Seawright Holdings, Inc. PLACEMENT AGENT AGREEMENT
Exhibit
10.3
▇▇▇▇▇▇▇▇▇
Holdings, Inc.
Dated
as
of: September 12, 2005
The
undersigned, ▇▇▇▇▇▇▇▇▇ Holdings, Inc., a Delaware corporation (the “COMPANY”),
hereby agrees with ▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, Inc. (the “PLACEMENT AGENT”) as
follows:
| 1. |
OFFERING.
The Company hereby engages the Placement Agent to act as its exclusive
placement agent in connection with the Investment Agreement dated
September 12, 2005 (the “INVESTMENT AGREEMENT”) pursuant to which the
Company shall issue and sell to the Dutchess Private Equities Fund
II,
L.P., a Delaware Limited Partnership (the “INVESTOR”), from time to time,
and the Investor shall purchase from the Company (the “OFFERING”) up to
Five Million Dollars ($5,000,000) of the Company’s Common Stock (the
“COMMITMENT AMOUNT”), par value $0.001 per share (the “COMMON STOCK”), at
price per share equal to the Purchase Price, as that term is defined
in
the Investment Agreement. Pursuant to the terms hereof, the Placement
Agent shall render consulting services to the Company with respect
to the
Investment Agreement and shall be available for consultation in
connection
with the advances to be requested by the Company pursuant to the
Investment Agreement. All capitalized terms used herein and not
otherwise
defined herein shall have the same meaning ascribed to them as
in the
Investment Agreement. The Investor will be granted certain registration
rights with respect to the Common Stock as more fully set forth
in a
Registration Rights Agreement between the Company and the Investor
dated
September 12, 2005 (the “REGISTRATION RIGHTS AGREEMENT”). The documents to
be executed and delivered in connection with the Offering, including,
but
not limited to, this Agreement, the Investment Agreement, and the
Registration Rights Agreement, and any offering memorandum, prospectus
or
other disclosure document (including all amendments and supplements)
utilized in connection with the Offering are referred to sometimes
hereinafter collectively as the “OFFERING MATERIALS.” The Company’s Common
Stock is sometimes referred to hereinafter as the “SECURITIES.” The
Placement Agent shall not be obligated to sell any Securities and
the
Offering by the Placement Agent shall be solely on a “best efforts
basis.”
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| 2. |
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE PLACEMENT
AGENT.
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| A. |
The
Placement Agent represents, warrants and covenants as
follows:
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(i) The
Placement Agent has the necessary power to enter into this Agreement and
to
consummate the transactions contemplated hereby.
(ii) The
execution and delivery by the Placement Agent of this Agreement and the
consummation of the transactions contemplated herein will not result in any
violation of, or be in conflict with, or constitute a default under, any
agreement or instrument to which the Placement Agent is a party or by which
the
Placement Agent or its properties are bound, or any judgment, decree, order
or,
to the Placement Agent’s knowledge, any statute, rule or regulation applicable
to the Placement Agent. This Agreement when executed and delivered by the
Placement Agent, will constitute the legal, valid and binding obligation
of the
Placement Agent, enforceable in accordance with its terms, except to the
extent
that (a) the enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time
in
effect and affecting the rights of creditors generally, (b) the enforceability
hereof or thereof is subject to general principles of equity, or (c) the
indemnification provisions hereof or thereof may be held to be in violation
of
public policy.
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(iii) Upon
receipt and execution of this Agreement the Placement Agent will promptly
forward copies of this Agreement to the Company or its counsel and the Investor
or its counsel.
(iv) The
Placement Agent will not take any action that it reasonably believes would
cause
the Offering to violate the provisions of the Securities Act of 1933, as
amended
(the “1933 ACT”), the Securities Exchange Act of 1934 (the “1934 ACT”), the
respective rules and regulations promulgated there under (the “RULES AND
REGULATIONS”) or applicable “Blue Sky” laws of any state or
jurisdiction.
(v) The
Placement Agent will use all reasonable efforts to determine (a) whether
the
Investor is an Accredited Investor and (b) that any information furnished
by the
Investor is true and accurate. The Placement Agent shall have no obligation
to
insure that (x) any check, note, draft or other means of payment for the
Common
Stock will be honored, paid or enforceable against the Investor in accordance
with its terms, or (y) subject to the performance of the Placement Agent’s
obligations and the accuracy of the Placement Agent’s representations and
warranties hereunder, (1) the Offering is exempt from the registration
requirements of the 1933 Act or any applicable state “Blue Sky” law or (2) the
Investor is an Accredited Investor.
(vi) The
Placement Agent is a member of the National Association of Securities Dealers,
Inc., and is a broker-dealer registered as such under the 1934 Act and under
the
securities laws of the states in which the Securities will be offered or
sold by
the Placement Agent unless an exemption for such state registration is available
to the Placement Agent. The Placement Agent is in compliance with all material
rules and regulations applicable to the Placement Agent generally and applicable
to the Placement Agent’s participation in the Offering.
| 3. |
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
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| A. |
The
Company represents and warrants to the Placement Agent as follows:
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(i) The
execution, delivery and performance of each of this Agreement, the Investment
Agreement and the Registration Rights Agreement has been or will be duly
and
validly authorized by the Company and is, and with respect to this Agreement,
the Investment Agreement and the Registration Rights Agreement will each
be, a
valid and binding agreement of the Company, enforceable in accordance with
its
respective terms, except to the extent that (a) the enforceability hereof
or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity or (c) the indemnification provisions hereof or thereof
may
be held to be in violation of public policy. All corporate action required
to be
taken for the authorization, issuance and sale of the Securities has been
duly
and validly taken by the Company.
(ii) The
Company has a duly authorized, issued and outstanding capitalization as set
forth herein. The Company is not a party to or bound by any instrument,
agreement or other arrangement providing for it to issue any capital stock,
rights, warrants, options or other securities, except for this Agreement,
the
agreements described herein and as described in the Investment Agreement,
dated
the date hereof and the agreements described therein. All issued and outstanding
securities of the Company have been duly authorized and validly issued and
are
fully paid and non-assessable; the holders thereof have no rights of rescission
or preemptive rights with respect thereto and are not subject to personal
liability solely by reason of being security holders; and none of such
securities were issued in violation of the preemptive rights of any holders
of
any security of the Company. As of June 30, 2005, the authorized capital
stock
of the Company consists of 19,900,000 shares of Common Stock, par value $0.001
per share, of which 8,875,476 shares of Common Stock are issued and outstanding
and 100,000 shares of preferred stock, of which no shares are issued
and
outstanding.
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(iii) The
Common Stock to be issued in accordance with this Agreement and the Investment
Agreement has been duly authorized and when issued and paid for in accordance
with this Agreement, the Investment Agreement and the certificates/instruments
representing such Common Stock, will be validly issued, fully-paid and
non-assessable.
| 4. |
CERTAIN
COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants
and agrees
at its expense and without any expense to the Placement Agent as
follows:
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| A. |
To
advise the Placement Agent of any material adverse change in the
Company’s
financial condition, prospects or business or of any development
materially affecting the Company or rendering untrue or misleading
any
material statement in the Offering Materials occurring at any time
as soon
as the Company is either informed or becomes aware
thereof.
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| B. |
To
use its commercially reasonable efforts to cause the Common Stock
issuable
in connection with the Investment Agreement to be qualified or
registered
for sale on terms consistent with those stated in the Registration
Rights
Agreement and under the securities laws of such jurisdictions as
the
Placement Agent shall reasonably request. Qualification, registration
and
exemption charges and fees shall be at the sole cost and expense
of the
Company.
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| C. |
Upon
written request, to provide and continue to provide the Placement
Agent
copies of all quarterly financial statements and audited annual
financial
statements prepared by or on behalf of the Company, other reports
prepared
by or on behalf of the Company for public disclosure and all documents
delivered to the Company’s
stockholders.
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| D. |
To
deliver, during the registration period of the Investment Agreement,
to
the Placement Agent upon the Placement Agent’s
request,
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(i) within
sixty (60) days, a statement of its income for each such quarterly period,
and
its balance sheet and a statement of changes in stockholders’ equity as of the
end of such quarterly period, all in reasonable detail, certified by its
principal financial or accounting officer;
(ii) within
one hundred twenty (120) days after the close of each fiscal year, its balance
sheet as of the close of such fiscal year, together with a statement of income,
a statement of changes in stockholders’ equity and a statement of cash flow for
such fiscal year, such balance sheet, statement of income, statement of changes
in stockholders’ equity and statement of cash flow to be in reasonable detail
and accompanied by a copy of the certificate or report thereon of independent
auditors if audited financial statements are prepared; and
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(iii) a
copy of
all documents, reports and information furnished to its stockholders at the
time
that such documents, reports and information are furnished to its
stockholders.
(iv) a
copy of
all documents, reports and information furnished to the Investor at the time
that such documents, reports and information are furnished to the
Investor.
| E. |
To
comply with the terms of the Offering
Materials.
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| F. |
To
ensure that any transactions between or among the Company, or any
of its
officers, directors and affiliates be on terms and conditions that
are no
less favorable to the Company, than the terms and conditions that
would be
available in an “arm’s length” transaction with an independent third
party.
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| 5. |
INDEMNIFICATION.
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| A. |
The
Company hereby agrees that it will indemnify and hold the Placement
Agent
and each officer, director, shareholder, employee or representative
of the
Placement Agent and each person controlling, controlled by or
under common
control with the Placement Agent within the meaning of Section
15 of the
1933 Act or Section 20 of the 1934 Act or the SEC’s Rules and Regulations
promulgated there under (the “Rules and Regulations”), harmless from and
against any and all loss, claim, damage, liability, cost or expense
whatsoever (including, but not limited to, any and all reasonable
legal
fees and other expenses and disbursements incurred in connection
with
investigating, preparing to defend or defending any action, suit
or
proceeding, including any inquiry or investigation, commenced
or
threatened, or any claim whatsoever or in appearing or preparing
for
appearance as a witness in any action, suit or proceeding, including
any
inquiry, investigation or pretrial proceeding such as a deposition)
to
which the Placement Agent or such indemnified person of the Placement
Agent may become subject under the 1933 Act, the 1934 Act, the
Rules and
Regulations, or any other federal or state law or regulation,
common law
or otherwise, arising out of or based upon (i) any untrue statement
or
alleged untrue statement of a material fact contained in (a)
the Offering
Materials (except those written statements relating to the Placement
Agent
given by an indemnified person for inclusion therein) or (b)
any
application or other document or written communication executed
by the
Company or based upon written information furnished by the Company
filed
in any jurisdiction in order to qualify the Common Stock under
the
securities laws thereof, or any state securities commission or
agency;
(ii) the omission or alleged omission from documents described
in clauses
(a) or (b) above of a material fact required to be stated therein
or
necessary to make the statements therein not misleading; or (iii)
the
breach of any representation, warranty, covenant or agreement
made by the
Company in this Agreement. The Company further agrees that upon
demand by
an indemnified person, at any time or from time to time, it will
promptly
reimburse such indemnified person for any loss, claim, damage,
liability,
cost or expense actually and reasonably paid by the indemnified
person as
to which the Company has indemnified such person pursuant hereto.
Notwithstanding the foregoing provisions of this Section 5(A),
any such
payment or reimbursement by the Company of fees, expenses or
disbursements
incurred by an indemnified person in any proceeding in which
a final
judgment by a court of competent jurisdiction (after all appeals
or the
expiration of time to appeal) is entered against the Placement
Agent or
such indemnified person based upon specific finding of fact as
to the
Placement Agent or such indemnified person’s gross negligence, fraud or
willful misfeasance will be promptly repaid to the
Company.
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B.
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The
Placement Agent hereby agrees that it will indemnify and hold the
Company
and each officer, director, shareholder, employee or representative
of the
Company, and each person controlling, controlled by or under common
control with the Company within the meaning of Section 15 of the
1933 Act
or Section 20 of the 1934 Act or the Rules and Regulations, harmless
from
and against any and all loss, claim, damage, liability, cost or
expense
whatsoever (including, but not limited to, any and all reasonable
legal
fees and other expenses and disbursements incurred in connection
with
investigating, preparing to defend or defending any action, suit
or
proceeding, including any inquiry or investigation, commenced or
threatened, or any claim whatsoever or in appearing or preparing
for
appearance as a witness in any action, suit or proceeding, including
any
inquiry, investigation or pretrial proceeding such as a deposition)
to
which the Company or such indemnified person of the Company may
become
subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
or
any other federal or state law or regulation, common law or otherwise,
arising out of or based upon (i) the conduct of the Placement Agent
or its
officers, employees or representatives in willful violation of
any of such
laws and regulations while acting as Placement Agent for the Offering,
(ii) the material breach of any representation, warranty, covenant
or
agreement made by the Placement Agent in this Agreement or (iii)
any false
or misleading information provided to the Company by one of the
Placement
Agent’s indemnified persons.
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| C. |
Promptly
after receipt by an indemnified party of notice of commencement
of any
action covered by Section 5(A) or (B), the party to be indemnified
shall,
within five (5) business days, notify the indemnifying party of
the
commencement thereof; the omission by one (1) indemnified party
to so
notify the indemnifying party shall not relieve the indemnifying
party of
its obligation to indemnify any other indemnified party that has
given
such notice and shall not relieve the indemnifying party of any
liability
outside of this indemnification if not materially prejudiced thereby.
In
the event that any action is brought against the indemnified party,
the
indemnifying party will be entitled to participate therein and,
to the
extent it may desire, to assume and control the defense thereof
with
counsel chosen by it which is reasonably acceptable to the indemnified
party. After notice from the indemnifying party to such indemnified
party
of its election to so assume the defense thereof, the indemnifying
party
will not be liable to such indemnified party under such Section
5(A) or
(B) for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, but the
indemnified party may, at its own expense, participate in such
defense by
counsel chosen by it, without, however, impairing the indemnifying
party’s
control of the defense. Subject to the proviso of this sentence
and
notwithstanding any other statement to the contrary contained herein,
the
indemnified party or parties shall have the right to choose its
or their
own counsel and control the defense of any action, all at the expense
of
the indemnifying party if, (i) the employment of such counsel shall
have
been authorized in writing by the indemnifying party in connection
with
the defense of such action at the expense of the indemnifying party,
(ii)
the indemnifying party shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense
of
such action within a reasonable time after notice of commencement
of the
action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which
are
different from or additional to those available to one or all of
the
indemnifying parties (in which case the indemnifying parties shall
not
have the right to direct the defense of such action on behalf of
the
indemnified party or parties), in any of which events such fees
and
expenses of one additional counsel shall be borne by the indemnifying
party; provided, however, that the indemnifying party shall not,
in
connection with any one action or separate but substantially similar
or
related actions in the same jurisdiction arising out of the same
general
allegations or circumstance, be liable for the reasonable fees
and
expenses of more than one separate firm of attorneys at any time
for all
such indemnified parties. No settlement of any action or proceeding
against an indemnified party shall be made without the consent
of the
indemnifying party.
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D.
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In
order to provide for just and equitable contribution in circumstances
in
which the indemnification provided for in Section 5 is due in accordance
with its terms but is for any reason held by a court to be unavailable
on
grounds of policy or otherwise, the Company and the Placement Agent
shall
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection
with
the investigation or defense of same) which the other may incur
in such
proportion so that the Company and the Placement Agent shall be
responsible for such percent of the aggregate of such losses, claims,
damages and liabilities as shall equal the percentage of the gross
proceeds paid to each of them; provided, however, that no person
guilty of
fraudulent misrepresentation within the meaning of Section 11(f)
of the
1933 Act shall be entitled to contribution from any person who
was not
guilty of such fraudulent misrepresentation. For purposes of this
Section
5(D), any person controlling, controlled by or under common control
with
the Placement Agent, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same
rights to
contribution as the Placement Agent and each person controlling,
controlled by or under common control with the Company within the
meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act and
each
officer of the Company and each director of the Company shall have
the
same rights to contribution as the Company. Any party entitled
to
contribution will, promptly after receipt of notice of commencement
of any
action, suit or proceeding against such party in respect of which
a claim
for contribution may be made against the other party under this
Section
5(D), notify such party from whom contribution may be sought, but
the
omission to so notify such party shall not relieve the party from
whom
contribution may be sought from any obligation they may have hereunder
or
otherwise if the party from whom contribution may be sought is
not
materially prejudiced thereby. The indemnity and contribution agreements
contained in this Section 5 shall remain operative and in full
force and
effect regardless of any investigation made by or on behalf of
any
indemnified person or any termination of this
Agreement.
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| 6. |
FEES.
The Company hereby agrees to pay the Placement Agent 1% for the
gross
proceeds from each Put upon the execution of this
Agreement.
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| 7. |
PAYMENT
OF EXPENSES. The Company hereby agrees to bear all of the expenses
in
connection with the Offering, including, but not limited to the
following:
filing fees, printing and duplicating costs, advertisements, postage
and
mailing expenses with respect to the transmission of Offering Materials,
registrar and transfer agent fees, and expenses, fees of the Company’s
counsel and accountants, issue and transfer taxes, if any. The
Company
agrees to bear all the reasonable expenses of the Placement Agent
in
performing its services under this Agreement including but not
limited to
the fees and expenses of counsel.
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| 8. |
TERMINATION.
This Agreement shall be co-terminus with, and terminate upon the
same
terms and conditions as those set forth in, the Investment Agreement.
The
rights and obligations of the Placement Agent and the Company shall
survive the termination of this Agreement unabridged for a period
of
twenty-four (24) months after the Closing
Date.
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| 9. |
MISCELLANEOUS.
|
| A. |
This
Agreement may be executed in any number of counterparts, each of
which
shall be deemed to be an original, but all which shall be deemed
to be one
and the same instrument.
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| B. |
Any
notice required or permitted to be given hereunder shall be given
in
writing and shall be deemed effective when deposited in the United
States
mail, postage prepaid, or when received if personally delivered
or faxed
(upon confirmation of receipt received by the sending party), addressed
as
follows:
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If
to
Placement Agent, to:
▇▇▇▇▇,
▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If
to the
Company, to:
▇▇▇▇▇▇▇▇▇
Holdings, Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇
or
to
such other address of which written notice is given to the others.
| C. |
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS UNDER
THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ANY OTHERWISE
APPLICABLE CONFLICT OF LAWS RULES OR PRINCIPLES. ANY SUIT, ACTION,
PROCEEDING OR LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT
SHALL BE BROUGHT AND PROSECUTED IN SUCH FEDERAL OR STATE COURT
OR COURTS
LOCATED WITHIN THE COMMONWEALTH OF VIRGINIA AS PROVIDED BY LAW.
THE
PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENT TO THE JURISDICTION
OF EACH SUCH COURT OR COURTS LOCATED WITHIN THE COMMONWEALTH OF
VIRGINIA
AND TO SERVICE OF PROCESS BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT
REQUESTED, OR BY ANY OTHER MANNER PROVIDED BY APPLICABLE LAW, AND
HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO CLAIM THAT ANY
SUIT,
ACTION, PROCEEDING OR LITIGATION SO COMMENCED HAS BEEN COMMENCED
IN AN
INCONVENIENT FORUM.
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| D. |
This
Agreement and the other agreements referenced herein contain the
entire
understanding between the parties hereto and may not be modified
or
amended except by a writing duly signed by the party against whom
enforcement of the modification or amendment is
sought.
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| E. |
If
any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect
any
other provision of this Agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
COMPANY:
▇▇▇▇▇▇▇▇▇
HOLDINGS, INC.
By: /s/
▇▇▇▇ ▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇
Title:
President and CEO
PLACEMENT
AGENT:
▇▇▇▇▇,
▇▇▇▇ AND ▇▇▇▇▇▇▇▇▇, INC.
By:
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
President