December 10, 2002
Bathgate Capital Partners LLC
Gentlemen:
Star E Media Corporation (the "Company"), hereby confirms its agreement with you
(the "Placement Agent") as follows:
Section 1
Representations and Warranties
The Company proposes to offer and sell a secured loan in the amount of $230,000
(the "Secured Loan") (on terms as set forth in Exhibit A attached hereto) with
an "equity kicker" of 230,000 shares of the Company's common stock.
In order to induce the Placement Agent to enter into this agreement, the Company
hereby represents and warrants to and agrees with the Placement Agent as
follows:
1.01 Documents: The documents with respect to the securities and all
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exhibits thereto, copies of which have heretofore been delivered by the
Company to the Placement Agent, have been prepared by the Company and
consist of all current SEC filings by the Company including its
Registration Statement on Form 10-SB, as amended (and still subject to
amendment in response to comments from the SEC), and all subsequently filed
Form 10-Q's, 8-K's and any other form filed with Securities and Exchange
Commission.
1.02 No Material Adverse Change: Except as reflected in or contemplated by
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the Documents, or as disclosed by the Company to the Placement Agent, there
shall not be, during the term of this Agreement, any material adverse
change in the business, properties or technological position of the Company
as a whole and there shall not have been any material transaction entered
into by the Company, other than transactions entered into in the ordinary
course of business.
1.03 Legality of Securities Offered: The securities to be offered will
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have been duly and validly authorized and when issued and sold against
payment, will be validly issued, fully paid and non assessable.
1.04 Litigation: There is, and at the Closing Date, there will be no
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action suit or proceeding pending or to the knowledge of the Company
threatened which might result in judgments against the Company, its
officers, directors or affiliates other than those listed in the Documents.
1.05 Authority: The execution and delivery by the Company of this
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agreement, has been duly authorized, and this Agreement is valid, binding
and legally enforceable obligation of the Company.
In order to induce the Company to enter into this agreement, the Placement Agent
hereby represents and warrants to and agrees with the Company as follows:
1.06 Throughout the course of the Private Placement, the Placement Agent
shall be and remain licensed as a broker-dealer with each state in which
the Secured Loan is sold by the Placement Agent, and shall be and remain a
member of the National Association of Securities Dealers, Inc.
Section 2
Issue Sale and Delivery of Securities
2.01 Placement Agent Appointment: The Company hereby appoints the
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Placement Agent, as a non-exclusive agent until December 31, 2002.
Placement Agent agrees to offer the Secured Loan on a "best efforts" basis
on the terms and conditions set forth herein.
2.02 Compensation of Placement Agent: In consideration for the Placement
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Agent's execution of this agreement, and for the successful placement of
the Secured Loan, the Company agrees to pay the Placement Agent cash
compensation of 10% of the loan amount, payable on Closing Date, plus a
non-accountable expense allowance equal to 3% of the loan amount, payable
on the Closing Date. As additional consideration for the successful
placement of the Secured Loan, the Company will issue to the Placement
Agent or, at the Placement Agent's sole discretion, the Registered
Representatives or Principals of the Placement Agent, Placement Agent
Warrants to purchase 23,000 shares of Star E Media common stock (Placement
Agent Warrants). The Warrants are exercisable for a period of thirty (30)
months with an exercise price of $0.50 per share.
2.03 Right of First Refusal on Additional Financing: From the date
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following the closing of the acquisition of the Secured Loan, and for a
period of two (2) years thereafter, the Company hereby grants to the
Placement Agent a right of first refusal to act as the non-exclusive
placement agent for any financing transactions by the Company of its equity
and/or debt securities (the "Right"). If the Company receives a bona fide
offer from any third party to serve as placement agent in such offering,
which the Company is willing to accept, the Company shall promptly give
written notice thereof to the Placement Agent, including all material terms
and conditions of such offer. The Placement Agent shall then have fifteen
(15) business days after receipt of such written notice to elect to enter
into an agreement with the Company as a placement agent on the same terms
and conditions as set forth in the Company's written notice. If the
Placement Agent declines to exercise its Right or fails to notify the
Company within the fifteen (15) business day period of an election to
invoke its Right, the Company may enter into an agreement with such third
party from whom it has received a bona fide offer and the Placement Agent's
right hereunder shall thereupon terminate. If, however, the Company fails
to enter into such an agreement with such third party or if the terms and
conditions of such offer are thereafter materially changed, the Right
granted to the Placement Agent shall once again apply.
2.04 Representations and Warranties: The Placement Agent represents that
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it is a registered broker dealer with the Securities and Exchange
Commission and a member in good standing with the NASD.
2.05 Delivery of Securities: All securities will be delivered at the
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closing of the secured loan.
Section 3
Covenants of the Company
3.01 Due Diligence: The Company will cooperate with the Placement Agent in
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such investigation of the Company as the Placement Agent may make or cause
to be made of the business, operations, contracts, and obligations of the
Company.
Section 4
Indemnification
4.01 Indemnification by Company: The Company agrees to indemnify, defend
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and hold harmless the Placement Agent, its representatives and affiliates
from and against any and all losses, claims, damages, liabilities,
expenses, joint or several, including reasonable attorney's and account-
ant's fees and the costs of any of the Placement Agent's personnel
involved in any matter arising out of the Company's reckless acts or
breaches of law in connection with its performance under this agreement
which they or any of them may incur under the Act, or any State securities
law and the Rules and Regulations thereunder.
4.02 Notification to Company: The indemnified persons agree to notify the
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Company promptly of the commencement of any litigation or proceeding
against the indemnified persons of which it may be advised, in connection
with the offering and sale of the securities. The omission of the
indemnified persons to so notify the Company of any such action shall
relieve the Company from any liability which it may have to the indemnified
persons.
4.03 Indemnification by Placement Agent: The Placement Agent agrees to
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indemnify and hold harmless the Company, its representatives and affiliates
from and against any and all losses claims, damages, liabilities, expenses,
joint or several, including reasonable attorney's and accountant's fees and
the costs of any of the Company's personnel involved in any such matter
arising out of the Placement Agent's reckless acts or breaches of law in
connection with its performance under this agreement which they or any of
them may incur under the Act, or any State securities law and the Rules and
Regulations thereunder.
4.04 Notification to Placement Agent: The Company and indemnified persons
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agree to notify the Placement Agent promptly of the commencement of any
litigation or proceeding against the indemnified persons of which it may be
advised, in connection with the offering and sale of the securities. The
omission of the indemnified persons to so notify the Company of any such
action shall relieve the Company from any liability which it may have to
the indemnified persons.
Section 5
Termination
5.01 Failure to Comply with Agreement: This Agreement may be terminated by
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either party hereto, by notice to the other party in the event that such
party shall have failed or been unable to comply with any of the terms,
conditions or provisions of this agreement required by either the Company
or the Placement Agent to be performed, complied with or fulfilled by
it within the respective times herein provided for, unless compliance
therewith has been expressly waived by the non-defaulting party in writing.
Section 6
Notice
Except as otherwise expressly provided in this agreement:
6.01 Notice to Company: Whenever notice is required by the provisions of
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this Agreement to be given to the Company, such notice shall be in writing
to the Company as provided below:
E.G. (Gene) Xxxxxxxxx, President, COO
Star E Media
00000 Xxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
6.02 Notice to Placement Agent: Whenever notice is required by the
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provisions of this Agreement to be given to the Placement Agent, such
notice shall be in writing to the Placement Agent as provided below:
Xxxxx X.X. Xxxxxx
Bathgate Capital Partners LLC
0000 X. Xxxxxx Xx., #000
Xxxxxxxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Section 7
Miscellaneous
7.01 Governing Law: The validity, interpretation, and construction of this
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Agreement and of each part hereof will be governed by the laws of the State
of Colorado. The parties agree that any dispute which arises between them
relating to this Agreement or otherwise shall be submitted for resolution
in conformity with the Securities Arbitration Rules of the American
Arbitration Association. The parties agree that the location of an
arbitration hearing before the arbitrators shall be in Denver, Colorado and
each party shall request such location.
7.02 Counterparts: This agreement may be executed in any number of
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counterparts, each of which will constitute an original.
Please confirm that the foregoing correctly sets forth the Agreement between you
and the Company.
Sincerely,
Star E Media Corporation
12/11/02 /s/ Xxxx Xxxxxxxxx
------------- By: -------------------------------------------
Date: E. G. (Gene) Xxxxxxxxx
We hereby confirm as of the date hereof that the above letter sets forth the
Agreement between the Company and us.
Bathgate Capital Partners LLC
12/10/02 /s/ Xxxxx X.X. Xxxxxx
------------- By: -------------------------------------------
Date: Xxxxx X.X. Xxxxxx, Manager and CCO/CFO
