EXHIBIT 3.8
PLACEMENT AGENT AGREEMENT
12 to 20 Plus, Inc.
PLACEMENT AGENT AGREEMENT
Dated as of: September 7, 2004.
The undersigned, 12 to 20 Plus, Inc., a Nevada corporation (the "COMPANY"),
hereby agrees with Legacy Trading Co., LLC (the "PLACEMENTAGENT") and Dutchess
Private Equities Fund II, L.P., a Delaware Limited Partnership (the "INVESTOR")
as follows:
1. OFFERING. The Company hereby engages the Placement Agent to act as its
exclusive placement agent in connection with the Investment Agreement
dated April 7, 2004 (the "INVESTMENT AGREEMENT") pursuant to which the
Company shall issue and sell to the Investor, from time to time, and
the Investor shall purchase from the Company (the "OFFERING") up to
Ten Million Dollars ($10,000,000) of the Company's Class A Voting
Common Stock (the "COMMITMENT AMOUNT"), par value $0.001 per share
(the "COMMON STOCK"), at price per share equal to the Purchase Price,
as that term is defined in the Investment Agreement. Pursuant to the
terms hereof, the Placement Agent shall render consulting services to
the Company with respect to the Investment Agreement and shall be
available for consultation in connection with the advances to be
requested by the Company pursuant to the Investment Agreement. All
capitalized terms used herein and not otherwise defined herein shall
have the same meaning ascribed to them as in the Investment Agreement.
The Investor will be granted certain registration rights with respect
to the Common Stock as more fully set forth in a Registration Rights
Agreement between the Company and the Investor dated April 7, 2004
(the "REGISTRATION RIGHTS AGREEMENT"). The documents to be executed
and delivered in connection with the Offering, including, but not
limited, to this Agreement, the Investment Agreement, and the
Registration Rights Agreement, and any Prospectus or other disclosure
document ( including all amendments and supplements ) utilized in
connection with the Offering are referred to sometimes hereinafter
collectively as the "OFFERING MATERIALS." The Company's Common Stock
is sometimes referred to hereinafter as the "SECURITIES." The
Placement Agent shall not be obligated to sell any Securities and this
Offering by the Placement Agent shall be solely on a "best efforts
basis."
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLACEMENT AGENT.
A. The Placement Agent represents, warrants and covenants as follows:
(i) The Placement Agent has the necessary power to enter into this
Agreement and to consummate the transactions contemplated hereby.
(ii) The execution and delivery by the Placement Agent of this
Agreement and the consummation of the transactions contemplated herein
will not result in any violation of, or be in conflict with, or
constitute a default under, any agreement or instrument to which the
Placement Agent is a party or by which the Placement Agent or its
properties are bound, or any judgment, decree, order or, to the
Placement Agent's knowledge, any statute, rule or regulation
applicable to the Placement Agent. This Agreement when executed and
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLACEMENT AGENT - continued
delivered by the Placement Agent, will constitute the legal, valid and
binding obligations of the Placement Agent, enforceable in accordance
with their respective terms, except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to
time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles
of equity, or (c) the indemnification provisions hereof or thereof may
be held to be in violation of public policy.
(iii) Upon receipt and execution of this Agreement the Placement Agent
will promptly forward copies of this Agreement to the Company or its
counsel and the Investor or its counsel.
(iv) The Placement Agent will not take any action that it reasonably
believes would cause the Offering to violate the provisions of the
Securities Act of 1933, as amended (the "1933 ACT"), the Securities
Exchange Act of 1934 (the "1934 ACT"), the respective rules and
regulations promulgated there under (the "RULES AND REGULATIONS") or
applicable "Blue Sky" laws of any state or jurisdiction.
(v) The Placement Agent will use all reasonable efforts to determine
(a) whether the Investor is an Accredited Investor and (b) that any
information furnished by the Investor is true and accurate. The
Placement Agent shall have no obligation to insure that (x) any check,
note, draft or other means of payment for the Common Stock will be
honored, paid or enforceable against the Investor in accordance with
its terms, or (y) subject to the performance of the Placement Agent's
obligations and the accuracy of the Placement Agent's representations
and warranties hereunder, (1) the Offering is exempt from the
registration requirements of the 1933 Act or any applicable state
"Blue Sky" law or (2) the Investor is an Accredited Investor.
(vi) The Placement Agent is a member of the National Association of
Securities Dealers, Inc., and is a broker-dealer registered as such
under the 1934 Act and under the securities laws of the states in
which the Securities will be offered or sold by the Placement Agent
unless an exemption for such state registration is available to the
Placement Agent. The Placement Agent is in compliance with all
material rules and regulations applicable to the Placement Agent
generally and applicable to the Placement Agent's participation in the
Offering.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
A. The Company makes to the Placement Agent all the representations and
warranties it makes to the Investor in the Investment Agreement and,
in addition, represents and warrants as follows:
(i) The execution, delivery and performance of each of this Agreement,
the Investment Agreement and the Registration Rights Agreement has
been or will be duly and validly authorized by the Company and is, and
with respect to this Agreement, the Investment Agreement and the
Registration Rights Agreement will each be, a valid and binding
agreement of the Company, enforceable in accordance with its
respective terms, except to the extent that (a) the enforceability
hereof or thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY - continued
and affecting the rights of creditors generally, (b) the
enforceability hereof or thereof is subject to general principles of
equity or (c) the indemnification provisions hereof or thereof may be
held to be in violation of public policy. The Securities to be issued
pursuant to the transactions contemplated by this Agreement and the
Investment Agreement have been duly authorized and, when issued and
paid for in accordance with (x) this Agreement, the Investment
Agreement and the certificates/instruments representing such
Securities, (y) will be valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except to the
extent that (1) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors
generally, and (2) the enforceability thereof is subject to general
principles of equity. All corporate action required to be taken for
the authorization, issuance and sale of the Securities has been duly
and validly taken by the Company.
(ii) The Company has a duly authorized, issued and outstanding
capitalization as set forth herein and in the Investment Agreement.
The Company is not a party to or bound by any instrument, agreement or
other arrangement providing for it to issue any capital stock, rights,
warrants, options or other securities, except for this Agreement, the
agreements described herein and as described in the Investment
Agreement, dated the date hereof and the agreements described therein.
All issued and outstanding securities of the Company, have been duly
authorized and validly issued and are fully paid and non-assessable;
the holders thereof have no rights of rescission or preemptive rights
with respect thereto and are not subject to personal liability solely
by reason of being security holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any
security of the Company. As of the date hereof, the authorized capital
stock of the Company consists of Common Stock authorized is
100,000,000 shares at $0.001 par value. Issued and outstanding on June
30, 2004 is 55,231,460.
(iii) The Common Stock to be issued in accordance with this Agreement
and the Investment Agreement has been duly authorized and when issued
and paid for in accordance with this Agreement, the Investment
Agreement and the certificates/instruments representing such Common
Stock, will be validly issued, fully-paid and non-assessable; the
holders thereof will not be subject to personal liability solely by
reason of being such holders; such Securities are not and will not be
subject to the preemptive rights of any holder of any security of the
Company.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
A. The Investor makes to the Placement Agent all the representations and
warranties it makes to the Company in the Investment Agreement and, in
addition represents, warrants and covenants as follows:
(i) The Investor has the necessary power to enter into this Agreement
and to consummate the transactions contemplated hereby.
(ii) The execution and delivery by the Investor of this Agreement and
the consummation of the transactions contemplated herein will not
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR - continued
result in any violation of, or be in conflict with, or constitute a
default under, any agreement or instrument to which the Investor is a
party or by which the Investor or its properties are bound, or any
judgment, decree, order or, to the Investor's knowledge, any statute,
rule or regulation applicable to the Investor. This Agreement when
executed and delivered by the Investor, will constitute the legal,
valid and binding obligations of the Investor, enforceable in
accordance with their respective terms, except to the extent that (a)
the enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to
time in effect and affecting the rights of creditors generally, (b)
the enforceability hereof or thereof is subject to general principles
of equity, or (c) the indemnification provisions hereof or thereof may
be held to be in violation of public policy.
(iii) the Investor is not, and will not be, as a result of the
transactions contemplated by the Offering Materials a "dealer" within
the meaning of the Securities Exchange Act of 1934 and applicable
federal and state securities laws and regulations. The Investor
covenants that in this respect it is and will remain in compliance
with the requirements of applicable "no action" rulings of the U.S.
Securities Exchange Commission.
(iv) The Investor will promptly forward copies of any and all due
diligence questionnaires compiled by the Investor to the Placement
Agent.
5. CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY.
The Company covenants and agrees at its expense and without any
expense to the Placement Agent as follows:
A. To advise the Placement Agent of any material adverse change in the
Company's financial condition, prospects or business or of any
development materially affecting the Company or rendering untrue or
misleading any material statement in the Offering Materials occurring
at any time as soon as the Company is either informed or becomes aware
thereof.
B. To use its commercially reasonable efforts to cause the Common Stock
issuable in connection with the Equity Line of Credit to be qualified
or registered for sale on terms consistent with those stated in the
Registration Rights Agreement and under the securities laws of such
jurisdictions as the Placement Agent and the Investor shall reasonably
request. Qualification, registration and exemption charges and fees
shall be at the sole cost and expense of the Company.
C. Upon written request, to provide and continue to provide the Placement
Agent and the Investor copies of all quarterly financial statements
and audited annual financial statements prepared by or on behalf of
the Company, other reports prepared by or on behalf of the Company for
public disclosure and all documents delivered to the Company's
stockholders.
D. To deliver, during the registration period of the Investment
Agreement, to the Placement Agent upon the Placement Agent's request,
(i) within forty five (45) days, a statement of its income for each
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CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY - continued
such quarterly period, and its balance sheet and a statement of
changes in stockholders' equity as of the end of such quarterly
period, all in reasonable detail, certified by its principal financial
or accounting officer;
(ii) within ninety (90) days after the close of each fiscal year, its
balance sheet as of the close of such fiscal year, together with a
statement of income, a statement of changes in stockholders' equity
and a statement of cash flow for such fiscal year, such balance sheet,
statement of income, statement of changes in stockholders' equity and
statement of cash flow to be in reasonable detail and accompanied by a
copy of the certificate or report thereon of independent auditors if
audited financial statements are prepared; and
(iii) a copy of all documents, reports and information furnished to
its stockholders at the time that such documents, reports and
information are furnished to its stockholders.
(iv) a copy of all documents, reports and information furnished to the
Investor at the time that such documents, reports and information are
furnished to the Investor.
E. To comply with the terms of the Offering Materials.
F. To ensure that any transactions between or among the Company, or any
of its officers, directors and affiliates be on terms and conditions
that are no less favorable to the Company, than the terms and
conditions that would be available in an "arm's length" transaction
with an independent third party.
6. INDEMNIFICATION.
A. The Company hereby agrees that it will indemnify and hold the
Placement Agent and each officer, director, shareholder, employee or
representative of the Placement Agent and each person controlling,
controlled by or under common control with the Placement Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act or the SEC's Rules and Regulations promulgated there under (the
"Rules and Regulations"), harmless from and against any and all loss,
claim, damage, liability, cost or expense whatsoever (including, but
not limited to, any and all reasonable legal fees and other expenses
and disbursements incurred in connection with investigating, preparing
to defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in
any action, suit or proceeding, including any inquiry, investigation
or pretrial proceeding such as a deposition) to which the Placement
Agent or such indemnified person of the Placement Agent may become
subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
or any other federal or state law or regulation, common law or
otherwise, arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in (a) Section 4
of this Agreement, (b) the Offering Materials (except those written
statements relating to the Placement Agent given by an indemnified
person for inclusion therein), (c) any application or other document
or written communication executed by the Company or based upon written
information furnished by the Company filed in any jurisdiction in
order to qualify the Common Stock under the securities laws thereof,
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INDEMNIFICATION - continued
or any state securities commission or agency; (ii) the omission or
alleged omission from documents described in clauses (a), (b) or (c)
above of a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (iii) the breach of any
representation, warranty, covenant or agreement made by the Company in
this Agreement. The Company further agrees that upon demand by an
indemnified person, at any time or from time to time, it will promptly
reimburse such indemnified person for any loss, claim, damage,
liability, cost or expense actually and reasonably paid by the
indemnified person as to which the Company has indemnified such person
pursuant hereto. Notwithstanding the foregoing provisions of this
Paragraph 6(A), any such payment or reimbursement by the Company of
fees, expenses or disbursements incurred by an indemnified person in
any proceeding in which a final judgment by a court of competent
jurisdiction (after all appeals or the expiration of time to appeal)
is entered against the Placement Agent or such indemnified person
based upon specific finding of fact as to the Placement Agent or such
indemnified person's gross negligence or willful misfeasance will be
promptly repaid to the Company.
B. The Placement Agent hereby agrees that it will indemnify and hold the
Company and each officer, director, shareholder, employee or
representative of the Company, and each person controlling, controlled
by or under common control with the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and Regulations, harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to
defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in
any action, suit or proceeding, including any inquiry, investigation
or pretrial proceeding such as a deposition) to which the Company or
such indemnified person of the Company may become subject under the
1933 Act, the 1934 Act, the Rules and Regulations, or any other
federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of the Placement Agent or its
officers, employees or representatives in willful violation of any of
such laws and regulations while acting as Placement Agent for the
Offering or (ii) the material breach of any representation, warranty,
covenant or agreement made by the Placement Agent in this Agreement
(iii) any false or misleading information provided to the Company by
one of the Placement Agent's indemnified persons.
C. The Investor hereby agrees that it will indemnify and hold the
Placement Agent and each officer, director, shareholder, employee or
representative of the Placement Agent, and each person controlling,
controlled by or under common control with the Placement Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act or the Rules and Regulations, harmless from and against any and
all loss, claim, damage, liability, cost or expense whatsoever
(including, but not limited to, any and all reasonable legal fees and
other expenses and disbursements incurred in connection with
investigating, preparing to defend or defending any action, suit or
proceeding, including any inquiry or investigation, commenced or
threatened, or any claim whatsoever or in appearing or preparing for
appearance as a witness in any action, suit or proceeding, including
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INDEMNIFICATION - continued
any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Placement Agent or such indemnified person of
the Placement Agent may become subject under the 1933 Act, the 1934
Act, the Rules and Regulations, or any other federal or state law or
regulation, common law or otherwise, arising out of or based upon (i)
the conduct of the Investor or its officers, employees or
representatives in its acting as the Investor for the Offering or (ii)
the material breach of any representation, warranty, covenant or
agreement made by the Investor in the Offering Materials (iii) any
false or misleading information provided to the Placement Agent by the
Investor or one of the Investor's indemnified persons.
D. The Placement Agent hereby agrees that it will indemnify and hold the
Investor and each officer, director, shareholder, employee or
representative of the Investor, and each person controlling,
controlled by or under common control with the Investor within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act or
the Rules and Regulations, harmless from and against any and all loss,
claim, damage, liability, cost or expense whatsoever (including, but
not limited to, any and all reasonable legal fees and other expenses
and disbursements incurred in connection with investigating, preparing
to defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim
whatsoever or in appearing or preparing for appearance as a witness in
any action, suit or proceeding, including any inquiry, investigation
or pretrial proceeding such as a deposition) to which the Investor or
such indemnified person of the Investor may become subject under the
1933 Act, the 1934 Act, the Rules and Regulations, or any other
federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of the Placement Agent or its
officers, employees or representatives in willful violation of any of
such laws and regulations while acting as the Placement Agent for the
Offering or (ii) the material breach of any representation, warranty,
covenant or agreement made by the Placement Agent in this Agreement
(iii) any false or misleading information provided to the Investor by
one of the Placement Agent's indemnified persons.
E. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 6(A), (B), (C) or (D),
the party to be indemnified shall, within five (5) business days,
notify the indemnifying party of the commencement thereof; the
omission by one (1) indemnified party to so notify the indemnifying
party shall not relieve the indemnifying party of its obligation to
indemnify any other indemnified party that has given such notice and
shall not relieve the indemnifying party of any liability outside of
this indemnification if not materially prejudiced thereby. In the
event that any action is brought against the indemnified party, the
indemnifying party will be entitled to participate therein and, to the
extent it may desire, to assume and control the defense thereof with
counsel chosen by it which is reasonably acceptable to the indemnified
party. After notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
such Section 6(A), (B), (C), or (D) for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, but the indemnified party may, at its own expense,
participate in such defense by counsel chosen by it, without, however,
impairing the indemnifying party's control of the defense. Subject to
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INDEMNIFICATION - continued
the proviso of this sentence and notwithstanding any other statement
to the contrary contained herein, the indemnified party or parties
shall have the right to choose its or their own counsel and control
the defense of any action, all at the expense of the indemnifying
party if, (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the
defense of such action at the expense of the indemnifying party, or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense
of such action within a reasonable time after notice of commencement
of the action, or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to one
or all of the indemnifying parties (in which case the indemnifying
parties shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party
shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstance, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No settlement
of any action or proceeding against an indemnified party shall be made
without the consent of the indemnifying party.
F. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6
is due in accordance with its terms but is for any reason held by a
court to be unavailable on grounds of policy or otherwise, the Company
and the Placement Agent and the Investor shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with the
investigation or defense of same) which the other may incur in such
proportion so that the Company, the Placement Agent and the Investor
shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the
gross proceeds paid to each of them.; provided, however, that no
person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the 1933 Act shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 6(F), any person controlling, controlled
by or under common control with the Placement Agent, or any partner,
director, officer, employee, representative or any agent of any
thereof, shall have the same rights to contribution as the Placement
Agent and each person controlling, controlled by or under common
control with the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act and each officer of the Company and
each director of the Company shall have the same rights to
contribution as the Company and each person controlling, controlled by
or under common control with the Investor within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
member of the general partner of the Investor shall have the same
rights to contribution as the Company. Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which
a claim for contribution may be made against the other party under
this Section 6(F), notify such party from whom contribution may be
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INDEMNIFICATION - continued
sought, but the omission to so notify such party shall not relieve the
party from whom contribution may be sought from any obligation they
may have hereunder or otherwise if the party from whom contribution
may be sought is not materially prejudiced thereby. The indemnity and
contribution agreements contained in this Section 6 shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified person or any termination of
this Agreement.
7. FEES. The Company hereby agrees to pay the Placement Agent 1% for the
gross proceeds from each Put with a maximum of ten thousand dollars
($10,000) upon the execution of this Agreement.
8. PAYMENT OF EXPENSES. The Company hereby agrees to bear all of the
expenses in connection with the Offering, including, but not limited
to the following: filing fees, printing and duplicating costs,
advertisements, postage and mailing expenses with respect to the
transmission of Offering Materials, registrar and transfer agent fees,
and expenses, fees of the Company's counsel and accountants, issue and
transfer taxes, if any. The Company agrees to bear all the reasonable
expenses of the Placement Agent in performing its services under this
Agreement including but not limited to the fees and expenses of
counsel.
9. CONDITIONS OF CLOSING. The Closing shall be held at the offices of the
Investor or its counsel. The obligations of the Placement Agent
hereunder shall be subject to the continuing accuracy of the
representations and warranties of the Company herein as of the date
hereof and as of the Date of Closing (the "Closing Date") with respect
to the Company as if it had been made on and as of such Closing Date;
the accuracy on and as of the Closing Date of the statements of the
officers of the Company made pursuant to the provisions hereof; and
the performance by the Company on and as of the Closing Date of its
covenants and obligations hereunder and to the following further
conditions:
A. Upon the effectiveness of a registration statement in accordance with
the Investment Agreement, the Placement Agent shall receive the
opinions of Counsel to the Company and of the Investor, dated as of
the date thereof, which opinion shall be in form and substance
reasonably satisfactory to the Investor, the Company, their counsel
and the Placement Agent.
B. At or prior to the Closing, the Placement Agent shall have been
furnished such documents, certificates and opinions as it may
reasonably require for the purpose of enabling them to review or pass
upon the matters referred to in this Agreement and the Offering
Materials, or in order to evidence the accuracy, completeness or
satisfaction of any of the representations, warranties or conditions
herein contained.
C. At and prior to the Closing, (i) there shall have been no material
adverse change nor development involving a prospective change in the
condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such
condition is set forth in the Offering Materials; (ii) there shall
have been no transaction, not in the ordinary course of business
except the transactions pursuant to the Investment Agreement entered
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CONDITIONS OF CLOSING - continued
into by the Company which has not been disclosed in the Offering
Materials or to the Placement Agent in writing; (iii) except as set
forth in the Offering Materials, the Company shall not be in default
under any provision of any instrument relating to any outstanding
indebtedness for which a waiver or extension has not been otherwise
received; (iv) except as set forth in the Offering Materials, the
Company shall not have issued any securities (other than those to be
issued as provided in the Offering Materials) or declared or paid any
dividend or made any distribution of its capital stock of any class
and there shall not have been any change in the indebtedness (long or
short term) or liabilities or obligations of the Company (contingent
or otherwise) and trade payable debt; (v) no material amount of the
assets of the Company shall have been pledged or mortgaged, except as
indicated in the Offering Materials; and (v) no action, suit or
proceeding, at law or in equity, against the Company or affecting any
of its properties or businesses shall be pending or threatened before
or by any court or federal or state commission, board or other
administrative agency, domestic or foreign, wherein an unfavorable
decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company,
except as set forth in the Offering Materials.
D. At Closing, the Placement Agent shall receive a certificate of the
Company signed by an executive officer and chief financial officer,
dated as of the applicable Closing, to the effect that the conditions
set forth in subparagraph (C) above have been satisfied and that, as
of the applicable closing, the representations and warranties of the
Company set forth herein are true and correct.
10. TERMINATION. This Agreement shall be co-terminus with, and terminate
upon the same terms and conditions as those set forth in, the
Investment Agreement. The rights of the Investor and the obligations
of the Company under the Registration Rights Agreement, and the rights
of the Placement Agent and the obligations of the Company shall
survive the termination of this Agreement unabridged for a period of
twenty-four (24) months after the Closing Date.
11. MISCELLANEOUS. A. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
which shall be deemed to be one and the same instrument. B. Any notice
required or permitted to be given hereunder shall be given in writing
and shall be deemed effective when deposited in the United States
mail, postage prepaid, or when received if personally delivered or
faxed (upon confirmation of receipt received by the sending party),
addressed as follows:
If to Placement Agent, to:
Legacy Trading Co., LLC
301 South Bryant, Suite A400
Edmond, OK 73034
Tel: (405)216-0554
Fax: (405)562-0012
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MISCELLANEOUS - continued
If to the Company, to:
12 to 20 Plus, Inc.
3450 Broad Street
Suite 103
San Luis Obispo, CA 93401
Tel: (805)543-7228
Fax: (805)543-7101
If to the Investor:
Dutchess Private Equities Fund II, LP
312 Stuart St.
Boston, MA 02116
Tel: (617) 960-3582
Fax: (617) 960-3772
or to such other address of which written notice is given to the others.
C. This Agreement shall be governed by and construed in all respects
under the laws of the State of Delaware, without reference to its
conflict of laws rules or principles. Any suit, action, proceeding or
litigation arising out of or relating to this Agreement shall be
brought and prosecuted in such federal or state court or courts
located within the Commonwealth of Massachusetts as provided by law.
The parties hereby irrevocably and unconditionally consent to the
jurisdiction of each such court or courts located within the
Commonwealth of Massachusetts and to service of process by registered
or certified mail, return receipt requested, or by any other manner
provided by applicable law, and hereby irrevocably and unconditionally
waive any right to claim that any suit, action, proceeding or
litigation so commenced has been commenced in an inconvenient forum.
D. This Agreement and the other agreements referenced herein contain the
entire understanding between the parties hereto and may not be
modified or amended except by a writing duly signed by the party
against whom enforcement of the modification or amendment is sought.
E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
COMPANY:
By: /s/ Carol Slavin
- ----------------------------------
Name: Carol Slavin
Company: 12 to 20 Plus, Inc.
Title: President and CEO
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PLACEMENT AGENT:
By: /s/ Stephan Boruchin
- ----------------------------------
Name: Stephan Boruchin
Company: Legacy Trading Co., LLC
Title: Managing Director
INVESTOR:
DUTCHESS PRIVATE EQUITIES FUND II, L.P.
BY ITS GENERAL PARTNER DUTCHESS
CAPITAL MANAGEMENT, LLC
By: /s/ Douglas H. Leighton
- ----------------------------------
Name: Douglas H. Leighton
Title: A Managing Member
12