EXHIBIT 10.15
ASTRATA GROUP INCORPORATED
CO-PLACEMENT AGENTS AGREEMENT
Dated: Xxxxx 0, 0000
Xxxxxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx & Xxxxxxx, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned, Astrata Group Incorporated, a Nevada corporation (the
"Company"), proposes to issue and sell a minimum of $5,000,000 of investment
units ("Units") (the "Minimum Offering") and a maximum of $10,000,000 of Units
(the "Maximum Offering"). The terms and conditions of the sale, issuance, and
rights held by the securities underlying these Units will be as set forth in
certain subscription agreements and related documents, which shall be prepared
by the Company and subject to the approval of the Co-Placement Agents (together,
with all exhibits and supplements thereto, the "Investment Documents"). The
Units, the common stock underlying the Units ("Shares"), the warrants underlying
the Units ("Warrants"), the common stock underlying the Warrants ("Warrant
Shares"), and the Placement Agent Warrants (as hereinafter defined) are referred
to collectively herein as the "Equity".
The offering of Units in the Company (the "Offering") will be conducted
on a "best efforts, all or none" basis with respect to the Minimum Offering and
on a "best efforts" basis with respect to the remainder of the Maximum Offering
in excess of the Minimum Offering. Fractional Units may be sold at the mutual
consent of the Co-Placement Agents. As used herein, including with respect to
the representations and warranties contained herein, unless the context
otherwise requires, the term "Company" shall include the Company together with
all of its direct and indirect wholly owned subsidiaries, and all
representations and warranties of the Company herein shall also be deemed made
on behalf of and with respect to each such subsidiary of the Company. This
Co-Placement Agent Agreement ("Agreement") is to confirm the arrangements with
you (the "Co-Placement Agents"), with respect to the sale of the Units by the
Co-Placement Agents as exclusive co-agents for the Company in the Offering.
The Offering will not be registered with the Securities and Exchange
Commission ("SEC") nor with any state securities authority, but rather will be
offered as a private placement pursuant to an exemption from registration under
Regulation D ("Regulation D") promulgated under Section 4(2) and Rule 506 of the
Securities Act of 1933, as amended ("Securities Act"), and available state
securities law exemptions. The Units are to be sold in the Offering only to
"accredited investors", as that term is defined in Regulation D, pursuant to the
Investment Documents.
SECTION 1. DESCRIPTION OF COMMON STOCK. The Equity shall conform in all
respects to descriptions thereof contained in the Investment Documents.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants and covenants with the Co-Placement Agents as
follows:
-1-
(a) The Investment Documents, copies of which will be delivered to the
Co-Placement Agents, will be carefully prepared to disclose all information
concerning the Company which would be material to an investment decision by a
reasonable investor. The date on which the Offering is authorized by the Company
to commence is the date of the Investment Documents and is herein called the
"Commencement Date." The time and date of each issuance of Units hereunder is
herein called the "Issuance Date" or the "Closing."
(b) The Company is duly incorporated and validly existing as a
corporation in good standing under the laws of the state of its incorporation,
having corporate power and authority to own its properties and conduct its
business and is duly qualified and in good standing in each foreign jurisdiction
where the conduct of its business so requires such qualification. No direct or
indirect rights to acquire Common Stock exist, except as have been previously
disclosed to the public or as disclosed in the Investment Documents.
(c) The unaudited financial statements of the Company for the nine
months ended November 30, 2004 and the audited financial statements of the
Company for two years ended February 28, 2004, included in the Investment
Documents (collectively, the "Financial Statements"), fairly present the
information purported to be shown therein of the Company, at the respective
dates to which they apply; and such Financial Statements have been prepared in
conformity with GAAP consistently applied throughout the periods involved and
are in accordance in all material respects with the books and records of the
Company.
(d) The assets of the Company, as shown in the Financial Statements,
are owned by the Company with good title, free and clear of all liens,
encumbrances and equities of record or otherwise, except (i) those specifically
referred to in the Investment Documents, (ii) those which do not materially
adversely affect the use or value of such assets, (iii) the lien of current
taxes not now due or which are being contested in good faith and for which
adequate reserves have been set aside and (iv) those disclosed in the Financial
Statements. The Company has the full right, power and authority to maintain and
operate its business and properties as the same are now operated or proposed to
be operated and is complying with all laws, ordinances and regulations
applicable thereto, except where the failure to so comply would not have a
material adverse effect on the Company.
(e) There are no actions, suits or proceedings at law or in equity
pending, or to the Company's knowledge threatened, against the Company before or
by any federal or state commission, regulatory body, administrative agency or
other governmental body wherein, either in any case or in the aggregate, an
unfavorable ruling, decision or finding would materially adversely affect the
business, franchise, licenses, permits, operations or financial condition of the
Company which are not disclosed in the Investment Documents.
(f) The execution and delivery by the Company of this Agreement, the
consummation and performance of the transactions herein contemplated, and
compliance with the terms of this Agreement and the Investment Documents by the
Company will not conflict with, result in a breach of, or constitute a material
default under, the Certificate or Articles of Incorporation or the bylaws of the
Company, in each case as amended, or any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is now a party or by which it
or any of its assets or properties is bound, or any law, order, rule,
regulation, writ, injunction, judgment or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its business or properties, to the extent that such conflict,
breach or default might have a material adverse effect on the Company, and its
subsidiaries as a whole, or their respective businesses, properties or financial
condition on a consolidated basis.
(g) Except as set forth in the Investment Documents, all material
licenses, permits, approval, leases, contracts and agreements referred to in the
Investment Documents (including the Financial Statements), along with all other
material licenses, permits, approvals, leases, governmental authorizations or
contracts to which the Company is a party, have been obtained and are valid and
in full force and effect and neither the Company nor, to the knowledge of the
Company, any other party is in default thereunder, and to the knowledge of the
Company, no event has occurred which with the passage of time or the giving of
notice, or both, would
-2-
constitute a default thereunder. There are no proceedings pending, or to the
knowledge of the Company threatened, seeking to cancel, terminate or limit such
licenses, approvals or permits.
(h) Except as described in the Investment Documents, the Company has
timely filed all federal, state and local tax returns required to be filed,
including without limitation, all sales tax returns, or has obtained extensions
thereof and has paid, or is contesting in good faith, all taxes shown on such
returns.
(i) The Company shall use the net proceeds from the sale of the Units
hereunder to repay the $1,500,000 bridge loan made on or about February 17,
2005, and the balance for business expansion and working capital purposes
primarily. The Company may use not more than ten (10) percent of gross proceeds
for the satisfaction of the Company's debt (other than payment of the bridge
loan and trade payables in the ordinary course of the Company's business and
prior practices, with respect to which such limit shall not apply). The Company
will not use any proceeds from the sale of the Units to redeem any Common Stock
or securities convertible or exercisable into Common Stock to settle any
litigation outstanding as of any Closing.
(j) The Investment Documents shall set forth a true and complete list
of all material patents, trademarks, trade names, copyright registrations and
applications therefor now or heretofore used or presently proposed to be used in
the conduct of the business of the Company. Except as set forth in the
Investment Documents: (i) the Company owns or possesses adequate licenses or
other valid rights to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, trade secrets, copyright registrations,
know-how and other proprietary information (collectively, "Rights") necessary to
the conduct of the business of the Company as presently being conducted; (ii)
the validity of such Rights and the title thereto of the Company has not been
questioned in any litigation to which the Company is or has been a party, nor,
to the best knowledge of the Company, is any such litigation threatened, other
than as set forth in the Investment Documents; (iii) to the best knowledge of
the Company, the conduct of the business of the Company as now conducted does
not and will not conflict with Rights of others in any way which has or might
reasonably be deemed to have a material adverse effect on the Company; and (iv)
no proceedings are pending against the Company nor, to the best knowledge of the
Company, are any proceedings threatened against the Company, alleging any
violation of Rights of any third person. The Company does not know of (X) any
use that has heretofore been or is now being made of any Rights owned by the
Company, except by the Company or by a person duly licensed by it to use the
same under an agreement described in the Investment Documents or (Y) any
material infringement of any Right owned by or licensed by or to the Company. To
the best knowledge of the Company, all Rights heretofore owned or held by any
agent, independent contractor, employee or officer of the Company or any
subsidiary thereof and used in the business of the Company in any manner have
been duly and effectively transferred to the Company. The consummation of the
transactions contemplated by this Agreement will not alter or impair the rights
and interests of the Company in any of the items referred to in this paragraph
or disclosed in the Investment Documents as it relates to intangible property
rights.
(k) All of the representations, agreements and warranties in this
Section 2 shall survive delivery of and payment for all or any part of the Units
for three years from and after such delivery and payment.
(l) The Company has no subsidiaries other than those disclosed in the
Investment Documents.
(m) All of the Company's filings with the SEC were true and correct in
all material respects upon the dates of filing thereof
SECTION 3. ISSUANCE, SALE AND DELIVERY OF THE UNITS.
(a) The Company hereby agrees to sell the Units directly through the
Co-Placement Agents on a "best efforts all-or-none" basis with respect to the
Minimum Offering, and thereafter on a "best efforts" basis with respect to the
remaining Units up to the Maximum Offering. The Offering will commence on the
date of the Investment Documents. Pending the closing of the sale of the Minimum
Offering, the proceeds of the Offering will be deposited in escrow in a
non-interest bearing account at Xxxxx Xxxx LLP ("Escrow Agent").
-3-
Unless the Minimum Offering of Units is sold, the Offering will terminate and
all funds theretofore received from the sale of the Units will be promptly
returned to the subscribers without deduction therefrom or interest thereon.
During the period of escrow, subscribers will not be entitled to a return of
their subscriptions, except as required by law. If the Minimum Offering is
completed, the remaining Units up to the amount of the Maximum Offering will be
offered on a "best efforts" basis until the first to occur of (i) the completion
of the Maximum Offering (unless increased by mutual agreement of the Company and
the Co-Placement Agents), (ii) April 15, 2005 or (iii) the termination of the
Offering by mutual agreement of the Co-Placement Agents and the Company ("Final
Closing").
(b) All checks or wire transfers for the purchase of Units shall be
deposited with the Escrow Agent in accordance with the terms of an escrow
agreement to be executed among the Company, the Co-Placement Agents, and the
Escrow Agent. Upon receipt thereof or on such scheduled Issuance Date as the
Company and the Co-Placement Agents may mutually agree after the Escrow Agent
shall receive subscriptions for the Minimum Offering, the Company shall issue
the Units and, simultaneously with the delivery of the Units, the Company, or
its counsel, shall deliver to each of the Co-Placement Agents' counsel such
opinions, documents and certificates as are provided for herein. No funds shall
be disbursed from escrow in connection with any Closing without the written
consent of both the Company and both of the Co-Placement Agents. Notwithstanding
anything contained herein to the contrary, each of the Company and the
Co-Placement Agents, in their respective sole discretion, shall have the right
to return any amount to any potential investor together with the appropriate
cancellation of any signed subscription agreements prior to consummation of such
potential investors' purchase of Units. The Company may withdraw its offer to
sell the Units at any time prior to acceptance of a subscription. No purchase
will be effective unless and until accepted by the Company and included in a
Closing.
(c) The parties hereto represent that at each Issuance Date, the
representations and warranties herein contained, and the statements contained in
all certificates theretofore or simultaneously delivered by any party to another
pursuant to this Agreement, shall be true and correct.
SECTION 4. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Co-Placement Agents that:
(a) On the Commencement Date, and on each Issuance Date, the Investment
Documents (as amended or as supplemented, if the same shall have been amended or
supplemented) will not (i) contain an untrue statement of a material fact and
will not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading and (ii) contain any material,
non-public information required to be disclosed to the general public in order
to comply with Regulation FD promulgated under the Securities Exchange Act of
1934, as amended, unless all recipients of the Investment Documents execute a
confidentiality agreement in form and substance acceptable to the Company and
the Co-Placement Agents, prior to receipt of the Investment Documents.
(b) The Company will prepare, promptly upon the reasonable request of
the Co-Placement Agents, such amendments or supplements to the Investment
Documents, in such form as in the opinion of counsel to the Co-Placement Agents
may be reasonably necessary or advisable in connection with the Offering. In
addition, if at any time prior to the last date on which Units shall be issued,
(i) an event relating to or affecting the Company shall have occurred which, in
the judgment of the Company or in the opinion of counsel for either of the
Co-Placement Agents, would cause the Investment Documents as then in effect to
include an untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (ii) it is otherwise necessary to amend or supplement the
Investment Documents, the Company shall promptly notify each Co-Placement Agent
of the occurrence and shall promptly prepare and deliver to each Co-Placement
Agent, without charge, sufficient copies of an amended or supplemented
Investment Documents, and shall use its reasonable best efforts to cause the
appropriate state securities
-4-
authorities to take any required action with regard to any amendment as may be
necessary to permit the lawful use of the Investment Documents in connection
with the Offering.
(c) The Company's counsel shall prepare and file any necessary filings,
in the reasonable opinion of Company's counsel or counsel for either of the
Co-Placement Agents, under the state securities, or so-called "blue sky" laws
and regulations (the "Blue Sky Laws") and the Company shall pay the filing fees
and all other expenses in connection with any such qualification in such
jurisdictions as the Co-Placement Agents shall collectively designate, and to
continue such qualification in effect so long as required for the purposes of
the Offering; PROVIDED, HOWEVER, that the Company shall not be required to
qualify as a foreign corporation or to file a consent to service of process in
any jurisdiction in any action other than one arising out of the offering or
sale of the Units. The Company will provide copies to each of the Co-Placement
Agents of all documents, exhibits and information filed in connection with the
qualification of the Units for sale under the Blue Sky Laws.
(d) The Company, at its own expense, will give and continue to give
such financial statements and other information to and as may be required by the
proper public bodies of the jurisdictions in which the Offering may be
qualified.
(e) The Company will pay all cash and security-based compensation and
expenses due to the Co-Placement Agents in the manner set forth in the
engagement letter dated March 2, 2005, between the Company and the Co-Placement
Agents ("Engagement Letter"). For clarification with respect to Section 4a of
the Engagement Letter, the Co-Placement Agents (or its assignees) will receive
warrants ("Placement Agent Warrants") to purchase eight (8%) of the total common
stock issued and issuable from the financing (including common stock underlying
warrants and convertible securities), exercisable at the lower of the price for
each Share or the exercise price of the Warrants. The Placement Agent Warrants
shall be exercisable at any time from the Issuance Date through the last
expiration date of any of the Warrants. The Placement Agent Warrants and the
Shares and Warrants issuable upon conversion of the Placement Agent Warrants
shall have registration, anti-dilution and other rights identical to the
Warrants and Shares included in or issuable upon sale of the Units. In the event
that any payment due to the Co-Placement Agents hereunder shall not be made when
due, interest shall accrue on the unpaid balance of such overdue payments at the
rate of twelve percent (12%) per annum until paid.
(f) [Reserved.]
(g) The Company shall not release any Offering documents or the
Investment Documents unless they are reasonably and mutually acceptable to the
Co-Placement Agents and their counsel.
(h) Except as described in the Investment Documents, all material
licenses, permits, approvals or governmental authorization necessary to permit
the Company to conduct its business will be valid on each Issuance Date, the
Company shall in all material respects be compliant therewith and there shall be
no proceedings pending, or to the knowledge of the Company threatened, seeking
to cancel, terminate, suspend or limit any such licenses, permits, approvals or
governmental authorization.
(i) At each Issuance Date, the Company shall not have failed to qualify
to do business as a foreign corporation in any jurisdiction where required,
except where failure so to qualify would not have a material adverse effect on
the Company or where any qualification is required solely as a result of
conducting business over the Internet.
(j) At the Commencement Date and at each Issuance Date, the Company
will be validly existing as a corporation in good standing under the laws of the
state of its incorporation, having corporate power and authority to own its
properties and conduct its business, and will have a capitalization as described
in the Investment Documents. Prior to the first Issuance Date, the Company shall
have outstanding and of record not more than 14.0 million fully diluted shares
of Common Stock, which includes options and warrants to
-5-
purchase not more than 2.4 million shares of Common Stock and not more than 0.4
million shares Common Stock which underlie the Convertible Debt. Following the
date of publication of the Investment Documents and prior to the final Issuance
Date, the only additional securities issued in addition to those described in
the previous sentence shall be the Equity.
(k) At each Closing, (i) the Equity will conform, in all material
respects, to all statements with regard thereto contained in the Investment
Documents, (ii) the Equity shall have been duly and validly authorized by proper
corporate authority, (iii) each portion of the Equity, when issued, exercised
and/or paid for (as applicable), or otherwise earned, each in accordance with
its terms, will be validly issued, fully paid and nonassessable and (iv) all
shares of Common Stock that comprise the Equity shall have been duly and validly
reserved for issuance. The Company shall ensure that all exercises properly
requested shall be effected promptly by the Company.
SECTION 5. INDEMNIFICATION.
(a) The Company hereby agrees to indemnify and hold harmless each of
the Co-Placement Agents, their respective directors, officers, agents,
employees, members, affiliates, counsel and each other person or entity who
controls each of the Co-Placement Agents within the meaning of Section 15 of the
Securities Act (collectively, the "Agent Indemnified Parties") from and against
any and all losses, claims, damages or liabilities (or actions in respect
thereof), joint or several, to which they or any of them may become subject
under the Securities Act or any other statute or at common law, and to reimburse
such Agent Indemnified Parties for any reasonable legal or other expense
(including the cost of any investigation and preparation) incurred by them in
connection with any litigation, whether or not resulting in any liability, but
only insofar as such losses, claims, liabilities and litigation arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact required to be stated in the Investment Documents or necessary to
make the statements therein not misleading, or omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading (including, but not
limited to, any documents deemed to be incorporated into the Investment
Documents by reference), (ii) any breach by the Company of any representation,
warranty or covenant contained herein, (iii) any matter otherwise relating to,
arising out of or in connection with the Offering or (iv) Co-Placement Agents'
service as Co-Placement Agents hereunder; PROVIDED, HOWEVER, that the indemnity
provisions contained in this subsection (a) shall not apply to (x) amounts paid
in settlement of any such litigation if such settlement is effected without the
consent of the Company (which shall not be unreasonably withheld, delayed or
denied), or (y) as to the particular Co-Placement Agent or any of its Agent
Indemnified Parties in respect of any such losses, claims, damages, liabilities
or actions (A) arising out of, or based upon any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon information furnished in writing
to the Company by such Co-Placement Agent or such Agent Indemnified Parties
specifically for use in connection with the preparation of the Investment
Documents or any amendment thereof or supplement thereto or (B) arising from the
willful misconduct or gross negligence of such Co-Placement Agent or any of its
Agent Indemnified Party.
The Company will reimburse all Agent Indemnified Parties for all reasonable
expenses (including, but not limited to, reasonable fees and disbursements of
counsel for the Agent Indemnified Parties) incurred by any such Agent
Indemnified Parties in connection with investigating, preparing and defending
any such action or claim, whether or not in connection with pending or
threatened litigation in connection with the transaction to which an Agent
Indemnified Party is a party, as such expenses are incurred or paid. Each of the
Co-Placement Agents agrees, within ten (10) business days of receipt, to notify
the Company in writing (although notice from either Co-Placement Agent shall be
deemed to be notice from both) of the receipt of written notice of the
commencement of any action against it, the other Co-Placement Agent , or against
any other Agent Indemnified Parties, in respect of which indemnity may be sought
from the Company on account of the indemnity provisions contained in this
subsection (a), but the failure to timely give such notice shall not act to
eliminate the Company's obligations hereunder except to the extent the Company
can demonstrate actual
-6-
prejudice therefrom. In case any such action shall be brought against either of
the Co-Placement Agents or any other Agent Indemnified Parties, the Company
shall be entitled to participate in (and, to the extent that it shall wish, to
direct) the defense thereof at its own expense, but such defense shall be
conducted by counsel reasonably satisfactory to each of the Co-Placement Agents
or such other Agent Indemnified Parties.
(b) The indemnity provision set forth herein, and the representations
and warranties of the Company set forth in this Agreement, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of either of the Co-Placement Agents or by or on behalf of any of
the Agent Indemnified Parties, subject to the limitations contained herein, and
shall survive the delivery of the Units, and any successor of either or both of
the Co-Placement Agents or any other Agent Indemnified Parties shall be entitled
to the benefit of the respective indemnity provisions.
(c) In order to provide for just and equitable contribution in any case
in which (i) any person entitled to indemnification under this Section 5 makes
claim for indemnification pursuant hereto but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any such
person in circumstances for which indemnification is provided under this Section
5, then and in each such case, the Company and each of the Co-Placement Agents
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after any contribution from others) in such
proportion so that both of the Co-Placement Agents is responsible for an
aggregate of eight percent (8.0%) of the gross proceeds received by the Company
on account of the sale of Units (being the Co-Placement Agents' cash
commission), and the Company is responsible for the remaining portion; provided
however, that in any such case, no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Promptly after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made
against another party (the "Contributing Party"), notify the Contributing Party
in writing of the commencement thereof, but the omission to so notify the
Contributing Party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any such action,
suit or proceeding is brought against any party and such party so notifies a
Contributing Party or his or its representative of the commencement thereof
within the aforesaid period, the Contributing Party will be entitled to
participate therein, with the notifying party and any other Contributing Party
similarly notified. Any such Contributing Party shall not be liable to any party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution without the written
consent of such Contributing Party. The contribution provisions contained in
this Section 5 are in addition to any other rights or remedies which the Company
and each of the Co-Placement Agents may have hereunder or otherwise.
Notwithstanding anything to the contrary contained herein or in the
Letter Agreement among the parties hereto and of even date herewith, if there is
a conflict in the scope of the indemnification provisions of this Section 5 and
the indemnification provisions of Schedule A of such Letter Agreement, the
broader indemnification provisions shall be applicable; PROVIDED, HOWEVER, that
the parties do not intend, by this paragraph, to increase the scope or breadth
of the indemnification provided by either such provision, but, rather, to
provide for an interpretive provision in the event of an inconsistency in the
manner in which an indemnification claim will be prosecuted or determined.
SECTION 6. EFFECTIVENESS OF AGREEMENT. This Agreement shall become
effective as of the date hereof.
-7-
SECTION 7. CONDITIONS OF THE CO-PLACEMENT AGENTS' OBLIGATIONS. Each of
the Co-Placement Agents' obligations to act as the co-agent of the Company
hereunder, and their respective obligation to use their respective best efforts
to find purchasers for the Units, shall be subject to the satisfactory
completion of their respective due diligence examination and the accuracy, as of
each Issuance Date, of the representations and warranties on the part of the
Company herein contained, to the performance by the Company of all its
agreements herein contained, to the fulfillment of or compliance by the Company
with all covenants and conditions hereof, and to the following additional
conditions:
(a) Neither of the Co-Placement Agents shall have disclosed in writing
to the Company that the Investment Documents or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of counsel
to the Co-Placement Agents, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(b) Between the date hereof and each Issuance Date, the Company shall
not have sustained any loss on account of fire, explosion, flood, accident,
calamity or other cause, of such character as shall, in the sole discretion of
each of the Co-Placement Agents, materially adversely affect its business or
property.
(c) Between the date hereof and each Issuance Date, there shall be no
litigation instituted, or to the knowledge of the Company threatened, against
the Company and there shall be no proceeding instituted or threatened against
the Company or before or by any federal or state commission, regulatory body or
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding would materially adversely affect the
business, franchises, licenses, permits, operations, prospects, financial
condition or income of the Company.
(d) During the period subsequent to the Commencement Date and prior to
each Issuance Date, the Company (i) shall have conducted its business in the
usual and ordinary manner as the same was being conducted on the Commencement
Date and (ii) the Company shall not have suffered or experienced any materially
adverse change in its financial condition or prospects.
(e) The authorization of the Units, the Placement Agent Warrants, the
Equity, the Investment Documents, and all corporate proceedings and other legal
matters incident thereto and to this Agreement shall be reasonably satisfactory
in all material respects to counsel to each of the Co-Placement Agents.
(f) The Company shall have furnished to each of the Co-Placement Agents
a reasonably acceptable opinion of its counsel dated as of each Issuance Date in
the form attached hereto as Exhibit A.
(g) The Company shall have furnished to each of the Co-Placement Agents
a certificate of the Chief Executive Officer and the Chief Financial Officer of
the Company dated as of each Issuance Date in the form attached hereto as
Exhibit B.
All the opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
to each of the Co-Placement Agents, whose approval shall not be unreasonably
withheld.
SECTION 8. TERMINATION.
(a) This Agreement may be terminated by either of the Co-Placement
Agents for their own part by notice to the Company in the event that the Company
shall have failed or been unable to comply with any of the terms, conditions or
provisions of this Agreement on the part of the Company to be performed,
complied with or fulfilled within the respective times herein provided for,
unless compliance therewith or performance
-8-
or satisfaction thereof shall have been expressly waived by such Co-Placement
Agent in writing. Termination by one Co-Placement Agent shall not be deemed
termination by both.
(b) This Agreement may be terminated by either of the Co-Placement
Agents for their own part by notice to the Company at any time if, in the sole
judgment of such Co-Placement Agent, the Offering or the sale or the payment for
or the delivery of the Units is rendered impracticable or inadvisable because
(i) additional material governmental restrictions not in force and effect on the
date hereof shall have been imposed upon trading in securities generally, or
minimum or maximum prices shall have been generally established, or trading in
securities generally on the Over-The-Counter Bulletin Board shall have been
suspended or a general banking moratorium shall have been established by federal
or New York State authorities, (ii) a war, major hostilities, terrorist or
similar activity, act of God or other calamity shall have occurred which
materially adversely affects the ability of such Co-Placement Agent to perform
its respective obligations hereunder, (iii) of a material adverse change in the
condition (financial or otherwise) of the Company, its business or business
prospects or (iv) such Co-Placement Agent, in its respective sole discretion,
shall be dissatisfied with the results of its due diligence investigations.
Termination by one Co-Placement Agent shall not be deemed termination by both.
(c) Any termination of this Agreement pursuant to this section shall be
without liability of any character (including, but not limited to, loss of
anticipated profits or consequential damages) on the part of any party hereto,
except that the Company shall remain obligated to pay the costs and expenses
provided to be paid by it specified in Section 4(e) through the date of
termination, and the Company shall be obligated to pay all losses, claims,
damages or liabilities, joint or several, payable by the Company under Section
5(a).
SECTION 9. FINDERS. The Company and the Co-Placement Agents mutually
represent that, other than (i) The Xxxxxx Group LLC, with whom the Company has a
separate consulting agreement, and (ii) Consulting For Strategic Growth 1, Ltd.,
to whom Westminster Securities Corporation may owe a fee for certain
introductory services, they know of no third party who rendered any service in
connection with the introduction of the Company to the Co-Placement Agents and
who is making a claim against anyone for a "finder's fee" or similar type of fee
in connection with the Offering, except as set forth in the Engagement Letter.
Each party hereby indemnifies the other against any claims by any person known
to it and not known to the other parties hereto, who shall claim to have
rendered services in connection with the introduction of the Company to the
Co-Placement Agents or to have such a claim and who shall make a claim for a fee
in connection therewith.
SECTION 10. CO-PLACEMENT AGENTS' REPRESENTATIONS AND WARRANTIES. Each
of the Co-Placement Agents, jointly and severally, represent and warrant to and
agree with the Company that:
(a) Each of the Co-Placement Agents is registered as a broker and a
dealer with the Securities and Exchange Commission and is a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD").
(b) Neither of the Co-Placement Agents will effect sales of the Units
in any jurisdiction unless it or its representative is duly licensed to effect
sales in such jurisdiction and the offer and sale of the Units are registered or
exempt from registration in such jurisdiction.
(c) Each of the Co-Placement Agents has duly authorized this Agreement
and this Agreement is the valid, binding and enforceable obligation of the
Co-Placement Agents.
SECTION 11. NOTICE. Except as otherwise expressly provided in this
Agreement, (a) whenever notice is required by the provisions of this Agreement
to be given to the Company, such notice shall be given in writing, addressed to
the Company at the address set forth in the Investment Documents, with a copy to
Xxxxx Xxxx LLP, 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxx, Esq. and (b)
-9-
whenever notice is required by the provisions of this Agreement to be given to
the Co-Placement Agents, such notice shall be in writing addressed to the
Co-Placement Agents at the addresses set forth above, with a copy, for
Westminster Securities Corporation, to Xxxxxxx Xxxxxxxxx LLP, 000 Xxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxx, Esq., and for
Xxxxxx & Xxxxxxx, LLC, Black & Associates, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, XX 00000, Attention: Xxxxx X. Xxxxx, Esq.
SECTION 12. MISCELLANEOUS.
(a) This Agreement is made solely for the benefit of the Co-Placement
Agents, the Company and any controlling person referred to in Section 15 of the
Securities Act, and their respective successors and authorized assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successor" or the term "successors and assigns" as used in
this Agreement shall not include any purchaser, as such, of any of the Units.
Any attempt by any party to assign any rights, duties, or obligations which may
arise under this Agreement without the prior written consent of the other
parties shall be void; however, any such consent shall not be unreasonably
withheld, delayed, or denied.
(b) The headings in this Agreement are for reference only and shall not
limit or otherwise affect any of the terms or provisions hereof.
(c) This Agreement relates solely to the Offering. The Engagement
Letter shall continue to remain in full force and effect, as supplemented
herein, and shall survive any termination of this Agreement.
(d) The provisions of this Agreement shall be deemed severable, so that
if any part, section or provision hereof shall be declared unlawful or
unenforceable, the remaining parts, sections or provisions hereof shall not be
affected thereby and shall remain in full force and effect.
(e) This Agreement shall be deemed to have been drafted jointly by the
parties hereto.
(f) Each of the Co-Placement Agents shall have the right to associate
itself with such other members of the NASD and/or foreign investment firms duly
licensed, if required, in their respective locales offering the Units only
offshore to the United States as additional agents as each of the Co-Placement
Agents may elect, in their sole discretion. Such additional agents may become
selected dealers subject to this Agreement in the sole discretion of either of
the Co-Placement Agents by signing a Selected Dealer Agreement in form
satisfactory to such Co-Placement Agent. Each Co-Placement Agent shall have the
right to share any compensation due to such Co-Placement Agent hereunder, with
such additional agents and in such amounts as such Co-Placement Agent deems fit,
in its sole judgment. In addition, such additional agents shall be afforded the
same indemnification by the Company as offered to the Co-Placement Agents
hereunder.
(g) The validity, interpretation and construction of this Agreement,
and of each part hereof, will be governed by the local laws of the State of New
York, without giving effect to its conflict of law principles or rules. In the
event of a dispute, the parties hereto agree to be bound by the arbitration
procedures of the American Arbitration Association, and that such arbitration
shall take place in the New York City metropolitan area. In actions not
involving collection by the Co-Placement Agents of compensation and/or
reimbursement expenses, the prevailing party shall be reimbursed by the
nonprevailing party for all reasonable attorney's fees and costs (including all
arbitration costs) incurred by the prevailing party in resolving such dispute.
In any action in which Co-Placement Agents seeks compensation and/or
reimbursement of expenses, the Company shall reimburse Co-Placement Agents for
all costs associated with such action (including but not limited to reasonable
attorney fees) as and when the Co-Placement Agents provides the Company with
invoices for such costs and expenses.
(h) This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which together will constitute one and the same
instrument.
-10-
(i) Westminster shall not be obligated to provide advice or perform
services to the Company that are not specifically addressed in this Agreement
and/or the Engagement Letter. The obligations of Westminster described in this
Agreement and the Engagement Letter consist solely of best efforts services to
the Company. In no event shall Westminster be required or permitted without
express authorization by this Agreement to make decisions for the Company or to
provide legal or accounting services. All final decisions with respect to acts
of the Company or its affiliates, whether or not made pursuant to or in reliance
upon information or advice furnished by Westminster hereunder, shall be those of
the Company or such affiliates, and Westminster shall under no circumstances be
liable for any expense incurred or loss suffered by the Company as a consequence
of such decisions.
(j) This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and authorized assigns. Any attempt
by either party to assign any rights, duties, or obligations which may arise
under this Agreement without the prior written consent of the other party shall
be void.
(k) This Agreement and the Engagement Letter contain the entire
agreement between the parties with respect to the subject matter hereof, and
neither party is relying on any agreement, representation, warranty, or other
understanding not expressly stated herein.
(l) The parties acknowledge that certain provisions of this Agreement
must survive any termination or expiration thereof in order to be fair and
equitable to the party to whom any promise or duty to perform is owed under such
provision prior to such termination or expiration of the Agreement. Therefore,
the parties agree that the provisions of Sections 1, 2, 3, 4, 5, 7, 8(c), 9, 10,
11, and 12 shall survive the termination or expiration of this Agreement for the
period required to meet and satisfy any obligations and promises arising therein
and thereunder
Please confirm that the foregoing correctly sets forth the Agreement
between the Co-Placement Agents and the Company.
ASTRATA GROUP INCORPORATED
By:
-----------------------------------------------------------
Xxxxxx Xxxxx, Chief Financial Officer
We hereby confirm as of the date hereof that the above letter sets
forth the agreement between the Company and us.
WESTMINSTER SECURITIES CORPORATION
By:
-----------------------------------------------------------
Xxxx X. X'Xxxx, President
XXXXXX & XXXXXXX, LLC
By:
-----------------------------------------------------------
Xxxxxx X. Xxxxx, Chief Financial Officer
-11-
EXHIBIT A
FORM OF LEGAL OPINION
FORM OF LEGAL OPINION SATISFACTORY TO CO-PLACEMENT AGENTS AND CO-PLACEMENT
AGENTS' COUNSEL WILL BE PROVIDED BY COMPANY PRIOR TO THE FIRST CLOSING.
-12-
EXHIBIT B
FORM OF OFFICER'S CERTIFICATE
[Date]
Westminster Securities Corporation
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx & Xxxxxxx, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We, the Chief Executive Officer and Chief Financial Officer of Astrata Group
Incorporated (the "Company"), in connection with the execution and delivery by
the Company of each Subscription Agreement (the "Subscription Agreements"), by
and among the Company and the investors identified on each signature page
thereto (the "Investors") as of the date above ("Closing"), do hereby certify as
follows (Capitalized terms not otherwise defined herein are defined as set forth
in the Subscription Agreements.):
(i) The representations and warranties of the Company in each
Subscription Agreement are true and correct in all material respects at and as
of the Closing and the Company has complied in all material respects with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing.
(ii) The Investment Documents and any amendments and supplements
thereto, and all statements contained therein, are true and correct, and neither
the Investment Documents nor any amendment or supplement thereto includes any
untrue statement of a material fact or omits to state any material fact required
to be stated therein in light of the circumstances in which they were made or
necessary to make the statements therein not misleading, and since the
Commencement Date, there has occurred no event required to be set forth in an
amended or supplemented Investment Documents which has not been so set forth.
Very truly yours,
--------------------------- ---------------------------
Xxxxxxx X. Xxxxxxxx Xxxxxx Xxxxx
Chief Executive Officer Chief Financial Officer
-13-
