EXHIBIT 10.2
PLACEMENT AGENCY
AGREEMENT
This Placement Agency Agreement
(this “Agreement”) is made and entered into as of
December 2, 2005 (the “Effective Date”), by and
between Intrusion Inc., a Delaware corporation (the
“Company”), and Stonegate Securities, Inc., a
Texas corporation (“Stonegate”).
WHEREAS, the Company desires to
retain Stonegate as its non-exclusive placement agent, and
Stonegate is willing to act in such capacity, in each case subject
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of
the premises and the mutual covenants herein contained, the Company
and Stonegate (each a “Party” and collectively, the
“Parties”) hereby agree as follows:
1.
RETENTION OF STONEGATE; SCOPE OF
SERVICES.
(a)
Subject to the
terms and conditions set forth herein, the Company hereby retains
Stonegate to act as the non-exclusive placement agent to the
Company during the Contract Period (as defined in Section 2
below), and Stonegate hereby agrees to be so retained.
(b)
As the
non-exclusive placement agent to the Company, Stonegate will have
the non-exclusive right during the Contract Period to identify for
the Company prospective accredited investors, as such term is
defined in Rule 501 of the Securities Act of 1933, as amended
(the “Securities Act”) (such accredited investors being
collectively, the “Purchasers” and each, individually,
a “Purchaser”), in one or more placement (each, a
“Placement” and collectively, the
“Placements”) of equity securities to be issued by the
Company, the type and dollar amount being as mutually agreed to by
the Parties (the “Securities”).
(c)
Terms of the
Placements shall be as set forth in subscription documents,
including any stock purchase or subscription agreement, escrow
agreement, registration rights agreement, warrant agreement and/or
other documents to be executed and delivered in connection with
each Placement (collectively, the “Subscription
Documents”). The Placements are intended to be exempt
from the registration requirements of the Securities Act, pursuant
to Regulation D (“Regulation D”) of the rules and
regulations of the Securities and Exchange Commission (the
“SEC”) promulgated under the Securities
Act.
(d)
Stonegate will
act on a best efforts basis and will have no obligation to purchase
any of the Securities offered in any Placement. During the Contract
Period, Stonegate shall have the non-exclusive right to arrange for
all sales of Securities in the Placements, including without
limitation the non-exclusive right to identify potential buyers for
the Securities. All Purchasers and sales of Securities in the
Placements
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shall be subject
to the approval of the Company, which approval may be withheld, in
whole or in part, in the Company’s sole
discretion.
2.
CONTRACT PERIOD AND
TERMINATION.
(a)
Stonegate shall
act as the Company’s non-exclusive placement agent under this
Agreement for a period commencing on the Effective Date, and
continuing until terminated by either Party upon 10 days notice to
the other Party (the “Contract Period”).
(b)
Upon termination,
neither party will have any further obligation under this
Agreement, except as provided in Sections 5, 6, 7, 8, 9 and 10
hereof.
3.
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY.
The company represents and warrants
that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder. This Agreement is
enforceable against the Company in accordance with its terms,
subject to applicable laws governing bankruptcy, insolvency and
creditors’ rights generally. The Agreement does not
conflict with, violate, cause a default, right of termination, or
acceleration (whether through the passage of time or otherwise)
under any contract, agreement, or understanding binding upon the
Company or any subsidiary of the Company.
4.
COVENANTS OF THE
COMPANY.
The Company covenants and agrees as
follows:
(a)
Neither the
Company nor any affiliate of the Company (as defined in
Rule 501(b) of the Securities Act) will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act) of the Company
which will be integrated with the sale of the Securities in a
manner which would require the registration under the Securities
Act of the Securities.
(b)
Any and all
filings and documents required to be filed in connection with or as
a result of the Placements pursuant to federal and state securities
laws are the responsibility of the Company and will be filed by the
Company, other than NASD or other regulatory filings required to be
made by Stonegate or a particular Purchaser, which shall be the
sole obligation of Stonegate or such Purchaser, as
applicable.
(c)
Any press release
to be issued by the Company announcing or referring to any
Placement shall, at the request of Stonegate, identify Stonegate as
the placement agent. Subject to prior review of the Company,
Stonegate shall be permitted to publish a tombstone or similar
advertisement upon completion of each Placement identifying itself
as the Company’s placement agent with respect thereto;
provided, that each such advertisement does not constitute a
general solicitation under federal securities laws and otherwise
complies with the requirements of the Securities Act. This
Agreement shall not be filed publicly by the Company without the
prior written consent of Stonegate, unless required by applicable
law or regulation.
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5.
FURNISHING OF COMPANY INFORMATION;
CONFIDENTIALITY.
(a)
In connection
with Stonegate’s activities hereunder on the Company’s
behalf, the Company shall furnish Stonegate with all reasonable
information concerning the Company and its operations that
Stonegate deems necessary or appropriate (the “Company
Information”) and shall provide Stonegate with reasonable
access to the Company’s books, records, officers, directors,
employees, accountants and counsel. The Company acknowledges
and agrees that, in rendering its services hereunder, Stonegate
will be using and relying upon the Company Information without
independent verification thereof or independent appraisal of any of
the Company’s assets and may, in its sole discretion, use
additional information contained in public reports or other
information furnished by the Company or third parties.
(b)
Stonegate agrees
that the Company Information will be used solely for the purpose of
performing its services hereunder. Subject to the limitations
set forth in subsection (c) below, Stonegate will keep
the Company Information provided hereunder confidential and will
not disclose such Company Information or any portion thereof,
except (i) to a third party contacted by Stonegate on behalf
of, and with the prior approval of, the Company pursuant hereto who
has agreed to be bound by a confidentiality agreement satisfactory
in form and substance to the Company, or (ii) to any other
person for which the Company’s consent to disclose such
Company Information has been obtained. Further, Stonegate
acknowledges that certain Confidential Information may constitute
material non-public information (as defined in Regulation FD) and
agrees to, and to cause its officer, directors, employees and
affiliates to, refrain from trading in the Company’s common
stock until such information is made publicly available by the
Company.
(c)
Stonegate’s
confidentiality obligations under this Agreement shall not apply to
any portion of the Company Information which (i) at the time
of disclosure to Stonegate or thereafter is generally available to
and known by the public (other than as a result of a disclosure
directly or indirectly by Stonegate in violation of this
Agreement); (ii) was available to Stonegate on a
non-confidential basis from a source other than the Company,
provided that such source is not and was not bound by a
confidentiality agreement with the Company; (iii) has been
independently acquired or developed by Stonegate without violating
any of its obligations under this Agreement; or (iv) the
disclosure of which is legally compelled (whether by deposition,
interrogatory, request for documents, subpoena, civil or
administrative investigative demand or other similar
process). In the event that Stonegate becomes legally
compelled to disclose any of the Company Information, Stonegate
shall provide the Company with prompt prior written notice of such
requirement so that the Company may seek a protective order or
other appropriate remedy and/or waive compliance with the terms of
this Agreement.
(d)
The obligations
of the Parties under this Section 5 shall survive the
termination of this Agreement for 12 months.
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6.
FEES AND EXPENSES.
(a)
As compensation
for services rendered by Stonegate in connection with the
Pla
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