Exhibit 10.12
LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
PRIVATE PLACEMENTAGREEMENT
THIS PRIVATE PLACEMENT AGREEMENT (the "Agreement") is made and entered
into as of the 18th day of April, 2001 and through the period ending the 31st
day of August, 2001 by and between Xxxxxxxx.xxx, Corp., a Delaware corporation,
with a business address at 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX,
00000 (the "Issuer"), and Lighthouse Financial Group, LLC, a Delaware limited
liability company, with a business address at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, XX, 00000 (the "Agent").
Recitals:
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A. The Issuer desires to obtain the services of Agent to assist it in
an effort to raise a minimum of $37,500 and a maximum of $300,000 in bridge
financing capital (the "Offering"). The Issuer is offering to sell to certain,
qualified investors a maximum of 8 Units each of which consists of one 10%
Subordinated Convertible Note for a principal amount of $37,500 a unit and a
warrant to purchase 150,000 shares of Common Stock of the Company (the "Units").
B. The Agent is a member of the National Association of Securities
Dealers, Inc. (the "NASD") and is willing, as an Agent, to assist the Issuer in
the offering and sale of the Units in the Jurisdictions on the terms and
conditions set forth herein.
Agreement:
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NOW, THEREFORE, for and in consideration of the foregoing, and of the
mutual covenants, agreements, undertakings, representations and warranties
contained herein, the parties hereto agree as follows:
1. Appointment of Agent. The Issuer hereby appoints the Agent as its
Agent in the Jurisdictions for the Offering.
The Issuer further appoints the Agent to act in its behalf to sell the Offering.
The Issuer maintains the right in its sole discretion to approve or disapprove
any potential Purchaser of the Units.
2. Acceptance of Appointment; Best Efforts. The Agent hereby accepts
the appointment described in Section I above and agrees, as Agent for the
Issuer, to use its best efforts to find purchasers for the Units in the
Jurisdictions. The Agent makes no commitment to purchase all or any of the Units
of the Offering.
3. Other Jurisdictions. The Issuer retains the right to employ other
agents in jurisdictions other than the Jurisdictions for and in connection with
the sale of the Units. However, the Issuer, in its sole discretion, may accept
or reject those agents.
4. Proceeds to Issuer. The net proceeds that shall be paid to the
Issuer on the sale of Units by the Agent at a price to be determined per share.
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
5. Agent Compensation. (a) As compensation for its activities hereunder
and pursuant hereto, the Agent shall be paid a commission as follows:
i. Each acceptance by the Company, in whole or in part,
of a Subscription Agreement from any prospective
Purchaser shall be deemed to be a separate closing as
of the date of such acceptance (a "Closing"). As sole
consideration for the services provided by Agent
hereunder, within five (5) days of any Closing, the
Company shall pay to Agent cash in an amount equal to
ten percent (10%) of the total principal amount of
any Units actually purchased by a prospective
Purchaser first introduced to the Company by the
Agent and accepted by the Company.
6. Agent Expenses. The Agent shall be responsible for payment of all of
its, travel, printing and other expenses.
The Issuer shall, however, reimburse the Agent for its reasonable legal
fees and disbursements related to the Offering.
7. Subscriptions. Each subscriber purchasing Units through the Agent
shall subscribe for the Units by completing and executing a subscription
agreement in the form attached hereto as Exhibit A ("Subscription Agreement")
and delivering the completed and executed Subscription Agreement along with
payment to the Agent. The Agent will transmit such Subscription Agreements
directly to the Issuer by noon the next business day after receipt.
8. Acceptance or Rejection of Subscriptions. The Issuer has the right
to accept or reject any subscription. Only upon the acceptance of a subscription
by the Issuer is a sale made. Upon the acceptance of a subscription, the Issuer
shall execute the acceptance on the Subscription Agreement, and shall forward a
duplicate of the accepted Subscription Agreement to the subscriber with a copy
to the Agent.
9. Representations and Warranties of the Issuer. The Issuer represents
and warrants to, and agrees with the Agent that:
(a) The Issuer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware
with power and authority to own its properties and to conduct
its business as described in the Offering documents;
(b) The Issuer has a duly authorized and outstanding
capitalization as set forth in the Offering documents, its
capital Units conforms to the description contained in the
Offering documents and the Units conform to the description
contained in the Offering documents and the Units, when issued
and delivered pursuant to Subscription Agreements, shall be
duly and validly issued, fully paid and non-assessable;
(c) The Issuer shall prepare and file the Offering documents with
the Jurisdictions in which such filing(s) is required, if any
and shall use its best efforts to cause the registration or
exemption with each such regulatory agency to become
effective;
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
(d) The Offering documents does not contain any untrue statement
of a material fact or omit to state any material fact required
to be stated or necessary to make the statements in the
Offering documents, in light of the circumstances under which
they are made, not misleading;
(e) The consolidated financial statements and schedules filed
with, and as part of, the Offering documents present fairly
the cost of the assets, the liabilities and the capital Units
of the Issuer as of the dates of the statements and schedules,
all in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout
the entire periods involved, except that those of such
financial statements and schedules that are unaudited do not
contain the notes normally required by GAAP and are subject to
audit adjustments, and since the respective dates of the
financial statements and schedules there has been no material
adverse change in the condition or general affairs of the
Issuer, financial or otherwise, other than as referred to in,
or contemplated by, the Offering documents;
(f) The execution and delivery of this Agreement, the consummation
of the transactions contemplated in this Agreement and
compliance with the terms and provision of this Agreement
shall not 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 of the
Issuer or any of its subsidiaries, or any indenture, mortgage
or other agreement or instrument to which the Issuer or any of
its subsidiaries is a party or by which any of their
respective assets or properties are bound, or any applicable
law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Issuer or any of its
subsidiaries or any of their respective assets or properties,
except for instances where not material to the Issuer;
(g) This Agreement has been duly authorized, executed and
delivered on behalf of the Issuer, and is the valid, binding
and enforceable obligation of the Issuer; and
(h) No authorization, approval, consent or license of any
regulatory body or authority is required for the valid
authorization, issuance, sale and delivery of the UnitsUnits,
or, if so required, all authorizations, approvals, consents
and licenses have been obtained and are in full force and
effect, except for instances where not material to the Issuer.
10. Covenants of the Issuer. The Issuer covenants that:
(a) The Issuer shall not at any time make or file any amendment
or supplement to the Offering documents of which the Agent
previously has not been advised and furnished a copy, or to
which the Agent reasonably may object in writing. The Issuer
shall prepare and file any amendments or supplements to the
Offering documents that in the reasonable opinion of counsel for
the Agent may be necessary in connection with the offering and
sale of the Units by the Agent, and shall use its best efforts
to cause each such amendment or supplement to become effective
as promptly as possible.
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
(b) The Issuer shall deliver to the Agent a confidential listing
of potential investors for the Offering, including contact
information for each such potential investor (the
"Confidential Investor List"). The Issuer shall also deliver
to the Agent, without charge, from time to time during the
term of this Agreement as many copies of the Offering
documents, the Offering Circular included therein (as amended
from time to time, the "Circular") and any other documents as
the Agent reasonably may request.
(c) The Issuer shall use its best efforts to comply with, and to
continue to comply with, all applicable state and federal
securities and other laws so as to permit the continuation of
the offering and sale of the Units.
(d) The Issuer promptly shall notify the Agent in the event of (i)
the issuance by any federal or state securities commission or
authority of any stop order suspending the effectiveness of
the Offering documents, or (ii) the institution or notice of
the intended institution of any action or proceeding for that
purpose. The Issuer shall make every reasonable effort to
prevent the issuance of such a stop order, and, if such a stop
order is issued at any time, to obtain the withdrawal of the
order at the earliest possible time.
(e) The Issuer will cooperate with the Agent in connection with,
and shall make available to the Agent such documents and other
information as the Agent shall reasonably require to satisfy,
its reasonable due diligence requirements.
11. Representations and Warranties of the Agent . The Agent represents
and warrants to, and agrees with the Issuer that:
(a) The Agent is a member in good standing of the NASD and is
currently licensed in the jurisdictions in which the offering
will be sold;
(b) The Agent and all persons employed by it or who work for it as
agents have all necessary permits, licenses and permissions to
enable it and them to act as agent for the Issuer in the
offering and sale of the Units as required by applicable state
and federal securities and other laws; and
(c) Neither the Agent nor any partner, director or officer of the
Agent is disqualified under Rule 262 promulgated under the
Securities Act or any applicable disqualification provision of
any Jurisdiction's law.
12. Covenants of the Agent. The Agent covenants that:
(a) The Agent shall not sell the Units offered pursuant to the
Offering documents in any manner that violates the conditions
imposed by applicable state or federal securities laws in
connection with an offer and sale of securities pursuant to
registrations pertaining to the Offering and under the
Securities Act and the registrations and/or exemptions
therefrom in each of the Jurisdictions.
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
(b) The Agent shall use its best efforts to contact all of the
potential investors listed in the Confidential Investor List
to be provided by the Issuer for purposes of Offering and
selling the Units in the Offering. The Agent shall be limited
to offering the Units solely to the potential investors listed
in the Confidential Investor List, and the Agent shall not be
required to contact any additional potential investors listed
in the Confidential Investor List not already contacted by the
Agent, after the Issuer has accepted Subscription Agreements
from investors for the total amount of Units available in the
Offering.
13. Termination of Agreement. This Agreement may, subject to the other
provisions hereof, be terminated as follows:
(a) At any time prior to the commencement of the Offering, the
Issuer may, by notice to the Agent, terminate this Agreement;
and at any time prior to the commencement of the Offering, the
Agent may, by notice to the Issuer, terminate this Agreement;
(b) By the Agent at any time by notice to the Issuer because of
any failure on the part of the Issuer to comply with any of
the terms and provisions, or to fulfill any of the conditions
hereof, or if for any reason the Issuer is unable to perform
its obligations hereunder;
(c) By the Issuer at any time by notice to the Agent because of
any failure on the part of the Agent to comply with any of the
terms and provisions, or to fulfill any of the conditions
hereof, or if for any reason the Agent is unable to perform
its obligations hereunder;
(d) By the Issuer at any time by notice to the Agent because of
disapproval of the terms of this Agreement by the NASD, SEC,
or any state securities regulatory authority charged with
approving such agreements or the registration of the Offering
or any exemption therefrom. However, without first terminating
this Agreement, the Issuer and the Agent, by mutual written
consent, may amend this Agreement, by adding, deleting, or
modifying any of the provisions hereof if necessary to obtain
approval of this Agreement or of the offering by the NASD,
SEC, or any state securities regulatory authority.
(e) Upon the occurrence and satisfactory completion of the
offering and sale of all of the Units and the distribution of
the proceeds to the Agent.
14. Indemnification. The Issuer shall indemnify and hold harmless the
Agent and each person, if any, who controls the Agent within the meaning of
Section 15 of the Securities Act from and against any and all losses, claims,
damages, expenses or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act or under any other statute or at
common law or otherwise, and, except as provided below, shall reimburse the
Agent and each controlling person, if any, for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as the
losses, claims, damages, expenses, liabilities actions or expenses
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
(collectively, "Losses") arising out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Offering
documents, or arising out of or based upon the omission or alleged omission to
state a material fact contained in the Offering documents, or arising out of or
based upon the omission or alleged omission to state a material fact required to
be stated in the Offering documents necessary in order to make the statements in
the Offering documents not misleading, unless the untrue statement or omission
was made in the Offering documents in reliance upon and in conformity with
information furnished in writing to the Issuer by the Agent directly or through
counsel expressly for the purpose of inclusion therein. However, this
indemnification provision shall not benefit the Agent or any person controlling
the Agent if the Agent failed to send or give a copy of the Offering documents
to a person at or prior to the time an offer of Units was made to that person,
or acted in violation of any covenants made by it herein.
Promptly after receipt by the Agent or any person controlling the Agent
of notice of the commencement of any action with respect to which
indemnification may be sought from the Issuer under this Section, the Agent
shall notify the Issuer in writing of the commencement, and, subject to the
provisions stated below, the Issuer shall assume the defense of the action
(including the employment of counsel and the payment of expenses) in so far as
the action relates to any alleged Losses with respect to which indemnification
may be sought from the Issuer. The Agent or any person controlling the Agent
shall have the right to employ separate counsel in any action and to participate
in the defense of the action, but the fees and expenses of such counsel must be
specifically authorized in writing by the Issuer before being incurred. The
Issuer shall not be liable, and shall not be required, to indemnify any person
in connection with any settlement of any action effected without the Issuer's
consent in writing.
The Agent shall indemnify and hold harmless the Issuer, each of its
directors, each of its officers, and each person, if any, who controls the
Issuer within the meaning of Section 15 of the Securities Act from and against
any and all Losses to which they or any of them may become subject under the
Securities Act or under any other statute or at common law or otherwise, and,
except as provided below, shall reimburse the Issuer and each director, officer
or controlling person, if any, for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, (i) insofar as the Losses
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained the Offering documents, or arise out of or are
based upon the omission or alleged omission to state a material fact required to
be stated in the Offering documents or necessary in order to make the statements
in the Offering documents not misleading, but only in so far as the untrue
statement or omission was made in the Offering documents in reliance upon and in
conformity with information furnished in writing to the Issuer by the Agent
directly or through counsel expressly for the purpose of inclusion therein, or
(ii) in so far as the Losses arise out of or are based upon any statements made
or action taken in connection with an offer or sale in connection with the
offering and under the Securities Act and the registrations and/or exemptions
therefrom in each of the Jurisdictions.
Promptly after receipt of notice of the commencement of any action with
respect to which indemnification may be sought from the Agent under this
Section, the Issuer shall notify the Agent in writing of the commencement, and,
subject to the provisions stated below, the Agent shall assume the defense of
the action (including the employment of counsel and the payment of expenses) in
so far as the action relates to any alleged Losses with respect to which
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
indemnification may be sought from the Agent. The Issuer and each director,
officer or controlling person shall have the right to employ separate counsel in
any action and to participate in the defense of the action, but the fees and
expenses of the counsel shall not be the expense of the Agent unless the
employment of the counsel has been specifically authorized in writing by the
Agent. The Agent shall not be liable, and shall not be required, to indemnify
any person in connection with any settlement of any action effected without the
Agent's consent in writing.
15. Contribution. If the indemnity referred to in Section 14 should be,
for any reason whatsoever, unenforceable, unavailable or otherwise insufficient
to hold each indemnified person harmless, the indemnified person shall pay to or
on behalf of each indemnified person contributions for Losses so that each
indemnified person ultimately bears only a portion of such Losses as is
appropriate (i) to reflect the relative benefits received by each such
indemnified person, respectively, on the one hand and the indemnifying person on
the other hand in connection with the transaction, or (ii) if the allocation of
that basis is not permitted by applicable law, to reflect not only the relative
fault of each such indemnified person, respectively, and the indemnifying person
as well as any other relevant equitable considerations. The respective relative
benefits received by the Agent and the Issuer shall be deemed to be in the same
proportion as the aggregate commission paid to the Agent bears to the total
gross proceeds of the Offering. The relative fault of each indemnifying person
shall be determined by reference to, among other things, whether the actions or
omissions to act were by such indemnifying person and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action or omission to act.
16. Provisions to Survive Delivery. The representations, warranties,
covenants, indemnities, understandings, agreements, and other statements of the
Issuer and the Agent contemplated by, set forth in, or made pursuant to, this
Agreement and the indemnification agreements of the Issuer and the Agent shall
survive delivery of, and payment for, the Units.
17. Arbitration. Any dispute arising out this Agreement or breach
hereof shall, at the election of A party hereto, by written notice to the other
(the "Non-electing Party"), be referred to the American Arbitration Association
(the "AAA") to be settled by arbitration in the city and state where the
Non-electing Party, or its principal executive office, is located under the then
existing Commercial Arbitration Rules of the AAA. Any arbitration conducted
pursuant hereto shall be conducted by a recognized independent and impartial
arbitrator mutually agreed to by the Issuer and the Agent involved in such
dispute, or, if they cannot agree, by three (3) arbitrators, one chosen by the
Issuer, one chosen by the Agent and the third (who shall be a recognized
independent and impartial arbitrator and who shall act as chairperson of the
arbitrators) selected by the first two arbitrators; provided, however, that if
either party fails to appoint an arbitrator within fifteen (15) calendar days of
its receipt of written notice by the other that the other has appointed an
arbitrator, the arbitration shall be conducted by an arbitrator selected by the
AAA. If the arbitrators selected by the issuer and the Agent fail to agree on a
third arbitrator, the third arbitrator shall be appointed by the AAA. All costs
of each arbitration pursuant to this Section (including, without limitation, all
fees of the arbitrator(s) and attorneys' fees) shall be borne by the party whose
last written offer of settlement (or claim if no offer of settlement was made by
such party) differed by a greater amount from the award made by the
arbitrator(s), or in the case of an arbitration to determine a matter other than
a dollar amount or percentage, by the party against whom the decision of the
arbitration(s) shall be rendered, as such issue is determined by the
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
arbitrator(s); provided, however, that no offer of settlement shall be disclosed
by a party to the arbitrator(s) until after the arbitrator(s) has (have)
rendered an award or decision on the merits.
Any award granted or decision reached pursuant to arbitration hereunder
shall be final and binding upon the parties and payment shall be made as so
determined within seven calendar days of the date of the award or decision.
Judgment upon the arbitration award or decision may be entered in any court
having competent jurisdiction.
18. Governing Law. This Agreement shall be construed in accordance with
the laws ofthe State of New York without regard to conflict of law principles.
19. Assignment. Neither this Agreement nor any interest of any party
herein may be assigned, pledged or transferred without the prior written consent
of the parties hereto.
20. Binding Effect. This Agreement inures to the benefit of, and is
binding upon, the parties hereto, and their respective heirs, representatives,
successors, assigns and controlling person, but nothing herein shall be
construed as an authorization or right of any party to assign its rights and
obligations hereunder. A successor or an assign does not include a purchaser of
Units of the Issuer solely by reason of that purchase.
21. Waiver. No waiver of any provision hereof is valid unless it is in
writing and signed by the person against whom it is charged.
22. Notice. Any notice required or permitted to be given pursuant
hereto must be in writing addressed to the person at the address specified
herein, or at an address changed in this manner.
23. Entire Agreement. This Agreement, including all exhibits,
constitutes the entire agreement among the parties with respect to the subject
matter hereof.
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LIGHTHOUSE FINANCIAL GROUP, LLC
MEMBERS NASD, SIPC
Empire State Building 8360 E. Via xx Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx X-000
Xxx Xxxx, XX 10118 Xxxxxxxxxx, XX 00000
TEL: 000-000-0000
TEL: 000-000-0000
FAX: 000-000-0000
E-mail: xxxxxxxx@xxxx.xxx
LIGHTHOUSE FINANCIAL GROUP, LLP
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day, month and year first written above.
THE ISSUER: XXXXXXXX.XXX, CORP.
By: /S/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
Chairman of the Board
THE AGENT: Lighthouse Financial Group, LLC
By: /S/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Principal/ Partner
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