Placement Agent Agreement
Exhibit
10.21
June
25,
2007
DrTattoff,
LLC
0000
Xxxxxxxx Xxxx – Street
Level
Suite 105
(SW
Corner of Wilshire at La Cienega)
Xxxxxxx
Xxxxx, XX 00000
Attention:
Xxxxx Xxxxx
Dear
Xxxxx,
We
are
pleased that Dr. Tattoff (together with its subsidiaries and affiliates, the
“Company”) has selected Xxxxxxxxxx Securities Corporation (“The Placement
Agent”) to act as its exclusive financial advisor and placement agent to assist
the Company in connection with a best efforts private placement (the
"Financing") of up to $3,500,000 of the Company’s equity securities (the
"Securities"). This letter will confirm our acceptance of such retention and
set
forth the terms of our engagement.
1.
Retention; Terms of Financing. (a) The Company hereby retains Xxxxxxxxxx
Securities Corp. (The Placement Agent) as its exclusive financial advisor and
placement agent in connection with the proposed Financing and The Placement
Agent accepts such retention on the terms and conditions set forth in this
Agreement. As currently contemplated, the Financing shall consist of the sale
of
up to $3,500,000 of Securities. The actual size of the Financing, the terms
of
the Securities, the precise number of Securities to be offered by the Company
and the offering price shall be subject to a variety of factors, including
the
capitalization and financial condition of the Company, changes in the Company's
prospects and forecasts, market and general economic conditions and the results
of negotiations with potential investors.
(b) In
its
capacity as exclusive financial advisor and placement agent in connection with
the Financing, The Placement Agent shall (i) familiarize itself with the
business, operations, properties, financial condition, management and prospects
of the Company; (ii) assist the Company in developing an appropriate structure
for the Financing; (iii) introduce the Company to potential investors and
contact potential investors on the Company’s behalf; (iv) assist the Company in
any discussions and negotiations with potential investors; and (v) assist the
Company in closing the Financing. Except as provided on Schedule 1(b) hereto,
the Company will not contact or solicit potential investors with respect to
the
Financing or pursue any financing transaction in lieu of the Financing, and
the
Company shall refer all inquiries and offers received, directly or indirectly,
with respect to the Financing or any financing transaction in lieu of the
Financing to The Placement Agent (all such inquiries and offers, including
all
inquiries and offers which the Company may have received concerning an
investment in the Company prior to the date hereof, being deemed to have been
contacted by The Placement Agent in connection with the Financing). It is
understood that upon termination of this Agreement, the Company shall have
the
right to contact or solicit potential investors with respect to the Financing
in
an effort to complete the sale the minimum amount, subject to the Company
providing the Placement Agent with 50% of the compensation the Placement Agent
is otherwise entitled to receive under Section 3(b), 3(c) and 4 of this
Agreement on any such amount that the Company rises in this
effort.
May
9,
2007
Page
2
(c) Closing
Conditions. As a condition precedent to the obligations of the Placement Agent
to close any financing, the Company shall:
(i)
furnish to the Placement Agent the opinion, dated the Closing Date, of its
counsel, which opinion shall be reasonably acceptable to the Placement Agent
and
its counsel
(ii)
deliver and execute a closing certificate from the president or chief executive
officer of the Company containing standard representations and warranties of
the
Company for a transaction of this nature which shall be true and correct on
and
as of the Closing.
2.
Information; Offering Materials. (a) In connection with The Placement Agent’s
activities hereunder, the Company will furnish The Placement Agent and its
counsel upon request with all relevant information regarding the business,
operations, properties, financial condition, management and prospects of the
Company (all such information so furnished being hereinafter referred to as
the
“Information”), and with a private placement memorandum with respect to the
Company and the Financing in a form acceptable to The Placement Agent (such
memorandum, including any exhibits, amendments and supplements thereto, all
documents incorporated by reference therein and all other documents, instruments
and communications prepared for or otherwise used in connection with the
Financing being hereinafter referred to as the “Offering Materials”). The
Company shall also provide The Placement Agent with access to the Company’s
officers, directors, employees, accountants and legal counsel. The Company
acknowledges and agrees that The Placement Agent’s obligations under this
Agreement are subject to the satisfactory completion by The Placement Agent
of
its due diligence review of the Company and the Offering
Materials.
May
9,
2007
Page
3
(b)
The
Company represents and warrants to The Placement Agent that (i) all Information
and the Offering Materials will be complete and correct in all material respects
and will not contain any untrue statement of a material fact or omit to state
a
material fact necessary in order to make the statements therein not misleading
in light of the circumstances under which such statements are or will be made,
and (ii) any projections and other forward-looking information provided by
it to
The Placement Agent will have been prepared in good faith and will be based
upon
assumptions which, in light of the circumstances under which they are made,
are
reasonable. The Company recognizes and confirms that The Placement Agent: (1)
will use and rely primarily on the Information, the Offering Materials and
on
information available from generally recognized public sources in performing
the
services contemplated by this Agreement without having independently verified
the same; (2) is authorized as the Company's exclusive financial advisor and
placement agent to transmit to any prospective investor a copy or copies of
the
Offering Materials, forms of purchase agreements and any other legal
documentation supplied to The Placement Agent for transmission to any
prospective investor by or on behalf of the Company or by any of the Company’s
officers, representatives or agents, in connection with the performance of
The
Placement Agent’s services hereunder or any transaction contemplated hereby; (3)
does not assume responsibility for the accuracy or completeness of the
Information or Offering Materials and such other information; (4) will not
make
an appraisal of any assets of the Company; and (5) retains the right to continue
to perform due diligence during the course of its engagement
hereunder.
3.
Compensation. Except as set forth in Section 3(e) hereof, as consideration
for
The Placement Agent’s services pursuant to this Agreement, The Placement Agent
shall be entitled to receive, and the Company agrees to pay The Placement Agent,
the following compensation:
May
9,
2007
Page
4
(a)
The
Company shall pay to The Placement Agent, upon execution of this Agreement,
an
engagement fee of $5,000, which fee shall be non-refundable but shall be applied
against The Placement Agent’s expenses as set forth in Section 4
hereof.
(b)
Upon
closing of the Financing, the Company shall pay to The Placement Agent, in
cash,
a fee in an amount equal to 8% of the aggregate gross proceeds raised in the
Financing. If any portion of the proceeds raised in the Financing are not paid
to the Company at the closing of the Financing but rather is deferred until
a
later date or satisfaction of a condition precedent, the placement fee relating
to such deferred proceeds shall be paid by the Company upon receipt of the
deferred proceeds. If the Financing is consummated by means of more than one
closing, The Placement Agent shall be entitled to the fees provided herein
with
respect to each such closing.
(c)
The
Company shall grant and deliver to The Placement Agent (or its designated
nominees) at the closing of the Financing, for nominal consideration, warrants
(the “Warrants”) to purchase a number of shares of the Company's Common Stock
equal to 10% of the number of Units (and/or shares of Common Stock issuable
upon
exercise of securities or upon conversion or exchange of convertible or
exchangeable securities) sold at such closing. If the Financing is consummated
by means of more than one closing, The Placement Agent shall be entitled to
receive additional Warrants at each additional closing. The Warrants shall
be
exercisable at any time during the five-year period commencing on the closing
to
which they relate at an exercise price equal to the exercise price paid by
investors in the Financing or, in the case of exercisable, convertible, or
exchangeable securities, the exercise, conversion or exchange price thereof,
and
shall contain provisions, including, without limitation, those pertaining to
cashless exercise, anti-dilution protection and demand and piggyback
registration rights, customarily contained in warrants received by The Placement
Agent in similar transactions.
(d)
Notwithstanding any termination of this Agreement pursuant to the terms hereof
or otherwise, if within 6 months from the effective date of termination of
this
Agreement, the Company enters into a definitive commitment relating to the
Financing or any financing transaction in lieu of the Financing (or any portion
thereof) with any investor to whom the Company was introduced by The Placement
Agent or who was contacted by The Placement Agent, with the exception of any
investors introduced to The Placement Agent by the Company or by any other
selling group member, in connection with the Financing, the Company shall pay
to
The Placement Agent fees in accordance with the terms and provisions of Section
3(b) and grant and deliver to The Placement Agent (or its designated nominees)
Warrants in accordance with the terms and provisions of Section
3(c).
May
9,
2007
Page
5
(e)
In
the event any financing hereunder is closed with any of the investors listed
on
Schedule 1(b), the compensation due the Placement Agent as set forth in Sections
3 (b) and (c) hereof and Section 4 below shall each be reduced by 50%.
(f)
The
Placement Agent will not be entitled to any compensation of any kind upon the
exercise of any Warrants.
4.
Expenses. In addition to payment to The Placement Agent of the compensation
set
forth in Section 3 hereof, the Company shall pay the Selling Agent at each
Closing a non-accountable expense allowance (the “Expense Allowance”) of 2.0% of
the aggregate dollar value of Units sold at such Closing. Non-accountable
expense allowance is for the reimbursement of The Placement Agents expenses
including, without limitation, legal fees of the Placement Agent counsel and
all
travel and other of pocket expenses incurred by The Placement Agent in
connection with this engagement. Without limiting the foregoing, it is agreed
that all “blue sky” filing fees, printing costs, due diligence meetings,
registration expenses and qualification expenses shall be paid directly by
the
Company.
5.
Certain Matters Relating to the Financing; Other Actions. (a) The parties
acknowledge that it is their intention that the Financing shall be conducted
so
as to be exempt from the registration requirements of the Securities Act of
1933
(the "Act"). It is understood that investors in the Financing shall be
"accredited investors" or fall within other categories sanctioned by Regulation
D under the Act. The Company shall be responsible for ensuring that the sale
of
the Securities shall be exempt from the registration requirements of the Act
and
will otherwise comply with the applicable provisions of the Act and any
regulations thereunder and any applicable laws and requirements of any country,
state or other jurisdiction. Without limiting the foregoing, the Company
represents and warrants that it has not, and agrees that it will not, directly
or indirectly, engage in any form of general solicitation, general advertising
or directed selling efforts.
May
9,
2007
Page
6
(b) The
sale
of the Securities pursuant to the Financing shall be made pursuant to the terms
of a purchase agreement or subscription agreement (each a “Purchase Agreement”)
in form satisfactory to The Placement Agent. The Company represents and warrants
that (i) the representations and warranties contained in each Purchase Agreement
will be true and correct in all respects on the date such Purchase Agreement
is
entered into and as of the closing date of the sale of the Securities to which
such Purchase Agreement relates, and (ii) The Placement Agent shall be entitled
to rely on such representations and warranties (and on the representations
and
warranties contained in any of the other Offering Materials) as if they were
made directly to The Placement Agent. The Placement Agent shall also be entitled
to rely upon any opinions of counsel delivered to any purchaser of the
Securities, including, without limitation, any opinions relating to the
Registration Statement (as defined below)]
(c) Within
45
days after the closing of the reverse merger, the Company shall prepare and
file, at the Company’s sole cost and expense, a registration statement with the
Securities and Exchange Commission registering the resale of the shares of
common stock underlying the Securities (the “Registration Statement”) and shall
use its best efforts to cause the Registration Statement to be declared
effective within 120 days from the closing of the Reverse Merger. The Company
shall keep such Registration Statement effective until the earlier of (i) the
date that all of the securities covered thereby have been sold, and (ii) two
years from the effective date thereof, and shall comply with all of the other
requirements with respect thereto set forth in the Purchase Agreements, all
at
the Company’s sole cost and expense.
(d) During
the period this Agreement remains in effect, and for a period of 1 year after
the effective date of the Registration Statement, neither the Company nor any
officer, director or person or entity who beneficially owns five percent or
more
of the common stock of the Company shall offer, issue, sell, contract to sell,
grant any option for the sale of or otherwise dispose of any securities without
The Placement Agent’s prior written consent, except for the Securities, the
issuance of options or restricted stock awards under the Company’s or its
successor’s employee stock incentive plans, and shares of common stock upon the
exercise of any such stock options and any currently outstanding
options.
May
9,
2007
Page
7
(e) The
Company shall also execute and/or deliver such other instruments, documents
and
agreements (including, without limitation, delivery of such legal opinions
and
accountants’ “comfort letters” as The Placement Agent may request) and take such
other action as The Placement Agent may reasonably request in connection with
the provision of its services hereunder and the consummation of the Financing
or
an Alternative Transaction.
6.
Indemnification. The Company agrees to indemnify The Placement Agent in
accordance with the indemnification and other provisions (the “Indemnification
Provisions”) attached to this Agreement, which provisions are incorporated
herein by reference and shall survive the termination or expiration of this
Agreement.
7.
Termination; Survival of Provisions. This Agreement will terminate upon the
earlier of: 1.) the closing of the Financing 2.) Any time upon 30 days’ prior
written notice by The Placement Agent or the Company to the other party or
3.)
60 days from the signing of the Placement Agent Agreement.
8.
In the
event of such termination, the Company shall pay and deliver to The Placement
Agent (i) all compensation earned through the date of such termination
(“Termination Date”) pursuant to any provision of Section 3 hereof, and (ii) all
compensation which may be earned by The Placement Agent after the Termination
Date pursuant to Section 3(d) hereof, and shall reimburse The Placement Agent
for expenses incurred by The Placement Agent up to a maximum of $25,000 in
documented expenses in connection with its services hereunder pursuant to
Section 4 hereof, provided, however that should the Company breach this
Agreement, cap on documented expenses shall be increased to $75.000. All such
fees and reimbursements due to The Placement Agent pursuant to the immediately
preceding sentence shall be paid to The Placement Agent on or before the
Termination Date (in the event such fees and reimbursements are earned or owed
as of the Termination Date) or upon the closing of the Financing or Alternative
Transaction or any applicable portion thereof (in the event such fees are due
pursuant to the terms of Section 3(d hereof). Notwithstanding anything expressed
or implied herein to the contrary, the terms and provisions of Sections 3(d),
4,
6 (including, but not limited to the Indemnification Provisions attached to
this
Agreement and incorporated herein by reference), 8, 9, 10, 11, 12, 13, 14 and
15
shall survive the termination of this Agreement.
May
9,
2007
Page
8
9.
Notices. All notices provided hereunder shall be given in writing and either
delivered personally or by overnight courier services or sent by certified
mail,
return receipt requested, if to The Placement Agent, to 0 Xxxx Xxx Xxxx Xxxx.
Xxxxx 000 Xx. Xxxxxxxxxx Xxxxxxx 00000 and if to the Company, to the address,
and to the attention of the person, set forth on the first page of this
Agreement. Any notice delivered personally shall be deemed given upon receipt;
any notice given by overnight courier shall be deemed given on the next business
day after delivery to the overnight courier; and any notice given by certified
mail shall be deemed given upon the second business day after certification
thereof.
10.
Governing Law; Jurisdiction: Waiver of Jury Trial. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
applicable to agreements made and to be fully performed therein, without regard
to conflicts of law principles. The Company irrevocably submits to the exclusive
jurisdiction of any court of the State of Florida or the United States District
Court for the southern district of the State of Florida for the purpose of
any
suit, action or other proceeding arising out of this Agreement, or any of the
agreements or transactions contemplated hereby, which is brought by or against
the Company, and agrees that service of process in connection with any such
suit, action or proceeding may be made upon the Company in accordance with
Section 9 hereof. The parties hereby expressly waive any and all rights to
trail
by jury in any suit, action or proceeding arising under this
Agreement.
11.
Amendments. This Agreement may not be modified or amended except in a writing
duly executed by the parties hereto.
12.
Headings. The section headings in this Agreement have been inserted as a matter
of reference and are not part of this Agreement.
13.
Successors and Assigns. The benefits of this Agreement shall inure to the
parties hereto, their respective successors and assigns and to the indemnified
parties hereunder and their respective successors and assigns, and the
obligations and liabilities assumed in this Agreement shall be binding upon
the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained herein to the contrary, neither The Placement Agent nor
the
Company shall assign any of its obligations hereunder without the prior written
consent of the other party.
May
9,
2007
Page
9
14.
No
Third Party Beneficiaries. This Agreement does not create, and shall not be
construed as creating, any right enforceable by any person or entity not a
party
hereto, except those entitled to the benefits of the Indemnification Provisions.
Without limiting the foregoing, the Company acknowledges and agrees that The
Placement Agent is not being engaged as, and shall not be deemed to be, an
agent
or fiduciary of the Company’s stockholders or creditors or any other person by
virtue of this Agreement or the retention of The Placement Agent hereunder,
all
of which are hereby expressly waived.
15.
Waiver. Any waiver or any breach of any of the terms or conditions of this
Agreement shall not operate as a waiver of any other breach of such terms or
conditions or of any other term or condition, nor shall any failure to insist
upon strict performance or to enforce any provision hereof on any one occasion
operate as a waiver of such provision or of any other provision hereof or a
waiver of the right to insist upon strict performance or to enforce such
provision or any other provision on any subsequent occasion. Any waiver must
be
in writing.
16.
Press
Announcements. At any time after the consummation or other public announcement
of the Financing or any Alternative Transaction, The Placement Agent may place
an announcement in such newspapers and publications as it may choose, stating
that The Placement Agent has acted as exclusive financial advisor and/or
placement agent to the Company in connection with the Financing or such
Alternative Transaction.
17.
Counterparts. For the convenience of the parties this Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
instrument, but all of which taken together shall constitute one and the same
agreement. Facsimile signatures shall be deemed to be original signatures for
all purposes.
May
9,
2007
Page
10
If
the
foregoing correctly sets forth our agreement, please sign the enclosed copy
of
this Agreement in the space provided and return it to us.
|
Very
truly yours,
|
|
|
/s/
Xxxxx X. Xxxxx
|
|
|
By:
|
Xxxxx
X. Xxxxx
|
|
Name:
Xxxxx X. Xxxxx
|
|
|
Title:
Managing Director
|
|
Confirmed
and Agreed to this
_____
day
of _________, ____.
DRTATTOFF,
LLC
|
/s/
Xxxxx Xxxxx
|
|
|
Name:
Xxxxx Xxxxx
|
|
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Title:
CEO
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Indemnification
Provisions (attached)
INDEMNIFICATION
PROVISIONS
DrTattoff,
LLC (the “Company”) agrees to indemnify and hold harmless Xxxxxxxxxx Securities
Corp. (“Placement Agent”) and each of the other Indemnified Parties (as
hereinafter defined) from and against any and all losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses and
disbursements, and any and all actions, suits, proceedings and investigations
in
respect thereof and any and all legal and other costs, expenses and
disbursements in giving testimony or furnishing documents in response to a
subpoena or otherwise (including, without limitation, the costs, expenses and
disbursements, as and when incurred, of investigating, preparing, pursing or
defending any such action, suit, proceeding or investigation (whether or not
in
connection with litigation in which any Indemnified Party is a party))
(collectively, “Losses”), directly or indirectly, caused by, relating to, based
upon, arising out of, or in connection with, The Placement Agent’s acting for
the Company, including, without limitation, any act or omission by The Placement
Agent in connection with its acceptance of or the performance or non-performance
of its obligations under the Agreement between the Company and The Placement
Agent to which these indemnification provisions are attached and form a part
(the “Agreement”), any breach by the Company of any representation, warranty,
covenant or agreement contained in the Agreement (or in any instrument,
certificate, document or agreement relating thereto), or the enforcement by
The
Placement Agent of its rights under the Agreement or these indemnification
provisions, except to the extent that any such Losses are found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
to
have resulted primarily and directly from the gross negligence or willful
misconduct of the Indemnified Party seeking indemnification hereunder. The
Company also agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company for or
in
connection with the engagement of The Placement Agent by the Company or for
any
other reason, except to the extent that any such liability is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
to
have resulted primarily and directly from such Indemnified Party’s gross
negligence or willful misconduct.
These
indemnification provisions shall extend to the following persons (collectively,
the “Indemnified Parties”): The Placement Agent, its present and former
affiliated entities, managers, members, officers, employees, legal counsel,
agents and controlling persons (within the meaning of the federal securities
laws), and the officers, directors, partners, stockholders, members, managers,
employees, legal counsel, agents and controlling persons of any of them. These
indemnification provisions shall be in addition to any liability which the
Company may otherwise have to any Indemnified Party.
If
any
action, suit, proceeding or investigation is commenced, as to which an
Indemnified Party proposes to demand indemnification, it shall notify the
Company with reasonable promptness; provided,
however,
that
any failure by an Indemnified Party to notify the Company shall not relieve
the
Company from its obligations hereunder. An Indemnified Party shall have the
right to retain counsel of its own choice to represent it, and the fees,
expenses and disbursements of such counsel shall be borne by the Company. Any
such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Company and any counsel designated by
the
Company. The Company shall be liable for any settlement of any claim against
any
Indemnified Party made with the Company’s written consent. The Company shall
not, without the prior written consent of The Placement Agent, settle or
compromise any claim, or permit a default or consent to the entry of any
judgment in respect thereof, unless such settlement, compromise or consent
(i)
includes, as an unconditional term thereof, the giving by the claimant to all
of
the Indemnified Parties of an unconditional release from all liability in
respect of such claim, and (ii) does not contain any factual or legal admission
by or with respect to an Indemnified Party or an adverse statement with respect
to the character, professionalism, expertise or reputation of any Indemnified
Party or any action or inaction of any Indemnified Party.
In
order
to provide for just and equitable contribution, if a claim for indemnification
pursuant to these indemnification provisions is made but it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification may not be enforced in such case, even though the
express provisions hereof provide for indemnification in such case, then the
Company shall contribute to the Losses to which any Indemnified Party may be
subject (i) in accordance with the relative benefits received by the Company
and
its stockholders, subsidiaries and affiliates, on the one hand, and the
Indemnified Party, on the other hand, and (ii) if (and only if) the allocation
provided in clause (i) of this sentence is not permitted by applicable law,
in
such proportion as to reflect not only the relative benefits, but also the
relative fault of the Company, on the one hand, and the Indemnified Party,
on
the other hand, in connection with the statements, acts or omissions which
resulted in such Losses as well as any relevant equitable considerations. No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for fraudulent
misrepresentation. The relative benefits received (or anticipated to be
received) by the Company and it stockholders, subsidiaries and affiliates shall
be deemed to be equal to the aggregate consideration payable or receivable
by
such parties in connection with the transaction or transactions to which the
Agreement relates relative to the amount of fees actually received by The
Placement Agent in connection with such transaction or transactions.
Notwithstanding the foregoing, in no event shall the amount contributed by
all
Indemnified Parties exceed the amount of fees previously received by The
Placement Agent pursuant to the Agreement.
Neither
termination nor completion of the engagement of The Placement Agent referred
to
above shall affect these indemnification provisions which shall remain operative
and in full force and effect. The indemnification provisions shall be binding
upon the Company and its successors and assigns and shall inure to the benefit
of the Indemnified Parties and their respective successors, assigns, heirs
and
personal representatives.
