Exhibit 10.9
Quasar Group, Inc.
0000 Xxxx Xxxxxxxxx
Xxxxxxxx 00, Xxxxx 000
Xxxxxx, XX 00000-0000
May 23, 2003
Xxxx X. Xxxxxxxxxxx
Chief Financial Officer
Sequiam Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Dear Xxxx:
This letter agreement (the "Agreement") will confirm the understanding between
Quasar Group, Inc. ("QG") and Sequiam Corporation (the "Company") as follows:
1. RETENTION. The Company hereby retains QG to act as its agent in the
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private placement of ten million common shares of Sequiam Corporation
at $0.50 per share. Such placement shall be referred to as the
"Transaction." The shares issued in the private placement will be
restricted pursuant to Rule 144 and be further restricted from any
sale for a period of two full years from the date of the transaction.
The Company will also be granted an option to repurchase the shares
beginning two years from the date of the transaction as follows:
Year 2 - 2,500,000 shares at $5.00 per share
Year 3 - 2,500,000 shares at $10.00 per share
Year 4 - 2,500,000 shares at $15.00 per share
Year 5 - 2,500,000 shares at $20.00 per share
2. QG'S ROLE. As part of its engagement and subject to the conditions
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contained herein, QG hereby agrees to:
(a) assist in structuring the financing and the terms of the
Securities;
(b) if requested, assist in preparing a private placement memorandum
(the "Memorandum") describing the Company and the Securities;
(c) review with the Company a list of the Investors to whom the
Memorandum will be provided;
(d) assist the Company in the preparation of communications, as
necessary, to be used in placing the Securities, whether in the
form of letter, circular, notice or otherwise; and
(e) assist and advise the Company with respect to the negotiation of
the sale of the Securities to the Investors.
It is understood that QG's assistance in the Transaction will be
subject to the satisfactory completion of such investigation and
inquiry into the affairs of the Company as QG deems appropriate under
the circumstances (such investigation hereinafter to be referred to as
"Due Diligence") and to the receipt of all internal approvals of QG in
connection with the Transaction. QG shall have the right in its sole
discretion to terminate this Agreement if the outcome of the Due
Diligence is not satisfactory to QG or if approval of its internal
committees is not obtained ("Early Termination").
3. TERM. This engagement will commence on the date of this agreement and
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terminate on the earlier to occur of: (i) Early Termination; (ii) the
Closing of the Transaction; or (iii) thirty-six months from the date
of this agreement.
4. EXCLUSIVE PERIOD. For a period of forty-five days from the date of
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this agreement, the Company will not contact or solicit potential
Investors to purchase the Securities without QG's prior written
approval, which will not be unreasonably withheld. The Company
represents, warrants and agrees the QG's engagement hereunder shall,
for the referenced forty-five day period, be an exclusive engagement
and that no other financial advisor, broker or agent is or will be
authorized by it during such period to perform services on its behalf
of any type that QG has been engaged to perform hereunder.
5. PLACEMENT; BEST EFFORTS. It is understood that QG's involvement in the
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Transaction is strictly on a best efforts basis and that the
consummation of the Transaction will be subject to, among other
things, market conditions. Nothing contained herein constitutes a
commitment on the part of QG to purchase any Securities or on the part
of the Company to sell any Securities and the final decision to issue
the same shall be subject to the discretionary approval of the
Company.
6. PRIVATE PLACEMENT MEMORANDUM. If necessary, The Company will prepare a
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Memorandum with the assistance of its counsel and QG. The Company will
advise, represent and warrant to QG in writing that the Memorandum is
accurate in all material respects and does not contain an untrue
statement of material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein in
light of the circumstances under which they are made, not misleading.
The Company authorizes QG to transmit the Memorandum to prospective
Investors consistent with the requirements under Section 4(2) of the
Securities Act of 1933, as amended (the "Act") and applicable state
securities laws.
7. COOPERATION. The Company will furnish, or cause to be furnished, to QG
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all information reasonably requested by QG for purposes of rendering
services hereunder (all such information being the "Information"). In
addition, the Company agrees to make available to QG upon request from
time to time, the officers, directors, accountants, counsel and other
advisors to the Company. The Company recognizes and confirms that QG
(a) will use and rely on the Information and on information available
from generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified
the same; (b) does not assume responsibility for the accuracy or
completeness of the Information; and (c) will not make an appraisal of
any of the assets or liabilities of the Company. The Company agrees
that all Information furnished to QG in connection with this Agreement
shall be accurate in all material respects at the time provided, and
that if such Information, in whole or in part, becomes materially
inaccurate, misleading or incomplete during the term of QG's
engagement hereunder, the Company shall promptly so advise QG in
writing and correct any such inaccuracy or omission.
The Company shall also furnish or cause to be furnished to QG at
closing of the sale of Securities copies of such agreements,
certificates, opinions and other documents delivered at such closing
as QG shall reasonably request.
The Company has not taken, and will not take, any action directly or
indirectly, so as to cause the transactions contemplated by this
agreement to fail to be entitled to exemption under Section 4(2) of
the Act.
8. EXPENSE REIMBURSEMENT. QG shall provide the Company with a monthly
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invoice, itemizing all third-party expenditures incurred by it in
connection with performing the services undertaken by it hereunder.
Company agrees to reimburse QG within 30 days of receipt all such
invoiced expenditures. Third-party expenditures reimbursable hereunder
shall include, but are not limited to, amounts paid to third parties
for such costs as printing, telephone, telex, courier service,
accommodations, food and travel. In the event that QG proposes to
undertake any single project or travel, the expenses of which are
reasonably expected to exceed $5,000, then QG will submit to Company
in writing a brief description of the projected amount and purpose of
the proposed expenditures. Company shall not be required to reimburse
QG for any expenditure incurred in connection with such a project or
travel unless the proposed project or trip has received prior approval
of Company.
9. COMPENSATION. As compensation for the services to be rendered by QG
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hereunder, the Company agrees to pay QG the following:
(a) INITIAL SHARE ISSUANCE. Within 30 days of the execution of
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this Agreement, the Company shall issue 750,000 shares of
its common stock to QG as compensation for services
performed by QG under the terms of this Agreement for the
benefit of the Company. Such services shall include but not
be limited to advisory services for acquisition of Smart
Biometrics, advisory services for acquisition of certain
targeted companies, advice on finance and business
development, technology assessment and assistance with
current and future private placement of Sequiam equity.
Shares issued hereunder shall be restricted pursuant to Rule
144 and be further restricted from any sale for a period of
two full years from date of issuance. Such shares shall be
fully earned upon issuance.
(b) SUCCESS FEE. At the Closing of the Transaction, the Company
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agrees to pay QG at closing, from the proceeds of the sale
of the Securities, a cash
transaction fee (the "Success Fee") equal to ten percent
(10.0%) of the aggregate gross proceeds raised from the sale
of the Securities.
(c) ADDITIONAL SUCCESS FEE. At the Closing of the Transaction,
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the Company shall also issue to QG at Closing warrants to
purchase shares of common stock in the Company in an amount
equal to ten percent (10%) of the number of shares of common
stock of the Company that have been issued in the
Transaction. The warrants shall be purchasable at any time
from one year after Closing of the Transaction until four
years thereafter. The exercise price for the warrants shall
be $0.50/share.
10. GOVERNING LAWS. This letter agreement will be governed by and
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construed in accordance with the laws of the State of Florida
applicable to agreements made and to be fully performed therein. The
Company irrevocably submits to the jurisdiction of any court of the
State of Florida located in the County of Orange or in the United
States District Court for the Middle District of Florida for the
purpose of any suit, action or other proceeding arising out of this
letter agreement or our engagement hereunder.
Each of the Company and QG hereby waives any right it may have to a
trial by jury in respect of any claim brought by or on behalf of
either party based upon, arising out of or in connection with this
letter agreement, our engagement hereunder or the transactions
contemplated hereby.
11. CONFIDENTIALITY. Except as required by law, this Agreement and the
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services and advice to be provided by QG hereunder and the Indemnity
Letter, shall not be disclosed to third parties without QG's prior
written permission. Notwithstanding, QG shall be permitted to
advertise the services it provided in connection with the Transaction
subsequent to its consummation. Such expense shall not be reimbursable
under Paragraph 8 hereof.
12. CONFLICTS. The Company acknowledges that QG and its affiliates may
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have and may continue to have investment banking and other
relationships with parties other than the Company pursuant to which QG
may acquire information of interest to the Company. QG shall have no
obligation to disclose such information to the Company or to use such
information in connection with any contemplated transaction.
13. BENEFICIARIES. It is understood that QG is being engaged hereunder
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solely to provide the services described above to the Company and that
QG is not acting as an agent or a fiduciary of, and shall have no
duties or liabilities to, the equity holders of the Company or any
third party in connection with its engagement hereunder, all of which
are expressly waived. No one other than the Company is authorized to
rely upon the engagement of QG hereunder or any statements, advice,
opinions or conduct by QG
14. NO BROKERS. The Company represents and warrants to QG that there are
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no brokers, representatives or other persons which have an interest in
compensation due to QG
from any transaction contemplated herein or which would otherwise be
due any fee, commission or remuneration upon consummation of any
Transaction.
15. AUTHORIZATION. The Company and QG represent and warrant that each has
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all requisite power and authority to enter into and carry out the
terms and provisions of this Agreement and the execution, delivery and
performance of this Agreement does not breach or conflict with any
agreement, document or instrument to which it is a party or bound.
16. MISCELLANEOUS. This Agreement constitutes the entire understanding and
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agreement between the Company and QG with respect to the subject
matter hereof and supersedes all prior understandings or agreements
between the parties with respect thereto, whether oral or written,
express or implied. Any amendments or modifications must be executed
in writing by both parties. This Agreement, the Indemnity Letter and
all rights, liabilities and obligations hereunder and thereunder shall
be binding upon and inure to the benefit of each party's successors
but may not be assigned without the prior written approval of the
other party. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but
such counterparts shall, together, constitute only one instrument. The
descriptive headings of the Sections of this Agreement are inserted
for convenience only, do not constitute a part of this Agreement and
shall not affect in any way the meaning or interpretation of this
Agreement.
17. NON-CIRCUMVENTION. The Company acknowledges that QG intends to
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introduce it to various individuals and entities that may be, or
become, interested in investing in Company, its affiliates and
business ventures. The Company and QG acknowledge that the ultimate
form and timing of investment or assistance provided by such persons
may be different than that currently contemplated by this Agreement.
Accordingly, Company and QG agree that any investment in, or providing
of other business assistance by individuals or entities introduced to
the Company through the direct or indirect efforts of QG shall entitle
QG to a fee or other compensation commensurate with the benefit
derived by the Company or its affiliates and with the level of
compensation contemplated in this Agreement. In the event that such
assistance is provided to the Company in a form or at a time that is
not explicitly covered by the terms of this Agreement, Company and QG
agree to negotiate in good faith toward agreement upon the form and
timing of such compensation. In the event that Company and QG are
unable to reach agreement upon such compensation, then the
compensation shall be set and finally resolved by arbitration by a
sole arbitrator in accordance with the CPR Rules for Non-Administered
Arbitration, and judgment upon the award rendered by the arbitrator
may be entered by any court having jurisdiction thereof.
Please confirm that the foregoing correctly sets forth our agreement by signing
the enclosed duplicate of this letter in the space provided and returning it,
whereupon this letter shall constitute a binding agreement as of the date first
above written.
Very truly yours,
Quasar Group, Inc.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, PhD.
Chairman, President and CEO
AGREED TO AND ACCEPTED
AS OF THE ABOVE DATE:
Sequiam Corporation
By:
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Xxxx X. Xxxxxxxxxxx
Senior Vice President and CFO
