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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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October 6, 2009 Russell K. Boyd Chairman, CEO
501 Trophy Lake Drive Ste, 314 PMB 106, Trophy Club, Texas, 76262
www.INTREorg.com Re: Funding/Financing Referral/Placement Agency
Agreement Dear Russell, This Funding/financing referral/ Placement
Agency Agreement (this "Agreement") will confirm that INTREorg
Systems, Inc. (the "Company") hereby engages Europa Securities, LLC
("Europa"), to act as its exclusive referral/placement agent, on a
commercially reasonable, best-efforts basis, to provide certain
Services (as defined below) to the Company in accordance with the
terms and conditions set forth herein; and Europa hereby agrees to
provide such Services on a commercially reasonable, best-efforts
basis to the Company in accordance with such terms and conditions.
Europa makes no assurances that the provision of the Services
hereunder will be successful. Now, therefore, in consideration of
the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows: For the purposes
of this Agreement, the term "Services" shall include efforts to
obtain capital for the Company or any of its Projects, or otherwise
arrange for the Company to receive capital on terms and conditions
acceptable to the Company, through any legal means, whether equity,
debt or any combination thereof, etc (collectively, a "Financing")
For the purposes of this Agreement, an Accredited Investor, as such
term is defined in Rule 501 of Regulation D, shall be considered to
have been "introduced to the Company by or through Europa" if the
Accredited Investor was introduced to the Company either directly
or indirectly by Europa, its agents or employees, (a "Europa
Investor"). Nothing contained in this Agreement shall be construed
as an offer by Europa or any of its affiliates to extend credit. In
addition, Europa does not provide legal, tax or accounting services
and does not render such advice. The "Term" of this Agreement shall
extend from the date this Agreement is fully executed and shall
continue until delivery of written notice by the Company to Europa
to terminate this agreement at any time with or without cause (the
"Termination Date"), provided, however, that the termination of
this Agreement shall not in any way limit, modify, or otherwise
affect the rights of Europa to: (i) receive its entire compensation
pursuant to the terms of this Agreement in connection with a
Financing involving the Company during the Term of this Agreement
or subsequent to the termination or expiration of this Agreement,
(ii) The Company, its agents, heirs, assignees and successors agree
that there can be no direct contact between the Company, its agents
and the source of potential financing without the written
authorization or consent of the Agent. Said provision shall remain
in effect for Five years from effective date or last closing and
include 1
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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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all third party persons or companies for
financing/funding. An introduction will be viewed as formally made
by means of facsimile, email, United States Postal Service, phone,
conference call or hand delivered letter to the Company. Any
funding source introduced by the company itself, is excluded.
Expiration of this Agreement and (iii) is protected by the
indemnification rights, waivers and other provisions of this
Agreement. The Company will authorize distribution or provide
comments to Europa within five business days after receiving such
material. In consideration of the performance of the Services
pursuant to this Agreement, the Company shall compensate Europa as
follows: Upon the execution of this Agreement, the Company will pay
to Europa a fee of $10,000, of which $5,000 is payable within two
(2) business days after the signing of this Agreement by the
Company and the balance at the first closing of any financing. Said
funds will be used to defray the cost of performing initial Due
Diligence, travel and background checks in conformity with the
rules of the Financial Industry Regulatory Authority ("FINRA").
Upon the closing of a Financing on any terms accepted by the
Company with a Europa Investor, the Company shall pay fees to
Europa from escrow at closing following the actual transfer of
Consideration (as defined herein) to the Company, its stockholders,
affiliates or subsidiaries. These fees shall consist of the
following: A. In the case of equity, a cash fee equal to eight
percent (8.0%) of the aggregate Consideration received by the
Company, its stockholders, affiliates or subsidiaries from said
investors relative to a Financing referred to in this Section plus
a two (2) percent non-accountable expense allowance. In addition,
the Company shall issue to Europa common stock of the company equal
to ten percent (10.0%) of the gross dollars number raised for the
Company at a price of 110% of the five day volume weigh average bid
price (VWAP) per share before said transaction is announced Europa
may assign any or all of its rights to affiliates. If all or part
of the Financing is in the form of a note that is convertible into
equity, the Company shall pay fees on the portion of the
Consideration that meets these criteria in accordance with the
above Section of this Agreement. B. If all or part of the Financing
for a particular Company Project is in the form of non-convertible
debt or equity, (i.e.) (merger or acquisition, transaction, etc
then the cash fee shall be five per cent (5.0%). In addition, the
Company shall issue to Europa common stock equal to eight and an
half (8.50%) of the gross amount raised for the company at the five
day (VWAP) or at $1 ashare which every is closer to $1.00 before
said transaction is announced. Europa may assign any or all of its
rights to affiliates. Subsequent Transactions Tail. During the Term
of this Agreement, minimum of three years and for a period of Sixty
(60) months after the termination or expiration of this Agreement,
if the Company consummates a Financing with any Europa Investor
then the Company shall pay to Europa all fees and expenses provided
hereunder. 2
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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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Fees and expenses due Europa hereunder shall
be earned and paid out of the funds received at the closing of a
Financing. Europa and/or its affiliates may be Europa Investors in
the Financing. During the Term of this Agreement and subject to The
Company's prior written approval which may be reasonably withheld,
Europa reserves the right to have selected dealers ("Selected
Dealers") in good standing with the Financial Industry Regulatory
Authority ("FINRA") participate in the Financing, specifically for
the purposes of assisting the Company in finding qualified Europa
Investors for the Financing. Such Selected Dealers shall be
compensated by Europa. For the purposes of this Agreement,
"Security" or "Securities" shall mean: (i) any stock or other
security or ownership interest of the Company of the class, series
and with the same terms as is issued in connection with a
Financing, as the case may be, or (ii) if no such stock, security
or ownership interest is issued in connection with a Financing, the
existing common stock or unit of ownership interest of the Company.
For the purposes of this Agreement, "Consideration" shall mean the
aggregate amount of all cash, plus the fair market value of all
securities, other property, goods, services, use of premises or
personnel or other items of value, received by the Company, its
agents, employees, stockholders, affiliates, and subsidiaries, in
connection with a Financing, as the case may be, of any nature,
arising from Europa's rendering of the Services hereunder. For the
purposes of this Agreement: (i) the fair market value of any share
or unit of any stock or other security in which a public market
exists shall be based at the average of the last sales price for
such securities on the five (5) trading days prior to the date of
closing of such Financing, or on the Closing price on the date of
the closing of the financing, whichever is higher, as the case may
be; (ii) the fair market value of any share or unit of any stock or
other security in which no public market exists and of all other
property shall be the value as agreed to by the parties or as
determined by an independent appraiser chosen by the parties
hereto; and (iii) the fair market value of any services, use of
premises or personnel received in exchange for stock or other
security shall be the fair market value of such stock or securities
determined in accordance with the foregoing clauses (i) and (ii).
Notwithstanding the foregoing, to the extent the Consideration
offered in a transaction is other than cash, the Company shall
determine, in good faith, whether it will accept such non-cash
Consideration as part of the Financing. If such non-cash
Consideration are excluded from the Financing, Europa will be
entitled to any fees on such excluded non-cash Consideration.
Europa's fee in connection with a Financing shall be based upon the
percentages provided above of the aggregate Consideration, before
any deductions, including, but not limited to fees, deposits,
transaction expenses, reserves, insurance or other amounts withheld
or paid by the investor or party providing the funds in such
Financing. Consideration relative to a Financing shall be deemed to
include total value of equity or debt Securities sold directly or
indirectly, in connection with a Financing, including proceeds
received by the Company, its stockholders, affiliates or
subsidiaries upon exercise of options, warrants and/or similar
securities (collectively, the "Options"), and any amounts paid into
escrow and any amounts payable in the future at such time as the
money is paid to the Company. If the Consideration received by the
Company, its stockholders, affiliates or subsidiaries in connection
with a Financing is to be paid in whole or in part through
installment payments, Europa's fee shall be paid when funds are
received by the Company. To the extent such future payments
relative to either a Financing are not currently ascertainable or
relate 3
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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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to the exercise of Options, the portion of
Europa's fee relating thereto shall be calculated and paid when and
as such contingent payments are made or when such Options are
exercised and the company receives money from such exercise. If the
Consideration received by the Company, its stockholders, affiliates
or subsidiaries in connection with a Financing, as the case may be,
is paid in whole or in part in the form of securities or other
non-cash Consideration, such Consideration shall be valued at the
fair market value thereof on the day prior to the date of closing
of such Financing (or later date on which a contingent payment is
made), as the Company and Europa shall agree; provided, however,
that if such Consideration consists of securities with an existing
trading market, such securities shall be valued at the average of
the last sales price for such securities on the five (5) trading
days prior to the date of closing of such Financing, as the case
may be, (or later date on which a contingent payment is made).
Representations and Warranties of the Company. The Company
understands and agrees that Europa will be relying upon the same
representations and warranties required by and given to Europa
Investors in connection with any Financing. Accordingly, the
Company agrees that, as a condition to closing of any Financing
with Europa Investors that are introduced to the Company by or
through Europa, the Company will make customary representations and
warranties to Europa Investors and will confirm in writing to
Europa that Europa may rely on such representations and warranties
in connection with any such Financing. Specifically, the Company
represents and warrants to Europa as follows: Securities Law
Compliance. The Offering Documents conform in all material respects
with the requirements of Section 4(2) of the Securities Act and
Regulation D promulgated hereunder and with the requirements of all
other published rules and regulations of the Securities and
Exchange Commission (the "Commission") currently in effect relating
to "private offerings" to "accredited investors." The Offering
Documents, when read together as of their respective dates, will
not contain an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in light of the circumstances in which they were made, not
misleading. If at any time prior to the Termination Date or other
termination of this Agreement any event shall occur as a result of
which it might become necessary to amend or supplement the Offering
Documents so that they do not include any untrue statement of any
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
then existing, not misleading, the Company will promptly notify
Europa and will supply Europa with amendments or supplements
correcting such statement or omission. The Company will also
provide Europa for delivery to all offered and purchasers and their
representatives, if any, any information, documents and instruments
which Europa deems necessary to comply with applicable state and
federal law. Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of incorporation and has all requisite corporate power
and authority to own and lease its properties, to carry on its
business as currently conducted and as proposed to be conducted, to
execute and deliver this Agreement and to carry out the
transactions contemplated by this Agreement, and is duly licensed
or qualified to do business as a foreign corporation in each
jurisdiction in which the 4
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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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conduct of its business or ownership or
leasing of its properties requires it to be so qualified, except
where the failure to be so qualified would not have a material
adverse effect on the business, financial condition or prospects of
the Company. Capitalization. The authorized, issued and outstanding
capital stock of the Company prior to the consummation of the
transactions contemplated hereby is as set forth in the Offering
Documents. All issued and outstanding shares of the Company are
validly issued, fully paid and non-assessable and have not been
issued in violation of the preemptive rights of any shareholder of
the Company. All prior sales of securities of the Company were
either registered under the Securities Act and applicable state
securities laws or exempt from such registration. Warrants,
Preemptive Rights, etc. Except for the Investor Warrants and the
Financing Warrants to purchase shares of Common Stock to be issued
to Europa or its designees in consideration for acting as Placement
Agents hereunder, and except as disclosed in the Offering
Documents, there are not any outstanding warrants, options,
agreements, convertible securities, preemptive rights to subscribe
for or other commitments pursuant to which the Company is, or may
become, obligated to issue any shares of its capital stock or other
securities of the Company and the Offering will not cause any
anti-dilution adjustments to such securities or commitments.
Subsidiaries and Investments. Except as stated in the Offering
Documents, the Company has no subsidiaries and the Company does not
own, directly or indirectly, any capital stock or other equity
ownership or proprietary interests in any other corporation,
company, association, trust, partnership, joint venture or other
entity. Financial Statements. The financial information contained
in the Offering Documents will be accurate in all material respects
(such financial statements included as part of the Offering
Documents is hereinafter referred to collectively as the "Financial
Statements"). The Financial Statements have been prepared in
conformity with generally accepted accounting principles
consistently applied and show all material liabilities, absolute or
contingent, of the Company required to be recorded thereon and
present fairly the financial position and results of operations of
the Company as of the dates and for the periods indicated, except
that interim financial data shall be subject to normal year-end
adjustments consistent with past practice. National Security
Legislation. Neither the sale of the Securities hereunder nor the
Company's use of the proceeds thereof will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto. Without limiting the foregoing,
neither the Company nor any of its subsidiaries (a) is a person
whose property or interests in property are blocked pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) or (b) engages in any dealings or transactions, or be
otherwise associated, with any such person. The Company and its
5
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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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subsidiaries are in compliance with the USA
Patriot Act of 2001 (signed into law October 26, 2001). Absence of
Changes. Except as set forth in the Offering Documents, the Company
has not incurred any liabilities or obligations, direct or
contingent, not in the ordinary course of business, or entered into
any transaction not in the ordinary course of business, which is
material to the business of the Company, and there has not been any
change in the capital stock of, or any incurrence of long term debt
by, the Company, or any issuance of options, warrants or other
rights to purchase the capital stock of the Company, or any adverse
change or any development involving, so far as the Company can now
reasonably foresee, a prospective adverse change in the condition
(financial or otherwise), net worth, results of operations,
business, key personnel or properties which would be material to
the business or financial condition of the Company, and the Company
has not become a party to, and neither the business nor the
property of the Company has become the subject of, any litigation
which if adversely determined would have a material adverse affect,
whether or not in the ordinary course of business. Title. Except as
set forth in the Private Placement Memorandum, the Company has good
and marketable title to all properties and assets owned by it, free
and clear of all liens, charges, encumbrances or restrictions,
except such as are not materially significant or important in
relation to the Company's business; all of the material leases and
subleases under which the Company is the lessor or sublessor of
properties or assets or under which the Company holds properties or
assets as lessee or sub lessee are in full force and effect, and
the Company is not in default in any material respect with respect
to any of the terms or provisions of any of such leases or
subleases, and no material claim has been asserted by anyone
adverse to rights of the Company as lessor, sublessor, lessee or
sub lessee under any of the leases or subleases mentioned above, or
affecting or questioning the right of the Company to continued
possession of the leased or subleased premises or assets under any
such lease or sublease. The Company owns or leases all such
properties as are necessary to its operations as now conducted and
to be conducted, as presently planned. Patents, Trademarks, etc.
The Company licenses, owns or possesses adequate and enforceable
rights to use all patents, patent applications, trademarks, service
marks, copyrights, trade secrets, processes, formulations,
technology or know-how used or proposed to be used in the conduct
of its business as described in the Offering Documents
(collectively, "Proprietary Rights"). The Company has not received
any notice of any claims, nor does it have any knowledge of any
threatened claims, and knows of no facts which could form the basis
of any claim, asserted by any person to the effect that the sale or
use of any product or service now used or offered by the Company or
proposed to be used or offered by the Company infringes on any
patents or infringes upon the use of any such Proprietary Rights of
another person and, to the best of the Company's knowledge, no
others have infringed the Proprietary Rights. Software. The Company
licenses all of the software used in connection with the Company's
products. The current software licensed by the Company (the
"Software") is, to the knowledge of the Company, original and
capable of copyright protection in the United States, and the
Company has exclusive licensed rights to such Software, including
possession of, or ready access to, the source code for such
Software in its most recent version. No part of any such Software
is, to the knowledge of the Company, an imitation or copy of, or
infringes upon, the software of any other 6
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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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person or entity, or violates or infringes
upon any common law or statutory rights of any other person or
entity, including, without limitation, rights relating to
defamation, contractual rights, copyrights, trade secrets, and
rights of privacy or publicity. The Company has not sold, assigned,
licensed, distributed or in any other way disposed of or encumbered
the Software, other than in the ordinary course of its business.
The Software, to the extent any part of it is licensed from any
third-party licensor or constitutes "off-the-shelf" software, is
held by the Company legitimately. The Company warrants that, to the
best of the Company's knowledge, the Software is free from any
significant software defect or programming or documentation error,
operates and runs in a reasonable and efficient business manner,
and conforms to its stated specifications. The Company has no
knowledge of the existence of any bugs or viruses with respect to
the Software which would have a material adverse effect on the
condition (financial or otherwise), earnings, operations, business
or business prospects of the Company. Litigation. There is no
material action, suit, investigation, customer complaint, claim or
proceeding at law or in equity by or before any arbitrator,
governmental instrumentality or other agency now pending or, to the
knowledge of the Company, threatened against the Company (or basis
therefore known to the Company), the adverse outcome of which could
materially adversely affect the Company's business. The Company is
not subject to any judgment, order, writ, injunction or decree of
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign which could materially adversely affect the Company's
business or prospects. No defaults; No contravention. The Company
is not in violation of or default under, nor will the execution and
delivery of this Agreement or any of the Offering Documents or
consummation of the transactions contemplated herein or therein
result in a violation of or constitute a default in the performance
or observance of any obligation under, (i) its Certificate of
Incorporation or its Bylaws, (ii) any indenture, mortgage, deed of
trust, material contract, material purchase order or other material
agreement or instrument to which the Company is a party or by which
it or its property is bound or affected or (iii) with respect to
any material order, writ, injunction or decree of any court or any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, and there exists no condition, event or act which
constitutes, nor which after notice, the lapse of time or both,
could constitute a default under any of the foregoing, which in
either case would have a material adverse effect on the business of
the Company. Taxes. The Company has filed all federal, state, local
and foreign tax returns which are required to be filed by it and
all such returns are true and correct in all material respects. The
Company has paid all taxes pursuant to such returns or pursuant to
any assessments received by it or which it is obligated to withhold
from amounts owing to any employee, creditor or third party. The
Company has properly accrued all taxes required to be accrued. The
tax returns of the Company are not currently being audited by any
state, local or federal authorities. The Company has not waived any
statute of limitations 7
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EUROPA SECURITIES LLC 800 Village Square Crossing, Suite 121
TELEPHONE (561)656-2019 PALM BEACH GARDENS, FLORIDA 33410 FACSIMILE
(561) 656-2091
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with respect to taxes or agreed to any
extension of time with respect to any tax assessment or deficiency.
Compliance with Laws; Licenses, etc. The Company has not received
notice of any violation of or noncompliance with any federal,
state, local or foreign laws, ordinances, regulations and orders
applicable to its business which has not been cured, the violation
of, or noncompliance with which, would have a materially adverse
effect on the business or operations of the Company. The Company
has all licenses and permits and other governmental certificates,
authorizations and approvals (collectively, "Licenses") required by
every federal, state and local government or regulatory body for
the operation of its business as currently conducted and the use of
its properties, except where the failure to be licensed would not
have a material adverse effect on the business of the Company. The
Licenses are in full force and effect and no violations are or have
been recorded in respect of any License and no proceeding is
pending or, to the knowledge of the Company, threatened to revoke
or limit any thereof. Authorization of Agreement. This Agreement
has been duly executed and delivered by the Company and the
execution, delivery and performance by the Company of this
Agreement and the Subscription Agreement and other Offering
Documents have been duly authorized by all requisite corporate
action by the Company and constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their
respective terms. Authorization of Securities. The issuance, sale
and delivery of the Securities, the Investor Warrants and the
Financing Warrants have been duly authorized by all requisite
corporate action of the Company and, when so issued, paid for and
delivered, will be validly issued, fully paid and non-assessable
and will not be subject to preemptive or any other similar rights
of the shareholders of the Company or others which rights shall not
have been waived prior to the Closing. Authorization of Reserved
Shares. The issuance, sale and delivery by the Company of the
shares of Common Stock reserved for issuance upon exercise of the
Investor Warrants and Financing Warrants (the "Reserved Shares")
have been duly authorized by all requisite corporate action of the
Company. The Reserved Shares have been duly reserved for issuance
upon exercise of the Investor Warrants and Agent's Warrants and
when so issued, sold, paid for and delivered, the Reserved Shares
will be validly issued and outstanding, fully paid and
non-assessable, and not subject to preemptive or any other similar
rights of the shareholders of the Company or others which rights
shall not have been waived prior to the Closing. Exemption from
Registration. Assuming (i) the accuracy of the information provided
by the respective Subscribers in the Subscription Documents and the
other Offering Documents and (ii) that Europa has complied in all
material respects with the provisions of Rule 502(c) of Regulation
D promulgated under the Securities Act, the offer and sale of the
Securities pursuant to the terms of this Agreement are exempt
from