Exhibit 10.9
------------
▇▇▇▇▇▇ FINANCIAL CORPORATION PLACEMENT AGENT AGREEMENT
Dated as of: February 20, 2006
The undersigned, ▇▇▇▇▇▇ Financial Corporation, a Delaware corporation (the
"COMPANY"), hereby agrees with US EURO Securities, Inc. (the "PLACEMENT AGENT")
and Dutchess Private Equities Fund, L.P., 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 Investment Agreement dated
February 20, 2006 (the "INVESTMENT 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
($10,000,000) of the Company's Common Stock (the "COMMITMENT AMOUNT"), par value
$0.10 per share (the "COMMON STOCK"), at price per share equal to the Purchase
Price, as that term is defined in the Investment Agreement. Pursuant to the
terms hereof, the Placement Agent shall render consulting services to the
Company with respect to the Investment Agreement and shall be available for
consultation in connection with the advances to be requested by the Company
pursuant to the Investment Agreement. All capitalized terms used herein and not
otherwise defined herein shall have the same meaning ascribed to them as in the
Investment Agreement. The Investor will be granted certain registration rights
with respect to the Common Stock as more fully set forth in a Registration
Rights Agreement between the Company and the Investor dated February 20, 2006
(the "REGISTRATION RIGHTS AGREEMENT"). The documents to be executed and
delivered in connection with the Offering, including, but not limited, to this
Agreement, the Investment Agreement, and the Registration Rights Agreement, and
any Prospectus or other disclosure document ( including all amendments and
supplements ) utilized in connection with the Offering 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 and this Offering by the Placement
Agent shall be solely on a "best efforts basis."
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLACEMENT AGENT. The
Placement Agent represents warrants and covenants as follows:
(i) The Placement Agent has the necessary authority 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 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.
Page 1 of 10
(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.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company makes to the Placement Agent all the representations and warranties
it makes to the Investor in the Investment Agreement and, in addition,
represents and warrants as follows:
(i) The execution, delivery and performance of each of this Agreement, the
Investment Agreement and the Registration Rights Agreement has been or will be
duly and validly authorized by the Company and is, and with respect to this
Agreement, the Investment Agreement and the Registration Rights Agreement will
each 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
Investment Agreement have been duly authorized and, when issued and paid for in
accordance with (x) this Agreement, the Investment 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 Investment 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
Investment 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. As of the date hereof, the
authorized capital stock of the Company consists of 100,000,000 shares of class
A voting stock, par value $0.10 per share of which 13,837,220 are issued and
outstanding.
(iii) The Common Stock to be issued in accordance with this Agreement and the
Investment Agreement has been duly authorized and when issued and paid for in
accordance with this Agreement, the Investment Agreement and the
certificates/instruments representing such Common Stock, will be
Page 2 of 10
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.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
The Investor makes to the Placement Agent all the representations and warranties
it makes to the Company in the Investment Agreement and, in addition represents,
warrants and covenants as follows:
(i) The Investor has the necessary power to enter into this Agreement and to
consummate the transactions contemplated hereby.
(ii) The execution and delivery by the Investor 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 Investor is a party or by which the
Investor or its properties are bound, or any judgment, decree, order or, to the
Investor's knowledge, any statute, rule or regulation applicable to the
Investor. This Agreement when executed and delivered by the Investor, will
constitute the legal, valid and binding obligations of the Investor, 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) The Investor is not, and will not be, as a result of the transactions
contemplated by the Offering Materials a "dealer" within the meaning of the
Securities Exchange Act of 1934 and applicable federal and state securities laws
and regulations. The Investor covenants that in this respect it is and will
remain in compliance with the requirements of applicable "no action" rulings of
the U.S. Securities Exchange Commission.
(iv) The Investor will promptly forward copies of any and all due diligence
questionnaires compiled by the Investor to the Placement Agent.
(v) The Investor acknowledges that the Company has agreed to pay the Placement
Agent fees for its services from each advance or Put and that Company has
instructed the Investor to pay this fee directly to Placement Agent at the time
of disbursement of such funds; Investor agrees to notify Placement Agent at the
time of each such advance or draw down by Company and to pay the fee directly to
Placement Agent.
5. CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY.
The Company covenants and agrees at its expense and without any expense to the
Placement Agent as follows:
A. To advise the Placement Agent of any material adverse change in the Company's
financial condition, prospects or business or of any development materially
affecting the Company or rendering untrue or misleading any material statement
in the Offering Materials occurring at any time as soon as the Company is either
informed or becomes aware thereof.
B. To use its commercially reasonable efforts to cause the Common Stock issuable
in connection with the Equity Line of Credit to be qualified or registered for
sale on terms consistent with those stated in the Registration Rights Agreement
and under the securities laws of such jurisdictions as the Placement Agent and
the Investor shall reasonably request. Qualification, registration and exemption
charges and fees shall be at the sole cost and expense of the Company.
C. Upon written request, to provide and continue to provide the Placement Agent
and the Investor copies of all quarterly financial statements and audited annual
financial statements prepared by or on behalf of the Company, other reports
prepared by or on behalf of the Company for public disclosure and all documents
delivered to the Company's stockholders.
Page 3 of 10
D. To deliver, during the registration period of the Investment Agreement, to
the Placement Agent upon the Placement Agent's request,
(i) within forty five (45) days, a statement of its income for each such
quarterly period, and its balance sheet and a statement of changes in
stockholders' equity as of the end of such quarterly period, all in reasonable
detail, certified by its principal financial or accounting officer;
(ii) within ninety (90) days after the close of each fiscal year, its balance
sheet as of the close of such fiscal year, together with a statement of income,
a statement of changes in stockholders' equity and a statement of cash flow for
such fiscal year, such balance sheet, statement of income, statement of changes
in stockholders' equity and statement of cash flow to be in reasonable detail
and accompanied by a copy of the certificate or report thereon of independent
auditors if audited financial statements are prepared; and
(iii) a copy of all documents, reports and information furnished to its
stockholders at the time that such documents, reports and information are
furnished to its stockholders.
(iv) a copy of all documents, reports and information furnished to the Investor
at the time that such documents, reports and information are furnished to the
Investor.
E. To comply with the terms of the Offering Materials.
F. To ensure that any transactions between or among the Company, or any of its
officers, directors and affiliates be on terms and conditions that are no less
favorable to the Company, than the terms and conditions that would be available
in an "arm's length" transaction with an independent third party.
G. The Company acknowledges that the Company has agreed to pay the Placement
Agent fees for its services from each advance or Put and that Company has
instructed the Investor to pay these fees directly to Placement Agent at the
time of disbursement of such funds; Company agrees to notify Placement Agent at
the time of each such advance or draw down by Company and to cooperate with the
process of fees being paid directly to Placement Agent, until all fees due are
paid.
6. INDEMNIFICATION.
A. The Company hereby agrees that it will indemnify and hold the Placement Agent
and each officer, director, shareholder, employee or representative of the
Placement Agent and each person controlling, controlled by or under common
control with the Placement Agent within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act or the SEC's Rules and Regulations promulgated
there under (the "Rules and Regulations"), harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Placement Agent or such indemnified person of the
Placement Agent may become subject under the 1933 Act, the 1934 Act, the Rules
and Regulations, or any other federal or state law or regulation, common law or
otherwise, arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in (a) Section 4 of this
Agreement, (b) the Offering Materials (except those written statements relating
to the Placement Agent given by an indemnified person for inclusion therein),
(c) any application or other document or written communication executed by the
Company or based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Common Stock under the securities laws
thereof, or any state securities commission or agency; (ii) the omission or
alleged omission from documents described in clauses (a), (b) or (c) above of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (iii) the breach of any representation, warranty,
covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an indemnified person, at any time or from time to
time, it will promptly reimburse such indemnified person for any loss, claim,
damage, liability, cost or expense actually and reasonably paid by the
indemnified person as to which the Company has indemnified such
Page 4 of 10
person pursuant hereto. Notwithstanding the foregoing provisions of this
Paragraph 6(A), any such payment or reimbursement by the Company of fees,
expenses or disbursements incurred by an indemnified person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all appeals
or the expiration of time to appeal) is entered against the Placement Agent or
such indemnified person based upon specific finding of fact as to the Placement
Agent or such indemnified person's gross negligence or willful misfeasance will
be promptly repaid to the Company.
B. The Placement Agent hereby agrees that it will indemnify and hold the Company
and each officer, director, shareholder, employee or representative of the
Company, and each person controlling, controlled by or under common control with
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act or the Rules and Regulations, harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of the Placement Agent or its officers,
employees or representatives in willful violation of any of such laws and
regulations while acting as Placement Agent for the Offering or (ii) the
material breach of any representation, warranty, covenant or agreement made by
the Placement Agent in this Agreement (iii) any false or misleading information
provided to the Company by one of the Placement Agent's indemnified persons.
Notwithstanding the foregoing provisions of this Paragraph 6(B), any such
payment or reimbursement by the Placement Agent of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in which a
final judgment by a court of competent jurisdiction (after all appeals or the
expiration of time to appeal) is entered against such indemnified person based
upon specific finding of fact as to such indemnified person's gross negligence
or willful misfeasance will be promptly repaid to the Placement Agent. Placement
Agent shall not be responsible for any such indemnity payment, loss, claim,
damage or liability beyond what amount of the gross proceeds was paid to them.
C. The Investor hereby agrees that it will indemnify and hold the Placement
Agent and each officer, director, shareholder, employee or representative of the
Placement Agent, and each person controlling, controlled by or under common
control with the Placement Agent within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act or the Rules and Regulations, harmless from
and against any and all loss, claim, damage, liability, cost or expense
whatsoever (including, but not limited to, any and all reasonable legal fees and
other expenses and disbursements incurred in connection with investigating,
preparing to defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or in
appearing or preparing for appearance as a witness in any action, suit or
proceeding, including any inquiry, investigation or pretrial proceeding such as
a deposition) to which the Placement Agent or such indemnified person of the
Placement Agent may become subject under the 1933 Act, the 1934 Act, the Rules
and Regulations, or any other federal or state law or regulation, common law or
otherwise, arising out of or based upon (i) the conduct of the Investor or its
officers, employees or representatives in its acting as the Investor for the
Offering or (ii) the material breach of any representation, warranty, covenant
or agreement made by the Investor in the Offering Materials (iii) any false or
misleading information provided to the Placement Agent by the Investor or one of
the Investor's indemnified persons.
D. The Placement Agent hereby agrees that it will indemnify and hold the
Investor and each officer, director, shareholder, employee or representative of
the Investor, and each person controlling, controlled by or under common control
with the Investor within the meaning of section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations, harmless from and against any and
all loss, claim, damage, liability, cost or expense whatsoever (including, but
not limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or
Page 5 of 10
threatened, or any claim whatsoever or in appearing or preparing for appearance
as a witness in any action, suit or proceeding, including any inquiry,
investigation or pretrial proceeding such as a deposition) to which the Investor
or such indemnified person of the Investor may become subject under the 1933
Act, the 1934 Act, the Rules and Regulations, or any other federal or state law
or regulation, common law or otherwise, arising out of or based upon (i) the
conduct of the Placement Agent or its officers, employees or representatives in
willful violation of any of such laws and regulations while acting as the
Placement Agent for the Offering or (ii) the material breach of any
representation, warranty, covenant or agreement made by the Placement Agent in
this Agreement (iii) any false or misleading information provided to the
Investor by one of the Placement Agent's indemnified persons. Notwithstanding
the foregoing provisions of this Paragraph 6(D), any such payment or
reimbursement by the Placement Agent of fees, expenses or disbursements incurred
by an indemnified person in any proceeding in which a final judgment by a court
of competent jurisdiction (after all appeals or the expiration of time to
appeal) is entered against such indemnified person based upon specific finding
of fact as to such indemnified person's gross negligence or willful misfeasance
will be promptly repaid to the Placement Agent. Placement Agent shall not be
responsible for any such indemnity payment, loss, claim, damage or liability
beyond what amount of the gross proceeds was paid to them.
E. Promptly after receipt by an indemnified party of notice of commencement of
any action covered by Section 6(A), (B), (C) or (D), the party to be indemnified
shall, within five (5) business days, notify the indemnifying party of the
commencement thereof; the omission by one (1) indemnified party to so notify the
indemnifying party shall not relieve the indemnifying party of its obligation to
indemnify any other indemnified party that has given such notice and shall not
relieve the indemnifying party of any liability outside of this indemnification
if not materially prejudiced thereby. In the event that any action is brought
against the indemnified party, the indemnifying party will be entitled to
participate therein and, to the extent it may desire, to assume and control the
defense thereof with counsel chosen by it which is reasonably acceptable to the
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under such Section 6(A), (B), (C),
or (D) for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, but the indemnified party may, at
its own expense, participate in such defense by counsel chosen by it, without,
however, impairing the indemnifying party's control of the defense. Subject to
the proviso of this sentence and notwithstanding any other statement to the
contrary contained herein, the indemnified party or parties shall have the right
to choose its or their own counsel and control the defense of any action, all at
the expense of the indemnifying party if, (i) the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such action at the expense of the indemnifying party, or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses of one additional counsel shall be borne by
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstance, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties. No settlement of any action or proceeding against an indemnified party
shall be made without the consent of the indemnifying party.
F. In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in Section 6 is due in accordance with
its terms but is for any reason held by a court to be unavailable on grounds of
policy or otherwise, the Company and the Placement Agent and the Investor shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that the
Company, the Placement Agent and the Investor shall be responsible for such
Page 6 of 10
percent of the aggregate of such losses, claims, damages and liabilities as
shall equal the percentage of the gross proceeds paid to each of them.;
provided, however, that no person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(F), any person controlling, controlled by or under
common control with the Placement Agent, or any partner, director, officer,
employee, representative or any agent of any thereof, shall have the same rights
to contribution as the Placement Agent and each person controlling, controlled
by or under common control with the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act and each officer of the Company and
each director of the Company shall have the same rights to contribution as the
Company and each person controlling, controlled by or under common control with
the Investor within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each member of the general partner of the Investor shall have
the same rights to contribution as the Company. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against the other party under this Section 6(F), notify
such party from whom contribution may be sought, but the omission to so notify
such party shall not relieve the party from whom contribution may be sought from
any obligation they may have hereunder or otherwise if the party from whom
contribution may be sought is not materially prejudiced thereby. The indemnity
and contribution agreements contained in this Section 6 shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any indemnified person or any termination of this Agreement.
7. FEES. The Company hereby agrees to pay the Placement Agent $3,000 within
three days of the effectiveness of the Company's current registration statement
concerning the Dutchess transaction which is currently filed with the SEC and
$4,000 from the gross proceeds of each Put with a maximum of twelve thousand
dollars ($ 12,000). The Company agrees to instruct the Investor to pay the
Placement Agent fees directly to the Placement Agent.
8. PAYMENT OF EXPENSES. The Company hereby agrees to bear all of the expenses in
connection with the Offering, including, but not limited to the following:
filing fees, printing and duplicating costs, advertisements, postage and mailing
expenses with respect to the transmission of Offering Materials, registrar and
transfer agent fees, and expenses, fees of the Company's counsel and
accountants, issue and transfer taxes, if any.
9. CONDITIONS OF CLOSING. The Closing shall be held at the offices of the
Investor or its counsel. The obligations of the Placement Agent hereunder shall
be subject to the continuing accuracy of the representations and warranties of
the Company herein as of the date hereof and as of the Date of Closing (the
"Closing Date") with respect to the Company as if it had been made on and as of
such Closing Date; the accuracy on and as of the Closing Date of the statements
of the officers of the Company made pursuant to the provisions hereof; and the
performance by the Company on and as of the Closing Date of its covenants and
obligations hereunder and to the following further conditions:
A. Upon the effectiveness of a registration statement in accordance with the
Investment Agreement, the Placement Agent shall receive the opinions of Counsel
to the Company and of the Investor, dated as of the date thereof, which opinion
shall be in form and substance reasonably satisfactory to the Investor, the
Company, their counsel and the Placement Agent.
B. At or prior to the Closing, the Placement Agent shall have been furnished
such documents, certificates and opinions as it may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Agreement and the Offering Materials, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained.
C. At and prior to the Closing, (i) there shall have been no material adverse
change nor development involving a prospective change in the condition or
prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Offering
Materials; (ii) there shall have been no transaction, not in the ordinary course
of business except the transactions pursuant to the Investment Agreement entered
into by the Company which has not been
Page 7 of 10
disclosed in the Offering Materials or to the Placement Agent in writing; (iii)
except as set forth in the Offering Materials, the Company shall not be in
default under any provision of any instrument relating to any outstanding
indebtedness for which a waiver or extension has not been otherwise received;
(iv) except as set forth in the Offering Materials, the Company shall not have
issued any securities (other than those to be issued as provided in the Offering
Materials) or declared or paid any dividend or made any distribution of its
capital stock of any class and there shall not have been any change in the
indebtedness (long or short term) or liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material amount of the
assets of the Company shall have been pledged or mortgaged, except as indicated
in the Offering Materials; and (v) no action, suit or proceeding, at law or in
equity, against the Company or affecting any of its properties or businesses
shall be pending or threatened before or by any court or federal or state
commission, board or other administrative agency, domestic or foreign, wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.
D. At Closing, the Placement Agent shall receive a certificate of the Company
signed by an executive officer and chief financial officer, dated as of the
applicable Closing, to the effect that the conditions set forth in subparagraph
(C) above have been satisfied and that, as of the applicable closing, the
representations and warranties of the Company set forth herein are true and
correct.
10. TERMINATION. This Agreement shall be co-terminus with, and terminate upon
the same terms and conditions as those set forth in, the Investment Agreement.
The rights of the Investor and the obligations of the Company under the
Registration Rights Agreement, and the rights of the Placement Agent and the
obligations of the Company shall survive the termination of this Agreement
unabridged for a period of twenty-four (24) months after the Closing Date.
11. MISCELLANEOUS.
A. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all which shall be deemed to be one and
the same instrument.
B. Any notice required or permitted to be given hereunder shall be given in
writing and shall be deemed effective when deposited in the United States mail,
postage prepaid, or when received if personally delivered or faxed (upon
confirmation of receipt received by the sending party), addressed as follows:
If to Placement Agent, to:
US EURO Securities, Inc Corporate Finance Department
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
US EURO Securities, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇-▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
If to the Company, to:
▇▇▇▇▇▇ Financial Corporation ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - President
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Page 8 of 10
With a copy to:
Attorney Info.
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq. Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investor:
Dutchess Private Equities fund, LP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address of which written notice is given to the others.
C. This Agreement shall be governed by and construed in all respects under the
laws of the State of Delaware, without reference to its conflict of laws rules
or principles. Any suit, action, proceeding or litigation arising out of or
relating to this Agreement shall be brought and prosecuted in such federal or
state court or courts located within the Commonwealth of Massachusetts as
provided by law. The parties hereby irrevocably and unconditionally consent to
the jurisdiction of each such court or courts located within the Commonwealth of
Massachusetts and to service of process by registered or certified mail, return
receipt requested, or by any other manner provided by applicable law, and hereby
irrevocably and unconditionally waive any right to claim that any suit, action,
proceeding or litigation so commenced has been commenced in an inconvenient
forum.
D. This Agreement and the other agreements referenced herein contain the entire
understanding between the parties hereto and may not be modified or amended
except by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Page 9 of 10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above. COMPANY:
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and/or CEO
PLACEMENT AGENT: PLACEMENT AGENT:
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
------------------------- -----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Title: CEO/Compliance Department Corporate Finance Department
INVESTOR:
DUTCHESS PRIVATE EQUITIES FUND, L.P. BY ITS GENERAL PARTNER DUTCHESS CAPITAL
MANAGEMENT, LLC
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: A Managing Member
Page 10 of 10