Exhibit 10.11
NESCO INDUSTRIES, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: August 23, 2004
Newbridge Securities Corporation
1451 Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309
Ladies and Gentlemen:
The undersigned, Nesco Industries, Inc., a Nevada corporation (the
"Company"),
hereby agrees with Newbridge Securities
Corporation (the
"Placement Agent") and
Cornell Capital Partners, LP, a Delaware Limited
Partnership (the
"Investor"),
as follows:
1. Offering.
The Company hereby
engages the Placement
Agent to act as its
exclusive placement agent in connection with the Standby Equity
Distribution
Agreement dated the date hereof (the
"Standby Equity
Distribution
Agreement"),
pursuant to which the Company shall issue
and sell to the Investor, from time to
time, and the Investor shall purchase from the Company (the
"Offering") up to
Ten Million U.S. Dollars ($10,000,000) of the Company's common stock (the
"Commitment Amount"), par value US$.001 per
share (the "Common Stock"), at price
per share equal to the Purchase Price, as that term is defined in the
Standby
Equity Distribution Agreement. The Placement Agent services shall consist
of
reviewing the terms of the Standby
Equity Distribution Agreement and advising
the Company with respect to those
terms.
All capitalized terms used herein and not
otherwise defined
herein shall
have the same meaning ascribed to them as in the Standby
Equity Distribution
Agreement. The Investor will be granted
certain registration rights with respect
to the Common Stock as more fully set forth
in the Registration Rights Agreement
between the Company and the Investor dated the date hereof (the
"Registration
Rights Agreement"). The documents to be executed and
delivered in
connection
with the Offering, including, but not
limited, to the Company's latest Quarterly
Report on Form 10-QSB as filed with the
United States
Securities
and Exchange
Commission, this Agreement, the Standby Equity Distribution Agreement, the
Registration Rights Agreement, and the Escrow Agreement dated the
date hereof
(the "Escrow Agreement"), are referred to sometimes
hereinafter collectively as
the "Offering Materials." The Company's
Common Stock purchased
by the Investor
hereunder or to be issued in connection
with the conversion of any debentures
are sometimes referred to hereinafter as the
"Securities." The
Placement Agent
shall not be obligated to sell any
Securities.
<PAGE>
2.
Compensation.
A. Upon the
execution of this
Agreement,
the Company
shall issue to the
Placement Agent or its designee shares of the Company's Common Stock in an
amount equal to Ten Thousand U.S. Dollars (US$10,000) divided by the volume
weighted average price of the Company's
Common Stock,
as quoted by
Bloomberg,
LP, on the date hereof (the "Placement Agent's Shares"). The Placement Agent
shall be entitled to "piggy-back"
registration rights,
which shall be triggered
upon registration of any shares of
Common Stock by the Investor with respect to
the Placement Agent's Shares pursuant to
the Registration Rights Agreement dated
the date hereof.
3.
Representations, Warranties and Covenants of the Placement
Agent.
A. The Placement
Agent represents, warrants and covenants as follows:
(i) The
Placement Agent has the necessary power to enter into this
Agreement and to consummate the
transactions contemplated hereby.
(ii) The
execution and delivery by the Placement Agent of this Agreement
and the consummation of the transactions
contemplated herein
will not result in
any violation of, or be in conflict
with, or constitute a default
under, any
agreement or instrument to which the
Placement Agent is a
party or by which the
Placement Agent or its properties are
bound, or any judgment, decree, order or,
to the Placement Agent's knowledge,
any statute,
rule or regulation
applicable
to the Placement Agent. This Agreement when executed and delivered by the
Placement Agent, will constitute the legal,
valid and binding obligations of the
Placement Agent, enforceable in accordance with
their respective terms, except
to the extent that (a) the enforceability hereof or thereof may be limited
by
bankruptcy, insolvency, reorganization,
moratorium or similar
laws from time to
time in effect and affecting the rights of creditors generally, (b) the
enforceability hereof or thereof is subject to
general principles of equity, or
(c) the indemnification provisions hereof or thereof may be held to be in
violation of public policy.
(iii) Upon
receipt and execution of this Agreement, the Placement Agent
will promptly forward copies of this
Agreement to the Company or its counsel and
the Investor or its counsel.
(iv) The
Placement Agent will not intentionally take any action that it
reasonably believes would cause the Offering to
violate the provisions
of the
Securities Act of 1933, as amended (the
"1933 Act"), the Securities Exchange Act
of 1934 (the "1934 Act"), the respective rules and regulations promulgated
thereunder (the "Rules and Regulations") or applicable "Blue Sky" laws of any
state or jurisdiction.
(v) The Placement Agent is a member of the National Association of
Securities Dealers, Inc., and is a broker-dealer
registered as such
under the
1934 Act and under the securities laws of the states in which the Securities
will be offered or sold by the Placement Agent unless an exemption for such
state registration is available to the
Placement Agent. The
Placement Agent is
in material compliance with the rules and regulations applicable to the
Placement Agent generally and applicable to
the Placement Agent's
participation
in the Offering.
<PAGE>
4.
Representations and Warranties of the Company.
A. The Company
represents and warrants as follows:
(i) The
execution, delivery
and performance of each of this Agreement, the
Standby Equity Distribution Agreement, the Escrow Agreement, and the
Registration Rights Agreement has been or
will be duly and validly authorized by
the Company and is, or with respect to this Agreement, the Standby Equity
Distribution Agreement, the Escrow Agreement, and the Registration Rights
Agreement, will be a valid and binding
agreement of the Company, enforceable in
accordance with its respective terms, except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect
and
affecting the rights of creditors
generally,
(b) the enforceability
hereof or
thereof is subject to general principles of equity or (c) the indemnification
provisions hereof or thereof may be held to
be in violation of
public policy.
The Securities to be issued pursuant to the transactions contemplated by this
Agreement and the Standby Equity Distribution Agreement have been duly
authorized and, when issued and paid for in
accordance with this Agreement, the
Standby Equity Distribution Agreement and the certificates/instruments
representing such Securities, will be valid and binding obligations of the
Company, enforceable in accordance with
their respective
terms, except to
the
extent that (1) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, and (2) the
enforceability thereof is subject to
general principles of equity. All corporate
action required to be taken for the authorization, issuance and sale of the
Securities has been duly and validly taken
by the Company.
(ii)
The Company has a duly authorized, issued and outstanding
capitalization as set forth herein and in the Standby Equity Distribution
Agreement. The Company is not a party to or
bound by any instrument, agreement
or other arrangement providing for it to issue any capital stock, rights,
warrants, options or other securities,
except for this Agreement, the agreements
described herein and as described in the
Standby Equity Distribution Agreement,
dated the date hereof and the agreements described therein. All issued and
outstanding securities of the Company,
have been duly
authorized
and validly
issued and are fully paid and
non-assessable; the holders thereof have no rights
of rescission or preemptive rights with respect thereto and are not subject to
personal liability solely by reason of
being security holders; and none of such
securities were issued in violation of the
preemptive rights of
any holders of
any security of the Company.
(iii) The Common
Stock to be issued in accordance with this Agreement and
the Standby Equity Distribution Agreement has been duly
authorized
and, when
issued and paid for in accordance with this Agreement, the Standby Equity
Distribution Agreement
and
the
Compensation Debenture,
the
certificates/instruments representing such Common Stock
will be validly issued,
fully-paid and non-assessable; the holders thereof will not be subject to
personal liability solely by reason of
being such holders;
such Securities are
not and will not be subject to the preemptive rights of any holder of any
security of the Company.
(iv) The Company
has good and marketable title to, or valid and enforceable
leasehold estates in, all items of real and
personal property necessary to
conduct its business (including, without limitation, any real or personal
<PAGE>
property stated in the Offering Materials
to be owned or leased by the Company),
free and clear of all liens, encumbrances, claims, security interests and
defects of any material nature whatsoever, other than those set forth in
the
Offering Materials and liens for taxes not
yet due and payable.
(v) There is no
litigation or
governmental
proceeding pending or,
to the
best of the Company's knowledge, threatened
against, or involving the properties
or business of the Company, except as set
forth in the Offering Materials.
(vi) The
Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
Nevada. Except as
set forth in the Offering Materials, the Company does not own or control,
directly or indirectly, an interest in any other corporation, partnership,
trust, joint venture or other business
entity. The Company is duly qualified or
licensed and in good standing as a foreign
corporation in each
jurisdiction in
which the character of its operations
requires such
qualification or
licensing
and where failure to so qualify would have a material adverse effect on the
Company. The Company has all requisite
corporate power and
authority, and all
material and necessary authorizations,
approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and bodies
(domestic and foreign) to conduct its
businesses
(and proposed business) as
described in the Offering Materials. Any disclosures in the Offering
Materials
concerning the effects of foreign,
federal, state and local regulation on the
Company's businesses as currently
conducted and as
contemplated are correct in
all material respects and do not omit to state
a material fact. The Company has
all corporate power and authority to enter into this
Agreement,
the Standby
Equity Distribution Agreement, the
Registration Rights Agreement, and the Escrow
Agreement, to carry out the provisions and
conditions hereof and
thereof, and
all consents, authorizations, approvals and orders required in connection
herewith and therewith have been obtained.
No consent,
authorization
or order
of, and no filing with, any court,
government
agency or other body
is required
by the Company for the issuance of the
Securities
or execution and
delivery of
the Offering Materials except for applicable
federal and state securities laws.
The Company, since its inception, has not incurred any liability
arising under
or as a result of the application of any of the
provisions of the 1933 Act, the
1934 Act or the Rules and Regulations.
(vii)
There has been no material adverse change in the condition or
prospects of the Company, financial or otherwise, from the latest dates as of
which such condition or prospects,
respectively,
are set forth in the
Offering
Materials, and the outstanding debt, the property and the business of the
Company conform in all material
respects to the
descriptions thereof
contained
in the Offering Materials.
(viii) Except as
set forth in the Offering Materials, the Company is not in
breach of, or in default under, any term or
provision of any material indenture,
mortgage, deed of trust, lease, note, loan or Standby Equity Distribution
Agreement or any other material agreement
or instrument evidencing an obligation
for borrowed money, or any other material
agreement or instrument to which it is
a party or by which it or any of its
properties
may be bound or
affected. The
Company is not in violation of any provision of its charter or by-laws or
in
violation of any franchise, license, permit, judgment, decree or order, or in
<PAGE>
violation of any material statute, rule or
regulation. Neither the execution and
delivery of the Offering Materials nor the issuance and
sale or delivery of the
Securities, nor the consummation of any of the
transactions contemplated in the
Offering Materials nor the compliance by the Company with the terms and
provisions hereof or thereof, has conflicted with or will
conflict with, or has
resulted in or will result in a breach of,
any of the terms and
provisions of,
or has constituted or will constitute a default under, or has resulted in or
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or pursuant to the terms of any
indenture, mortgage, deed of trust, note, loan or any other agreement or
instrument evidencing an obligation for
borrowed money, or any
other agreement
or instrument to which the Company
may be bound or to which any of the property
or assets of the Company is subject except
(a) where such default, lien, charge
or encumbrance would not have a material
adverse effect on the
Company and (b)
as described in the Offering Materials; nor will such action result in any
violation of the provisions of the charter or the by-laws of the
Company or,
assuming the due performance by the Placement Agent of its obligations
hereunder, any material statute or any material order, rule or regulation
applicable to the Company of any court or of any
foreign, federal, state or
other regulatory authority or other
government body having jurisdiction over the
Company.
(ix)
Subsequent
to the dates as of which information is given in the
Offering Materials, and except as may otherwise be indicated or
contemplated
herein or therein and the securities
offered pursuant to the Securities Purchase
Agreement dated the date hereof,
the Company has not
(a) issued any securities
or incurred any liability or obligation, direct or contingent, for borrowed
money, or (b) entered into any transaction
other than in the
ordinary course of
business, or (c) declared or paid any
dividend or made any other distribution on
or in respect of its capital stock. Except as described in the Offering
Materials, the Company has no outstanding
obligations to any officer or director
of the Company.
(x) There are no claims for services in the nature of a finder's or
origination fee with respect to the sale of the Common Stock or any other
arrangements, agreements or understandings
that may affect the Placement Agent's
compensation, as determined by the National
Association of
Securities Dealers,
Inc.
(xi)
The Company owns or possesses, free and clear of all liens or
encumbrances and rights thereto or therein by third parties, the requisite
licenses or other rights to use all trademarks, service marks, copyrights,
service names, trade names, patents,
patent applications
and licenses necessary
to conduct its business (including, without limitation, any such licenses or
rights described in the Offering Materials as being owned or
possessed by the
Company) and, except as set forth in the
Offering Materials,
there is no claim
or action by any person pertaining to, or proceeding, pending or threatened,
which challenges the exclusive rights of the Company with respect to any
trademarks, service marks, copyrights, service names, trade names, patents,
patent applications and licenses used in
the conduct of the Company's businesses
(including, without limitation, any such licenses or rights
described in the
Offering Materials as being owned or
possessed by the Company) except any claim
or action that would not have a material
adverse effect on the Company; the
Company's current products, services or processes do not
infringe or will not
infringe on the patents currently held by
any third party.
(xii) Except as
described in the
Offering Materials, the Company is not
under any obligation to pay royalties or fees of any kind
whatsoever
to any
third party with respect to any trademarks,
service marks,
copyrights,
service
names, trade names, patents, patent
applications, licenses
or technology it has
developed, uses, employs or intends to use or employ, other than to their
respective licensors.
<PAGE>
(xiii) Subject
to the performance by the Placement Agent of its obligations
hereunder the offer and sale of the
Securities
complies, and will continue to
comply, in all material respects with the
requirements of Rule 506 of Regulation
D promulgated by the SEC pursuant to the 1933 Act and any
other applicable
federal and state laws, rules, regulations and executive
orders. Neither the
Offering Materials nor any amendment or supplement thereto nor any documents
prepared by the Company in connection
with the Offering will
contain any untrue
statement of a material fact or omit to state any material
fact required to
be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made,
not misleading. All statements of
material facts in the Offering Materials are true and correct as
of the date of
the Offering Materials.
(xiv) All
material taxes which are due and payable
from the Company
have
been paid in full or adequate provision has been made for such taxes on the
books of the Company, except for those taxes disputed in good faith by the
Company
(xv) None of the
Company nor any of its officers, directors, employees or
agents, nor any other person acting on
behalf of the Company,
has, directly or
indirectly, given or agreed to give any money,
gift or similar
benefit (other
than legal price concessions to customers
in the ordinary course of business) to
any customer, supplier, employee or agent
of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government
(domestic or foreign) or any political
party or candidate for
office (domestic
or foreign) or other person who is or may
be in a position to help or hinder the
business of the Company (or assist it in
connection with any
actual or proposed
transaction) which (A) might subject the
Company to any damage or penalty in any
civil, criminal or governmental litigation
or proceeding, or (B) if not given in
the past, might have had a materially
adverse effect on the assets, business or
operations of the Company as reflected in any of the financial statements
contained in the Offering Materials, or (C) if not continued in the future,
might adversely affect the assets, business, operations or prospects of the
Company in the future.
5.
Representations, Warranties and Covenants of the Investor.
A. The Investor
represents, warrants and covenants as follows:
(i) The Investor
has the necessary
power to enter into th
