EXHIBIT 10.12(l)
NON-EXCLUSIVE FINDER'S AGREEMENT
This Finder's Agreement (this "Agreement") is made as of September 29, 2003,
between Citizen's, Inc. a Colorado Corporation (the "Company"), and The Shemano
Group, Inc., a California corporation (the "Finder"). The Finder and the Company
agree:
1. ENGAGEMENT OF FINDER: The Company hereby engages the Finder,
and the Finder hereby accepts such engagement, to act as the
Company's finder with respect to sales by the Company in a
private placement transaction (the "Offering") of up to $50
million aggregate principal amount of Equity, Equity-Related
or Debt Securities (the "Securities") of the Company to the
investors.
2. OFFERING PROCEDURES: The Finder will introduce the Company to
investors who the Finder represents and warrants are
"accredited investors," as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as
amended (the "1933 Act"), with whom the Finder has a
pre-existing substantive relationship.
3. FINDER'S COMPENSATION: In consideration for the services
rendered by the Finder hereunder, the Company shall pay to the
Finder, or cause the Finder to be paid, compensation as
provided in this section within 3 business days of the
Company's receipt of funds from the Offerees.
(a) CASH COMPENSATION: The Company shall pay to the
Finder cash compensation equal to seven percent (7%)
of the gross Offering funds received in the Offering.
(b) WARRANTS: The Finder shall receive five percent (5%)
warrant compensation. The warrant's strike shall
equal the strike, expiration and registration rights
of that of the investor in the respective offering.
The equity interests will be priced on the same terms
as the investors. The Shares shall be subject to
equitable adjustment for stock splits, stock
dividends and similar events. The shares shall have
"piggyback" registration rights.
For purposes of determining the Finder's compensation
under this Section 3, the gross offering funds
received in the Offering(s) shall include any amounts
paid to the Company by investors in respect to an
exercise or conversion of any of the Securities.
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4. CERTAIN MATTERS RELATING TO FINDER'S DUTIES:
(a) The Finder's responsibilities shall be limited to
introducing potential investors to the Company, and
the Finder shall not have authority to offer or sell
the Securities to any potential investor. Finder
shall not use any general solicitation or general
advertising within the meaning of the applicable
securities laws in connection with any offering. The
Finder shall have no responsibility to participate or
assist in any negotiations between any potential
investor and the Company. The Finder will have no
responsibility to act, and the parties contemplate
that the Finder will not act, as a broker or dealer
with respect to the offer or sale of the Securities.
Further, the finder shall have no responsibility for
fulfilling any SEC reporting or filing requirements
as relates to the Company provided however, Finder
agrees to provide Company with reasonable assistance
related to any registration, qualification or other
requirements of applicable securities laws and other
regulatory matters.
(b) The Finder agrees to introduce the Company to
Offerees only in states in which the Finder has been
advised by the Company that offers and sales of
Securities can be legally made by the Company.
(c) The Finder shall perform its duties under this
Agreement in a manner consistent with the
instructions of the Company. Such performance shall
include, but not be limited to, the delivery to each
Offeree a current copy of the Private Placement
Memorandum, Subscription Agreement and any Offering
Questionnaire and/or similar documents provided to
the Finder by the Company, as such documents may be
amended from time to time by the Company and
delivered to the Finder. The Finder shall
consecutively number each copy of the Private
Placement Memorandum (which will include the first
letter of the Finder's name or other identifying xxxx
sufficient to designate an Offeree introduced by the
Finder); keep a log of when and to whom each copy of
the Private Placement Memorandum is given, with the
Private Placement Memorandum numbers; maintain a copy
of any written information the Finder obtains
regarding the suitability of each Offeree; and only
use the Private Placement Memorandum in introducing
Offerees to the Company. The Finder shall provide
this log and all such written information to the
Company at any time and promptly upon request of the
Company at the termination of this Agreement.
(d) The Finder is and will hereafter act as an
independent contractor and not as an employee of the
Company and nothing in this Agreement shall be
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interpreted or construed to create any employment,
partnership, joint venture, or other relationship
between the Finder and the Company. The Finder will
not hold itself out as having, and will not state to
any person that the Finder has, any relationship with
the Company other than as an independent contractor.
The Finder shall have no right or power to find or
create any liability or obligation for or in the name
of the Company or to sign any documents on behalf of
the Company.
4. RIGHT OF FIRST REFUSAL. In consideration for The Shemano Group
to act as the finder in connection with the proposed offering,
the Company hereby grants The Shemano Group a right of first
refusal to serve as the Company's financial advisor and
investment banker in connection with any non-acquisition
related offering of common stock for a period of 1 year from
the closing of the transaction. In the event the company
advises The Shemano Group that it desires to effect any
non-acquisition related offering of common stock, the Company
and The Shemano Group will negotiate in good faith the terms
of The Shemano Groups engagement in a separate agreement which
would set forth, among other matters, compensation for The
Shemano Group based upon customary fees for the services
provided.
5. TERMINATION OF AGREEMENT. Either party may terminate this
Agreement by notifying the other party in writing upon a
material breach by that other party, unless such breach is
curable and is in fact cured within 15 days after such notice.
This Agreement will terminate upon completion or termination
of the Offering. The Company may terminate this Agreement
following ninety (90) days after the date hereof upon written
notice. Notwithstanding the foregoing, all provisions of this
Agreement other than section 1, 2 and 4 shall survive the
termination of this Agreement with respect to Offerees who the
Finder introduces to the Company prior to any termination with
respect to the Offering. The Finder shall be entitled to
compensation under section 3 based on investments made by such
Offerees prior to the termination of this Agreement or at any
time within one year thereafter.
7. INDEMNIFICATION. The Company and the Finder each shall
indemnify and defend the other and the other's affiliates,
directors, officers, employees, agents, consultants,
attorneys, accountants and other representatives (each an
"Indemnified Person" in this subsection (a)) and shall hold
each Indemnified Person harmless, to the fullest extent
permitted by law, from and against any and all claims,
liabilities, losses, damages and expenses (including
reasonable attorney's fees and costs), as they are incurred,
in connection with the Offering, resulting from the
indemnifying party's negligence, bad faith or willful
misconduct in connection with the Offering, any violation by
the indemnifying party (not caused by an Indemnified Person)
of Federal or state securities laws in connection with the
Offering, or any breach by the indemnifying party of this
Agreement. In case any litigation or proceeding shall be
brought against any Indemnified Person under this section, the
indemnifying party shall be entitled to assume the defense of
such litigation or proceeding with counsel of the indemnifying
party's choice at its expense (in which case the indemnifying
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party shall not be responsible for the fees and expenses of
any separate counsel retained by such Indemnified Person,
except in the limited circumstances described below in this
section); provided, however, that such counsel shall be
reasonably satisfactory to the Indemnified Person.
Notwithstanding the indemnifying party's election to assume
the defense of such litigation or proceeding (a) such
Indemnified Person shall have the right to employ separate
counsel and to participate in the defense of such litigation
or proceeding, and (b) the indemnifying party shall bear the
reasonable fees, costs and expenses of separate counsel if
(but only if) the use of counsel selected by the indemnifying
party to represent such Indemnified Person would present such
counsel with a conflict of interest under applicable laws or
rules of professional conduct.
8. CONFIDENTIALITY OF OFFEREE INFORMATION. The Company
acknowledges that the identity of the Offerees, and all
confidential information about Offerees received by the
Company from an Offeree or the Finder, is confidential
information of the Finder and may not be shared with any other
person without the consent of the Finder.
9. NOTICES. Any notice, consent, authorization or other
communication to be given hereunder shall be in writing and
shall be deemed duly given and received when delivered
personally, when transmitted by fax, three days after being
mailed by first class mail, or one day after being sent by a
nationally recognized overnight delivery service, charges and
postage prepaid, properly addressed to the party to receive
such notice, at the following address or fax number for such
party (or at such other address or fax number as shall
hereafter be specified by such party by like notice):
(a) If to the Company, to:
Xxxx X. Xxxxxx
President
000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxxxxxxx.xxx
(b) If to the Finder, to:
Xxxx Xxxxxxx
CEO
The Shemano Group, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Calif. 94108
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxx.xxx
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10. COMPANY TO CONTROL TRANSACTIONS. The prices, terms and
conditions under which the Company shall offer or sell any
Securities shall be determined by the Company in its sole
discretion. The Company shall have the authority to control
all discussions and negotiations regarding any proposed or
actual offering or sale of Securities. Nothing in this
Agreement shall obligate the Company to actually offer or sell
any Securities or consummate any transaction. The Company may
terminate any negotiations or discussions at any time and
reserves the right not to proceed with any offering or sale of
Securities. Compensation pursuant to this Agreement shall only
be paid to the Finder in the event of an actual Closing of the
Offering to an Offeree introduced by Finder.
11. CONFIDENTIALITY OF COMPANY INFORMATION. The Finder, and its
officers, directors, employees and agents shall maintain in
strict confidence and not copy, disclose or transfer to any
other party (1) all confidential business and financial
information regarding the Company and its affiliates,
including without limitation, projections, business plans,
marketing plans, product development plans, pricing, costs,
customer, vendor and supplier lists and identification,
channels of distribution, and terms of identification of
proposed or actual contracts and (2) all confidential
technology of the Company. In furtherance of the foregoing,
the Finder agrees that it shall not transfer, transmit,
distribute, download or communicate, in any electronic,
digitized or other form or media, any of the confidential
technology of the Company. The foregoing is not intended to
preclude the Finder from utilizing, subject to the terms and
conditions of this Agreement, the Private Placement Memorandum
and/or other documents prepared or approved by the Company for
use in the Offering.
All communications regarding any possible transactions,
requests for due diligence or other information, requests for
facility tours, product demonstrations or management meetings,
will be submitted or directed to the Company, and the Finder
shall not contact any employees, customers, suppliers or
contractors of the Company or its affiliates without express
permission. Nothing in this Agreement shall constitute a grant
of authority to the Finder or any representatives thereof to
remove, examine or copy any particular document or types of
information regarding the Company, and the Company shall
retain control over the particular documents or items to be
provided, examined or copied. If the Offering is not
consummated, or if at any time the Company so requests, the
Finder and its representatives will return to the Company all
copies of information regarding the Company in their
possession.
The provisions of this Section shall survive any termination
of this Agreement.
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12. PRESS RELEASES, ETC. The Company shall control all press
releases or announcements to the public, the media or the
industry regarding any offering, placement, transaction or
business relationship involving the Company or its affiliates.
Except for communication to Offerees in furtherance of this
Agreement and the provision of the Private Placement
Memorandum, the Finder will not disclose the fact that
discussions or negotiations are taking place concerning a
possible transaction involving the Company, or the status or
terms and conditions thereof.
13. DUE DILIGENCE: Neither the Company, nor any of its directors,
officers or shareholders, should, in any way rely on the
Finder to perform any due diligence with respect to the
Company. It is expressly understood and agreed that to the
extent due diligence is conducted; it will be conducted by the
investors.
14. EXPENSES, ETC. The compensation described in Section 3 of this
Agreement shall be the Finder's sole compensation for all of
its services and efforts to the Company and its affiliates, in
connection with any offering or placement of Securities.
However, while the Finder shall pay all of its own costs and
expenses exceeding two thousand ($2,000) in carrying out its
activities hereunder; the Company will reimburse the Finder
for the first $2,000 of aforementioned expenses after they
have been incurred by the Finder, and simply accounted for to
the Company. The Finder shall be exclusively responsible for
any compensation, fees, commissions or payments of its
employees, agents representatives, co-finders or other persons
or entities utilized by it in connection with its activities
on behalf of the Company, and the Finder will indemnify and
hold harmless the Company and its affiliates from the claims
of any such persons or entities.
15. COMPLIANCE WITH LAWS. The Finder represents and warrants that
it is a duly registered broker/dealer and in good standing
with the SEC, NASD and the State of California and has and
shall maintain such registrations as well as all other
necessary licenses and permits to conduct its activities under
this Agreement, which it shall conduct in compliance with
applicable federal and state laws relating to a private
placement under Regulation D of the 1933 Act. The Finder
represents that it is not a party to any other agreement which
would conflict with or interfere with the terms and conditions
of this Agreement.
16. ASSIGNMENT PROHIBITED. No assignment of this Agreement shall
be made the prior written consent of the other party.
17. AMENDMENTS. Neither party may amend this Agreement or rescind
any of its existing provisions without the prior written
consent of the other party.
18. GOVERNING LAW. This Agreement shall be deemed to have been
made in the State of California and shall be construed, and
the rights and liabilities determined, in accordance with the
law of the State of California, without regard to the
conflicts of laws rules of such jurisdiction.
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19. WAIVER. Neither Finder's nor the Company's failure to insist
at any time upon strict compliance with this Agreement or any
of its terms nor any continued course of such conduct on their
part shall constitute or be considered a waiver by Finder or
the Company of any of their respective rights or privileges
under this Agreement.
20. SEVERABILITY. If any provision herein is or should become
inconsistent with any present or future law, rule or
regulation of any sovereign government or regulatory body
having jurisdiction over the subject matter of this Agreement,
such provision shall be deemed to be rescinded or modified in
accordance with such law, rule or regulation. In all other
respects, this Agreement shall continue to remain in full
force and effect.
21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each as all of the signatories hereto have
signed a counterpart of this Agreement. All counterparts so
executed shall constitute one Agreement binding on all of the
parties hereto, notwithstanding that all of the parties are
not signatory to the same counterpart. Each of the parties
hereto shall sign a sufficient number of counterparts so that
each party will receive a fully executed original of this of
which shall be deemed an original, and will become effective
and binding upon the parties at such time Agreement.
22. ENTIRE AGREEMENT. This Agreement and all other agreements and
documents referred herein constitutes the entire agreement
between the Company and the Finder. No other agreements,
covenants, representations or warranties, express or implied,
oral or written, have been made by any party hereto to any
other party concerning the subject matter hereof. All prior
and contemporaneous conversations, negotiations, possible and
alleged agreements, representations, covenants and warranties
concerning the subject matter hereof are merged herein. This
is an integrated Agreement.
23. ARBITRATION. The parties agree that this Agreement and all
controversies that may arise between the Finder and the
Company, whether occurring prior, on or subsequent to the date
of this Agreement, will be determined by arbitration. The
parties understand that:
(a) Arbitration is final and binding on the parties.
(b) The parties are waiving their right to seek remedies
in court, including the right to a jury trial.
(c) Pre-arbitration discovery is generally more limited
than and different from court proceedings.
(d) The arbitrators' award is not required to include
factual findings or legal reasoning and any party's
right to appeal or to seek modification or rulings by
the arbitrators is strictly limited.
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(e) The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated
with the securities industry.
The parties agree that any arbitration under this Agreement will be
held at the facilities of and before an Arbitration Panel appointed by the
National Association of Securities Dealers, Inc. ("NASD"), or if the NASD
refuses to accept jurisdiction, then before JAMS/ENDISPUTE in San Francisco,
California. The award of the arbitrators, or of the majority of them, will be
final, and judgments upon the award may be entered in any court, state or
federal, having jurisdiction. The parties hereby submit themselves and their
personal representatives to the jurisdiction of any state or federal court for
the purpose of such arbitration and entering such judgment.
Any forbearance to enforce an agreement to arbitrate will not
constitute a waiver of any rights under this Agreement except to the extent
stated herein.
THIS AGREEMENT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE
CONTAINED IN PARAGRAPH 23 OF THIS AGREEMENT
THE SHEMANO GROUP, INC. (the "Finder")
By: Xxxx Xxxxxxx
----------------------------------
Xxxx Xxxxxxx
Title: CEO
CITIZENS, INC. (the "Company")
By: Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Title: President
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