PLACEMENT AGENT AGREEMENT
December 12, 2005
Xxxxxxx Xxxxxx Xxxxxx Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. SiriCOMM, Inc., a Delaware corporation (the
"Company"), proposes to sell up to 4,700,000 units (the "Units"), each Unit
consisting of (i) one share of common stock of the Company, $0.001 par value per
share (the "Common Stock") and (ii) redeemable Common Stock purchase warrants
(the "Warrants"), each entitling the holder thereof to purchase one share of
Common Stock at $1.50 per share. The purchase price of the Units shall be $1.15
per Unit (the "Offering Price"). The securities comprising the Units shall at
times be referred to as the "Securities" herein.
2. Representations and Warranties of the Company. The Company
represents, warrants, and agrees that:
(i) The representations and warranties of the Company set
forth in Section 3 of each of the Subscription Agreements (as defined
below) are true and correct.
(ii) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware,
is duly qualified to do business as a foreign corporation and in good
standing in the State of Missouri, and has all requisite right, power,
and authority to own or lease its properties, to conduct its business
as described in the Exchange Act Documents (as defined in the
Subscription Agreements), and to execute, deliver, and perform this
Agreement, the Subscription Agreements between the Company and the
purchasers of the Units in the form attached as Exhibit A hereto (the
"Subscription Agreements"), the Registration Rights Agreement in the
form attached as Exhibit B hereto (the "Registration Rights
Agreement"), the Escrow Agreement among the Company, you, and Sterling
Bank (the "Escrow Agent") in the form attached as Exhibit C hereto (the
"Escrow Agreement" and together with the Subscription Agreements and
the Registration Rights Agreement, the "Related Agreements"), to issue
and sell the Units, and to carry out the provisions of this Agreement
and the Related Agreements and to carry on its business as presently
conducted. The Company is duly qualified to do business and in good
standing as a foreign corporation in all other jurisdictions in which
its ownership or leasing of properties, or the conduct of its business
requires or may require such qualification except where the failure to
be so qualified would not have a Material Adverse Effect (as defined in
the Subscription Agreements). The Company has complied in all material
respects with all material laws, rules, regulations, applicable to the
Company's business, operations, properties, assets, products, and
services, and the Company is in possession of and operating in
compliance with all material permits, licenses, and other
authorization, required to conduct its business as currently conducted.
(iii) All action required to be taken by the Company necessary
for the authorization of this Agreement and the Related Agreements, the
performance of all obligations of the Company hereunder and thereunder
at the Closing, and as a condition to the due and proper authorization,
issuance, sale, and delivery of the Units to subscribers therefor in
accordance with the terms of this Agreement has been, or prior to the
Closing Date will have been, taken.
(iv) Except as contemplated by this Agreement, or as described
in the Exchange Act Documents or the PPM (as defined in the
Subscription Agreements), (a) there is no commitment by the Company to
issue any shares of capital stock, subscriptions, warrants, options,
convertible securities, or other similar rights to purchase or receive
Company securities or to distribute to the holders of any of its equity
securities any evidence of indebtedness, cash, or other assets, (b) the
Company is under no obligation (contingent or otherwise) to purchase,
redeem, or otherwise acquire any of its equity or debt securities or
any interest therein, and (c) to the Company's knowledge there are no
voting trusts or similar agreements, shareholders' agreements, pledge
agreements, buy-sell agreements, rights of first refusal, preemptive
rights, or proxies relating to any securities of the Company. Except as
set forth in the Exchange Act Documents or filings with the Commission
made by third parties pursuant to Schedule 13D or 13G or Form 3 or 4,
and to the knowledge of the Company, no person holds of record or
beneficially, 5% or more of the outstanding shares of the capital stock
of the Company. All outstanding securities of the Company were issued
in compliance with applicable federal and state securities laws.
(v) The Company is not in violation of its certificate of
incorporation or by-laws, or in default, or with the giving of notice
or lapse of time or both, would be in default, in the performance of
any material obligation, agreement, or condition contained in any
lease, license, material contract, indenture, or loan agreement or in
any bond, debenture, note, or any other evidence of indebtedness,
except for such defaults as would not have a Material Adverse Effect.
The execution, delivery, and performance of this Agreement and the
Related Agreements, the incurrence of the obligations herein, the
issuance, sale, and delivery of the Units, and the consummation of the
transactions contemplated herein, have been duly authorized by all
requisite corporate action on the part of the Company and (a) do not
and will not conflict with the Company's certificate of incorporation
or by-laws, (b) do not and will not, with or without the passage of
time or the giving of notice, result in the breach of, or constitute a
default, cause the acceleration of performance, or require any consent
under, or result in the creation of any lien, charge or encumbrance
upon any property assets of the Company pursuant to, any material loan
agreement, mortgage, deed of trust, indenture, or other instrument or
agreement to which the Company is a party or by which the Company or
its properties are bound, except such consents as have been obtained as
of the date hereof or to the extent that the same have been, or prior
to the Closing Date will be, waived or cured, and as may be required in
connection with having securities listed on the NASD OTC Bulletin
Board, that the Company undertakes to obtain as promptly as
practicable, or (c) do not and will not result in the violation of any
law, statute, order, rule, administrative regulation, or decree of any
court, or governmental agency or body having jurisdiction over the
Company or its properties.
(vi) Except as disclosed in the Exchange Act Documents, there
are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, the Units
pursuant to the Company's certificate of incorporation, by-laws, or any
agreement or other instrument to which the Company is a party. The
issuance of the Units is not subject to any preemptive right of any
shareholder of the Company or to any right of first refusal or other
right in favor of any person.
(vii) This Agreement has been duly executed and delivered by
or on behalf of the Company and constitutes a legal, valid, and binding
obligation of the Company enforceable in accordance with its terms,
except to the extent that its enforceability is limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium, or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally, and (b) laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies
and except as enforceability of the indemnity and contribution
provisions contained in Section 7 may be limited by applicable law or
principles of public policy.
(viii) The Escrow Agreement has been duly executed and
delivered by or on behalf of the Company and constitutes a legal,
valid, and binding obligation of the Company enforceable in accordance
with its terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium, or other
laws of general application relating to or affecting enforcement of
creditors' rights generally and (b) laws relating to the availability
of specific performance, injunctive relief, or other equitable
remedies.
(ix) Except as would not have a Material Adverse Effect, the
Company has filed, or caused to be filed, on a timely basis, all tax
returns (including payroll, unemployment, and other taxes related to
its employees and independent contractors) required to be filed with
any Governmental Body and has paid or caused to be paid all taxes,
levies, assessments, tariffs, duties or other fees imposed, assessed,
or collected by any federal, state, municipal, or other governmental
department, commission, board, bureau, agency, authority or
instrumentality, domestic or foreign (each, a "Governmental Body"),
that have become due and payable pursuant to those tax returns or
otherwise except taxes being disputed by the Company in good faith or
with respect to which the Company has set aside sufficient reserves and
that are not delinquent. No deficiency assessment with respect to or
proposed adjustment of any of the Company's Federal, state, municipal,
or local tax returns has occurred or is threatened. There has been no
tax lien imposed by any Governmental Body outstanding against the
Company's assets or properties, except the lien for current taxes not
yet due. The charges, accruals, and reserves on the books of the
Company with respect to taxes for all fiscal periods are adequate, in
the opinion of the Company, and the Company does not know of any actual
or proposed tax assessment for any fiscal period or of any basis
therefor against which adequate reserves have not been set up. The
Company has not been advised that any Federal income tax return of the
Company has been, or will be, examined or audited by the Internal
Revenue Service.
(x) The Common Stock is registered pursuant to Section 12(b)
of the Securities Exchange Act of 1934, amended (the "Exchange Act")
and is quoted with the symbol "SIRC.OB" on the NASD OTC Bulletin Board.
(xi) The Company has not during the past six months offered or
sold any security by or for the Company that is of the same or a
similar class as the Units, other than offers of securities made solely
to accredited investors or otherwise under an employee benefit plan as
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Act"), securities issued in connection with acquisitions, or other
securities that will not invalidate the exemption from registration
relied on to offer and sell the Units.
(xii) Neither the Company nor any of its subsidiaries,
executive officers or directors is or has been subject to any order,
judgment, or decree of any court of competent jurisdiction temporarily,
preliminarily, or permanently enjoining such person for failure to
comply with Rule 503 under Regulation D.
(xiii) (i) The execution, delivery, and performance by the
Company of this Agreement and the Related Agreements and (ii) the offer
and sale of the Units require no consent of, action by or in respect
of, or filing with, any person or Governmental Body other than those
consents that have been obtained and filings that have been made
pursuant to applicable state securities laws and post-sale filings
pursuant to applicable state and federal securities laws, which the
Company undertakes to file within the applicable time periods.
(xiv) There are no brokers, representatives or other persons
who have an interest in commissions or compensation payable by the
Company in connection with the transactions contemplated hereby other
than you.
3. Representations and Warranties of the Placement Agent. You represent
and warrant to, and agree with, the Company that:
(i) You have been duly organized and are validly existing and
in good standing as a corporation under the laws of the State of Texas,
with power and authority (corporate and other) to perform your
obligations under this Agreement and the Escrow Agreement; you are a
broker-dealer registered and in good standing under the Exchange Act
and under the securities or Blue Sky laws of each state in which the
Units are being offered or sold by you, and you are a member in good
standing of the National Association of Securities Dealers, Inc.
("NASD"); you are in possession of and operating in compliance with all
authorizations, licenses, permits, consents, certificates, and orders
required for the performance of your duties under this Agreement and
the Escrow Agreement, and your performance of your duties hereunder and
thereunder will be in compliance with all applicable laws, including
state securities and Blue Sky laws.
(ii) There are no legal or governmental proceedings pending to
which you are a party or of which any of your properties is the subject
or, to your knowledge, threatened, that, if determined adversely to
you, would individually or in the aggregate materially and adversely
affect your ability to perform your obligations under this Agreement or
the Escrow Agreement.
(iii) No consent, approval, authorization or order of any
court or governmental authority or agency is required for the
performance by you of your obligations under this Agreement, except
such as may be required by the NASD or under Regulation D or state
securities or Blue Sky laws.
(iv) This Agreement has been duly and validly executed and
delivered by or on behalf of you and constitutes a legal, valid, and
binding obligation of you enforceable in accordance with its terms,
except to the extent that its enforceability is limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium, or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally, and (b) laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies
and except as enforceability of the indemnity and contribution
provisions contained in Section 7 may be limited by applicable law or
principles of public policy.
(v) The Escrow Agreement has been duly and validly executed
and delivered by or on behalf of you and constitutes a legal, valid,
and binding obligation of you enforceable in accordance with its terms,
except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium, or other laws of
general application relating to or affecting enforcement of creditors'
rights generally and (b) laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
4. Offering and Sale of the Units. (a) On the basis of the
representations, warranties, and covenants herein contained, but subject to the
terms and upon the conditions herein set forth, you are hereby appointed
placement agent of the Company on an exclusive basis during the term herein
specified (the "Offering Period") for the purpose of finding subscribers for the
Units on a best-efforts basis for the account of the Company at the Offering
Price through a private offering (the "Offering") to an unlimited number of
"accredited investors" (as such term is defined in Rule 501 of Regulation D)
("Accredited Investors") pursuant to and in accordance with the Act. Subject to
the performance by the Company of all its obligations to be performed hereunder,
and to the completeness and accuracy of all the representations and warranties
contained herein, you hereby accept such agency and agree on the terms and
conditions herein set forth to use your best efforts during the Offering Period
to find subscribers for Units at the Offering Price. Your agency hereunder,
which is terminable as provided in Section 11, shall terminate at 11:59 p.m.,
New York time, on January 13, 2006; provided, however, that such termination
date (the "Termination Date") may be extended by mutual written agreement of the
parties until February 28, 2006.
(b) Each Investor desiring to purchase Units will be required to: (i)
complete, execute, and deliver to you an executed copy of (a) a Subscription
Agreement between such Investor and the Company, and (b) an Investor
Questionnaire, in the form attached as Exhibit D hereto, and (ii) deliver to the
Escrow Agent payment for such subscription in the form of a check payable to the
order of "SiriCOMM, Inc. - Escrow Account" or a wire transfer of immediately
available funds in the amount that such Investor desires to purchase as provided
in the Escrow Agreement or as otherwise directed by you. Any payment you receive
that does not conform to this requirement will be returned to an Investor by the
end of the next business day following receipt. In the event funds are received
by you, you shall hold all such Subscription Agreements and Investor
Questionnaires for safekeeping and immediately forward all funds delivered to
you to the Escrow Agent. The Escrow Agent, upon receipt of such funds, will hold
the funds in an escrow account pursuant to the Escrow Agreement. You shall
promptly forward each executed Subscription Agreement received to the Company
for acceptance or rejection together with a schedule setting forth the name and
address of each subscriber and the amount received from each subscriber. The
Company shall notify you of such acceptance or rejection within ten days of
receipt of a Subscription Agreement.
(c) In the event that acceptable subscriptions for $2,300,000 in Units
at the Offering Price (the "Minimum Investment") shall not have been received
and accepted by the Company by the Termination Date, all funds received from
subscribers (if any) shall be returned in full, and your agency and this
Agreement shall terminate without obligation on your part or on the part of the
Company.
(d) If, by the Termination Date or such earlier time as may be agreed
upon by you and the Company, you have received subscriptions for the Minimum
Investment and such subscriptions have been accepted by the Company (in its sole
discretion) and the other conditions to Closing the Offering of Units have been
satisfied, you shall promptly notify the Company in writing of the aggregate
amount of Units for which you have received subscriptions (the "Notice Date").
Payment of the purchase price for the Units for which you have found
subscribers, and delivery, with respect to each subscriber for Units, of a copy
of a Subscription Agreement signed by such subscriber (the "Closing"), shall
then be made at such place and time as shall be agreed upon between you and the
Company, no later than the fifth full business day after the Notice Date (the
"Closing Date").
(e) As compensation for your services, the Company shall pay you a cash
commission of 5% of the purchase price of each Unit purchased at the Closing and
an advisory fee equal to 2% of the purchase price of each Unit purchased at the
Closing with respect to subscriptions received by you as to which the payments
and deliveries provided for in this Section 4 are made at the Closing Date. Such
commission and advisory fee shall be paid to you on the Closing Date by bank
wire transfer payable in immediately available funds. In addition, the Company
agrees to reimburse you for your reasonable expenses in accordance with Section
6.
(f) Neither you, the Company, nor any Additional Agent (as hereinafter
defined) shall, directly or indirectly, pay or award any finder's fees,
commissions or other compensation to any person engaged by a potential investor
for investment advice as an inducement to such advisor to advise the purchase of
the Units; provided, however, that normal sales commissions payable to a
registered broker-dealer or other properly licensed person for selling the Units
shall not be prohibited hereby.
(g) You will prepare and file such statements and reports as are or may
be required to enable the Units to be qualified for sale under the securities
laws of such jurisdictions as you may designate.
(h) As additional compensation, the Company will issue to you on the
Closing Date a Common Stock purchase warrant (the "Placement Agent Warrant") in
substantially the form attached hereto as Exhibit E granting you the right to
purchase from the Company for a period commencing on the Closing Date and ending
five years after the Closing Date, 233,755 shares of Common Stock at a per share
purchase price equal to the Offering Price.
(i) In connection with the Offering you will, to the extent within your
control, conduct the Offering in accordance with the applicable provisions of
the Act and Regulation D so as to preserve for the Company the exemption
provided by Rule 506 of Regulation D. You agree not to offer or sell the Units
by means of (a) any means of general solicitation, including any advertisement,
article, notice, or other communication published in any newspaper, magazine, or
similar media or broadcast over television or radio or (b) any seminar or
meeting, whose attendees have been invited by any general solicitation or
general advertising. Prior to the sale of any of the Units, you will have
reasonable grounds to believe, and in fact believe, that each subscriber for
Units is an Accredited Investor. You agree not to disclose any material
nonpublic information regarding the Company to any subscriber except as such
disclosure may be permitted pursuant to Regulation FD and is agreed to in
advance by the Company.
(j) In connection with the performance of your obligations under this
Agreement, you may engage, for the account of the Company, the services of one
or more broker-dealers ("Additional Agents"), who are members of the NASD and
who are acceptable to the Company, and, as compensation for their services,
shall pay to such Additional Agents an amount to be negotiated between you and
such Additional Agents. Such amount will be paid to the Additional Agents by you
only out of the commissions and fees received by you in respect of sales of
Units as described in paragraph (e) of this Section 4, and the Company shall
have no obligation to any Additional Agents respecting any such payment. The
arrangements, if any, between the Company, you, and any Additional Agent shall
be set forth in an Additional Agent Agreement ("Additional Agent Agreement"),
which shall provide, among other things, that such Additional Agent shall be
deemed to have agreed to the matters set forth herein as if the Additional Agent
were a signatory hereof. Nothing contained in this Agreement or in the
Additional Agent Agreement shall be deemed to constitute the Additional Agents,
if any, as your agents, and you shall not be liable to the Company in respect of
the performance by the Additional Agents, if any, of any representations,
warranties or covenants of such Additional Agents contained herein or in the
Additional Agent Agreement.
5. Covenants and Agreements of the Company. The Company covenants and
agrees with you that:
(a) Except as contemplated or described in this Agreement or in a
public disclosure made prior to the date hereof, it will not, prior to the
Closing Date, incur any material liability or obligation, direct or contingent,
or enter into any material transaction, in each case, other than in the ordinary
course of business. It will not, prior to the Closing Date, declare or pay any
dividend on the Common Stock or make any distribution on the Common Stock
payable to shareholders of record on a date prior to the Closing Date.
(b) It will cooperate with you to enable the Securities to be qualified
for sale under the securities laws of such jurisdictions as you may designate,
subject to approval by the Company, and at your request will make such
applications and furnish such information as may be required of it for that
purpose; provided, however, that you and the Company shall first determine
whether an exemption from registration other than the Uniform Limited Offering
Exemption (ULOE) or a similar exemption is available in each such jurisdiction
and the Company shall not be required to qualify to do business or to file a
general consent to service of process in any such jurisdiction. It will, from
time to time, prepare and file such statements and reports as are or may be
required to continue such qualifications in effect for so long a period as you
may reasonably request for the distribution of the Securities.
(c) It will make available to you and each purchaser of Units at a
reasonable time prior to the Closing Date the opportunity to ask questions and
receive answers concerning the terms and conditions of the Offering and to
obtain any additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy
of any information in the Exchange Act Documents or otherwise furnished by the
Company to you or any purchaser of Units; provided, however, that the Company
shall not be required to disclose any material nonpublic information to any
purchaser of Units.
(d) It will file all reports required by Regulation D with regard to
sales of the Securities and use of the proceeds therefrom; provided, however,
that you provide all relevant information to the Company in writing as to
purchasers of the Securities required for such filings.
(e) It will not offer or sell any securities of the Company that are of
the same or a similar class as the Units during the Offering Period or for a
period of six months after the Closing Date, other than those offers or sales of
securities under an employee benefit plan as defined in Rule 405 under the Act,
in connection with options, warrants, or convertible securities outstanding as
of the Closing Date, or in connection with an acquisition of assets or another
business by the Company if such offering will be integrated with the Offering of
the Units pursuant to this Agreement for purposes of the exemptions under
Regulation D, so as to invalidate the exemption from registration relied on to
offer and sell the Units.
(f) For a period of at least 18 months following the Closing Date, the
Company will maintain the registration of its Common Stock under Section 12 of
the Exchange Act so long as the Exchange Act requires it to be so registered,
will comply in all respects with its reporting and filing obligations under the
Exchange Act, and will not take any action or file any document (whether or not
permitted by the Exchange Act or the rules thereunder) to terminate or suspend
such registration or to terminate or suspend its reporting and filing
obligations under said Act unless required to do so by the Exchange Act.
(g) For a period of at least 18 months following the Closing Date, the
Company will use its commercially reasonable best efforts (i) to timely file all
reports required to be filed by the Company after the date hereof under the
Securities Act and the Exchange Act (including the reports pursuant to Section
13(a) or 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule
144) and the rules and regulations adopted by the Commission thereunder), (ii)
if the Company is not required to file reports pursuant to such sections, it
will prepare and furnish to the purchasers of Units and make publicly available
in accordance with Rule 144(c) such information as is required for the
purchasers to sell the Securities under Rule 144, and (iii) to take such further
action as any holder of Units may reasonably request, all to the extent required
from time to time to enable the purchasers to sell Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144, including causing its attorneys to issue and deliver any
appropriate legal opinion required to permit a purchaser to sell Securities
under Rule 144 upon receipt of appropriate documentation relating to such sale.
(h) No later than the fourth trading day following the Closing Date,
the Company shall file a Current Report on Form 8-K disclosing the consummation
of the transactions contemplated by this Agreement and attaching copies of the
related agreements, and disclosing all material non-public information that has
been communicated to the Investors by or on behalf of the Company in connection
with the transactions contemplated by this Agreement and the Related Agreements.
In addition, the Company shall make such other filings and notices in the manner
and time required by the Securities and Exchange Commission in connection with
the consummation of the transactions contemplated by this Agreement and the
Related Agreements.
6. Payment of Expenses. If this Agreement becomes effective and the
transactions contemplated by this Agreement are consummated, the Company will
pay (a) all reasonable expenses incident to the performance of the obligations
of the Company under this Agreement and (b) all of your reasonable out-of-pocket
expenses (including fees and disbursements of your counsel, travel, and related
expenses incurred in connection with this Agreement and the Offering) incurred
in connection with this Agreement, preparing to market, and marketing the Units,
provided, however, any single item (other than legal expenses) in excess of
$2,000 shall require the prior approval of the Company.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless you, each Additional Agent, and each person, if any,
who controls you or such Additional Agent within the meaning of the Act, against
any losses, claims, damages, liabilities, or expenses (including, unless the
Company elects to assume the defense as hereinafter provided, the reasonable
cost of investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, that (1) are based on the
ground or alleged ground that any information furnished to you by the Company or
its agents and furnished by you to purchasers of the Units includes or allegedly
includes an untrue statement of material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (2) arise out of the Company's breach
of a representation or warranty or covenant or agreement contained in this
Agreement; provided, however, that in no case is the Company to be liable with
respect to any claims made against you, such Additional Agent, or any such
controlling person unless you, such Additional Agent, or such controlling person
shall have notified the Company in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon you or such controlling person, but failure to
notify the Company of any such claim shall not relieve it from any liability
that it may have to you, such Additional Agent, or such controlling person
otherwise than on account of the indemnity agreement contained in this
paragraph. The Company will be entitled to participate at its own expense in the
defense, or if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it and reasonably
acceptable to you. In the event the Company elects to assume the defense of any
such suit and retain such counsel, you, such Additional Agent, or such
controlling person or persons, defendant or defendants in the suit, may retain
additional counsel but shall bear the fees and expenses of such counsel unless
(i) the Company shall have specifically authorized the retaining of such counsel
or (ii) the parties to such suit include you, such Additional Agent, or such
controlling person or persons, and the Company and you, such Additional Agent,
or such controlling person or persons have been advised by counsel that one or
more material legal defenses may be available to you, such Additional Agent, or
them that may not be available to the Company in which case the Company shall
not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the reasonable fees and expenses of such counsel. In no event
shall the Company be liable for the fees and expenses of more than one counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. The Company shall not be required to
indemnify any person for any settlement of any such claim effected without the
Company's consent, which shall not be unreasonably withheld. The Company shall
not, without your consent, consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof, the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation. This indemnification
obligation will be in addition to any primary liability that the Company might
otherwise have.
(b) You and each Additional Agent agree to indemnify and hold harmless
the Company, each of the Company's officers, directors, and each other person,
if any, who controls the Company within the meaning of the Act, against any
losses, claims, damages, liabilities, or expenses (including, unless you or such
Additional Agent elect to assume the defense, the reasonable cost of
investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, that (i) arise out of any
acts or omissions by you or any Additional Agent, or any purchaser of Units that
cause the offering to involve a public offering under the Act or your failure to
be properly licensed to sell the Units or (ii) arise out of your breach of a
representation or warranty or covenant or agreement contained in this Agreement;
provided, however, that in no case are you or any Additional Agent to be liable
with respect to any claims made against the Company or any such person against
whom the action is brought unless the Company or such person shall have notified
you or such Additional Agent in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Company or such person, but failure to
notify you or such Additional Agent of such claim shall not relieve you or such
Additional Agent from any liability that you or such Additional Agent may have
to the Company or such person otherwise than on account of the indemnity
agreement contained in this paragraph. You or such Additional Agent shall be
entitled to participate at each of their expense in the defense, or if you or
such Additional Agent so elect, to assume the defense of any suit brought to
enforce any such liability, but, if you or such Additional Agent elect to assume
the defense, counsel chosen by you or such Additional Agent and reasonably
acceptable to the Company shall conduct such defense. In the event that you or
such Additional Agent elect to assume the defense of any such suit and retain
such counsel, the Company, said officers and directors and any person or
persons, defendant or defendants in the suit, may retain additional counsel but
shall bear the fees and expenses of such counsel unless (i) you shall have
specifically authorized the retaining of such counsel or (ii) the parties to
such suit include you, such Additional Agent, or such controlling person or
persons, and the Company and you, such Additional Agent, or such controlling
person or persons have been advised by counsel that one or more material legal
defenses may be available to the Company that may not be available to you or
them in which case you shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the reasonable fees and expenses of such
counsel. You or such Additional Agent shall not be liable to indemnify any
person for any settlement of any such claim effected without your or such
Additional Agent's consent which consent shall not be unreasonably withheld.
This indemnification obligation will be in addition to any primary liability
that you or any Additional Agent might otherwise have.
(c) If the indemnification provided for in this Section 7 is
unavailable, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect not only the relative benefits received by the Company on
one hand and you and the Additional Agents, if any, on the other from the
offering, but also the relative fault of the Company on the one hand and you and
the Additional Agents, if any, on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities, or
expenses (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and you and the Additional Agents, if any, on the other, shall be
deemed to be in the same proportion as the total net proceeds from the Offering
(before deducting expenses) received by the Company, bear to the total selling
commissions and fees received by you. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, you, or an Additional Agent, the
party's relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and whether a party breached a
representation or warranty or covenant or agreement contained in this Agreement.
The Company and you agree that it would not be just and equitable if
contribution were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such claim. Notwithstanding the provisions of this paragraph
(c), you shall not be required to contribute any amount in excess the
commissions and fees that you receive pursuant to Section 4(d) less the amount
of any damages that you have otherwise been required to pay by reason of an
untrue or alleged untrue statement or omission or alleged omission by the
Company. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
8. Survival of Indemnities, Representations, Warranties, etc. The
respective representations and warranties of you and the Company as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of you, the Company, or any of the officers or directors of the Company
or any controlling person, and shall survive delivery of and payment for the
Units.
9. Conditions of Your Obligations. Your obligations hereunder are
subject to the accuracy in all material respects at and (except as otherwise
stated herein) as of the date hereof and at and as of the Closing Date, of the
representations and warranties made herein by the Company, to the compliance in
all material respects at and as of the Closing Date by the Company with its
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to the Closing Date and to the following additional
conditions:
(a) You shall not have stated in writing prior to the Closing Date to
the Company that any Exchange Act Document, or any amendment or supplement
thereto contains an untrue statement of fact that, in your opinion, is material,
or omits to state a fact that, in your opinion, is necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) You shall have received a certificate, dated the Closing Date, on
behalf of the Company by the Chief Executive Officer and the Chief Financial
Officer of the Company to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects at and as of
the Closing Date, and the Company has complied in all material respects
with all the agreements and satisfied in all material respects all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) Between the date of this Agreement and the Closing Date,
no litigation has been instituted or, to the knowledge of the Company,
threatened against the Company of a character required to be disclosed
in an Exchange Act Document under Item 103 of Regulation S-K that has
not been so disclosed to you; and
(iii) Between the date of this Agreement and the Closing Date,
there has not been any material adverse change in the financial
condition, business, or results of operations of the Company.
(c) The Company shall have entered into the Related Agreements.
(d) You shall have received from Xxxxxx & Xxxxxxxxx LLP, counsel to the
Company, an opinion, dated the Closing Date, with respect to such matters as you
may reasonably request.
(e) You shall have received such other documentation reasonably
requested by you to effect the transactions contemplated herein.
If any of the conditions provided for in this Section 9 shall not have
been satisfied when and as required by this Agreement, this Agreement may be
terminated by you by notifying the Company of such termination in writing at or
prior to the Closing Date, but you shall be entitled to waive any of such
conditions.
10. Effective Date. This Agreement shall become effective at 11:00
A.M., New York time, on the date hereof (the "Effective Time").
11. Termination. In the event of any termination of this Agreement
under this or any other provision of this Agreement, there shall be no liability
of any party to this Agreement to any other party, other than as provided in
Sections 6, 7, and 8 and this Section 11.
This Agreement may be terminated after the Effective Time (a) by the
Company for any reason by notice to you and (b) by you by notice to the Company
(i) if at or prior to the Closing Date trading in securities on the New York
Stock Exchange, the American Stock Exchange, or the Nasdaq Stock Market
(collectively, the "Exchanges") shall have been suspended for longer than four
consecutive hours or minimum or maximum prices shall have been established on
either such exchange or stock market, or a banking moratorium shall have been
declared by New York or United States authorities (unless such suspension is
made pending completion of the sale of the Units, at which time, such suspension
will be lifted); (ii) if at or prior to the Closing Date there shall have been a
material escalation of hostilities between the United States and any foreign
country (other than Iraq), or any other material insurrection or armed conflict
involving the United States that, in your judgment, after consultation with the
Company, makes it impracticable or inadvisable to offer or sell the Units; or
(iii) if there shall be any litigation or regulatory action, pending or
threatened against or involving the Company, that, in your judgment, makes it
impracticable or inadvisable to offer or deliver the Units on the terms
contemplated by this Agreement.
If, and only if, the Company terminates this Agreement after it becomes
effective for any reason (other than your material failure to comply with your
obligations under this Agreement or material breach of your representations and
warranties) or the Offering fails to close because of the Company's breach of
any representations or warranties contained in this Agreement or the Company's
failure to fulfill its covenants and agreements contained in this Agreement, the
Company shall pay you your actual out-of-pocket expenses incurred as provided in
Section 6.
12. Agreement Concerning Disclosure of Information. You agree to treat
confidentially any material nonpublic information that is furnished to you (or
to parties acting on your behalf) by or on behalf of the Company (the
"Information"). You agree that you will use the Information only for the
purposes related to a determination of your willingness to act as exclusive
selling agent pursuant to this Agreement, and that the Information will be kept
confidential by you and your partners, members, managers, officers, directors,
employees, agents, and other affiliates (collectively, the "Affiliates"), and
your attorneys and accountants (collectively, the "Professionals"), and that
you, such Affiliates, or Professionals will not disclose the Information to any
investor or other person; provided, however, that the Information may be
disclosed to (a) Affiliates and Professionals who need to know such Information
for the purpose of evaluating or providing services in connection with the your
and your clients' investment in the Company; provided, however, such persons are
advised of and agree to maintain the confidential nature of such information,
(b) to any federal or state regulatory agency and their employees, agents, and
attorneys (collectively, "Regulators") for the purpose of making any filings
with Regulators if disclosure of such Information is required by law (provided,
however, that you advise the Company in writing of the Information to be so
disclosed prior to such filing), (c) any other person to which the Company
consents in writing prior to any such disclosure.
In the event that you are requested or required (by oral questions,
documents, subpoena, civil investigation, demand, interrogatories, request for
information, or other similar process) to disclose to any person or entity any
information supplied to you, your Affiliates, or your Professionals in the
course of their dealings with the Company or their respective representatives,
you agree that you will provide the Company with prompt notice of such
request(s) within a reasonable time prior to such disclosure so that the Company
may seek an appropriate protective order and/or waiver of compliance with the
provisions of this Agreement. It is further agreed that, if a protective order
is not obtained, or a waiver is not granted hereunder, and you are nonetheless,
in the written opinion of counsel, compelled to disclose information concerning
the Company to any tribunal or else stand liable for contempt or suffer the
censure or penalty, you may disclose such information to such tribunal without
liability hereunder. Prior to making such disclosure, you shall deliver a
written opinion of your counsel to the Company's counsel that disclosure is
compelled by law. You will exercise your best efforts to obtain a protective
order or other reliable assurance that confidential treatment will be accorded
the Information.
13. Notices. All notices or other communications that are required or
permitted under this Agreement shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, by electronic mail, or by courier or overnight carrier, to the persons
at the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
If to the Company: SiriCOMM, Inc.
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Chairman, President and CEO
Facsimile: (000) 000-0000
e-mail: xxxx.xxxxxxx@xxxxxxxx.xxx
With a copy to:
Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
e-mail: xxxxxxxxxx@xxxxxxxx.xxx
If to you: Xxxxxxx Xxxxxx Xxxxxx Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Managing Director
Facsimile: (000) 000-0000
e-mail: xxxxxxx.xxxxxxxxx@xxxxxxxx.xxx
With a copy to:
Day, Xxxxx & Xxxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: R. Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
e-mail: xxxxxxx@xxx.xxx
or at such other address as any party shall have furnished to the other parties
in writing.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon you, and Additional Agents, the Company, and their respective
successors and legal representatives, except that neither the Company nor you
may assign or transfer any of its or your rights or obligations under this
Agreement without the prior written consent of the other. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement shall also be for the benefit of the person or persons, if any,
who control you or any Additional agents within the meaning of Section 15 of the
Act, and your and any Additional Agent's indemnities shall also be for the
benefit of each officer and director of the Company and the person or persons,
if any, who control the Company within the meaning of Section 15 of the Act.
15. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. Any judicial proceeding
brought against either of the parties to this agreement or any dispute arising
out of this Agreement or any matter related hereto shall be brought in the
courts of the State of New York, New York County or in the United States
District Court for the Southern District of New York and, by its execution and
delivery of this agreement, each party to this Agreement accepts the exclusive
jurisdiction of such courts. The foregoing consent to jurisdiction shall not be
deemed to confer rights on any person other than the parties to this Agreement.
The prevailing party in any such litigation shall be entitled to receive from
the losing party or parties all costs and expenses, including reasonable
attorney fees, incurred by the prevailing party.
[Signatures on the following page]
If the foregoing correctly sets forth our understanding please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
SIRICOMM, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
------------------------
Title: President / CEO
-----------------------
Accepted and delivered in New York, New York as of the date first above written.
XXXXXXX XXXXXX XXXXXX INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
---------------------------
Title: Managing Director
--------------------------
