Exhibit 10.2
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PLACEMENT AGENCY AGREEMENT
December ___, 2003
[Name] [Address]
Ladies and Gentlemen:
Catalyst Lighting Group, Inc., a Delaware corporation (the "Company"), hereby
confirms its agreement (the "Agreement") with you (the "Placement Agent"), as
follows (unless the context otherwise requires, as used herein, the "Company"
refers to Catalyst Lighting Group, Inc. and each of its subsidiaries):
1. Offering.
(a) The Company will offer (the "Offering") for sale through the Placement
Agent, on a non-exclusive basis, shares ("Shares") of its common stock, par
value $0.01 per share ("Common Stock"). The offering price per Share (the
"Purchase Price per Share") shall be $2.50. The total amount of gross proceeds
from the sale of Shares in the Offering shall be a maximum of $3,000,000 (the
"Maximum Amount").
(b) The Shares will be offered on a reasonable efforts basis from the effective
date (the "Effective Date" or "Commencement Date") of the Registration Statement
(as defined below) and continuing until the earlier of (i) the date on which all
of the Shares have been sold by the Company, or (ii) June 30, 2004, unless
extended by the Company (the "Offering Period"). The date on which the Offering
shall terminate shall be referred to as the "Termination Date." On September 30,
2003, the Company filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (Registration No.
333-109286), including the related preliminary prospectus (a "Preliminary
Prospectus"), for the registration of the Shares under the Securities Act of
1933, as amended (the "Act"). The Company either (i) will prepare and file,
prior to the effective date of such registration statement, an amendment to such
registration statement, including a final prospectus, or (ii) if the Company
shall elect to rely on Rule 430A promulgated under the Act ("Rule 430A"), will
promptly prepare and file a prospectus, in accordance with the provisions of
Rule 430A and Rule 424(b) promulgated under the Act ("Rule 424(b)") promptly
after the effectiveness of such registration statement. Such registration
statement, amendment(s) and/or prospectuses have been and all amendments made
subsequent to the date of this Agreement will be prepared by the Company in
conformity with the requirements of the Act, and the rules and regulations of
the Commission under the Act (the "Regulations"). The registration statement, as
amended, on file with the Commission at the time it becomes effective (including
the final prospectus, financial statements, schedules, exhibits and all other
documents filed as a part thereof or incorporated therein by reference and all
information deemed to be a part thereof as of such time pursuant to paragraph
(b) of Rule 430A) is hereinafter called the "Registration Statement," and the
form of the final prospectus (including the financial statements and all
documents incorporated therein by reference), dated the Effective Date or filed
with the Commission pursuant to Rule 424(b), as the case may be, is hereinafter
called the "Prospectus."
(c) The offering of the Shares will be made by the Placement Agent on behalf of
the Company solely pursuant to the Registration Statement.
2. Representations and Warranties. The Company hereby represents and warrants to
the Placement Agent that each of the following shall be true in all respects as
of the date hereof and, as applicable, on and as of the date of the Registration
Statement as if made on and as of the date hereof:
(a) The Registration Statement will be, and as of the date hereof has been,
diligently prepared by the Company, at its sole cost, in conformity with all
applicable laws, the Act and the Regulations relating to offerings of the type
contemplated by the Offering, and the applicable securities laws and the rules
and regulations of those jurisdictions wherein the Shares are to be offered and
sold, excluding foreign jurisdictions.
(b) The Registration Statement will not, and as of the date of the Registration
Statement does not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the statements, documents, certificates or other items
prepared or supplied by the Company with respect to the transactions
contemplated hereby contains or will contain an untrue statement of a material
fact or omits a material fact necessary to make the statements contained therein
not misleading.
(c) The Company is a corporation duly organized, validly existing and in good
standing under the laws of Delaware. The Company has no subsidiaries and does
not have an equity interest in any other firm, partnership, association or other
entity other than Whitco Company, LP.
(d) The Company has all requisite power and authority (corporate and other) to
conduct its business as presently conducted and as proposed to be conducted (as
described in the Registration Statement), to enter into and perform its
obligations under this Agreement and to issue, sell and deliver the Shares. This
Agreement has been duly executed and delivered and constitutes valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms.
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(e) The Shares have been duly authorized and, when issued and delivered against
payment therefor, will be validly issued, fully paid and nonassessable and will
be free and clear of all liens, charges, restrictions, claims and encumbrances
imposed by or through the Company. No holder of any of the Shares will be
subject to personal liability solely by reason of being a holder of Shares.
(f) No consent, authorization or filing of or with any court or governmental
authority is required in connection with the issuance of the Shares or the
consummation of the transactions contemplated by the Registration Statement,
except for required filings with the Commission and applicable "blue sky" or
state securities commissions relating specifically to the Offering (all of which
will be duly made on a timely basis).
3. Placement Agent Appointment and Compensation.
(a) In accordance with the terms hereof, the Company hereby appoints the
Placement Agent and its selected dealers, as its non-exclusive agent, in
connection with the Offering. The Placement Agent has no obligation to purchase
any of the Shares. The agency of the Placement Agent hereunder shall continue
until the earlier of the Termination Date or the final Closing (as defined in
Section 4(c) hereof).
(b) The Company will cause to be delivered to the Placement Agent copies of the
Registration Statement and has consented, and hereby consents, to the use of
such copies for the purposes permitted by the Act and applicable securities
laws, and hereby authorizes the Placement Agent and its agents, employees and
selected dealers to use the Registration Statement in connection with the sale
of the Shares until the Termination Date, and no other person or entity is or
will be authorized to give any information or make any representations other
than those contained in the Registration Statement or to use any offering
materials other than those contained in the Registration Statement in connection
with the sale of the Shares. The Company will provide at its own expense such
quantities of the Registration Statement and other documents and instruments
relating to the Offering as the Placement Agent may reasonably request.
(c) The Company will cooperate with the Placement Agent by making available to
its representatives such information as may be requested in making a reasonable
investigation of the Company and its affairs and shall provide access to such
employees as shall be reasonably requested.
(d) The Company shall pay to the Placement Agent a placement fee equal to eight
percent (8%) of the gross Purchase Price Per Share from the sale of Shares made
by or through Placement Agent (the "Placement Agent's Fee"). In addition, the
Company shall pay expenses incurred by the Placement Agent in connection with
the Offering up to a maximum of three (3%) percent of the gross proceeds from
the sale of Shares made by or through Placement Agent. Additionally, the Company
hereby agrees to issue and sell to Placement Agent, or to such persons as you
may designate, options or warrants for the purchase of an aggregate of one share
of common stock for each 10 Shares sold by or through Placement Agent at an
exercise price per share equal to 125% of the Purchase Price Per Share (the
"Placement Agent Warrant"). The Placement Agent's Fee, Placement Agent Warrant
and the expenses set forth herein will be deducted from the gross proceeds of
the Shares sold at each Closing.
4. Subscription and Closing Procedures.
(a) For sales of Shares made by or through Placement Agent, each prospective
purchaser will be required to complete and execute one original signature page
of the Subscription Agreement in the form annexed to the Registration Statement,
which will be forwarded or delivered to the Placement Agent at the Placement
Agent's offices at the address set forth in Section 11 hereof, together with the
subscriber's check or good funds in the full amount of the Purchase Price Per
Share for the number of Shares desired to be purchased.
(b) All funds for subscriptions received from the Offering will be promptly
forwarded by the Placement Agent to and deposited in an escrow account (the
"Escrow Account") with Xxxxx Fargo Bank, N.A., acting as escrow agent
established for the purpose of holding subscription funds prior to a Closing
(the "Escrow Agent"). All such funds for subscriptions will be held in the
Escrow Account pursuant to the terms of the escrow agreement with respect
thereto by the Company and the Escrow Agent. The Company will pay all fees
related to the establishment and maintenance of the Escrow Account. The Company
will either accept or reject the Subscription Agreements in a timely fashion and
at the Closing will countersign the Subscription Agreements and provide copies
of such agreements to the Placement Agent. The Company will give written notice
to the Placement Agent of its acceptance or rejection of each subscription. The
Company, or the Placement Agent on the Company's behalf, will promptly return to
subscribers incomplete, improperly completed, improperly executed and rejected
subscriptions and give written notice thereof to the Placement Agent or Company,
as applicable, upon such return.
(c) At such time or times as the Company determines, a closing shall be held
promptly with respect to that portion of the Shares sold (each, a "Closing").
Closings may from time to time be conducted with respect to Shares sold, with
the final Closing to occur within ten (10) days from the earlier of the
Termination Date or the sale of all Shares offered. Delivery of payment for the
accepted subscriptions from the funds held in the Escrow Account will be made at
each Closing at the Company's offices against delivery of the Shares by the
transfer agent of the Company, net of amounts due to the Placement Agent as of
such Closing. Executed Shares will be in such authorized denominations and
issued in such names as the Placement Agent may request on or before the second
full business day prior to the date of each Closing ("Closing Date").
5. Further Covenants. The Company hereby covenants and agrees that:
(a) The Company shall not, at any time prior to the final Closing, take any
action that would cause any of the representations and warranties made by it in
this Agreement not to be complete and correct on and as of each Closing Date
with the same force and effect as if such representations and warranties had
been made on and as of each such date.
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(b) If, at any time prior to the final Closing, any event shall occur that does
or may materially affect the Company or as a result of which it might become
necessary to amend or supplement the Registration Statement so that the
representations and warranties herein remain true, or in case it shall be
necessary to amend or supplement the Registration Statement to comply with all
applicable securities laws or regulations, the Company will promptly notify the
Placement Agent and shall, at its sole cost, prepare and furnish to the
Placement Agent copies of appropriate amendments and/or supplements in such
quantities as the Placement Agent may request. The Company will not at any time,
whether before or after the final Closing, prepare or use any amendment or
supplement to the Registration Statement of which the Placement Agent will not
previously have been advised and furnished with a copy, or which is not in
compliance with the Act, the Regulations and other applicable securities laws.
As soon as the Company is advised thereof, the Company will advise the Placement
Agent and its counsel, and confirm the advice in writing, of any order
preventing or suspending the use of the Registration Statement, or the
suspension of the qualification or registration of the Shares for offering or
the suspension of any exemption for such qualification or registration of the
Shares for offering in any jurisdiction, or of the institution or threatened
institution of any proceedings for any of such purposes, and the Company will
use its best efforts to prevent the issuance of any such order, judgment or
decree, and, if issued, to obtain as soon as reasonably possible the lifting
thereof.
(c) The Company shall comply with the Act, the Regulations, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the rules and regulations
thereunder, all applicable state securities laws and the rules and regulations
thereunder in the states in which the Shares are qualified or registered for
sale or exempt from such qualification or registration, so as to permit the
continuance of the sales of the Shares, and will file with the Commission, and
shall promptly thereafter forward to the Placement Agent, any and all reports on
Form D as are required.
(d) The Company shall use its reasonable best efforts to qualify the Shares for
sale (or seek exemption therefrom) under the securities laws of such
jurisdictions in the United States as the Placement Agent shall designate, and
the Company will (through Blue Sky counsel) make such applications and furnish
information as may be required for such purposes.
6. Conditions of Placement Agent's Obligations. The obligations of the Placement
Agent hereunder are subject to the fulfillment, at or before each Closing, of
the following additional conditions:
(a) Each of the representations and warranties of the Company shall be true and
correct when made on the date hereof and on and as of each Closing Date as
though made on and as of each Closing Date.
(b) The Company shall have performed and complied with all agreements, covenants
and conditions required to be performed and complied with by it under the
Registration Statement at or before each Closing.
(c) No order suspending the use of the Registration Statement or enjoining the
offering or sale of the Shares shall have been issued, and no proceedings for
that purpose or a similar purpose shall have been initiated or pending, or, to
the best of the Company's knowledge, contemplated or threatened.
(d) The Placement Agent shall have received certificates of the chief financial
officer of the Company, dated as of each Closing Date, certifying on behalf of
the Company, in such detail as Placement Agent may reasonably request, as to the
fulfillment of the conditions set forth in subparagraphs (a), (b) and (c) above.
(e) The Company shall have delivered to the Placement Agent (i) a currently
dated good standing certificate from the Secretary of State of Delaware and each
jurisdiction in which the Company is qualified to do business as a foreign
corporation, and (ii) certified resolutions of the Company's Board of Directors
approving this Agreement and the transactions and agreements contemplated by
this Agreement and the Registration Statement.
(f) At each Closing, the Company shall have (i) paid to the Placement Agent the
Placement Agent's Fee in respect of all Shares sold by Placement Agent at such
Closing and (ii) paid all fees, costs and expenses set forth herein.
7. Indemnification.
(a) The Company will (i) indemnify and hold harmless the Placement Agent, its
selected dealers and their respective officers, directors, employees and each
person, if any, who controls the Placement Agent within the meaning of the Act
and such selected dealers (each an "Indemnitee") against, and pay or reimburse
each Indemnitee for, any and all losses, claims, damages, liabilities or
expenses whatsoever (or actions or proceedings or investigations in respect
thereof), joint or several (which will, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees, including appeals), to which
any Indemnitee may become subject, under the Act or otherwise, in connection
with the offer and sale of the Shares, whether such losses, claims, damages,
liabilities or expenses shall result from any claim of any Indemnitee or any
third party; and (ii) reimburse each Indemnitee for any legal or other expenses
reasonably incurred in connection with investigating or defending against any
such loss, claim, action, proceeding or investigation; provided, however, that
the Company will not be liable in any such case to the extent that any such
claim, damage or liability results from (A) an untrue statement or alleged
untrue statement of a material fact made in the Registration Statement, or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
reliance upon and in conformity with written information furnished to the
Company by the Placement Agent, Indemnitee or any such controlling persons
specifically for use in the preparation thereof, or (B) any violations by the
Placement Agent of the Act or state securities laws which does not result from a
violation thereof or a breach hereafter by the Company or any of its affiliates.
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(b) The Placement Agent will indemnify and hold harmless the Company, its
officers, directors, employees and each person, if any, who controls the Company
within the meaning of the Act against, and pay or reimburse any such person for,
any and all losses, claims, damages or liabilities or expenses whatsoever (or
actions, proceedings or investigations in respect thereof) to which the Company
or any such person may become subject under the Act or otherwise, whether such
losses, claims, damages, liabilities or expenses (or actions, proceedings or
investigations in respect thereof) shall result from any claim of the Company,
any of its officers, directors, employees, agents, any person who controls the
Company within the meaning of the Act or any third party, insofar as such
losses, claims, damages or liabilities are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement (or any amendment or supplement thereto) but only with reference to
information contained in the Registration Statement relating to the Placement
Agent, or an omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if made or omitted in reliance upon and in conformity with written
information furnished to the Company by the Placement Agent or any such
controlling persons, specifically for use in the preparation thereof. The
Placement Agent will reimburse the Company or any such person for any legal or
other expenses reasonably incurred in connection with investigating or defending
against any such loss, claim, damage, liability or action, proceeding or
investigation to which such indemnity obligation applies.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, claim, proceeding or investigation
("Action"), such indemnified party, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, will notify the
indemnifying party of the commencement thereof, but the omission to so notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party under this Section 7 unless the indemnifying party has
been substantially prejudiced by such omission. The indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party, to assume the defense thereof subject to the
provisions herein stated, with counsel reasonably satisfactory to such
indemnified party. The indemnified party will have the right to employ separate
counsel in any such Action and to participate in the defense thereof, but the
fees and expenses of such counsel will not be at the expense of the indemnifying
party if the indemnifying party has assumed the defense of the Action with
counsel reasonably satisfactory to the indemnified party; provided, however,
that if the indemnified party shall be requested by the indemnifying party to
participate in the defense thereof or shall have concluded in good faith and
specifically notified the indemnifying party either that there may be specific
defenses available to it which are different from or additional to those
available to the indemnifying party or that such Action involves or could have a
material adverse effect upon it with respect to matters beyond the scope of the
indemnity agreements contained in this Agreement, then the counsel representing
it, to the extent made necessary by such defenses, shall have the right to
direct such defenses of such Action on its behalf and in such case the
reasonable fees and expenses of such counsel in connection with any such
participation or defenses shall be paid by the indemnifying party. No settlement
of any Action against an indemnified party will be made without the consent of
the indemnifying party and the indemnified party, which consent shall not be
unreasonably withheld or delayed in light of all factors of importance to such
party and no indemnifying party shall be liable to indemnify any person for any
settlement of any such claim effected without such indemnifying party's consent.
8. Contribution. To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 7 hereof
and it is finally determined, by a judgment, order or decree not subject to
further appeal that such claims for indemnification may not be enforced, even
though this Agreement expressly provides for indemnification in such case; or
(ii) any indemnified or indemnifying party seeks contribution under the Act, the
1934 Act, or otherwise, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Placement Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission or alleged
omission will be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by the Company or by the Placement Agent, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement, alleged statement, omission or alleged omission. The Company and the
Placement Agent agree that it would be unjust and inequitable if the respective
obligations of the Company and the Placement Agent for contribution were
determined by pro rata allocation of the aggregate losses, liabilities, claims,
damages and expenses or by any other method or allocation that does not reflect
the equitable considerations referred to in this Section 8. No person guilty of
a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person, if
any, who controls the Placement Agent within the meaning of the Act will have
the same rights to contribution as the Placement Agent, and each person, if any,
who controls the Company within the meaning of the Act will have the same rights
to contribution as the Company, subject in each case to the provisions of this
Section 8. Anything in this Section 8 to the contrary notwithstanding, no party
will be liable for contribution with respect to the settlement of any claim or
action effected without its written consent. This Section 8 is intended to
supersede, to the extent permitted by law, any right to contribution under the
Act, the 1934 Act or otherwise available.
9. Termination.
(a) This Agreement may be terminated by the Company at any time prior to the
Termination Date in the event that the Placement Agent shall have failed to
perform any of its material obligations hereunder.
(b) Upon any such termination, the Escrow Agent will cause all money received in
respect of subscriptions for Shares not sold to be promptly returned to such
subscribers without interest, penalty, expense or deduction.
10. Survival. The obligations of the parties to pay any costs and expenses
hereunder and to provide indemnification and contribution as provided herein
shall survive any termination hereunder.
11. Notices. All communications hereunder will be in writing and, except as
otherwise expressly provided herein or after notice by one party to the other of
a change of address, if sent to the Placement Agent, will be mailed, delivered
or telefaxed and confirmed to ___________________, Attention:
[_________________], President, Telefax number [ ], with a copy to
________________________, and if sent to the Company, will be mailed, delivered
or telefaxed and confirmed to Catalyst Lighting Group, Inc., 0000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxxxxxxx,
Telefax number: (000) 000-0000, with a copy to Xxxxxxx Xxxxxxxxx LLP, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esq.,
Telefax number (000) 000-0000.
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12. APPLICABLE LAW, COSTS, ETC. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE. ALL CONTROVERSIES
WHICH MAY ARISE BETWEEN THE PARTIES CONCERNING THIS AGREEMENT SHALL BE
EXCLUSIVELY DETERMINED BY ARBITRATION PURSUANT TO THE RULES THEN PERTAINING TO
THE AMERICAN ARBITRATION ASSOCIATION (THE "AAA") IN TARRANT COUNTY, TEXAS.
HEARINGS WITH REGARD TO SUCH DISPUTE SHALL BE HELD EXCLUSIVELY AT THE OFFICES OF
THE AAA IN THE CITY OF FORT WORTH AND JUDGMENT UPON ANY AWARD RENDERED PURSUANT
THERETO MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. ANY DECISION
RENDERED BY THE AAA SHALL BE FINAL AND BINDING. SERVICE OF PROCESS MAY BE MADE
UPON THE COMPANY BY MAILING A COPY THEREOF TO IT, BY CERTIFIED OR REGISTERED
MAIL, AT ITS ADDRESS TO BE USED FOR THE GIVING OF NOTICES UNDER THIS AGREEMENT.
THE COMPANY AND THE PLACEMENT AGENT EACH HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
13. Confidentiality. The Company hereby agrees to hold confidential the
identities of the purchasers in the Offering and shall not disclose their names
and addresses without the prior written consent of the Placement Agent, unless
required by law.
14. Miscellaneous. No provision of this Agreement may be changed or terminated
except by a writing signed by the party or parties to be charged therewith.
Unless expressly so provided, no party to this Agreement will be liable for the
performance of any other party's obligations hereunder. Any party hereto may
waive compliance by the other with any of the terms, provisions and conditions
set forth herein; provided, however, that any such waiver shall be in writing
specifically setting forth those provisions waived thereby. No such waiver shall
be deemed to constitute or imply waiver of any other term, provision or
condition of this Agreement. This Agreement contains the entire agreement
between the parties hereto and is intended to supersede any and all prior
agreements between the parties relating to the same subject matter. This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute a single agreement. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefore, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
15. Entire Agreement. This Agreement together with any other agreement referred
to herein is intended to supersede all prior agreements between the parties with
respect to the Shares purchased hereunder and the subject matter hereof.
[SIGNATURE PAGE FOLLOWS]
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return this Agreement, whereupon it will become a binding
agreement between the Company and the Placement Agent in accordance with its
terms.
Very truly yours,
CATALYST LIGHTING GROUP, INC.
By: ___________________________
Xxxxxx X. Xxxxxxxxxx
Chief Executive Officer
Accepted and agreed to this
___ day of December, 2003
[PLACEMENT AGENT]
By: ___________________________
Name:
Title:
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