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NEWTECH BRAKE CORP.
PLACEMENT AGENT AGREEMENT
Dated as of: January 6, 2004
Westrock Advisors,
Inc.
230 Park Avenue, Floor
9
New York, New York
10169
Ladies and
Gentlemen:
The undersigned,
NewTech Brake Corp., a Delaware corporation (the
"Company"), hereby agrees with Westrock
Advisors, Inc., a New
York 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 Equity Line of Credit
Agreement dated the date hereof, (the "Equity Line of Credit 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 Dollars ($US10,000,000) of the Company's common stock (the
"Commitment Amount"), par value US$0.0001 per share (the
"Common Stock"),
at
price per share equal to the Purchase Price, as that term is defined in the
Equity Line of Credit
Agreement.
Pursuant to the terms
hereof, the Placement
Agent shall render consulting
services to the Company with respect to the Equity
Line of Credit Agreement and shall be available
for consultation in
connection
with the advances to be
requested by the Company pursuant to the Equity Line
of
Credit Agreement
All capitalized
terms used herein and
not otherwise
defined herein
shall have the same
meaning ascribed to them as in the Equity
Line of
Credit
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 this Agreement,
the Equity
Line of Credit Agreement, the Registration Rights Agreement, and the Escrow
Agreement with Wachovia
Bank, N.A. (the "Escrow Agreement"), are referred to
sometimes hereinafter collectively as the "Offering
Materials." The
Company's
Common Stock is sometimes referred to hereinafter as the "Securities." The
Placement Agent shall not be
obligated to sell any Securities.
2. Compensation.
A. The
Placement Agent acknowledges and agrees that the Company
has
previously issued to the
Placement Agent shares of the Company's Common Stock in
an amount equal to Ten
Thousand Dollars ($10,000) (collectively, the "Placement
Agent's Shares"). The Placement Agent shall be entitled to "piggy-back"
registration rights 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.
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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 there under (the
"Rules and Regulations") or applicable
"Blue Sky" laws of any state
or jurisdiction.
(v) The Placement
Agent will use all
reasonable
efforts to
determine (a) whether the Investor is an
Accredited
Investor and (b) that
any
information furnished by the
Investor is true and accurate. The Placement Agent
shall have no obligation to insure that (x) any check, note, draft or other
means of payment for the Common Stock will be honored, paid or enforceable
against the Investor in accordance with its terms, or (y) subject to the
performance of the Placement Agent's obligations and the accuracy of the
Placement Agent's
representations and warranties hereunder, (1) the Offering is
exempt from the registration requirements of the 1933 Act or any
applicable
state "Blue Sky" law or (2)
the Investor is an Accredited Investor.
(vi) 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 compliance with
all material rules and regulations applicable to the
Placement Agent generally and
applicable to the Placement Agent's participation
in the Offering.
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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 Equity Line of Credit
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 Equity Line of Credit
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 Equity Line
of Credit Agreement have been duly
authorized and, when
issued and paid for in
accordance with (x) this Agreement, the Equity Line of Agreement and the
certificates/instruments
representing
such Securities, (y) will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms,
except to the extent
that (1) the enforceability thereof may
be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
from time to time in effect
and affecting the rights of creditors generally, and
(2) the enforceability thereof is subject to general
principles of equity. All
corporate action required to
be taken for the
authorization,
issuance and sale
of the Securities has been
duly and validly taken by the Company.
(ii) The Company has a duly authorized, issued and
outstanding
capitalization as set forth herein and in the
Equity Line of Credit
Agreement.
All issued and outstanding
securities of the
Company, have been duly authorized
and validly issued; 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. As of the date hereof, the
authorized capital stock of the Company
consists of 200,000,000
shares of Common Stock, par value US$0.0001 per share of
which 66,959,872 shares of
Common Stock are issued and outstanding.
(iii) The Common Stock
issued and to be issued in accordance
with this Agreement and the Equity Line of Credit Agreement have been duly
authorized and when issued
and paid for in accordance with this Agreement, the
Equity Line of Credit
Agreement and the
certificates/instruments representing
such Common Stock, were and will be, as the case maybe, 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.
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(iv) Except
as described in the Offering Materials, the
Company has good and
marketable
title to, or valid and
enforceable
leasehold
estates in, all items of real
and personal
property necessary to conduct its
business (including, without
limitation, any real or personal property stated in
the Offering Materials to be
owned or leased by the Company), free and clear of
all liens, encumbrances,
claims, security
interests and defects of any material
nature whatsoever, other than those set forth in the
Offering Materials and
liens for taxes not yet due
and payable.
(v) Except as described in the Offering Materials, 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
Delaware. Except as set forth in the
Offering Materials and, except for the
Company's subsidiary in
China, 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 Equity
Line of
Credit 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 Equity Line of
Credit Agreement or any other
material agreement or instrument
evidencing
an
obligation for borrowed
money, or any other material agreement or instrument
to
which it is a party or by which it or any of its properties may be bound or
affected. The Company is not in violation of any provision of its charter
or
by-laws or in violation of
any franchise,
license, permit, judgment, decree or
order, or in violation of any
material statute, rule or regulation. 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.
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(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, the Company has not (a) 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) Except for the royalty payments to NewTech Group and as
set forth on the Offering
Materials,
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.
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(xii) Except as
described in the Offering Materials, the
Company is not under any obligation to pay royalties or fees of any kind
whatsoever to any third party with respect to
any trademarks,
service marks,
copyrights, service names, trade names,
patents, patent applications, licenses
or technology it has
developed, uses, employs or intends to use or employ,
other
than to their respective
licensors.
(xiii) Subject to the
performance by the
Placement Agent
of
its obligations hereunder and the offer and sale
of the Securities
comply, 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 law
