EXHIBIT 10.16
SEARCHHELP, INC.
0000 XXXXXXX XXXXXX
XXXXX 00
XXXXXXXX, XX 00000
November 5, 2003
X.X. Xxxxxx Securities LLC
0 Xxxxxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
RE: PLACEMENT AGENT AGREEMENT ("AGREEMENT")
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Gentlemen:
The following shall constitute an agreement between us:
SearchHelp, Inc. (the "Company") hereby engages X.X. Xxxxxx Securities LLC (the
"Placement Agent") as a non-exclusive agent to use its best efforts to arrange
for subscribers to subscribe for up to 6,000,000 shares of the Company's common
stock at a purchase price of $.25 per share ("Shares") for a total of
$1,500,000, all as more particularly described in the Private Placement
Memorandum of the Company, dated November 5, 2003, as supplemented from time to
time ("Memorandum").
The term of this Agreement shall commence on the date hereof and continue
through November 30, 2003. Notwithstanding the foregoing, either party may
terminate this agreement with or without cause at any time upon delivery of
written notice to the other party.
The Placement Agent hereby accepts the engagement to use its best efforts to
solicit subscriptions for Shares from qualified subscribers pursuant to the
Memorandum and sales material, if any, supplied by the Company (collectively,
the "Offering Documents"), in accordance with the following terms and
conditions:
The Company represents and warrants that the Shares are being offered pursuant
to an exemption from registration under the Securities Act of 1933 as amended
(the "Act") afforded by Section 4(2) thereof and Regulation D thereunder. The
Shares and this offering are more particularly described in the Memorandum. The
Shares are non-transferable and non-assignable except under certain
circumstances more fully described in the Memorandum. The Company agrees to
furnish to the Placement Agent copies of the Offering Documents describing the
Company and the Shares, which shall not be made available to potential
subscribers until such Offering Documents and their use shall be approved by the
Company. The Company represents and warrants to the Placement Agent that the
Offering Documents do not contain any untrue statement or alleged untrue
statement of a material fact or omit to state a material fact required to be
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stated or necessary to make any statement not misleading and the Company further
represents and warrants that they shall immediately notify the Placement Agent,
in writing, if any such statement becomes untrue. In connection with the
Placement Agent's engagement, the Company will furnish the Placement Agent with
any information concerning the Company and their respective officers, directors
and/or shareholders which the Placement Agent reasonably deems appropriate and
will provide the Placement Agent with access to the Company's accountants,
counsel, and other advisors, officers and directors.
Except as provided in Paragraph 3 below with respect to indemnification by the
Placement Agent, the Placement Agent may rely upon the accuracy of information
about the Company provided to the Placement Agent by the Company and the Company
shall indemnify and hold the Placement Agent, its agents and employees harmless
from and against any claims relating thereto or to the Shares, provided that the
Placement Agent promptly notify the Company of any such claims and provide the
Company with an opportunity to defend against or settle such claims with counsel
of its choice and provided that the Company will not indemnify the Placement
Agent against any claims that result from willful misconduct by the Placement
Agent, its agents or employees.
In performing such services, the Placement Agent hereby acknowledges its
responsibility to (a) 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 and (b) fully disclose to those parties that the
Placement Agent contacts on the Company's behalf the capacity in which the
Placement Agent are contacting them and the Placement Agent's relationship with
the Company.
The Placement Agent agrees that any and all activities performed by it shall be
performed 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, and that 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, and further
provided that neither the Company nor any of its agents or affiliates is in any
way at fault with respect to such claim.
Subject to the terms and conditions in this Agreement, the Company shall pay the
Placement Agent (i) a commission equal to 10% of all Shares placed for which the
Placement Agent has acted as placement agent pursuant to this Agreement, (ii) a
non-accountable expense allowance equal to 2% of all the Shares placed by the
Placement Agent and (iii) a warrant to purchase up to 600,000 shares of Common
Stock at a purchase price of $.30 per share which will be exercisable for a
period of 5 years, which means that the Placement Agent will receive a warrant
to purchase one share of the Company's common stock for every 10 shares sold by
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the Placement Agent. The Placement Agent's warrants and the underlying shares of
common stock will not be registered at the time of grant. Pursuant to a
Registration Rights Agreement, the Placement Agent will have certain piggyback
rights to cause the registration of the shares if the Company effects a
registration of its securities.
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The Placement Agent acknowledges that it has been informed of the jurisdictions
in which the Company has been advised by counsel acceptable to the Placement
Agent that the Shares 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 Shares in any such jurisdiction. No offer to sell, solicitation
of an offer to buy, or sale of Shares in a state or other jurisdiction shall be
made by the Placement Agent until the Company has notified the Placement Agent
that the Shares have been so registered or qualified or are exempt from
registration or qualification with the securities authority in such state or
other jurisdiction.
The Offering Documents to be provided by the Placement Agent under this
Agreement shall not be publicly disclosed or made available to third parties
(excluding subscribers that have been previously approved by the Placement
Agent) without the Placement Agent's prior consent. The Placement Agent
represents 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 Shares will be offered or sold
by it. The Placement Agent covenants that it shall maintain such registration
and/or license in full force and effect at all times hereunder.
The Placement Agent agrees that (i) it will comply with the applicable
requirements of the Act (including the delivery of a Memorandum to each
prospective subscriber as required by the Act) and the Securities Exchange Act
of 1934 (the "1934 Act") and that it will not act in contravention of Section
4(2) of the Act or Regulation D, (ii) neither it nor any person acting for it
will give any information or make any representations, other than those
contained in the Offering Documents and (iii) it is not authorized to act as
agent for the Company for any purpose other than as expressly set forth herein.
The Placement Agent agrees to retain in its file, for period of at least five
(5) years after dissolution of the Company, information which will establish
that each subscriber for Shares, resident in those jurisdictions requiring it,
falls within the permitted class of investors. Such information shall remain on
file on-site for two (2) years and at an off-site storage facility for three (3)
years where such documents may be retrieved without undue delay. The Company
also agrees to maintain documents for five (5) years after dissolution of the
Company relating to subscribers Shares from which the Company determined to
admit them to the Company.
Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by arbitration under the auspices of and in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The arbitration panel shall consist of one arbitrator
selected from the panel of arbitrators of the AAA. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
This Agreement shall commence on the date hereof and shall continue until
terminated in accordance herewith. The provisions of this Paragraph and of
Paragraphs 1, 3, 5, 6, 7(i), 9, 11, 13, 14 and 15 shall survive any termination
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of this Agreement. Upon such termination, the brokerage commission and other
compensation arrangements with regard to the then existing subscriptions will
continue.
The benefits of this Agreement, including the indemnification, shall inure to
the benefit of the respective successors and assigns and representatives of the
Company and the Placement Agent, and the obligations and liabilities assumed in
this Agreement by the Company, and the Placement Agent and shall be binding upon
their respective successors and assigns.
This Agreement shall be binding upon the parties when duly accepted and signed,
and shall be governed by and construed in accordance with the laws of the State
of New York, without reference to that state's conflict of laws rules.
Any notice or other communication which is permitted or required hereunder shall
be duly and properly given if in writing and either delivered personally to the
person to whom it is authorized to be given if sent by (i) nationally-recognized
over-night courier, postage prepaid, or (ii) by registered or certified mail (in
each case, return receipt requested, postage prepaid), or (iii) by telecopy, as
follows:
If to the Placement Agent:
X. X. Xxxxxx Securities LLC
0 Xxxxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telecopy: _______________
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx, XX 00000
If to the Company:
SearchHelp, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 00
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
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with a copy to:
Xxxxxxxxxx Helpern Syracuse & Hirschtritt, LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
Should any party hereto notify the other party in accordance herewith of a
change in address, such further notices to such notifying party shall then be
delivered or marked to such last address given.
(a) This Agreement may not be amended or modified except in writing signed
by the party against whom enforcement is sought.
(b) The Company hereby consents to personal jurisdiction and to service and
venue in any court in which any claim which is subject to the indemnification
provisions of this Agreement is brought against the Placement Agent or any other
Indemnified Person.
(c) The Placement Agent and the Company waives all right to trial by jury
in any action, proceeding or counterclaim (whether based upon contract, tort, or
otherwise) related to or arising out of the engagement of the Placement Agent
pursuant to, or the performance by the Placement Agent of the services
contemplated by this Agreement, including the indemnification provided herein.
This Agreement may be executed in any number of counterparts, each of which
counterpart shall constitute an original instrument, and all of which, when
taken together, shall constitute one and the same instrument.
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If the foregoing correctly sets forth the terms and conditions of our agreement,
please sign the enclosed copy of this agreement beneath the words "Agreed to and
Accepted" and return same to us.
Very truly yours,
SEARCHHELP, INC.
By:
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Name: Xxxxxxx Xxxxxxxx
Title: President
Agreed to and Accepted:
X. X. XXXXXX SECURITIES LLC
By:
----------------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
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