EXHIBIT 10.10
[BIONEUTRAL LETTERHEAD]
February 3, 2004
SEARCHHELP, INC.
0000 Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxxx.
We understand that you are entering into an agreement with
Environmental Commercial Technology Corp ("ETS"), whereby you would acquire a
participation interest in certain ETS's revenues potentially arising from sales
by ETS of the proprietary formulation known as HTPA. You have provided us with a
copy of the foregoing Participation Agreement.
This will confirm to you the following:
1. ETS's rights to HTPA are set forth in an AGREEMENT TO SUPPLY AND ALLOW
DISTRIBUTION OF PRODUCT dated February 3, 2004 (the "LDA").
2. Bioneutral Laboratories Corporation USA ("Bioneutral") represents and
warrants that it has sufficient rights and authority to enter into the LDA and
this letter agreement and to fulfill its obligations under each of them.
Bioneutral consents to ETS' entry into the Participation Agreement. Furthermore,
Bioneutral undertakes and agrees to notify you of any amendment or modification
of its exclusive license with Bioneutral Laboratories Corporation (Worldwide)
Limited, a New Zealand corporation, pursuant to which Bioneutral was granted
certain rights with respect to HTPA, if such amendment or modification affects
the LDA.
3. As of the date hereof the LDA remains in force and ETS is not currently
in breach thereof.
4. In the event (a) that the LDA were to be terminated for any reason during
the term of your Participation Agreement, and (b) you are not at such time in
material violation of the Participation Agreement, then Bioneutral agrees that
it will grant you a participation interest (on terms substantially identical to
the terms of the Participation Agreement) such that you shall receive the same
economic benefits that you are then receiving under the Participation Agreement.
Nothing herein is intended to or shall have the effect of affording you greater
rights or revenues than you are otherwise entitled to from ETS pursuant to the
terms of the Participation Agreement. Bioneutral is entering into this agreement
solely as an accommodation and not as a guarantor, surety or agent of ETS.
Without limitation of the foregoing, you acknowledge that Bioneutral is not
liable or responsible for any debts, promises, actions or obligations of ETS.
5. In consideration for the foregoing, you hereby agree to issue to
Bioneutral:
(a) 1,725,000 presently unregistered shares (the "Shares") of
SearchHelp common stock, par value $.0001 ("Common Stock"), and
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(b) a warrant (the "Bioneutral Warrant"), in the form attached hereto
as Exhibit A, to purchase 1,725,000 presently unregistered shares (the "Warrant
Shares") of SearchHelp Common Stock, at an exercise price of $.33 per share (or
such exercise price as may result as a consequence of any adjustment thereto as
set forth herein or in the Bioneutral Warrant) (the "Exercise Price"),. The
right to purchase the presently unregistered Warrant Shares pursuant to the
Bioneutral Warrant will vest immediately and be exercisable through June 30,
2010. The Bioneutral Warrant will not be registered under the Securities Act of
1933, as amended (the "Securities Act").
6. REGISTRATION. On or before June 30, 2004, you will cause
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(i) the presently unregistered Shares referred to in paragraph
5(a) above; and
(ii) the presently unregistered Warrant Shares that are being
conveyed by you to Bioneutral pursuant paragraph 5(b) above; and
(iii) all of the presently unregistered shares of SearchHelp
Common Stock which may be acquired upon the exercise of the ETS Warrant
(as that term is defined in the Participation Agreement) and;
(iv) the 575,000 presently unregistered shares of SearchHelp
Common Stock which are being conveyed to ETS pursuant to the Participation
Agreement to be registered under the Securities Act ("Registration
Statement"). You covenant that you shall maintain the effectiveness of the
foregoing Registration Statement until (x) the closing bid price of the
Common Stock, as reported by the principal market on which such Common
Stock trades, has been equal to or exceeded $1.00 on at least ninety
percent (90%) of the trading days within any period of six consecutive
months, or (y) all of the shares registered under such Registration
Statement have been sold, whichever is earlier. In the event that the
Registration Statement does not become effective within the following time
frames then the Exercise Price shall be decreased for the unexercised
portion of the Warrant Shares as follows:
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REGISTRATION STATEMENT NOT EFFECTIVE: EXERCISE PRICE
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On or before September 1, 2004 $.32
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On or before October 1, 2004 $.31
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On or before November 1, 2004 $.30
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On or before December 1, 2004 $.28
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On or before January 1, 2005 $.27
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On or before February 1, 2005 $.23
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On or before March 1, 2005 $.21
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On or before April 1, 2005 $.19
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On or before May 1, 2005 $.17
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On or before June 1, 2005 $.15
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On or before July 1, 2005 $.13
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On or before August 1, 2005 $.11
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On or before September 1, 2005 $.09
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On or before October 1, 2005 $.07
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On or before November 1, 2005 $.05
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On or before December 1, 2005 $.03
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On or before January 1, 2006 $.01
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In the event that the effectiveness of the Registration Statement is
delayed in order to respond to a comment letter from the Securities and Exchange
Commission (the "SEC") containing substantive comments relating solely to ETS or
Bioneutral, Bioneutral shall cooperate with you in the preparation of the
response and the lowering of the Exercise Price as set forth above shall be
delayed for the period from the receipt of such comment letter by you until all
of such comments have been resolved to the satisfaction of the SEC.
In the event that the Participation Agreement is terminated pursuant to
Section 6A thereof or this Agreement is terminated pursuant to Section 7 below,
the foregoing registration rights provisions shall be of no further force and
effect; provided that the Exercise Price for the shares that may be acquired
pursuant to the Bioneutral Warrant shall remain fixed at the price in effect at
the time of such termination, as determined by the schedule set forth above.
In the event that the Participation Agreement is terminated by ETS
pursuant to Section 3.2 thereof, Bioneutral shall return 862,500 Shares or, to
the extent that 862,500 Shares are not then in Bioneutral's possession, fifteen
cents ($0.15) for each such Share that is no longer in Bioneutral's possession.
6A. In the event that the Participation Agreement is terminated pursuant to
Section 6A thereof, this Agreement shall also terminate and Bioneutral shall
promptly return to SearchHelp any Shares received by Bioneutral pursuant to
Section 5(a) above that remain in Bioneutral's possession and shall pay to
SearchHelp fifteen cents ($0.15) for each such Share that is no longer in
Bioneutral's possession.
7. In addition to the lowering of the Exercise Price as set forth above, in
the event the Registration Statement shall not become effective on or before
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January 1, 2005, Bioneutral may at any time thereafter terminate this Agreement
and within ten (10) days of such termination, return the Bioneutral Warrant to
you.
8. The expiration of the Bioneutral Warrant shall automatically be extended
such that it shall not expire until six years after the effective date of the
Registration Statement; provided that such expiration shall be further extended
for an additional number of days equal to the actual number of days, if any,
after such effective date, that Bioneutral is not permitted to sell such
registered securities under the Registration Statement (or a subsequent
Registration Statement filed in replacement thereof) for any reason.
9. As an inducement to Bioneutral to enter into this Agreement and to
consummate the transactions contemplated hereby, SearchHelp represents and
warrants to Bioneutral that each of the following statements is true on the date
of this Agreement and at the Closing under the Participation Agreement.
(a) ORGANIZATION, POWER, AUTHORITY AND GOOD STANDING.
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(i) SearchHelp is a corporation duly organized and validly
existing and in good standing under the laws of its jurisdiction
of organization and has all requisite power and authority
(corporate and otherwise) to own, lease and operate its assets
and properties and to carry on its business as presently
conducted.
(ii) SearchHelp is duly qualified and in good standing to
transact business as a foreign person wherever the conduct of its
business requires.
(b) AUTHORIZATION, EXECUTION AND ENFORCEABILITY. SearchHelp has all
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requisite power and authority to execute, deliver and perform its obligations
under this Agreement and all other agreements, documents and instruments related
to any of the transactions contemplated by this Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
SearchHelp of this Agreement and all such documents to which it is or will be a
party, and the performance by SearchHelp of its respective obligations hereunder
and thereunder have been duly and validly authorized by all requisite action on
the part of SearchHelp, and this Agreement and each other document to which
SearchHelp is or will be a party has been, or upon the execution thereof will
be, duly and validly executed and delivered by SearchHelp, and constitutes, or
upon its execution and delivery will constitute, a valid and binding obligation
of SearchHelp, enforceable against SearchHelp in accordance with its terms
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforceability of creditors' rights generally and to
general equity principles.
(c) ISSUANCE. The issuance of the Shares has been duly and validly
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authorized by all necessary corporate and shareholder action and, when issued
and paid for pursuant to this Agreement, will be validly issued, fully paid and
non-assessable shares of Common Stock of SearchHelp. The issuance of the Warrant
Shares has been duly and validly authorized by all necessary corporate and
shareholder action and, when issued and paid for pursuant to the terms of the
Bioneutral Warrants, will be validly issued, fully paid and non-assessable
shares of Common Stock of SearchHelp.
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(d) CONSENTS. All consents and approvals required to be obtained or
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provided by SearchHelp in connection with the execution, delivery and
performance by SearchHelp of this Agreement have been obtained and delivered to
Bioneutral.
(e) NO UNTRUE STATEMENTS. No statement by SearchHelp contained in
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this Agreement or in SearchHelp's periodic reports filed with the SEC contains
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary in order to make the statements therein contained not
misleading.
(f) NO OTHER REPRESENTATIONS. SearchHelp makes no representation
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about its company, business or stock price, except for statements contained in
its filings with the SEC.
10. As an inducement to SearchHelp to enter into this Agreement and to
consummate the transactions contemplated hereby, Bioneutral represents and
warrants to SearchHelp that each of the following statements is true on the date
of this Agreement:
(a) ORGANIZATION, POWER, AUTHORITY AND GOOD STANDING.
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(i) Bioneutral is a corporation duly organized and validly
existing and in good standing under the laws of its jurisdiction
of organization and has all requisite power and authority
(corporate and otherwise) to own, lease and operate its assets
and properties and to carry on its business as presently
conducted.
(ii) Bioneutral is duly qualified and in good standing to
transact business as a foreign person wherever the conduct of its
business requires.
(b) AUTHORIZATION, EXECUTION AND ENFORCEABILITY. Bioneutral has all
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requisite power and authority to execute, deliver and perform its obligations
under this Agreement and all other agreements, documents and instruments related
to any of the transactions contemplated by this Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Bioneutral of this Agreement and all such documents to which it is or will be a
party, and the performance by Bioneutral of its respective obligations hereunder
and thereunder have been duly and validly authorized by all requisite action on
the part of Bioneutral, and this Agreement and each other document to which
Bioneutral is or will be a party has been, or upon the execution thereof will
be, duly and validly executed and delivered by Bioneutral, and constitutes, or
upon its execution and delivery will constitute, a valid and binding obligation
of Bioneutral, enforceable against Bioneutral in accordance with its terms
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforceability of creditors' rights generally and to
general equity principles.
(c) CONSENTS. All consents and approvals required to be obtained or
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provided by Bioneutral in connection with the execution, delivery and
performance by Bioneutral of this Agreement have been obtained and delivered to
SearchHelp.
(d) NO OTHER REPRESENTATIONS. Except as expressly set forth herein,
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Bioneutral has made no other representation about HTPA, its company or its
business.
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(e) NO UNTRUE STATEMENTS. No statement by Bioneutral contained in
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this Agreement contains any untrue statement of a material fact, or omits or
will omit to state a material fact necessary in order to make the statements
therein contained not misleading.
11. SECURITIES MATTERS.
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(a) Bioneutral understands that the Shares, the Warrant Shares and
the Bioneutral Warrant have not been registered under the Securities Act, or
under the securities laws of any U.S. state jurisdiction or other jurisdiction,
by reason of a specified exception from the registration provisions thereunder.
(b) Bioneutral acknowledges that the Shares, the Warrant Shares and
the Bioneutral Warrant must be held indefinitely unless and until they are
subsequently registered under the Securities Act and under applicable state
securities laws or an exemption from such registration is available.
(c) Bioneutral understands that all certificates for the Shares and
the Warrant Shares issued to them shall bear a legend in the substantially the
following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MUST BE HELD
INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER
SAID ACT OR, IN THE OPINION OF COUNSEL TO THE COMPANY, AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.
ANY ROUTINE SALES OF THE SECURITIES WHICH MAY BE MADE IN
RELIANCE UPON RULE 144 UNDER SAID ACT, IF AVAILABLE, CAN BE
MADE ONLY IN ACCORDANCE WITH ALL OF THE TERMS AND
CONDITIONS OF THAT RULE. THE COMPANY MAKES NO
REPRESENTATION THAT IT WILL MEET THE REPORTING REQUIREMENTS
OR ANY OTHER REQUIREMENTS OF RULE 144."
(d) SearchHelp has not offered or sold and will not offer or sell
any other securities in connection with this transaction other than the Shares,
the Warrant Shares, the shares of Common Stock to be issued to ETS under the
Participation Agreement (the "ETS Shares") and the shares of Common Stock to be
issued pursuant to the exercise of the warrant to be issued to ETS under the
Participation Agreement (the "ETS Warrant Shares"). The sale of the Shares
hereunder is, and the issuance of the Warrant Shares upon exercise of the
Bioneutral Warrants will be, exempt from the registration requirements of the
Securities Act. Neither SearchHelp, nor any of its Affiliates, or, to its
knowledge, any person or entity acting on its or their behalf has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Shares, ETS Shares, the Warrant Shares or the ETS Warrant Shares. Neither
SearchHelp, nor any of its Affiliates, nor to its knowledge, any person or
entity acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security
other than pursuant to this Agreement and the Participation Agreement, under
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circumstances that would require registration under the Securities Act of the
Shares, ETS Shares, the Warrant Shares or the ETS Warrant Shares.
12. MISCELLANEOUS
(a) NOTICES. All notices, requests or other communications hereunder
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shall be in writing and shall be deemed to have been duly given if delivered or
mailed first class certified mail postage prepaid or sent by recognized
overnight courier addressed as follows: if to SearchHelp, at 0000 Xxxxxxx
Xxxxxx, Xxxxx 00, Xxxxxxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx. CEO
(with a copy to Xxxxxxxxxx Xxxxxxx Syracuse & Hirschtritt LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxxxx, Esq.); if to Bioneutral
c/o Xxxx Xxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx
X. Xxxxxx, Esq.; or to such other address as may have been furnished in writing
to the party giving the notice by the party to whom notice is to be given. Any
such notice which is sent by certified mail shall be deemed given three (3) days
after mailing and any such notice sent by overnight courier shall be deemed
given one (1) day after delivery to such courier.
(b) ENTIRE AGREEMENT. This Agreement embody the entire agreements
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among the parties and there have been and are no agreements, representations or
warranties, oral or written among the parties other than those set forth or
provided for in this Agreement. This Agreement may not be modified or changed,
in whole or in part, except by a supplemental agreement signed by each of the
parties.
(c) RIGHTS UNDER THIS AGREEMENT; ASSIGNABILITY. This Agreement shall
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bind and inure to the benefit of the parties hereto and their respective
successors and assigns.
Either party shall have the right to assign this Agreement, with the
prior written consent of the other party, which consent shall not be
unreasonably withheld, conditioned or delayed, but each party shall remain
liable under this Agreement notwithstanding any such assignment.
Nothing contained in this Agreement is intended to confer upon any
person, other than the parties to this Agreement and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
(d) GOVERNING LAW. This Agreement shall be governed by and construed
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in accordance with the internal laws of the State of New York.
(e) HEADINGS; REFERENCES TO SECTIONS, EXHIBITS AND SCHEDULES. The
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headings of the Sections, paragraphs and subparagraphs of this Agreement are
solely for convenience and reference and shall not limit or otherwise affect the
meaning of any of the terms or provisions of this Agreement. The references
herein to Sections, Exhibits and Schedules, unless otherwise indicated, are
references to sections of and exhibits and schedules to this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which shall be an original, but which together constitute
one and the same instrument.
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(g) LEGAL FEES. In the event either party brings a lawsuit against
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the other party in connection with this Agreement, the prevailing party in the
lawsuit shall be entitled to recover legal fees and costs from the other party.
Sincerely,
Bioneutral Laboratories Corporation USA
By:
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Name:
---------------------------------
Title:
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Acknowledged and agreed:
SEARCHHELP, INC.
By:
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Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer,
Chief Financial Officer,
Vice President and Treasurer
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