Exhibit 10.3
 
Seawright Holdings, Inc.
PLACEMENT AGENT AGREEMENT
 
Dated as of: September 12, 2005
 
The undersigned, Seawright Holdings, Inc., a Delaware corporation (the
“COMPANY”), hereby agrees with Jones, Byrd and Attkisson, 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.”

 

2.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLACEMENT AGENT.

 

A.
The Placement Agent represents, warrants and covenants as follows:

 
(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.

 

A.
The Company represents and warrants to the Placement Agent as follows:

 
(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:

 

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.

 

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.

 

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.

 

D.
To deliver, during the registration period of the Investment Agreement, to the
Placement Agent upon the Placement Agent’s request,

 
(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.

 

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.

 

5.
INDEMNIFICATION.

 

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.
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.

 

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.
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.

 

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.

 

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.

 

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.

 

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:

 
If to Placement Agent, to:
 
Jones, Byrd and Attkisson, Inc.
2839 Paces Ferry Road
Suite 320
Atlanta, Georgia 30339
Attention: Ronald Attkisson
 
If to the Company, to:
 
Seawright Holdings, Inc.
600 Cameron Street
Alexandria, Virginia 22314
Attention: Joel Sens
 
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.

 

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.

 

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:
 
SEAWRIGHT HOLDINGS, INC.
 
By: /s/ Joel Sens

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Name: Joel Sens
Title: President and CEO
 
 
PLACEMENT AGENT:
 
JONES, BYRD AND ATTKISSON, INC.
 
By: /s/ Ronald L. Attkisson

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Name: Ronald L. Attkisson
Title: President