EXHIBIT 1(a)
SEARCHHELP, INC
PLACEMENT AGREEMENT
, 2002
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned, SearchHelp, Inc., a Delaware corporation (the "Company"),
hereby engages ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., Inc. (the "Placement Agent"), as the sole
and exclusive selling agent of the Company in connection with the proposed
offering of certain of its securities to the public (the "Offering") as follows:
1. Introductory. The Company engages the Underwriter as the sole and
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exclusive selling agent of the Company for the purpose of finding subscribers
for 8,000,000 units, consisting of 8,000,000 shares (the "Shares") of common
stock, $.0001 par value, of the Company (the "Common Stock"), class A warrants
to purchase 8,000,000 shares of Common Stock at $.75 per share (the "Class A
Warrants") and class B warrants to purchase 8,000,000 shares of Common Stock at
$1.75 per share (the "Class B Warrants," collectively with the Class A Warrants,
the "Warrants") (The Warrants collectively with the Shares shall mean the
"Units") on a best efforts basis at $.50 per Unit for an aggregate of $4,000,000
worth of Units through the Offering. "Securities" shall mean, collectively, the
Shares, the Warrants and the Shares underlying the Warrants. The Securities are
more fully described in the Prospectus referred to below. The Placement Agent
will commence selling the Units on the date ("Effective Date") of the
Registration Statement (as defined in Section 2(a) below) becomes effective with
the Commission (as defined in Section 2(a) below) until the earlier of the
termination of the Offering pursuant to Section 12 of this Agreement or
[December 31, 2002].
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, the Placement Agent that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement, and may have filed one or more amendments thereto, on
Form SB-1 (Registration No. [ ]), including in such registration
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statement and each such amendment and prospectus (a "Prospectus") for the
registration of the 8,000,000 Units. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended, on file
with the Commission at the time such registration statement becomes effective
(including the prospectus, financial statements, exhibits, and all other
documents filed as a part thereof).
(b) When the Registration Statement becomes effective, and at all times
subsequent thereto, and during such longer period as the Prospectus may be
required to be delivered in connection with sales by the Placement Agent or any
dealer, and during such longer period until any post-effective amendment thereto
shall become effective, the Registration Statement (and any post-effective
amendment thereto) and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement to the
Registration Statement or the Prospectus) will contain all statements which are
required to be stated therein in accordance with the Act and the Regulations,
will comply with the Act and the Regulations, and will not contain 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 not misleading, and
no event will have occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has not then
been set forth in such an amendment or supplement; and the Prospectus, as of the
date filed with the Commission, did 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 not misleading; except that no
representation or warranty is made in this Section 2(b) with respect to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company as stated in Section 12(c) with respect to
the Placement Agent by the Placement Agent expressly for inclusion in the
Registration Statement, the Prospectus, or any amendment or supplement thereto.
(c) Neither the Commission nor the "blue sky" or securities authority
of any jurisdiction has issued an order (a "Stop Order") suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
the Prospectus, the Registration Statement, or any amendment or supplement
thereto, refusing to permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of any of the Units, nor has any of
such authorities instituted or threatened to institute any proceedings with
respect to a Stop Order.
(d) Any contract, agreement, instrument, lease or license required to
be described in the Registration Statement or the Prospectus has been properly
described therein. Any contract, agreement, instrument, lease or license
required to be filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to the Registration Statement.
(e) The Company has no subsidiaries (as defined in the regulations
promulgated under the Act ("Regulations")). The Company is a corporation duly
organized, validly existing, and in good standing under the laws of Delaware,
with full power and authority, and all necessary consents, authorizations,
approvals, orders, licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and other governmental
authorities and all courts and other tribunals, to own, lease, license, and use
its properties and assets and to carry on the business in the manner described
in the Prospectus. The Company is duly qualified to do business and is in good
standing in every jurisdiction in which its ownership, leasing, licensing, or
use of property and assets or the conduct of its business makes such
qualification necessary or advisable, except where the failure to be so
qualified does not have a material adverse effect on any of the operations,
business, properties or assets of the Company.
(f) As of the Effective Date, the authorized capital stock of the
Company consists of 100,000,000 shares of Common Stock, of which 15,025,000
shares are outstanding. Each outstanding share of Common Stock is validly
authorized, validly issued, fully paid and nonassessable, without any personal
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liability attaching to the ownership thereof, and has not been issued and is not
owned or held in violation of any preemptive rights of stockholders. There is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of, any share of capital stock of the
Company or any security or other instrument which by its terms is convertible
into, exercisable for, or exchangeable for, capital stock of the Company, except
as shall be properly described in the Prospectus. There is outstanding no
security or other instrument which by its terms is convertible into or
exchangeable for capital stock of the Company except as may have been properly
described in the Prospectus. There is outstanding no indebtedness except as may
have been seen properly described in the Prospectus.
(g) The financial statements of the Company included in the
Registration Statement and the Prospectus fairly present the financial position,
the results of operations, and the other information purported to be shown
therein at the respective dates and for the respective periods to which they
apply. Such financial statements have been prepared in accordance with generally
accepted accounting principles (except to the extent that certain footnote
disclosures regarding any interim period may have been omitted in accordance
with the applicable rules of the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) consistently applied throughout the
periods involved, are correct and complete, and are in accordance with the books
and records of the Company. The accountants whose report on the audited
financial statements is filed with the Commission as a part of the Registration
Statement are, and during the periods covered by their report(s) included in the
Registration Statement and the Prospectus, were independent certified public
accountants within the meaning of the Act and the Regulations. No other
financial statements are required by Form SB-1 or otherwise to be included in
the Registration Statement or the Prospectus. There has at no time been a
material adverse change in the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the Company
from the latest information set forth in the Registration Statement or the
Prospectus, except as may be properly described in the Prospectus.
(h) There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or in
prospect (or any basis therefor) with respect to the Company, or any of its
operations, businesses, properties, assets, liabilities or future prospects,
except as may be properly described in the Prospectus or such as individually or
in the aggregate do not now have and cannot be expected in the future to have a
material adverse effect upon the operations, business, properties or assets of
the Company. The Company is not in violation of, or in default with respect to,
any law, rule, regulation, order, judgment or decree except as may be properly
described in the Prospectus or such as in the aggregate do not now have and will
not in the future have a material adverse effect upon the operations, business,
properties, assets, liabilities or future prospects, of the Company; nor must
the Company take any action in order to avoid any such violation or default.
(i) The Company has good title to all properties and assets which the
Prospectus indicates are owned by it, free and clear of all liens, claims,
security interests, pledges, charges, encumbrances and mortgages (except as may
be properly described in the Prospectus).
(j) The Company is not, nor, to the best knowledge of the Company, is
any other party, in violation or breach of, or in default with respect to, any
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material provision of any contract, agreement, instrument, lease, license,
arrangement or understanding which is material to the Company, and each such
contract, agreement, instrument, lease, license, arrangement, and understanding
is in full force and is the legal, valid, and binding obligation of the parties
thereto and is enforceable as to each party thereto in accordance with its
terms. The Company has no actual knowledge that any party to any such contract,
agreement, instrument, lease, license, arrangement or understanding which is
material to the Company has any intention of canceling, not renewing or not
performing with respect thereto. The Company enjoys peaceful and undisturbed
possession under all leases and licenses under which it is operating. The
Company is not a party to or bound by any contract, agreement, instrument,
lease, license, arrangement or understanding, or subject to any charter or other
restriction, which has had or may in the future have a material adverse effect
on the financial condition, results of operations, business, properties, assets,
liabilities or future prospects of the Company. The Company is not in violation
or breach of, or in default with respect to, any term of its articles of
incorporation (or other charter document) or by-laws.
(k) All patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises, and other
intangible properties and assets (all of the foregoing being herein called
"Intangibles") that the Company owns or has pending, or under which it is
licensed, are in good standing and, to the Company's knowledge, uncontested.
There is no right under any Intangible necessary to the business of the Company
as presently conducted or as the Prospectus indicates it contemplates conducting
except as may be so designated in the Prospectus. The Company has not infringed,
is not infringing, nor has received notice of infringement with respect to
asserted Intangibles of others. To the knowledge of the Company, there is no
infringement by others of Intangibles of the Company.
(l) Neither the Company, nor any director, officer, agent, employee, or
other person associated with or acting on behalf of the Company has, directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended;
or made any bribe, rebate, payoff, influence payment, kickback, or other
unlawful payment.
(m) The Company has all requisite corporate power and authority to
execute, deliver, and perform its obligations under this Agreement upon its
execution. All necessary corporate proceedings of the Company have been duly
taken to authorize the execution, delivery, and performance of this Agreement by
the Company. This Agreement has been duly authorized, executed, and delivered by
the Company, is the legal, valid, and binding obligation of the Company, and is
enforceable as to the Company in accordance with its terms. No consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or other governmental
authority or any court or other tribunal is required by the Company for the
execution, delivery, or performance by the Company of this Agreement (except
filings under the Act which have been or will be made before the Effective Date
and such consents consisting only of consents under "blue sky" or state
securities laws). No consent of any party to any contract, agreement,
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instrument, lease, license, arrangement, or understanding to which the Company
is a party, or to which any of its properties or assets are subject, is required
for the execution, delivery, or performance of this Agreement; and the
execution, delivery, and performance of any of this Agreement will not violate,
result in a breach of, conflict with, or (with or without the giving of notice
or the passage of time or both) entitle any party to terminate or call a default
under any such contract, agreement, instrument, lease, license, arrangement, or
understanding, or violate or result in a breach of any term of the certificate
of incorporation (or other charter document) or by-laws of the Company or
violate, result in a breach of, or conflict with any law, rule, regulation,
order, judgment, or decree binding on the Company or to which any of its
operations, businesses, properties, or assets are subject.
(n) The Securities are validly authorized and, when issued and
delivered in accordance with this Agreement, will be validly issued, fully paid,
and nonassessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive rights of
stockholders.
(o) The Securities conform to all statements relating thereto contained
in the Registration Statement or the Prospectus.
(p) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as may otherwise be
properly described in the Prospectus, the Company has not (i) issued any
securities or incurred any liability or obligation, primary or contingent, for
borrowed money, (ii) entered into any transaction not in the ordinary course of
business, or (iii) declared or paid any dividend on its capital stock.
(q) The Company has obtained from each of its directors, officers and
affiliates (as defined in the Regulations), and from each other person or entity
who beneficially owned as of the effective date of the Registration Statement
shares of Common Stock of the Company (each an "Original Stockholder"),
enforceable written agreements, in form and substance satisfactory to counsel
for the Placement Agent, that for a period of twelve (12) months from the
Effective Date such person will not, without your prior written consent, offer,
pledge, issue, sell, contract to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any shares of Common Stock or any
security or other instrument which by its terms is convertible into, exercisable
for, or exchangeable for shares of Common Stock or other securities of the
Company, including, without limitation, any shares of Common Stock issuable
under any outstanding stock options or warrants. The foregoing restriction shall
not apply to: (i) the Units; (ii) the issuance of Common Stock issuable (except
to directors, officers and affiliates (as defined in the Regulations)) upon the
exercise of stock options and warrants and conversion of other convertible
securities outstanding on the Effective Date and pursuant to the plans, (iii)
the issuance of any securities in connection with any merger or acquisition
approved by a majority of the independent directors of the Company; or (iv) the
issuance of any securities to unaffiliated third parties at fair market value
approved by a majority of the independent directors of the Company.
(r) Except as may have been registered in the Registration Statement or
waived, no person or entity has the right to require registration of shares of
Common Stock or other securities of the Company because of the filing or
effectiveness of the Registration Statement.
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(s) Except as may be set forth in the Prospectus, the Company has not
incurred any liability for a fee, commission or other compensation on account of
the employment of a broker or finder in connection with the transactions
contemplated by this Agreement.
(t) Except as contemplated herein or therein or as may have been
waived, no person or entity has any right of first refusal, preemptive right,
right to any compensation, or other similar right or option, in connection with
the offering or this Agreement, or any of the transactions contemplated hereby
or thereby.
(u) No officer, director, employee or stockholder of the Company is
affiliated with any NASD member.
3. Offering. The Placement Agent is to make a best efforts public offering
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of the Units as soon, on or after the Effective Date of the Registration
Statement, as the Placement Agent deems it advisable so to do. The Units are to
be initially offered to the public at the initial public offering price as
provided for in the Prospectus (such price being herein called the "public
offering price"). The offering will continue until the earliest of (a) [December
31, 2002,] (b) all of the Units have been sold or (c) such date as the Company
and the Placement Agent shall agree.
4. Covenants of the Company. The Company covenants that it will:
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(a) Use its best efforts to cause the Registration Statement to become
effective as promptly as possible. If filing of the Prospectus is required under
Rule 424(b), the Company will file the Prospectus, properly completed, pursuant
to Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Placement Agent of such timely filing.
(b) Notify the Placement Agent immediately by telephone, and confirm
such notice in writing, (i) when the Registration Statement and any
post-effective amendment thereto become effective, (ii) of the receipt of any
comments from the Commission or the "blue sky" or securities authority of any
jurisdiction regarding the Registration Statement, any post-effective amendment
thereto, the Prospectus, or any amendment or supplement thereto, and (iii) of
the receipt of any notification with respect to a Stop Order or the initiation
or threatening of any proceeding with respect to a Stop Order. The Company will
use its best efforts to prevent the issuance of any Stop Order and, if any Stop
Order is issued, to obtain the lifting thereof as promptly as possible.
(c) During the time when a prospectus relating to the Units is required
to be delivered hereunder or under the Act or the Regulations, comply so far as
it is able with all requirements imposed upon it by the Act, as now existing and
as hereafter amended, and by the Regulations, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in the Units,
as the case may be, in accordance with the provisions hereof and the Prospectus.
If, at any time when a prospectus relating to the Units is required to be
delivered hereunder or under the Act or the Regulations, any event shall have
occurred as a result of which, in the reasonable opinion of counsel for the
Company or counsel for the Placement Agent, the Registration Statement or the
Prospectus as then amended or supplemented contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
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or necessary to make the statements therein not misleading, or if, in the
opinion of either of such counsel, it is necessary at any time to amend or
supplement the Registration Statement or the Prospectus to comply with the Act
or the Regulations, the Company will immediately notify the Placement Agent and
promptly prepare and file with the Commission an appropriate amendment or
supplement (in form and substance satisfactory to the Placement Agent) which
will correct such statement or omission or which will effect such compliance and
will use its best efforts to have any such amendment declared effective as soon
as possible.
(d) Deliver without charge to the Placement Agent such number of copies
of each Prospectus as may reasonably be requested by the Placement Agent and, as
soon as the Registration Statement, or any amendment thereto, becomes effective
or a supplement is filed, deliver without charge to the Placement Agent two (2)
signed copies of the Registration Statement, including exhibits, or such
amendment thereto, as the case may be, and two (2) copies of any supplement
thereto, and deliver without charge to the Placement Agent such number of copies
of the Prospectus, the Registration Statement, and amendments and supplements
thereto, if any, without exhibits, as the Placement Agent may request for the
purposes contemplated by the Act.
(e) Endeavor in good faith, in cooperation with the Placement Agent, at
or prior to the time the Registration Statement becomes effective, to qualify
the Units for offering and sale under the "blue sky" or securities laws of such
jurisdictions as the Placement Agent may designate. In each jurisdiction where
such qualification shall be effected, the Company will, unless the Placement
Agent agrees in writing that such action is not at the time necessary or
advisable, file and make such statements or reports at such times as are or may
be required by the laws of such jurisdiction and will keep all filings current.
(f) Use its best efforts to keep the Prospectus and the Registration
Statement current and effective by filing post-effective amendments, as
necessary, during the Offering Period.
(g) Make generally available (within the meaning of Section 11(a) of
the Act and the Regulations) to its security holders as soon as practicable, but
not later than sixteen (16) months after the Effective Date, an earnings
statement (which need not be certified by independent certified public
accountants unless required by the Act or the Regulations, but which shall
satisfy the provisions of Section 11(a) of the Act and the Regulations) covering
a period of at least twelve (12) months beginning after the Effective Date.
(h) For a period of three (3) years after the Effective Date, furnish
the Placement Agent, without charge, the following:
(i) Within ninety (90) days after the end of each fiscal year,
financial statements certified by the independent certified public accountants
for the Company, including a balance sheet, statement of income, and statement
of cash flows of the Company and its then existing subsidiaries, with supporting
schedules, prepared in accordance with generally accepted accounting principles,
consistently applied, as at the end of such fiscal year and for the twelve (12)
months then ended, which may be on a consolidated basis;
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(ii) as soon as practicable after they have been sent to
stockholders of the Company or filed with the Commission, three (3) copies of
each annual and interim financial and other report or communication sent by the
Company to its stockholders or filed with the Commission;
(iii) as soon as practicable, a copy of every press release and
every material news item and article in respect of the Company or its affairs
which was released by the Company; and
(iv) such additional documents and information with respect to the
Company and its affairs and the affairs of any of its subsidiaries as the
Placement Agent may from time to time reasonably request.
(i) Apply the net proceeds received by it from the offering in the
manner set forth under "Use of Proceeds" in the Prospectus.
(j) Furnish to the Placement Agent as early as practicable prior to the
Effective Date, but no less than two (2) full business days prior thereto, a
copy of the latest available unaudited interim consolidated financial statements
of the Company and its consolidated subsidiaries which have been read by the
Company's independent certified public accountants.
(k) File no amendment or supplement to the Registration Statement or
Prospectus at any time, whether before or after the Effective Date of the
Registration Statement, unless such filing shall comply with the Act and the
Regulations and unless the Placement Agent shall previously have been advised of
such filing and furnished with a copy thereof, and the Placement Agent and
counsel for the Placement Agent shall have approved such filing in writing.
(l) Comply with all registration, filing, and reporting requirements of
the Exchange Act which may from time to time be applicable to the Company.
(m) Comply with all provisions of all undertakings contained in the
Registration Statement.
(n) File timely with the Commission an appropriate form to register the
Common Stock pursuant to Section 12(g) under the Exchange Act.
(o) Use its best efforts to cause the application for quotation of the
Common Stock to be approved as soon as possible on the OTC Bulletin Board.
(p) Use its best efforts to maintain the quotation and provide the
Placement Agent with price information for the Common Stock issued hereunder.
(q) Until three (3) years after the Effective Date, retain a transfer
agent acceptable to the Placement Agent. Upon the request of the Placement
Agent, the Company shall provide the Placement Agent, for a period of three
years following the Effective Date, with copies of the Company's daily stock
transfer sheets and lists of the beneficial and record holders of the Company's
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Securities, from such transfer agent and from the Depository Trust Company, at
the Company's sole cost and expense
5. Covenants of the Placement Agent. The Placement Agent covenants and
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agrees:
(a) To use its best efforts to preserve the confidentiality of any
proprietary or not publicly available information or data provided to the
Placement Agent by the Company.
(b) To fully disclose to those parties that the Placement Agent
contacts on the Company's behalf the capacity in which the Placement Agent is
contacting them and the Placement Agent's relationship with the Company and to
perform all its responsibilities.
(c) Subject to the limitations set forth above and in compliance with
applicable federal and state securities laws, rules and regulations as well as
in accordance with applicable rules and regulations of the National Association
of Securities Dealers, Inc. and NASDAQ, the Placement Agent shall indemnify and
hold harmless the Company and its affiliates from and against claims relating to
any material breach by the Placement Agent of the foregoing covenants or any
other agreements of the Placement Agent contained in this Agreement or resulting
from the Placement Agent's gross negligence or willful misconduct, provided that
the Company promptly notifies the Placement Agent of any such claim and offers
the Placement Agent the opportunity to defend against or settle such claim with
counsel of the Placement Agent's choice.
(d) That it has been informed of the jurisdictions in which the Company
has been advised by counsel acceptable to the Placement Agent that the Units
have been qualified or registered for sale or are exempt under the respective
securities or "Blue Sky" laws of such jurisdictions; but the Company has not
assumed, nor will they assume, any obligation or responsibility concerning the
Placement Agent's right to act as broker with respect to the Units in any such
jurisdiction. No offer to sell, solicitation of an offer to buy, or sale of
Units in a state or other jurisdiction shall be made by the Placement Agent
until the Company has notified the Placement Agent that the Units have been so
registered or qualified or are exempt from registration or qualification with
the securities authority in such state or other jurisdiction.
(e) That it is a broker-dealer properly registered or licensed under
applicable federal and securities laws and regulations and under the securities
laws and regulations of the states in which the Units will be offered or sold by
it and it shall maintain such registration and/or license in full force and
effect at all times hereunder.
(f) That it will comply with the applicable requirements of the Act
(including the delivery of a Prospectus to each prospective subscriber as
required by the Act) and the Securities Exchange Act of 1934 (the "1934 Act").
(g) That neither it nor any person acting for it will give any
information or make any representations relating to the Company or the Offering,
other than those contained in the Prospectus and it is not authorized to act as
agent for the Company for any purpose other than as expressly set forth herein.
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(h) That it will comply with ▇▇▇▇▇ stock procedures set forth in the
1934 Act and rules and regulations promulgated thereunder which include (i)
determining suitability of the security for each customer, (ii) obtaining a
written agreement from each customer to purchase the security, (iii) setting
forth the identity and quantity of the ▇▇▇▇▇ stock to be purchased and (iv)
delivering a risk disclosure document to the purchaser prior to the initial
transaction in ▇▇▇▇▇ stocks.
6. Representations and Warrants of the Placement Agent. The Placement Agent
---------------------------------------------------
represents and warrants:
(a) It has the necessary corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated by this
Agreement.
(b) It is a corporation duly organized and validly existing under the
laws of the state of its incorporation; is duly authorized to execute this
Agreement and to perform duties hereunder, and execution and delivery of this
Agreement and consummation of the transactions herein contemplated 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 judgement, decree,
order or, to knowledge, any statue, rule or regulation applicable to Placement
Agent.
(c) The information contained in the Prospectus relating to you is
complete and correct and does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not misleading.
(d) It is a member of the National Association of Securities Dealer,
Inc., and is registered as a broker-dealer under the 1934 Act and under the
securities laws of the states in which the Units will be offered or sold by the
Placement Agent. It is not subject to any order or regulation which in any way
relates to any violation of law and it is not committed any act or is subject to
any state of fact described in the "bad boy" provisions of any state "blue sky
law."
(e) It shall make no representations concerning the Offering.
7. Compensation and Payment of Expenses.
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(a) As compensation for the Placement Agent's services, the Company (in
accordance with the terms of the Prospectus) shall pay and/or deliver to the
Placement Agent (i) a ten percent (10%) commission for all Units placed by the
Placement Agent pursuant to this Agreement and (ii) Warrants to purchase a
number of Units equal to ten percent (10%) of the Units sold in the Offering
pursuant to the terms set forth in the Placement Agent's Warrant dated as of
even date herewith and (iii) a non-accountable expense allowance equal to three
percent (3%) of the Units placed by the Placement Agent.
(b) The Company hereby agrees to pay all expenses (other than fees of
counsel for the Placement Agent) in connection with (1) the preparation,
printing, filing, distribution, and mailing of the Registration Statement and
the Prospectus and the printing, filing, distribution, and mailing of this
Agreement, any Selected Dealers Agreement, any Blue Sky Surveys, and if
appropriate, any Power of Attorney, and related documents, including the cost of
all copies thereof and of the Preliminary Prospectuses and of the Prospectus and
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any amendments or supplements thereto supplied to the Placement Agent in
quantities as hereinabove stated, (2) the issuance, sale, transfer, and delivery
of the Units, including any transfer or other taxes payable thereon, (3) the
qualification of the Units under state or foreign "blue sky" or securities laws,
including the costs of printing and mailing the preliminary and final "Blue Sky
Survey" and the fees of counsel for the Placement Agent and the disbursements in
connection therewith, (4) the filing fees payable to the Commission, the NASD,
and the jurisdictions in which such qualification is sought, (5) the reasonable
fees and disbursements of the Placement Agent relating to all filings with the
NASD, (6) the quotation of the Common Stock on the OTC Bulletin Board (7) the
fees and expenses of the Company's transfer agent and registrar, if any, and (h)
the fees and expenses of the Company's legal counsel and accountants.
8. Closing Procedures.
------------------
(a) From time to time, but no less frequently than every other Thursday
commencing with the second Thursday after the Effective Date, and until the end
of the Offering Period, there shall be a closing with respect to the Units in
accordance with the terms and procedures set forth in this Section 8. Any date
upon which a closing shall occur is referred to in this Agreement as a "Closing
Date." Notwithstanding the foregoing, (i) if any such Thursday shall not be a
Business Day, such closing shall be held on the next succeeding Business Day and
(ii) if the total amount of subscriptions for Units not yet remitted to the
Company ("Pending Subscription") as of any scheduled Closing Date shall be less
than $2,500, no closing shall be held on such date, and (iii) the Placement
Agent shall give notice to the Company at any time that there shall be Pending
Subscriptions of at least $25,000 and a closing shall then be held within two
(2) Business Days after such notice is given. This Section 8 shall be subject to
the terms and restrictions contained in the escrow agreement among the Placement
Agent, the Company and NY Western Trust Company (the "Escrow Agent"). As used
herein, Business Day shall mean any day other than Saturday, Sunday or other day
on which commercial banks in New York City are authorized or permitted by law to
close.
(b) Payment of the net proceeds of the Pending Subscriptions and
delivery of the Units to the Placement Agent for transmittal to the purchaser
thereof shall take place as set forth on Schedule A attached to this Agreement.
(c) At least two (2) full Business Days prior to each Closing Date, the
certificates for the Units sold hereunder shall be registered in such name or
names and shall be in such denominations as the Placement Agent may request from
the Company. For purposes of expediting the checking and packaging of
certificates for the Units, the Company agrees to make such certificates
available for inspection at the offices of the transfer agent at least
twenty-four (24) hours prior to each respective Closing Date.
9. Conditions of Placement Agent's Obligations. The obligations of the
---------------------------------------------
Placement Agent to cause the placement of the Units, as provided herein, shall
be subject, in its reasonable discretion, to the continuing accuracy of the
representations and warranties of the Company contained herein and in each
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certificate and document contemplated under this Agreement to be delivered to
the Placement Agent, as of the date hereof and as of each Closing Date to the
performance by the Company of its obligations hereunder, and to the following
conditions:
(a) The Placement Agent shall have received the favorable opinion of
▇▇▇▇▇▇▇▇▇▇ Helpern Syracuse & Hirschtritt LLP, counsel for the Company, dated
the date of each Closing Date, addressed to the Placement Agent, with such
number of reproduced copies or signed counterparts thereof for the Placement
Agent as shall be satisfactory to the Placement Agent, to the effect that:
(i) the Company is a corporation, duly organized and validly
existing, and in good standing under the laws of Delaware with full power and
authority, to own, lease, license, and use its properties and assets and to
conduct its business in the manner described in the Prospectus;
(ii) the authorized capital stock of the Company consists of
100,000,000 Shares of Common Stock, of which 15,025,000 Shares are outstanding.
Each outstanding Share of Common Stock, is duly authorized and validly issued,
and has not been issued and is not owned or held in violation of any preemptive
right of stockholders. To the knowledge of such counsel, there is no commitment,
plan, or arrangement to issue, and no outstanding option, warrant, or other
right calling for the issuance of, any share of capital stock of the Company, or
any security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for, capital stock of the Company, except as
shall be properly described in the Prospectus. To the knowledge of such counsel,
there is outstanding no security or other instrument which by its terms is
convertible into or exchangeable for capital stock of the Company, except as may
be properly described in the Prospectus;
(iii) the Company has obtained from each of its directors,
officers and affiliates (as defined in the Regulations), and from each other
person or entity who beneficially owned as of the Effective Date Shares of
Common Stock of the Company, other than persons listed on EXHIBIT A enforceable
written agreements, in form and substance satisfactory to counsel for the
Placement Agent, that for a period of twelve (12) months from the Effective Date
such person will not, without your prior written consent, offer, pledge, issue,
sell, contract to sell, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, any Shares of Common Stock or any security or other
instrument which by its terms is convertible into, exercisable for, or
exchangeable for Shares of Common Stock or other securities of the Company,
including, without limitation, any Shares of Common Stock issuable under any
outstanding stock options or warrants. The foregoing restriction shall not apply
to: (i) the Units; (ii) the issuance of Common Stock issuable (except to
directors, officers and affiliates (as defined in the Regulations)) upon the
exercise of stock options and warrants and conversion of other convertible
securities outstanding on the date hereof and pursuant to the plans, (iii) the
issuance of any securities in connection with any merger or acquisition approved
by a majority of the independent directors of the Company; or (iv) the issuance
of any securities to unaffiliated third parties at fair market value approved by
a majority of the independent directors of the Company;
(iv) except as described in the Registration Statement, the
Securities are validly authorized and, when issued and delivered in accordance
with this Agreement, will be validly issued, fully paid, and nonassessable,
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without any personal liability attaching to the ownership thereof, and to the
knowledge of such counsel will not be issued in violation of any preemptive
rights;
(v) to the knowledge of such counsel, the Company is not currently
offering any securities for sale except as described in the Registration
Statement;
(vi) there is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending or to the
knowledge of such counsel, threatened with respect to the Company, or its
operations, business, properties, or assets except as may be properly described
in the Prospectus or as individually or in the aggregate do not now have and
cannot reasonably be expected in the future to have a material adverse effect
upon the operations, business, properties, or assets of the Company. To the
knowledge of such counsel, the Company is not in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, or decree, except
as may be properly described in the Prospectus or such as in the aggregate do
not now have and cannot reasonably be expected in the future to have a material
adverse effect upon the operations, business, properties, or assets of the
Company, nor, to the knowledge of such counsel, must the Company take any action
in order to avoid any such violation or default;
(vii) to the knowledge of such counsel, neither the Company, nor
any other party is now in violation or breach of, or in default with respect to,
complying with any material provision of any contract, agreement, instrument,
lease, license, arrangement, or understanding known to such counsel which is
material to the Company;
(viii) the Company is not in violation or breach of, or in default
with respect to, any term of its certificate of incorporation (or other charter
document) or bylaws;
(ix) the Company has all requisite power and authority to issue
and deliver the Securities; necessary corporate proceedings of the Company have
been taken to authorize the execution and delivery of the Securities;
(x) this Agreement has been duly executed and delivered by the
Company. No consent, authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any federal, state, local, or
other governmental authority or any court or other tribunal is required by the
Company for the execution, delivery, or performance by the Company of any of
this Agreement or any other agreements (except filings under the Act which have
been made prior to each Closing Date and consents consisting only of consents
under "blue sky" or state securities laws). No consent of any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
known to such counsel and listed as an exhibit to the Registration Statement, to
which the Company is a party; and the execution, delivery, and performance of
this Agreement will not violate, result in a breach of, conflict with, or (with
or without the giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract, agreement,
instrument, lease, license, arrangement, or understanding, or violate or result
in a breach of any term of the certificate of incorporation (or other charter
document) or by-laws of the Company;
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(xi) the Securities conform to all statements relating thereto
contained in the Registration Statement or the Prospectus;
(xii) to the knowledge of such counsel, the descriptions of any
contract, agreement, instrument, lease, or license required to be described in
the Registration Statement or the Prospectus are correct in all material
respects. To the knowledge of such counsel, any contract, agreement, instrument,
lease, or license required to be filed as an exhibit to the Registration
Statement has been filed with the Commission as an exhibit to the Registration
Statement or has been incorporated as an exhibit by reference into the
Registration Statement;
(xiii) the conditions for use of Form SB-1 have been satisfied
with respect to the Registration Statement;
(xiv) to the knowledge of such counsel, no person or entity has
the right to require registration of the Securities of the Company because of
the filing or effectiveness of the Registration Statement;
(xv) the Registration Statement has become effective under the
Act. To the knowledge of such counsel, no Stop Order has been issued and no
proceedings for that purpose have been instituted or threatened; the
Registration Statement has become effective under the Act. To the knowledge of
such counsel, no Stop Order has been issued and no proceedings for that purpose
have been instituted or threatened;
(xvi) the Registration Statement and the Prospectus, and any
amendment or supplement thereto (other than financial statements and other
financial data and schedules contained therein, as to which such counsel need
express no opinion), comply as to form in all material respects with the
requirements of the Act and the Regulations; and
(xvii) to the knowledge of such counsel, since each Closing Date,
no event has occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has not been
set forth in such an amendment or supplement.
(b) In rendering such opinion, counsel for the Company may rely (A) as
to matters involving the application of laws other than the laws of the United
States, and the laws of the State of Delaware, to the extent counsel for the
Company deems proper and to the extent specified in such opinion, upon an
opinion or opinions (in form and substance satisfactory to counsel for the
Placement Agent) of other counsel, acceptable to counsel for the Placement
Agent, familiar with the applicable laws, in which case the opinion of counsel
for the Company shall state that the opinion or opinions of such other counsel
are satisfactory in scope, form, and substance to counsel for the Company and
that reliance thereon by counsel for the Company and the Placement Agent is
reasonable; (B) may rely as to matters of fact, to the extent proper, on
certificates of responsible officers of the Company; and (C) may rely to the
extent proper, upon written statements or certificates of officers of
departments of various jurisdictions having custody of document respecting the
corporate existence or good standing of the Company, provided that copies of any
such opinions, statements or certificates shall be delivered to counsel for the
Placement Agent.
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(c) As of each Closing Date, the Placement Agent shall have received a
certificate of the chief executive officer and of the chief financial officer of
the Company, dated the Closing Date to the effect that as of the date of this
Agreement and as of the Closing Date, the representations and warranties of the
Company contained herein were and are accurate, and that as of the Closing Date,
the obligations to be performed by the Company hereunder on or prior thereto
have been fully performed.
(d) At the time this Agreement is executed and at each Closing Date, as
the case may be, the Placement Agents shall have received a letter from ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Co., certified public accountants, dated each Closing Date,
and addressed to the Placement Agent, and in form and substance satisfactory to
the Placement Agent, with reproduced copies or signed counterparts thereof for
the Placement Agent.
(e) All proceedings taken in connection with the issuance, sale,
transfer, and delivery of the Units shall be satisfactory in form and substance
to the Placement Agent and to counsel for the Placement Agent, and the Placement
Agent shall have received from such counsel for the Placement Agent a favorable
opinion, dated as of each Closing Date with respect to such of the matters set
forth under Section 9(b), and with respect to such other related matters, as the
Placement Agent may reasonably request.
(f) The NASD, upon review of the terms of the public offering of the
Units, shall not have objected to the Placement Agent's participation in such
offering.
(g) Prior to or on each Closing Date, the Company shall have issued or
delivered the Placement Agent's Warrant.
(h) Prior to or on each Closing Date, the Company shall have provided
to the Placement Agent copies of the agreements referred to in Section 2(q) and
such additional certificates or documents that the Placement Agent reasonably
requests as to the accuracy, as to the representation and warranties of the
Company and as to the performance of the Company or its obligations hereby
(i) Any certificate or other document signed by any officer of the
Company and delivered to the Placement Agent or to counsel for the Placement
Agent shall be deemed a representation and warranty by such officer individually
and by the Company hereunder to the Placement Agent as to the statements made
therein. If any condition to the Placement Agent's obligations hereunder to be
fulfilled prior to or at any Closing Date is not so fulfilled, the Placement
Agent may terminate this Agreement or, if the Placement Agent so elects, in
writing, waive any such conditions which have not been fulfilled or extend the
time for their fulfillment.
10. Indemnification and Contribution.
--------------------------------
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Placement Agent, its officers, directors,
partners, employees, agents, and counsel, and each person, if any, who controls
the Placement Agent within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, against any and all loss, liability, claim, damage, and
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expense whatsoever (which shall include, for all purposes of this Section 10,
but not be limited to, attorneys' fees and any and all expense whatsoever
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation) as and when incurred arising out of,
based upon, or in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained (A) the Registration Statement, or the
Prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto or (B) in any application or other document or communication
(in this Section 10 collectively called an "application") executed by or on
behalf of the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify any of the
Securities under the "blue sky" or securities laws thereof or filed with the
Commission or any securities exchange; or any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company as stated in Section 10(b) with respect to the Placement Agent by or on
behalf of the Placement Agent through the Placement Agent expressly for
inclusion in the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or (ii) any
breach of any representation, warranty, covenant, or agreement of the Company
contained in this Agreement. The foregoing agreement to indemnify shall be in
addition to any liability the Company may otherwise have, including liabilities
arising under this Agreement.
(b) If any action is brought against the Placement Agent or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of any Placement Agent (an "indemnified party") in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such indemnified party or parties shall promptly notify the Company in writing
of the institution of such action (but the failure so to notify shall not
relieve the Company from any liability it may have other than pursuant to this
Section 10(b), except to the extent it may have been prejudiced in any material
respect by such failure) and the Company shall promptly assume the defense of
such action, including the employment of counsel (satisfactory to such
indemnified party or parties) and payment of expenses. Such indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
action or the Company shall not have promptly employed counsel satisfactory to
such indemnified party or parties to have charge of the defense of such action
or such indemnified party or parties shall have reasonably concluded that there
may be one or more legal defenses available to it or them or to other
indemnified parties which are different from or additional to those available to
the Company, in any of which events such fees and expenses shall be borne by the
Company and the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties. Anything in this paragraph
to the contrary notwithstanding, the Company shall not be liable for any
settlement of any such claim or action effected without its written consent,
which shall not be unreasonably withheld. The Company shall not, without the
prior written consent of each indemnified party that is not released as
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described in this sentence, settle or compromise any action, or permit a default
or consent to the entry of judgment in or otherwise seek to terminate any
pending or threatened action, in respect of which indemnity may be sought
hereunder (whether or not any indemnified party is a party thereto), unless such
settlement, compromise, consent, or termination includes an unconditional
release of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify the Placement Agent of the commencement of
any litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of the Units, the Registration Statement
or the Prospectus, or any amendment or supplement thereto, or any application.
(c) The Placement Agent agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent as the foregoing indemnity from
the Company to the Placement Agent in Section 10(a), but only with respect to
statements or omissions, if any, made in the Registration Statement or the
Prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, or in any application in reliance upon and in conformity
with written information furnished to the Company as stated in this Section
10(c) with respect to the Placement Agent by or on behalf of the Placement Agent
through the Placement Agent expressly for inclusion in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be; provided, however, that the obligation of the
Placement Agent to provide indemnity under the provisions of this Section 10(c)
shall be limited to the amount which represents the discounts received by the
Placement Agent hereunder. If any action shall be brought against the Company or
any other person so indemnified based on the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or in any application, and
in respect of which indemnity may be sought against the Placement Agent pursuant
to this Section 10(c), the Placement Agent shall have the rights and duties
given to the Company, and the Company and each other person so indemnified shall
have the rights and duties given to the indemnified parties, by the provisions
of Section 10(a).
(d) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 10(a),
10(b) or 10(c) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such indemnification
may not be enforced in such case, 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 the Company
(including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed the Registration
Statement, and any controlling person of the Company), as one entity, and the
Placement Agent (including for this purpose any contribution by or on behalf of
an indemnified party), as a second entity, shall contribute to the losses,
liabilities, claims, damages and expenses whatsoever to which any of them may be
subject, so that the Placement Agent is responsible for the proportion thereof
equal to the percentage which the underwriting discount per Unit set forth on
the cover page of the Prospectus represents of the initial public offering price
per share set forth on the cover page of the Prospectus and the Company is
responsible for the remaining portion; provided, however, that if applicable law
does not permit such allocation, then other relevant equitable considerations
such as the relative fault of the Company and the Placement Agent, in connection
with the facts which resulted in such losses, liabilities, claims, damages and
expenses shall also be considered. The relative fault, in the case of an untrue
statement, alleged untrue statement, omission, or alleged omission, shall 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
-17-
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
or per capita allocation of the aggregate losses, liabilities, claims, damages,
and expenses (even if the Placement Agent and the other indemnified parties were
treated as one entity for such purpose) or by any other method of allocation
that does not reflect the equitable considerations referred to in this Section
10(d). No person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
is not guilty of such fraudulent misrepresentation. For purposes of this Section
10(d), each person, if any, who controls the Placement Agent within the meaning
of Section 15 of the Act or Section 20(a) of the 1934 Act and each officer,
director, partner, employee, agent, and counsel of the Placement Agent shall
have the same rights to contribution as such Placement Agent and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement, and each director of the Company shall have
the same rights to contribution as the company, subject in each case to the
provisions of this Section 10(d). Anything in this Section 12(d) to the contrary
notwithstanding, no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
Section 10(d) is intended to supersede any right to contribution under the Act,
the 1934 Act, or otherwise.
11. Representations and Agreements to Survive Delivery. All
------------------------------------------------------------
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Effective Date, and such representations, warranties,
covenants, and agreements of the Placement Agent and the Company, including the
indemnity and contribution agreements contained in Section 10, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Placement Agent or any indemnified person, or by or on
behalf of the Company or any person or entity which is entitled to be
indemnified under Section 10(c), and shall survive termination of this
Agreement. In addition, the provisions of Sections 7, 10, and 12 shall survive
termination of this Agreement, whether such termination occurs before or after
the Effective Date.
12. Effectiveness of This Agreement and Termination Thereof.
-------------------------------------------------------
(a) This Agreement shall become effective at 9:30 A.M., New York City
Time, on the first full business day following the Effective Date. The Placement
Agent or the Company may prevent this Agreement from becoming effective without
liability of any party to any other party, except as noted below in this Section
12, by giving the notice indicated in Section 12(c) before the time this
Agreement becomes effective.
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(b) In addition to the right to terminate this Agreement pursuant to
this Section 12, the Placement Agent shall have the right to terminate this
Agreement at any time prior to any Closing Date by giving notice to the Company
if any domestic or international event, act, or occurrence has materially
disrupted, or in the Placement Agent's reasonable opinion will in the immediate
future materially disrupt, the securities markets; or if there shall have been a
general suspension of, or a general limitation on prices for, trading in
securities on the New York Stock Exchange, NASDAQ, the American Stock Exchange,
the Boston Stock Exchange, or the Philadelphia Stock Exchange, or in the
over-the-counter market; or if there shall have been an outbreak of major
hostilities or other national or international calamity; or if a banking
moratorium has been declared by a state or federal authority; or if a moratorium
in foreign exchange trading by major international banks or persons has been
declared; or if there shall have been a material interruption in the mail
service or other means of communication within the United States; or if the
Company shall have sustained a material or substantial loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage, or other calamity or malicious
act which, whether or not such loss shall have been insured, will, in your
opinion, make it inadvisable to proceed with the offering, sale, or delivery of
the Units, as the case may be; or if there shall have been such change in the
market for securities in general or in political, financial, or economic
conditions as in your judgment makes it inadvisable to proceed with the
offering, sale, and delivery of the Units, as the case may be, on the terms
contemplated by the Prospectus.
(c) If the Placement Agent elects to prevent this Agreement from
becoming effective, as provided in this Section 12, or to terminate this
Agreement pursuant to this Section 12, the Placement Agent shall notify the
Company promptly by telephone, telex, facsimile or telegram, confirmed by
letter. If the Company elects to prevent this Agreement from becoming effective,
as provided in this Section 12, the Company shall notify the Placement Agent
promptly by telephone, telex, facsimile, or telegram, confirmed by letter.
(d) Anything in this Agreement notwithstanding other than Section
12(e), if this Agreement shall not become effective by reason of an election
pursuant to this Section 12 or if this Agreement shall terminate or shall
otherwise not be carried out within the time specified herein by reason of any
failure on the part of the Company to perform any covenant or agreement or
satisfy any condition of this Agreement by it to be performed or satisfied, the
sole liability of the Company to the Placement Agent, in addition to the
obligations the Company assumed pursuant to Section 4, will be to reimburse the
Placement Agent for such out-of-pocket expenses (including the fees and
disbursements of their counsel) as shall have been incurred by them in
connection with this Agreement or the proposed offer, sale, and delivery of the
Units, and the Company agrees to pay promptly upon demand the full amount
thereof to the Placement Agent for the account of the Placement Agent less
amounts previously paid to the Placement Agent in reimbursement of such
expenses.
(e) Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 7, 10 and 12 shall not be in any way affected by such
election or termination or failure to carry out the terms of this Agreement or
any part hereof.
-19-
13. Notices. Any notice or other communication required or permitted to be
-------
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or by Federal Express, Express Mail or similar
overnight delivery or courier service or delivered (in person or by telecopy,
telex or similar telecommunications equipment) against receipt to the party to
whom it is to be given, (i) if to the Company, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President, with a copy to:
▇▇▇▇▇▇▇▇▇▇ Helpern Syracuse & Hirschtritt LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. (ii) if to the
Placement Agent, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ with a copy to: Atlas
▇▇▇▇▇▇▇▇, P.A., ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., or (iii) in either case, to such other address
as the party shall have furnished in writing in accordance with the provisions
of this Section 13. Any notice or other communication given by certified mail
shall be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof. Any notice given by other means permitted by this Section 13 shall be
deemed given at the time of receipt thereof.
14. Binding Agreement. This Agreement shall inure solely to the benefit of,
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and shall be binding upon, the Placement Agent and the Company and the persons
and entities referred to in Section 13 who are entitled to indemnification or
contribution, and their respective successors, legal Placement Agent, and
assigns (which shall not include any buyer, as such, of the Units), and no other
person shall have or be construed to have any legal or equitable right, remedy,
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
15. Governing Law. This Agreement shall be construed in accordance with the
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laws of the State of New York, without giving effect to conflict of law
principles.
16. Consent to Jurisdiction. The Company irrevocably consents to the
------------------------
jurisdiction of the courts of the State of New York and of any federal court
located in such State in connection with any action or proceeding arising out of
or relating to this Agreement, any document or instrument delivered pursuant to,
in connection with or simultaneously with this Agreement, or a breach of this
Agreement or any such document or instrument. In any such action or proceeding,
the Company waives personal service or any summons, complaint or other process
and agrees that service thereof may be made in accordance with Section 13.
Within 30 days after such service, or such other time as may be mutually agreed
upon in writing by the attorneys for the parties to such action or proceeding,
the Company shall appear or answer such summons, complaint or other process.
17. Captions. Paragraph captions contained in this Agreement are inserted
--------
only as a matter of convenience and for reference and in no way define, limit,
or extend or describe the scope of this Agreement or the intent of any provision
hereof.
-20-
If the foregoing correctly sets forth the understanding between the
Placement Agents and the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
SEARCHHELP, INC.
By:
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer, President
and Treasurer
Accepted as of the date first above written.
New York, New York
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., INC.
By:
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
21
EXHIBIT A
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A-1
Schedule A
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1. The Placement Agent will be responsible for clearing each investor, by
reviewing the subscription agreement to make sure it is completed
properly (checking name, ss#, etc.) and by determining that the
investor is qualified, both from an overall suitability viewpoint and
pursuant to the relevant blue sky laws. The Placement Agent must make
sure the investor's check is properly made payable to the escrow
account for the correct amount as provided in the subscription
agreement or that the wire has hit the escrow account for the correct
amount as provided in the subscription agreement. Also, the Placement
Agent must make sure that all ▇▇▇▇▇ stock disclosure requirements are
complied with.
2. The Placement Agent must make sure that the investor resides in a state
in which the Company is permitted to sell its Investor Units, based
upon the latest blue-sky memorandum. The Company's counsel will provide
the Placement Agent and the Company with a blue-sky memorandum that
will set forth all the states in which the Company is allowed to sell
its Investors Units and will update the memorandum periodically. If a
prospective investor resides in a state in which sales are not
permitted, the Placement Agent must notify the Company and the
Company's counsel so that the Company and the Company's counsel can
seek to register in that state immediately.
3. The Placement Agent must keep a complete ledger in hard copy and
computerized form of all of the investors which must include: (i) the
exact name of the investor, (ii) the address, (iii) the social security
number or employer identification number, (iii) the amount invested,
(iv) how many shares subscribed for, (v) how many warrants are
subscribed for, and (v) if there are two parties to the investment, how
are they holding the stock and warrant (as joint tenants, tenant in
common, etc.).
4. The Placement Agent must turn over the investor's check to the U.S.
Trust Company N.F. ("Escrow Agent") by the next business day after of
receiving the check. (via federal express - priority next morning)
(Assuming the investor is qualified and the subscription document,
▇▇▇▇▇ stock disclosure forms and check or wire transfer are properly
completed).
HSBC Bank
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
ABA # ▇▇▇▇▇▇▇▇▇
Account # 945703180
5. The Placement Agent will hold the original subscription document until
the relevant closing.
6. Every second Thursday, starting with the second Thursday after the date
the registration statement becomes effective and until the ending date
A-1
of the offering period (which is scheduled to be [December 31, 2002,]
but may be earlier if the Company and Placement Agent agree), a closing
with respect to the Investor Units is scheduled to be held.
7. The Tuesday before each closing date, the Placement Agent must furnish
a list of all the investors in the form and content stated in 3 above.
8. This list, together with a copy of the subscription agreement and ▇▇▇▇▇
stock documents must be faxed and emailed on Tuesday to the Company,
the Company's counsel, the transfer agent and the Placement Agent's
counsel.
9. On that same Tuesday, the Placement Agent and the Company must give the
Escrow Agent written notice by facsimile that 90% of the monies in the
escrow account pertaining to the investors that are admitted on that
specific closing date shall be released and delivered to an account
specified by the Company on the closing date and the other 10% shall be
released to the Placement Agent. Each notice shall specify the exact
amounts to be disbursed to the Company and to the Placement Agent and
shall provide the necessary wiring instructions to the Escrow Agent.
10. If any subscription, for which monies have already been wired to the
Escrow Agent or sent to the Escrow Agent by the Placement Agent, is
rejected, canceled or withdrawn, then the Placement Agent and the
Company shall give joint notice to the Escrow Agent to disburse such
monies on each closing date directly to the applicable subscriber at
the address set forth in his or her subscription agreement.
11. American Stock Transfer and Trust Company (the "Transfer Agent") will
prepare the stock certificates and warrant certificates and send them
out directly to the investors. The other parties will receive a
stockholder list from the transfer agent of the shares and warrants
that were issued.
A-2