valid and binding agreement of the
Company and SFL enforceable in accordance with its terms. The
performance of this Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of any of
the terms or provision of, or constitute a default under the articles
of
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incorporation or the bylaws of the Company, the limited partnership
agreement of SFL, or any obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence or
indebtedness or in any contract, indenture, mortgage, loan agreement
or other agreement or instrument to which the Company or SFL or any of
their respective subsidiaries is a party or by which the Company or
SFL or any of their respective subsidiaries or any of their respective
properties is bound, or any law, order, rule, regulation, writ,
injunction or decree of any government, governmental instrumentality
or court, domestic or foreign, and will not result in the creation or
imposition of any lien, charge claim or encumbrance upon any property
or asset of the Company or SFL. No consent, approval, authorization
or order of any government, governmental instrumentality or court is
required in connection with the execution of this Agreement or the
consummation of the transactions contemplated by this Agreement except
such as may be required by the NASD or by state regulatory authorities
under state securities or blue sky laws in connection with the
distribution of the Shares or in connection with the Agent's services
hereunder.
(p) For purposes of the Agent's obligation to file certain documents and
make certain representations to the NASD in connection with the
Offering: (i) neither the Company nor SFL have placed any securities
within the last eighteen months; (ii) there have been no material
dealings within the last twelve months between the Company or SFL and
any NASD member or any person related to or associated with any such
member; (iii) except as contemplated by this Agreement, no financial
or management consulting contracts are outstanding with any other
person; (iv) there has been no intermediary between the Agent and the
Company in connection with the Offering and (other than BSC) no person
is being compensated in any manner for providing such service.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE AGENT. The Agent
represents and warrants to, and agrees with the Company that:
(a) The Agent and all of its agents and representative have or will have
all required licenses and registrations to perform the Agent's
obligations under this Agreement, and such licenses and registrations
will remain in effect during the term of this Agreement.
(b) Any and all information furnished to the Company by the Agent in
writing expressly for use in the Prospectus will not contain any
untrue statement of material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) All checks and funds received by the Agent with respect to the
subscription price from prospective purchasers in the Offering shall
be made payable to the escrow agent and transmitted directly to the
escrow agent by noon of the next business day after receipt by the
Agent until the minimum offering of $1,000,000 has been obtained. If
the Offering is terminated prior to the end of the Offering Period by
the Company, then subscription funds received after any such
termination shall be promptly returned to the prospective purchasers.
(d) The Agent will deliver to the Company the original copies of all
subscription documents of prospective purchasers received by the Agent
in the Offering, and the Agent will promptly inform the Company of any
facts which come to the Agent's attention which would cause a
reasonable person to believe that such subscription documents contain
any material misstatement or omission.
5. COVENANTS OF THE COMPANY. The Company further agrees with and covenants to
the Agent as follows:
(a) To comply with the "Blue Sky" and other securities laws and
regulations of each state in which subscriptions are solicited in the
Offering and to assist the Agent in any necessary registration or
filings that may be required of the Agent with respect to the
Offering, in the states mutually agreed upon by the Agent and the
Company, with any costs of such registrations or filings incurred by
the Agent to be borne by the Company at its sole expense. The Company
will advise
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the Agent promptly of the issuance by any state regulatory authority
of any stop order or other order suspending the registrations or
exemptions therefrom of the Prospectus or of the institution of any
proceedings for that purpose, will use its best efforts to prevent
the issuance of any stop order or other such order, and should a stop
order or other such order be issued, to obtain as soon as possible
the lifting thereof.
(b) To furnish the Agent with such numbers of printed copies of the
Prospectus, with all amendments, supplements and exhibits thereto,
together with subscription materials, as the Agent may reasonable
request, and similarly, to furnish the Agent and others designated by
the Agent with as many copies of additional sales literature or other
materials approved by the Company for use in connection with the
Offering as the Agent may reasonably request.
(c) Promptly to furnish such information and execute and file such
documents as may be necessary for SFL to offer and sell the Notes in
full compliance with applicable state and federal statutes,
regulations and policy statements.
(d) To advise the Agent promptly if any event known to the Company shall
have occurred as a result of which the Prospectus in its then current
form (including any amendments or supplements thereto) would include
an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, no misleading.
(e) To utilize or furnish no sales literature in connection with the
Offering, other than the Prospectus, unless such other sales
literature has been approved by the SEC and the NASD, if necessary,
and furnished to the Agent at least ten (10) days prior to its first
use and the Agent has failed to object to the contents of, or the
proposed use of, such other sales literature.
6. CONDITIONS OF THE AGENT'S OBLIGATIONS. The Agent's obligation to effect
the transactions contemplated by this Agreement shall be subject to the
continuing accuracy throughout the Offering Period of the representations,
warranties and agreements of the Company, the performance by the Company of
all of its obligations under this Agreement, and the following further
terms and conditions:
(a) At the Effective Date, the Agent shall have received the opinion of
Buchalter, Nemer, Fields & Younger, counsel for the Company, dated as
of the Effective Date, to the effect that:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida.
(ii) SFL is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Florida.
(iii) the Notes to be sold by SFL have been duly authorized by all
requisite action of the Company and SFL and will be, upon
issuance and delivery against payment therefor in accordance
with the terms of this Agreement, validly issued in due and
proper form (such opinion may be given in reliance on the
opinion of Xxxxx, Storey & Xxxxxxxx, special counsel to the
Company and SFL).
(iv) the amounts, terms and designations of the Notes conform as to
legal matters in all material respects to the description
thereof contained in the Registration Statement under the
caption "Description of the Notes".
(v) this Agreement has been duly authorized, executed and delivered
by the Company on behalf of itself and SFL and, when so
executed and delivered, constitutes the legal, valid
6
and binding obligation of the Company and SFL, enforceable
against the Company and SFL (such opinion may be based on an
assumption that the governing law applicable to the Agreement
is substantially similar to California law).
(vi) the execution and delivery by the Company of this Agreement
does not, and if the Company and SFL were now to perform their
obligations under this Agreement such performance would not,
result in any: (1) violation of the Company's articles or
incorporation or bylaws; (2) violation of SFL's agreement of
limited partnership; (3) violation of any existing federal or
state constitution, statute, regulation, rule, order, or law to
which either the Company or SFL or their respective assets are
subject; (3) breach of or default under any Material
Agreements; (4) creation or imposition of a contractual lien or
security interest in, on or against the assets of the Company
or SFL under any Material Agreements; or (5) violation of any
judicial or administrative decree, writ, judgment or order to
which, to our knowledge, the Company or SFL or their respective
assets are subject.
(vi) to the knowledge of such counsel, each of the Company and SFL
has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and
other governmental authorities, all self-regulatory
organizations, all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its
business in the manner described in the Registration Statement,
except to the extent that the failure to obtain or file would
not have a material adverse effect on the Company or SFL.
(vii) to the knowledge of such counsel, no authorization, consent,
approval of or qualification with any federal or state
governmental authority is required for the execution, delivery
or performance by the Company or SFL of this Agreement, except
such as have been previously made or obtained, in connection
with the distribution of the Notes by the Agent, and except
those which, if not made or obtained, will not, individually or
in the aggregate, have a material adverse effect on the Company
or SFL.
(viii) to such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which either the Company
or SFL is a party or to which any of the properties of the
Company or SFL is subject that are not fairly summarized in all
material respects in the Registration Statement.
(ix) to such counsel's knowledge, after due inquiry, all contracts,
indentures, mortgages, loan agreements, leases or other
documents to which either the Company or SFL is a party or to
which its business or properties are subject are fairly
summarized in all material respects in the Registration
Statement; and
(x) after due inquiry, such counsel does not know of any pending or
threatened proceeding relating to the revocation or
modification of any consent, authorization, approval, order,
certificate or permit necessary to the conduct of the business
of the Company or SFL.
As to questions of fact material to such opinion, counsel may rely on
(without independent verification of the accuracy or completeness
thereof), the representations and warranties of the Company or SFL
contained in this Agreement as well as the Material Agreements. The
term "Material Agreement," for purposes of such opinion, shall mean
each of the agreements which has been filed with the Securities and
Exchange Commission as an exhibit to the Registration Statement of
which the Prospectus is filed as part thereof. Counsel shall also
provide a letter to the effect that nothing has come to the attention
of such counsel to cause such counsel to believe that (except for
financial statements, projections, schedules and other financial and
statistical information included or incorporated by reference in the
Registration Statement as to which such counsel need not express any
opinion) the Registration Statement contained any untrue statement
7
of a material fact or omitted 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, or
that the Registration Statement as of the Closing Date, contained any
untrue statement of a material fact or omitted 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.
(b) At the Effective Date, the Agent shall receive the opinion of Xxxxx,
Storey & Xxxxxxxx, P.A., special counsel to the Company and SFL, dated
as of the Effective Date, to the effect that:
(i) The Notes are enforceable obligations of SFL.
(ii) The Notes to be delivered have been duly authorized by all
requisite action of the Company and SFL and will be, upon
issuance and delivery against payment therefor in accordance
with the terms of this Agreement, validly issued in due and
proper form.
As to questions of fact material to such opinion, counsel may rely on
(without independent verification of the accuracy or completeness
thereof), the representations and warranties of the Company contained
in this Agreement as well as the Material Agreements. The term
"Material Agreement", as used herein, shall mean each of the
agreements which has been filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement of which the
Prospectus is filed as part thereof.
(c) On the Effective Date, the Agent shall have received from the
President of the Company a letter dated as of the Effective Date, in
form and substance satisfactory to the Agent in all respects,
concerning the accuracy, to his best knowledge and belief, of the
financial information included in the Prospectus.
(d) At the Effective Date, there shall be furnished to the Agent a
certificate, dated as of the Effective Date, signed by the President
and Secretary of the Company (collectively the "Officers") in form and
substance satisfactory to the Agent (the "Certificate") to the effect
that, to their best knowledge and belief:
(i) The Officers of the Company have carefully examined the
Prospectus, and as of the date of such Certificate, the
statements in the Prospectus are true and correct, and the
Prospectus does not misstate or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not untrue or misleading.
(ii) The conditions to the performance of the Agent's obligations
under this Agreement have been complied with.
(iii) Each of the representations and warranties of the Company
contained in this Agreement was when originally made and is as
of the date of such Certificate true and correct.
(iv) No order from any regulatory body has been issued and no
proceedings have been instituted, or to the knowledge of such
Officers contemplated, to prevent the consummation of the
Offering.
7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Agent, its officers,
directors, counsel, representatives and persons who control the Agent
within the meaning of the Securities Exchange Act of 1934, from and
against all losses, claims, damages and liabilities, joint and
several, to which any of the aforesaid parties, including the Agent
(collectively, the "Agent Parties"), may become subject, under federal
or state securities laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon: (I) any untrue
8
statement or alleged untrue statement of a material fact contained in
the Prospectus, or in any Blue Sky application or other document
executed by the Company or on its behalf for the purpose of qualifying
any or all of the Notes for sale under the securities laws of any
jurisdiction, or based upon written information furnished by the
Company under the securities laws thereof (any such application,
document, or omission to state in the Prospectus, or in any Blue Sky
Application, 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. The Company
will further reimburse the Agent Parties, and each and every one of
them, for any legal or other expenses reasonably incurred by any one
or more of the Agent Parties in connection with investigating and
defending such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any case to the
extent that the subject loss, claim, damage or liability arises out
of, or is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and
unconformity with written information furnished to the Company by the
Agent specifically for use in the preparation of the subject
Prospectus, Blue Sky Application, or any amendment or supplement
thereto. The indemnity provided for in this Section 7(a) will be in
addition to any liability which the Company may otherwise have.
(b) The Agent will indemnify and hold harmless the Company, its officers,
directors, counsel, representatives and persons who control the
Company which the meaning of the Securities Exchange Act of 1934, from
and against all losses, claims, damages and liabilities, joint and
several, to which any of the aforesaid parties, including the Company
(collectively, the "Company Parties"), may become subject, under
federal or state securities laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon: (I) any untrue statement of material fact
contained in the Prospects, any Blue Sky Application, or any amendment
or supplement thereto; (ii) the omission to state in the Prospectus,
any Blue Sky Application, or any amendment or supplement to any of the
foregoing, a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, in the case
of Sections (7)(b)(i) and (7)(b)(ii) to the extent, but only to the
extent, that such untrue statement or omission was made in reliance
upon or in conformity with written information furnished to the
Company by the Agent specifically for use with reference to the Agent
in preparation of the Prospectus, any Blue Sky Application, or any
supplement or amendment thereto; or (iii) arising out of any
misrepresentation by the Agent in this Agreement or any breach of
warranty by the Agent with respect to this Agreement. The Agent will
further reimburse the Company Parties for legal or other reasonably
incurred by the Company Parties in connection with investigating or
defending any loss, claim, damage, liability or action under this
Section (7)(b). The indemnification provided for in this Section
(7)(b) shall be in addition to any liability which the Agent may
otherwise have.
(c) Promptly after receipt by an indemnified party under Section (7)(a) or
&7)(b) above notice of commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such Section, notify the indemnifying party
in writing of the commencement of the action; but the omission so to
notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise and under such
Section. In case any such action shall be brought against any
indemnified person, then it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein, and, to extent it shall wish, jointly with any
other indemnifying party similarly notified, the indemnified party may
assume the defense thereof, with counsel satisfactory to such
indemnified party ( who may also be counsel to the indemnifying party
only if the representation of both parties does not constitute a
conflict ) and after notice from the indemnifying party shall not be
liable to such indemnified party under such Section for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable cost of investigation.
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8. SURVIVAL CLAUSE. The respective indemnities, agreements ( including,
without limitation, the agreements set forth in Section 7 hereof ),
representations, warranties and other statements of the Company and the
Agent as set forth in this Agreement, shall remain in full force and
effect, regardless of any investigation ( or any statement as to the
results thereof ) made by or on behalf of the Agent, any officer or
director of the Agent, or counsel therefor. Or the Company or any officer
or director of the Company, or counsel therefor, and shall survive any
termination of this Agreement and the receipt of any payment of the Notes.
9. NOTICES. All notices under this Agreement shall be in writing and if sent
to the Agent shall be mailed, delivered or telegraphed to the Agent at the
address first provided above, and if sent to the Company shall be mailed or
delivered to the Company at its present headquarters address, 000 Xxxxxxx
Xxxx., Xxxxx 000, Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
President. Any notice shall be deemed to have been given when it is
received by the party to whom it is addressed.
10. GOVERNING LAW. Except to the extent governed by preemptive federal law,
this Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Georgia.
11. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
SENTINEL ACCEPTANCE CORPORATION
Xxxxxxxx X. Xxxxxxxxxxxxx
President
ACCEPTED AND AGREED TO this _________ day of March, 1998
XXXXXXXXX, XXXXXX & XXXXX, INC.
_________________________________
Xxxxxx X. Xxxxxxxxx, President
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