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Exhibit 10.4
POWER TECHNOLOGY, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: May 10, 2005
Newbridge Securities Corporation
1451 Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309
Ladies and Gentlemen:
The undersigned, Power Technology, 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 of even date herewith (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
Five Million Dollars ($5,000,000) of the Company's common stock
(the "Commitment
Amount"), par value $0.001 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.
2. Compensation.
A. The Company shall issue to the Placement Agent 442,477 shares
of
Common Stock (the "Placement Agent's Shares"). The Placement
Agent shall be
entitled to "piggy-back" registration rights with respect to the
Placement
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Agent's Shares, which shall be triggered upon registration of
any shares of
Common Stock by the Company 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
"Securities Act"), the
Securities Exchange Act of 1934 (the "Exchange 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 Exchange 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.
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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 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
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
and the Standby
Equity Distribution Agreement, 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 property stated in the Offering Materials to be owned
or leased by the
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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 Securities Act, the Exchange 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 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
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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
Standby Equity Distribution Agreement and the Securities
Purchase Agreement
between the Investor and the Company dated as of August 27,
2004, 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) Except as set forth in the SEC Documents, 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 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
Securities 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 Materi
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