TECHNOCONCEPTS, INC. PLACEMENT AGENT AGREEMENT Dated: June 28, 2007
Dated:
June 28, 2007
Westminster
Securities Corporation
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TriPoint
Global Equities, LLC
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Ladies
and Gentlemen:
The
undersigned, TechnoConcepts, Inc., a Colorado corporation (the “Company”),
proposes to issue
and
sell up to $3,000,000 of investment units (“Units”) (the “Maximum Offering”) in
a private placement
for which you, Westminster Securities Corp. (“Westminster”) and TriPoint Global
Equities, LLC
(“TriPoint”) (each a “Placement Agent” and collectively, the “Placement
Agents”), shall act as co-placement
agents. The terms and conditions of the sale, issuance, and rights held by
the
securities underlying these Units are as set forth in the subscription
agreements among the Company and the investors in the offering (“Investors”),
which shall be prepared by the Company and subject to the approval
of the Placement Agents (together with all exhibits, schedules and supplements
thereto, the “Subscription
Documents”). The Units, the 10% Promissory Note forming a part of the Units
(“Notes”), the
common stock underlying the Notes (“Shares”), the warrants forming a part of the
Units (“Warrants”),
the common stock underlying the Warrants (“Warrant Shares”), and the Placement
Agent Warrants
(as hereinafter defined) are referred to collectively herein as the
“Equity”.
The
offering of Units in the Company (the “Offering”) will be conducted on a “best
efforts” basis up
to the
Maximum Offering. Fractional Units may be sold at the discretion of the Company.
As used herein,
including with respect to the representations and warranties contained herein,
unless the context otherwise
requires, the term “Company” shall include the Company together with all of its
direct and indirect
wholly owned subsidiaries, and all representations and warranties of the Company
herein shall also
be
deemed made on behalf of and with respect to each such subsidiary of the
Company, except where the context indicates that such representation and
warranty applies only to the Company, including, without limitation, any
representations and warranties relating to the capital stock of the Company.
This Placement Agent Agreement (“Agreement”) is to confirm the arrangements with
the Placement
Agents with respect to the sale of the Units by the Placement Agents as
exclusive agents for the Company in the Offering.
The
Offering will not be registered with the Securities and Exchange Commission
(“SEC”) nor with
any
state securities authority, but rather will be offered as a private placement
pursuant to an exemption
from registration under Regulation D (“Regulation D”) promulgated under Section
4(2) and Rule 506 of the Securities Act of 1933, as amended (“Securities Act”),
and available state securities law exemptions.
The Units are to be sold in the Offering only to “accredited investors”, as that
term is defined
in Regulation D, pursuant to the Subscription Documents.
SECTION
1. Description
of Capital Stock. The
Equity shall conform in all respects to descriptions
thereof contained in the Subscription Documents.
SECTION
2. Representations
and Warranties of the Company. The
Company hereby represents, warrants
and covenants with the Placement Agents as follows:
(a) The
Subscription Documents, copies of which will be delivered to the Placement
Agents, will be
carefully prepared to disclose or incorporate by reference all information
concerning the Company which
would be material to an investment decision by a reasonable investor. The date
on which the Offering is authorized by the Company to commence is June 28,
2007
and is herein called the “Commencement Date.” The time and date of each issuance
of Units hereunder is herein called an “Issuance
Date” or a “Closing.”
(b) The
Company is duly incorporated and validly existing as a corporation in good
standing under the laws of the state of its incorporation, having corporate
power and authority to own its properties
and conduct its business and is duly qualified and in good standing in each
foreign jurisdiction where
the
conduct of its business so requires such qualification, except where the failure
to be so qualified
would not have a material adverse effect on the financial condition, results
of
operations, assets or
business of the Company or the Material Subsidiaries, taken as a whole (a
“Material Adverse Effect”). No
direct
or indirect rights to acquire Common Stock exist, except as have been previously
disclosed to the
public or as disclosed in the Subscription Documents.
(c) The
unaudited financial statements of the Company for the periods ended March 31,
2007 and December
31, 2006, and the audited financial statements of the Company for the years
ended September 30,
2006
and 2005, each included in the SEC Reports (defined below) (collectively, the
“Financial Statements”), fairly present in all material respects the information
purported to be shown therein of the Company, at the respective dates to which
they apply; and such Financial Statements have been prepared in
conformity with GAAP consistently applied throughout the periods involved and
are in accordance in all
material respects with the books and records of the Company.
(d) The
assets of the Company, as shown in the Financial Statements, are owned by the
Company with
good
title, free and clear of all liens, encumbrances and equities of record or
otherwise, except (i) those specifically referred to in the Subscription
Documents, (ii) those which do not materially adversely affect
the use or value of such assets, (iii) the lien of current taxes not now due
or
which are being contested
in good faith and for which adequate reserves have been set aside and (iv)
those
disclosed in the
Financial Statements or elsewhere in the Subscription Documents. The Company
has
the full corporate
right, power and authority to maintain and operate its business and properties
as the same are now operated or proposed to be operated and is complying with
all laws, ordinances and regulations applicable
thereto, except where the failure to so comply would not have a Material Adverse
Effect.
(e) There
are
no actions, suits or proceedings at law or in equity pending, or to the
Company’s knowledge,
threatened, against the Company before or by any federal or state commission,
regulatory body,
administrative agency or other governmental body wherein, either in any case
or
in the aggregate, an
unfavorable ruling, decision or finding would have a Material Adverse Effect
which are not disclosed in
the
Subscription Documents or the SEC Reports.
(f) The
execution and delivery by the Company of this Agreement, the consummation and
performance
of the transactions herein contemplated, and compliance with the terms of this
Agreement by
the
Company will not conflict with, result in a material breach of, or constitute
a
material default under,
the Certificate of Incorporation or the bylaws of the Company, in each case
as
amended, or any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is now a party or by which it or any of its
assets or properties is bound and which is filed as an exhibit to the Company’s
Annual
Report on Form 10-K for the year ended September 30, 2006, or any other periodic
or current report
filed by the Company with the Securities and Exchange Commission since September
30, 2006 (the
“SEC
Reports”) (such agreements or instruments, the “Material Contracts”), or any
law, order, rule, regulation,
writ, injunction, judgment or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its business or properties, to the extent that such conflict,
breach or default could have a Material Adverse Effect.
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(g) Except
as
set forth in the Subscription Documents or the SEC Reports, all material
licenses, permits
and approvals referred to in the Subscription Documents or the SEC Reports
(including the Financial
Statements) (the “Permits”) have been obtained and are valid and in full force
and effect. There are
no
proceedings pending, or to the knowledge of the Company threatened, seeking
to
cancel, terminate or limit such Permits. Neither the Company nor, to the
knowledge of the Company, any other party is in default
under any of the Material Contracts, and to the knowledge of the Company, no
event has occurred which
with the passage of time or the giving of notice, or both, would constitute
a
default thereunder.
(h) Except
as
described in the Subscription Documents or the SEC Reports, the Company has
timely
filed all federal, state and local tax returns required to be filed, including
without limitation, all sales tax
returns, or has obtained extensions thereof and has paid, or is contesting
in
good faith, all taxes shown on such
returns.
(i) The
Company shall use the net proceeds from the sale of the Units hereunder
primarily as described
in the Subscription Documents. The Company will not use any proceeds from the
sale of the Units for
the
satisfaction of any indebtedness for borrowed money, to redeem any Common Stock
or Common Stock
Equivalents or to settle any litigation outstanding as of any
Closing.
(j) The
SEC
Reports describe all material patents, trademarks, trade names, copyright
registrations
and applications therefor now or heretofore used or presently proposed to be
used in the conduct
of the business of the Company and the failure of which the Company to have
would have a Material
Adverse Effect (the “IP Rights”). Except as set forth in the SEC Reports: (i)
the Company owns or possesses adequate licenses or other valid rights to use
all
IP Rights necessary to the conduct of the business
of the Company as presently being conducted; (ii) the validity of such IP Rights
and the rights of
the
Company thereto have not been questioned in any litigation to which the Company
is or has been a party,
nor, to the best knowledge of the Company, is any such litigation threatened,
other than as set forth in
the
SEC Reports; (iii) to the best knowledge of the Company, the conduct of the
business of the Company
as now conducted does not and will not conflict with IP Rights of others in
any
way which has or might reasonably be expected to have a Material Adverse Effect;
and (iv) no proceedings are pending against
the Company nor, to the best knowledge of the Company, are any proceedings
threatened against the
Company, alleging any violation of IP Rights of any third person. The Company
does not know of (x)
any
use
that has heretofore been or is now being made of any IP Rights owned by the
Company, except
by
the Company, any licensor of such IP Rights to the Company or by a person duly
licensed by the
Company to use the same under an agreement described in the SEC Reports or
(y)
any
material infringement of any IP Right owned by or licensed by or to the Company.
To the best knowledge of the Company, all IP Rights heretofore owned or held
by
any agent, independent contractor, employee or officer
of the Company or any subsidiary thereof and used in the business of the Company
in any manner have
been
duly and effectively transferred to the Company. The consummation of the
transactions contemplated
by this Agreement will not alter or impair the rights and interests of the
Company in any of the
IP
Rights.
(k)
All
of the representations, agreements and warranties in this Section 2 shall
survive delivery of
and
payment for all or any part of the Units for two years from and after such
delivery and payment.
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(l) The
Company has no subsidiaries other than as disclosed in the Subscription
Documents.
(m) All
of
the SEC Reports were true and correct in all material respects upon the dates
of
filing
thereof except as subsequently amended or disclosed in the SEC
Reports.
SECTION
3. Issuance,
Sale and Delivery of the Units.
(a) The
Company hereby agrees to sell the Units directly to subscribers identified
by
the Placement
Agents on a “best efforts” basis with respect to the remaining Units up to the
Maximum Offering.
The offering will commence on the Commencement Date and continue until
terminated by the Company. The Units will be offered for cash and delivery
of
the purchase price for the Units and the certificates representing the Notes
and
Warrants shall be pursuant to the procedures set forth in the
Subscription Documents.
(b) As
their
basic compensation, the Placement Agents shall receive (i) cash compensation
equal to
ten
percent (10%) of the gross cash proceeds received by the Company from the sale
of Units, as commission,
which commission shall be allocated as follows: 2% to Westminster and 8% to
TriPoint; and (ii)
additional compensation in the form of warrants (“Placement Agent Warrants”) to
purchase shares of Common
Stock, in an amount equal to 10% of the Shares and Warrant Shares underlying
Units sold in the
Offering, which warrants shall be allocated as follows: 2.5% to Westminster
or
its designees and 7.5% to TriPoint or its designees. The Placement Agent
Warrants shall have their exercise price, registration,
anti-dilution and other rights identical to the Warrants. They shall be
exercisable any time from the Issuance Date through the last expiration date
of
any of the Warrants, and shall be exercisable via
cashless exercise at any time in which they are not registered in an effective
registration statement but are
otherwise eligible for resale pursuant to Rule 144 or another exemption from
registration then in effect.
Cash compensation shall be paid in full on the Issuance Date with respect to
gross proceeds for Units
deliverable on such date.
(c)
The
parties hereto represent that at the Issuance Date, the representations and
warranties herein
contained, and the statements contained in all certificates theretofore or
simultaneously delivered by
any
party to another pursuant to this Agreement, shall be true and correct, except
as otherwise disclosed
in any certificate delivered on the Issuance Date.
SECTION
4. Covenants
of the Company. The
Company covenants and agrees with the Placement
Agents that:
(a) On
the
Commencement Date, and on each Issuance Date, the Subscription Documents (as
amended
or as supplemented, if the same shall have been amended or supplemented) will
not (i) contain an
untrue
statement of a material fact and will not omit to state a material fact required
to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they
were
made, not misleading and (ii) contain any material, non-public information
required to be disclosed
to the general public in order to comply with Regulation FD promulgated under
the Securities Exchange Act of 1934, as amended, unless all recipients of the
Subscription Documents execute a confidentiality
agreement in form and substance acceptable to the Company and the Placement
Agents, prior
to
receipt of the Subscription Documents.
(b) The
Company will prepare promptly upon the reasonable request of the Placement
Agents, such
amendments or supplements to the Subscription Documents, in such form as in
the
opinion of the respective
counsel to the Placement Agents may be reasonably necessary or advisable in
connection with the
Offering. In addition, if at any time prior to the last date on which Units
shall be issued, (i) an event relating
to or affecting the Company shall have occurred which, in the judgment of the
Company or in the opinion
of the respective counsel for the Placement Agents, would cause the Subscription
Documents as then
in
effect to include an untrue statement of a material fact or to omit to state
a
material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under
which they were made, not misleading, or (ii) it is otherwise necessary to
amend
or supplement the Subscription Documents, the Company shall promptly notify
the
Placement Agents of the occurrence and shall
promptly prepare and deliver to the Placement Agents, without charge, sufficient
copies of any amended
or supplemented Subscription Documents, and shall use its reasonable best
efforts to cause the appropriate
state securities authorities to take any required action with regard to any
amendment as may be necessary to permit the lawful use of the Subscription
Documents, as so amended and supplemented, in connection with the
Offering.
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(c) The
Company’s counsel shall prepare and file any necessary filings, in the
reasonable opinion of
Company’s counsel or Placement Agents’ counsel, under the state securities, or
so-called “blue sky” laws
and
regulations (the “Blue Sky Laws”) and the Company shall pay the filing fees and
all other expenses
in connection with any such qualification in such jurisdictions as the Placement
Agents shall designate,
and to continue such qualification in effect so long as required for the
purposes of the Offering;
provided, however, that the Company shall not be required to qualify as a
foreign corporation or
to
file a consent to service of process in any jurisdiction in any action other
than one arising out of the offering
or sale of the Units. The Company will provide copies to the Placement Agents
of
all documents,
exhibits and information filed in connection with the qualification of the
Units
for sale under the
Blue
Sky Laws.
(d) The
Company, at its own expense, will give and continue to give such financial
statements and
other
information to and as may be required by the proper public bodies of the
jurisdictions in which the Offering may be qualified.
(e) The
Company will pay all fees, taxes (excluding any taxes on the income or revenue
of the purchasers of the Units) and expenses incident to the preparation and
distribution of the Subscription Documents,
the establishment of the escrow account with the Escrow Agent, the issuance
of
the Units and
the
fees and expenses of counsel and accountants for the Company. The Company will
pay all of the Placement
Agents’ accountable fees and expenses (including legal, due diligence, printing,
mailing, travel,
entertainment, etc), payable at the earlier of each Closing or twenty days
following receipt of invoice.
The Company will additionally pay the Placement Agents for their non-accountable
fees and expenses
at the rate of one percent (1%) of the gross proceeds received by the Company
from the sale of the Units, payable at each Closing and allocated as follows:
0.5% to Westminster and 0.5% to TriPoint. In
the
event that any payment due to the Placement Agents or their respective counsel
hereunder shall not be
made
when due, interest shall accrue on the unpaid balance of such overdue payments
at the rate of twelve
percent (12%) per annum until paid.
(f) The
form
of Subscription Documents, Notes, Warrants and Placement Agent Warrants shall
contain
the registration rights, anti-dilution protection and such other information,
representations, warranties
and covenants as shall be reasonably acceptable to the Placement
Agents.
(g) The
Company shall not release any Offering documents or the Subscription Documents
unless
they are reasonably acceptable to the Placement Agents.
(h) Except
as
described in the SEC Reports or the Subscription Documents, all Permits will
be
valid
on
the Issuance Date, the Company shall in all material respects be complying
therewith and there shall
be
no proceedings pending, or to the knowledge of the Company threatened, seeking
to cancel, terminate,
suspend or limit any such Permits.
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(i) At
each
Issuance Date, the Company shall not have failed to qualify to do business
as a
foreign
corporation in any jurisdiction where required, except where failure to so
qualify would not have a
Material Adverse Effect or where any qualification is required solely as a
result of conducting business over the Internet.
(j) At
the
Commencement Date and at each Issuance Date, the Company will be validly
existing as
a
corporation in good standing under the laws of the state of its incorporation,
having corporate power and authority to own its properties and conduct its
business, and will have a capitalization as described in the
SEC
Reports. Other than as described in the Subscription Documents or the SEC
Reports, there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any
person or entity any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Material Subsidiary
is or may
become bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable
into shares of Common Stock. Following the date of publication of the
Subscription Documents
and prior to the final Issuance Date, the only additional securities issued
in
addition to those described
in the previous sentence shall be the Equity.
(k)
At
each Closing, (i) the Equity will conform, in all material respects, to all
statements with regard
thereto contained in the Subscription Documents, (ii) the Equity shall have
been
duly and validly authorized by proper corporate authority, (iii) each portion
of
the Equity, when issued, exercised and/or paid
for
(as applicable), or otherwise earned, each in accordance with its terms, will
be
validly issued, fully
paid and nonassessable and (iv) all shares of Common Stock that comprise the
Equity shall have been
duly
and validly reserved for issuance. The Company shall ensure that all exercises
properly requested
shall be effected promptly by the Company.
SECTION
5. Indemnification.
(a)
The
Company hereby agrees to indemnify and hold harmless the Placement Agents,
their
respective
directors, officers, agents, employees, members, affiliates, counsel and each
other person or entity
who controls either of the Placement Agents within the meaning of Section 15
of
the Securities Act (collectively,
the “Agent Indemnified Parties”) from and against any and all losses, claims,
damages or liabilities
(or actions in respect thereof), joint or several, to which they or any of
them
may become subject
under the Securities Act or any other statute or at common law, and to reimburse
such Agent Indemnified
Parties for any reasonable legal or other expense (including the cost of any
investigation and preparation)
incurred by them in connection with any litigation, whether or not resulting
in
any liability, but
only
insofar as such losses, claims, liabilities and litigation arise out of or
are
based upon (i) any untrue
statement or alleged untrue statement of a material fact required to be stated
in the Subscription Documents, or omission to state therein a material fact
necessary in order to make the statements therein, in
the
light of the circumstances under which they are made, not misleading (including,
but not limited to, any
documents deemed to be incorporated into the Subscription Documents by
reference), (ii) any breach by
the
Company of any representation, warranty or covenant contained herein, (iii)
any
matter otherwise relating
to, arising out of or in connection with the Offering or (iv) Placement Agents’
service as Placement Agents hereunder; provided, however, that the indemnity
provisions contained in this subsection
(a) shall not apply to (x) amounts paid in settlement of any such litigation
if
such settlement is effected
without the consent of the Company (which shall not be unreasonably withheld,
delayed or denied), or (y) the Placement Agents or any other Agent Indemnified
Parties in respect of any such losses,
claims, damages, liabilities or actions (A) arising out of, or based upon any
such untrue statement or alleged untrue statement, or any such omission or
alleged omission, if such statement or omission was made in reliance upon
information furnished in writing to the Company by the Placement Agents or
such
Agent Indemnified Parties specifically for use in connection with the
preparation of the Subscription Documents
or any amendment thereof or supplement thereto or (B) arising from the willful
misconduct or
gross
negligence of the Placement Agents or any other Agent Indemnified
Party.
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(b) The
Placement Agents, each individually with respect to themselves, hereby agree
to
indemnify
and hold harmless the Company, its directors, officers, agents, employees,
members, affiliates, counsel
and each other person or entity who controls the Company within the meaning
of
Section 15 of the
Securities Act (collectively, the “Company Indemnified Parties”) from and
against any and all losses, claims, damages or liabilities (or actions in
respect thereof), joint or several, to which they or any of them may
become subject under the Securities Act or any other statute or at common law,
and to reimburse such
Company Indemnified Parties for any reasonable legal or other expense (including
the cost of any investigation
and preparation) incurred by them in connection with any litigation, whether
or
not resulting
in any liability, but only insofar as such losses, claims, liabilities and
litigation arise out of or are
based
upon such Placement Agent’s service as a Placement Agent hereunder; provided,
however, that
the
indemnity provisions contained in this subsection (b) shall only apply to
losses, claims, damages, liabilities
or actions arising from the willful misconduct or gross negligence of such
Placement Agent or any other applicable Agent Indemnified Party and shall not
apply to amounts paid in settlement of any such
litigation if such settlement is effected without the consent of such Placement
Agent (which shall not be unreasonably withheld, delayed or
denied).
(c) Each
party will reimburse all the other’s Indemnified Parties for all reasonable
expenses (including,
but not limited to, reasonable fees and disbursements of counsel for the
applicable Indemnified
Parties) incurred by any such Indemnified Parties in connection with
investigating, preparing and
defending any such action or claim, whether or not in connection with pending
or
threatened litigation
in connection with the transaction to which an Indemnified Party is a party,
as
such expenses are
incurred or paid. Each party agrees, within thirty (30) days of receipt, to
notify the other party in writing of the receipt of written notice of the
commencement of any action against it or against any other Indemnified Parties,
in respect of which indemnity may be sought from the other party on account
of
the indemnity
provisions contained in this Section 5. In case any such action shall be brought
against the any Indemnified
Parties, the indemnifying party shall be entitled to participate in (and, to
the
extent that it shall
wish, to direct) the defense thereof at its own expense, but such defense shall
be conducted by counsel
reasonably satisfactory to the Indemnified Parties.
(d) The
indemnity provisions set forth herein, and the representations and warranties
of
each party
set
forth in this Agreement, shall remain operative and in full force and effect,
regardless of any investigation
made by or on behalf of the other party, subject to the limitations contained
herein, and shall
survive the delivery of the Units, and any successor of any Indemnified Parties
shall be entitled to the
benefit of the respective indemnity provisions.
(e) In
order
to provide for just and equitable contribution in any case in which (i) any
person entitled
to indemnification under this Section 5 makes claim for indemnification pursuant
hereto but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be
enforced in such case notwithstanding the fact that this Section 5 provides
for
indemnification in such case,
or
(ii) contribution under the Securities Act may be required on the part of any
such person in circumstances
for which indemnification is provided under this Section 5, then and in each
such case, the Company
and the Placement Agent shall contribute to the aggregate losses, claims,
damages or liabilities to
which
they may be subject (after any contribution from others) in such proportion
so
that the Placement
Agents are responsible for an aggregate of ten percent (10.0%) of the gross
proceeds received by
the
Company on account of the sale of such Units by the Placement Agents (being
the
Placement Agents’ cash commission, provided any such contribution shall be made
pro rata based on each Placement Agent’s respective cash commission), and the
Company is responsible for the remaining portion; provided however, that in
any
such case, no person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person
who was not guilty of such fraudulent misrepresentation.
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(f)
Promptly after receipt by any party to this Agreement (or its representative)
of
notice of the
commencement of any action, suit or proceeding, such party will, if a claim
for
contribution in respect thereof
is to be made against another party (the “Contributing Party”), notify the
Contributing Party in writing
of the commencement thereof, but the omission to so notify the Contributing
Party will not relieve
it from any liability which it may have to any other party other than for
contribution hereunder. In case
any
such action, suit or proceeding is brought against any party and such party
so
notifies a Contributing
Party or his or its representative of the commencement thereof within the
aforesaid period, the
Contributing Party will be entitled to participate therein, with the notifying
party and any other Contributing
Party similarly notified. Any such Contributing Party shall not be liable to
any
party seeking
contribution on account of any settlement of any claim, action or proceeding
effected by such party
seeking contribution without the written consent of such Contributing Party.
The
contribution provisions
contained in this Section 5 are in addition to any other rights or remedies
which the Company and
the
Placement Agents may have hereunder or otherwise.
SECTION
6. Effectiveness
of Agreement. This
Agreement shall become effective as of the date hereof.
SECTION
7. Conditions
of the Placement Agents’ Obligations. The
Placement Agents’ respective
obligation to act as an agent of the Company hereunder, and the Placement
Agents’ respective obligation to use their best efforts to find purchasers for
the Units, shall be subject to the satisfactory completion
of their due diligence examination and the accuracy, as of each Issuance Date,
of the representations
and warranties on the part of the Company herein contained, to the performance
by the Company
of all its agreements herein contained, to the fulfillment of or compliance
by
the Company with all
covenants and conditions hereof, and to the following additional
conditions:
(a) The
Placement Agents shall not have disclosed in writing to the Company that the
Subscription
Documents or any amendment or supplement thereto contains an untrue statement
of
a fact which in the opinion of counsel to the Placement Agents, is material
or
omits to state a fact which, in the opinion
of such counsel, is material and is required to be stated therein or is
necessary to make the statements
therein not misleading.
(b) Between
the date hereof and each Issuance Date, the Company shall not have sustained
any
loss
on
account of fire, explosion, flood, accident, calamity or other cause, of such
character as shall, in the
sole
discretion of a Placement Agent, materially adversely affect its business or
property.
(c) Between
the date hereof and each Issuance Date, there shall be no litigation instituted,
or to the
knowledge of the Company threatened, against the Company and there shall be
no
proceeding instituted
or threatened against the Company or before or by any federal or state
commission, regulatory body
or
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling,
decision or finding would have a Material Adverse Effect.
(d) During
the period subsequent to the Commencement Date and prior to each Issuance Date,
the Company
(i) shall have conducted its business in the usual and ordinary manner as the
same was being conducted on the Commencement Date and (ii) the Company shall
not
have suffered or experienced any Material
Adverse Effect.
(e)
The
authorization of the Units, the Placement Agent Warrants, the Equity, the
Subscription Documents,
and all corporate proceedings and other legal matters incident thereto and
to
this Agreement shall
be
reasonably satisfactory in all material respects to counsel to the Placement
Agent.
-8-
(f)
The
Company shall have furnished to the Placement Agent the opinion of its counsel,
that:
(i) The
Company is a validly existing corporation in good standing under the laws of
the
state of
its
incorporation with full corporate power and authority to enter into this
Agreement and perform its obligations hereunder, and the Company is in good
standing as a foreign corporation in the jurisdictions where
it
is qualified to do business and where its business requires such
qualification.
(ii) The
Company has an authorized capitalization as described in the Subscription
Documents.
The Units, Notes, Warrants and Placement Agent Warrants are in due and proper
form and conform
in all material respects to the rights set forth in the instruments defining
the
same. Except as set forth
in
the Subscription Documents or in the Company’s filings with the SEC, no direct
or indirect rights to
acquire Common Stock exist.
(iii) The
Equity has been duly and validly issued and are fully paid and does not have
any
preemptive rights applicable thereto; and all of the Common Stock underlying
the
Equity has been duly authorized,
reserved for issuance and, upon payment or conversion therefor (as applicable)
in accordance with
the
terms of the applicable security, will be duly and validly issued, fully paid
and non-assessable and
will
have no preemptive rights applicable thereto.
(iv) This
Agreement, the Subscription Documents and all transactions contemplated hereby
and
thereby have been duly authorized, executed and delivered by the Company and
are
valid and binding obligations of the Company legally enforceable against the
Company in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization and other laws of
general applicability relating to or affecting creditors’ rights now or
hereafter in effect, and to general equitable principles.
(v) Neither
the execution, delivery or performance of this Agreement nor the consummation
of
the
transactions herein contemplated, nor compliance with the terms hereof by the
Company do or will conflict
with or result in a breach of any of the terms or provisions of, or constitute
a
default under, the articles
of incorporation, as amended, or the bylaws, as amended, of the Company, any
indenture, mortgage,
deed of trust or other agreement or instrument to which the Company is a party
or by which it or
any of
its assets or properties is bound, or any law, order, rule, regulation,
judgment, writ, injunction or
decree
of any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or its business or any of its properties,
the violation of which could prevent
the Company from performing its obligations hereunder or otherwise materially
adversely affect the
Company; and no consent, approvals, authorizations or orders of agencies,
officers or other regulatory authorities are necessary for the valid
authorization, issue or sale of the Equity, and the performance
by the Company of this Agreement and its consummation of the transactions
contemplated hereby
and under the Subscription Documents, except under state securities or Blue
Sky
Laws, as to which
no
opinion need be expressed.
(vi) There
are
no actions, suits or proceedings at law or in equity pending or threatened,
against
the Company and there are no proceedings pending or threatened against the
Company before or by
any
federal or state commission, regulatory body or administrative agency or other
governmental body wherein,
either in any case or in the aggregate, an unfavorable ruling, decision or
finding could materially
adversely affect the business, franchise, licenses, permits, operations,
financial condition or income
of
the Company which are not disclosed in the Subscription Documents.
(vii)
The
issuance of the Equity is exempt from registration under the Securities Act
of
1933, as amended.
(g)
The
Company shall have furnished to the Placement Agents a certificate of the Chief
Executive
Officer and the Chief Financial Officer of the Company dated as of each Issuance
Date, in the form
attached hereto as Exhibit A.
-9-
All
the
opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement
shall be deemed to be in compliance with the provisions hereof only if they
are
in form and substance satisfactory to counsel of the Placement Agents, whose
approval shall not be unreasonably withheld.
SECTION
8. Termination.
(a) This
Agreement may be terminated by the either or both of the Placement Agents by
notice to the Company in the event that the Company shall have failed or been
unable to comply with any of the terms,
conditions or provisions of this Agreement on the part of the Company to be
performed, complied with
or
fulfilled within the respective times herein provided for, unless compliance
therewith or performance
or satisfaction thereof shall have been expressly waived by the applicable
Placement Agent in
writing.
(b) This
Agreement may be terminated by either or both of the the Placement Agents by
notice to the Company at any time if, in the sole judgment of such Placement
Agent, the Offering or the sale or the payment
for or the delivery of the Units is rendered impracticable or inadvisable
because (i) additional material
governmental restrictions not in force and effect on the date hereof shall
have
been imposed upon
trading in securities generally, or minimum or maximum prices shall have been
generally established,
or trading in securities generally on the Over-The-Counter Bulletin Board shall
have been suspended or a general banking moratorium shall have been established
by federal or New York State authorities,
(ii) a war, major hostilities, terrorist or similar activity, act of God or
other calamity shall have
occurred which materially adversely affects the ability of the Placement Agents
to perform their obligations
hereunder, (iii) of a Material Adverse Effect or (iv) either Placement Agent,
in
its respective sole discretion, shall be dissatisfied with the results of its
due diligence investigation.
(c)
Any
termination of this Agreement pursuant to this section shall be without
liability of any character
(including, but not limited to, loss of anticipated profits or consequential
damages) on the part of
any
party hereto, except that the Company shall remain obligated to pay the costs
and expenses provided
to be paid by it specified in Section 4(e) through the date of termination,
and
the Company shall be
obligated to pay all losses, claims, damages or liabilities, joint or several,
payable by the Company under
Section 5(a).
SECTION
9. Finders.
The
Company and the Placement Agents mutually represent that they know
of
no third party who rendered any service in connection with the introduction
of
the Company to the
Placement Agents and who is making a claim against anyone for a “finder’s fee”
or similar type of fee in
connection with the Offering. Each party hereby indemnifies the other against
any claims by any person
known to it and not known to the other parties hereto, who shall claim to have
rendered services in
connection with the introduction of the Company to the Placement Agents or
to
have such a claim and who
shall
make a claim for a fee in connection therewith.
SECTION
10. Placement
Agent’s Representations and Warranties. The
Placement Agents, each individually
with respect to themselves, represent and warrant to and agree with the Company
that:
(a)
The
Placement Agent is registered as a broker-dealer with the Securities and
Exchange Commission
and is a member in good standing of the National Association of Securities
Dealers, Inc. (“NASD”).
-10-
(b) The
Placement Agent will not effect offers or sales of the Units in any jurisdiction
unless it or its
representative is duly licensed to effect offers and sales in such jurisdiction
and the offer and sale of the Units are registered or exempt from registration
in such jurisdiction.
(c) The
Placement Agent has duly authorized this Agreement and this Agreement is the
valid, binding
and enforceable obligation of the Placement Agent.
(d) In
making
any offer of the Units, the Placement Agent will not make any material
representation
to potential investors not contained in the Subscription Documents which has
not
been authorized
in writing by the Company.
(e) The
Placement Agent shall not utilize any general advertising or solicitation to
offer the Units.
SECTION
11. Notice.
Except
as
otherwise expressly provided in this Agreement, (a) whenever
notice is required by the provisions of this Agreement to be given to the
Company, such notice
shall be given in writing, addressed to the Company at the address set forth
in
the Subscription Documents,
with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
and (b) whenever notice is required by the provisions of this Agreement to
be
given to the Placement
Agent, such notice shall be in writing addressed to the Placement Agent at
the
address set forth
above, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
SECTION
12. Miscellaneous.
(a) This
Agreement is made solely for the benefit of the Placement Agents, the Company
and any controlling
person referred to in Section 15 of the Securities Act, and their respective
successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term
“successor” or the term “successors and assigns” as used in this Agreement shall
not include any purchaser,
as such, of any of the Units.
(b) The
headings in this Agreement are for reference only and shall not limit or
otherwise affect any
of
the terms or provisions hereof.
(c) The
provisions of this Agreement shall be deemed severable, so that if any part,
section or provision hereof shall be declared unlawful or unenforceable, the
remaining parts, sections or provisions hereof
shall not be affected thereby and shall remain in full force and
effect.
(d) This
Agreement shall be deemed to have been drafted jointly by the parties
hereto.
(e)
The
Placement Agents shall have the right to associate themselves with such other
members of
the
NASD and/or foreign investment firms duly licensed, if required, in their
respective locales offering
the Units only offshore to the United States as additional agents as the
Placement Agent may elect,
in
its sole discretion. Such additional agents may become selected dealers subject
to this Agreement
in the sole discretion of the Placement Agents by signing a Selected Dealer
Agreement in form
satisfactory to the Placement Agents. The Placement Agents, each individually,
shall have the right to
share
any compensation due to them hereunder, with such additional agents and in
such
amounts as the applicable
Placement Agent deems fit, in its sole judgment. In addition, such additional
agents shall be afforded
the same indemnification by the Company as offered to the Placement Agents
hereunder.
-11-
(f) The
validity, interpretation and construction of this Agreement, and of each part
hereof, will be
governed by the local laws of the State of New York, without giving effect
to
its conflict of law principles or rules. In the event of a dispute, the parties
hereto agree to be bound by the arbitration procedures
of the American Arbitration Association, and that such arbitration shall take
place in the New York City metropolitan area. In actions not involving
collection by a Placement Agent of compensation and/or
reimbursement expenses, the prevailing party shall be reimbursed by the
nonprevailing party for all
reasonable attorney’s fees and costs (including all arbitration costs) incurred
by the prevailing party in resolving
such dispute. In any action in which a Placement Agent seeks compensation and/or
reimbursement
of expenses, the Company shall reimburse such Placement Agent for all costs
associated with
such
action (including but not limited to reasonable attorney fees) as and when
the
Placement Agent provides
the Company with invoices for such costs and expenses.
(g) This
Agreement may be executed in counterparts, each of which shall be deemed an
original and
all
of which together will constitute one and the same instrument. This Agreement
may be executed by
facsimile signatures or scanned electronic mail (e-mail)
attachment.
(h) Westminster
shall not be obligated to provide advice or perform services to the Company
that
are
not
specifically addressed in this Agreement and/or the engagement letter between
the Company and Westminster Securities Corp. effective as of April 10, 2006
and
as amended on June 27, 2007 (the “Engagement Letter”), and TriPoint shall not be
obligated to provide advice or perform services to the Company
that are not specifically addressed in this Agreement. The obligations of the
Placement Agents
described in this Agreement and the Engagement Letter, as applicable, consist
solely of best efforts
services to the Company. In no event shall the Placement Agents be required
or
permitted without express authorization by this Agreement or the Engagement
Letter to make decisions for the Company or to provide legal or accounting
services. All final decisions with respect to acts of the Company or its
affiliates, whether or not made pursuant to or in reliance upon information
or
advice furnished by the Placement Agents hereunder, shall be those of the
Company or such affiliates, and the Placement Agents shall under no
circumstances be liable for any expense incurred or loss suffered by the Company
as a consequence
of such decisions.
(i) This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective
successors and authorized assigns. Any attempt by either party to assign any
rights, duties, or obligations
which may arise under this Agreement without the prior written consent of the
other party shall
be
void.
(j) This
Agreement contains the entirety of the agreements between the parties with
respect to the Offering,
and no party is relying on any agreement, representation, warranty, or other
understanding not expressly stated in this Agreement with respect to such
Offering. Notwithstanding the foregoing, the Engagement
Letter shall continue to remain in full force and effect, as supplemented herein
with the respect
to the Offering, and shall survive any termination of this
Agreement.
(k) The
parties acknowledge that certain provisions of this Agreement must survive
any
termination
or expiration thereof in order to be fair and equitable to the party to whom
any
promise or duty
to
perform is owed under such provision prior to such termination or expiration
of
the Agreement. Therefore,
the parties agree that the provisions of Sections 1, 2, 3, 4, 5, 7, 8(c), 9,
10,
11, and 12 shall survive
the termination or expiration of this Agreement for the period required to
meet
and satisfy any obligations
and promises arising therein and thereunder
-12-
[SIGNATURE
PAGE FOLLOWS]
-13-
[SIGNATURE
PAGE TO PLACEMENT AGENT AGREEMENT FOR TECHNOCONCEPTS,
INC.]
Please
confirm that the foregoing correctly sets forth the Agreement between the
Placement Agents
and the Company.
We
hereby
confirm as of the date hereof that the above letter sets forth the agreement
between the Company,
the other Placement Agent, and us.
| WESTMINSTER SECURITIES CORPORATION | ||
| By: | ||
|
▇▇▇▇ ▇. ▇’▇▇▇▇, Chairman & CEO |
||
| TRIPOINT GLOBAL EQUITIES, LLC | ||
| By: | ||
|
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, CEO |
||
-14-
EXHIBIT
A
FORM
OF OFFICER’S CERTIFICATE
[Date]
Westminster
Securities Corporation
▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
We,
the
Chief Executive Officer and Chief Financial Officer of TechnoConcepts, Inc.
(the
“Company”), in
connection with the execution and delivery by the Company of each Subscription
Agreement (the "Subscription
Agreements"), by and among the Company and the investors identified on each
signature page
thereto (the “Investors”) as of the date above (“Closing”), do hereby certify as
follows (Capitalized terms
not
otherwise defined herein are defined as set forth in the Subscription
Agreements.):
(i) The
representations and warranties of the Company in each Subscription Agreement
are
true
and
correct in all material respects at and as of the Closing and the Company has
complied in all material
respects with all the agreements and satisfied all the conditions on its part
to
be performed or satisfied
at or prior to the Closing.
(ii) The
Subscription Documents and any amendments and supplements thereto, and all
statements
contained therein, are true and correct, and neither the Subscription Documents
nor any amendment
or supplement thereto includes any untrue statement of a material fact or omits
to state any material
fact required to be stated therein in light of the circumstances in which they
were made or necessary
to make the statements therein not misleading, and since the Commencement Date,
there has occurred
no event required to be set forth in amended or supplemented Subscription
Documents which has
not
been so set forth.
Very
truly yours,
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ||
|
Chief
Executive Officer
|
Chief
Financial Officer
|
||
-15-