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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
, ▇▇▇▇
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▇▇▇▇ Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned, Marc Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), hereby engages Wien Securities Corp. (the "Placement Agent"),
as the sole and exclusive selling agent of the Company in connection with the
proposed offering of certain of its securities to the public (the "Offering") as
follows:
1. Introductory. The Company engages the Placement Agent as the sole and
exclusive selling agent of the Company for the purpose of finding subscribers
for a maximum 20,000,000 units, each unit consisting of one (1) share (the
"Shares") of common stock, $.0001 par value, of the Company (the "Common
Stock"), one (1) class A warrants to purchase one share of Common Stock at $.50
per share (the "Class A Warrants") and two (2) class B warrants to purchase one
shares of Common Stock at $1.00 per share (the "Class B Warrants," collectively
with the Class A Warrants, the "Warrants") (The Warrants collectively with the
Shares shall mean the "Units") on a best efforts basis at $.25 per Unit for an
aggregate of $5,000,000 worth of Units through the Offering. "Securities" shall
mean, collectively, the Shares, the Warrants and the Shares underlying the
Warrants. The Securities are more fully described in the Prospectus referred to
below. The Placement Agent will commence selling the Units on the date
("Effective Date") of the Registration Statement (as defined in Section 2(a)
below) becomes effective with the Commission (as defined in Section 2(a) below)
until the earlier of the termination of the Offering pursuant to Section 12 of
this Agreement or December 31, 2004.
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Placement Agent that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement, and may have filed one or more amendments thereto, on
Form SB-2 Registration Statement No. 333-113734, including in such registration
statement and each such amendment and prospectus (a "Prospectus") for the
registration of the 20,000,000 Units. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended, on file
with the Commission at the time such registration statement becomes effective
(including the prospectus, financial statements, exhibits, and all other
documents filed as a part thereof).
(b) When the Registration Statement becomes effective, and at all times
subsequent thereto, and during such longer period as the Prospectus may be
required to be delivered in
connection with sales by the Placement Agent or any dealer, and during such
longer period until any post-effective amendment thereto shall become effective,
the Registration Statement (and any post-effective amendment thereto) and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement to the Registration Statement or the
Prospectus) will contain all statements which are required to be stated therein
in accordance with the Act and the Regulations, will comply with the Act and the
Regulations, and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and no event will have occurred
which should have been set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not then been set forth in
such an amendment or supplement; and the Prospectus, as of the date filed with
the Commission, did not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading; except that no representation or warranty
is made in this Section 2(b) with respect to statements or omissions made in
reliance upon and in conformity with written information furnished to the
Company as stated in Section 12(c) with respect to the Placement Agent by the
Placement Agent expressly for inclusion in the Registration Statement, the
Prospectus, or any amendment or supplement thereto.
Neither the Commission nor the "blue sky" or securities authority of any
jurisdiction has issued an order (a "Stop Order") suspending the
effectiveness of the Registration Statement, preventing or suspending the
use of the Prospectus, the Registration Statement, or any amendment or
supplement thereto, refusing to permit the effectiveness of the
Registration Statement, or suspending the registration or qualification of
any of the Units, nor has any of such authorities instituted or threatened
to institute any proceedings with respect to a Stop Order.
Any contract, agreement, instrument, lease or license required to be
described in the Registration Statement or the Prospectus has been properly
described therein. Any contract, agreement, instrument, lease or license
required to be filed as an exhibit to the Registration Statement has been
filed with the Commission as an exhibit to the Registration Statement.
The Company has no subsidiaries (as defined in the regulations promulgated
under the Act ("Regulations")). The Company is a corporation duly
organized, validly existing, and in good standing under the laws of
Delaware, with full power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of
and from, and declarations and filings with, all federal, state, local, and
other governmental authorities and all courts and other tribunals, to own,
lease, license, and use its properties and assets and to carry on the
business in the manner described in the Prospectus. The Company is duly
qualified to do business and is in good standing in every jurisdiction in
which its ownership, leasing, licensing, or use of property and assets or
the conduct of its business makes such qualification necessary or
advisable, except where the failure to be so qualified does not have a
material adverse effect on any of the operations, business, properties or
assets of the Company.
As of the Effective Date, the authorized capital stock of the Company
consists of 750,000,000 shares of Common Stock, of which 283,650,000 shares
are outstanding. Each outstanding share of Common Stock is validly
authorized, validly issued, fully paid and nonassessable, without any
personal liability attaching to the ownership thereof, and has not
been issued and is not owned or held in violation of any preemptive rights
of stockholders. There is no commitment, plan, or arrangement to issue, and
no outstanding option, warrant, or other right calling for the issuance of,
any share of capital stock of the Company or any security or other
instrument which by its terms is convertible into, exercisable for, or
exchangeable for, capital stock of the Company, except as shall be properly
described in the Prospectus. There is outstanding no security or other
instrument which by its terms is convertible into or exchangeable for
capital stock of the Company except as may have been properly described in
the Prospectus. There is outstanding no indebtedness except as may have
been seen properly described in the Prospectus.
The financial statements of the Company included in the Registration
Statement and the Prospectus fairly present the financial position, the
results of operations, and the other information purported to be shown
therein at the respective dates and for the respective periods to which
they apply. Such financial statements have been prepared in accordance with
generally accepted accounting principles (except to the extent that certain
footnote disclosures regarding any interim period may have been omitted in
accordance with the applicable rules of the Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) consistently applied
throughout the periods involved, are correct and complete, and are in
accordance with the books and records of the Company. The accountants whose
report on the audited financial statements is filed with the Commission as
a part of the Registration Statement are, and during the periods covered by
their report(s) included in the Registration Statement and the Prospectus,
were independent certified public accountants within the meaning of the Act
and the Regulations. No other financial statements are required by Form
SB-2 or otherwise to be included in the Registration Statement or the
Prospectus. There has at no time been a material adverse change in the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of the Company from the latest information
set forth in the Registration Statement or the Prospectus, except as may be
properly described in the Prospectus.
There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or
in prospect (or any basis therefor) with respect to the Company, or any of
its operations, businesses, properties, assets, liabilities or future
prospects, except as may be properly described in the Prospectus or such as
individually or in the aggregate do not now have and cannot be expected in
the future to have a material adverse effect upon the operations, business,
properties or assets of the Company. The Company is not in violation of, or
in default with respect to, any law, rule, regulation, order, judgment or
decree except as may be properly described in the Prospectus or such as in
the aggregate do not now have and will not in the future have a material
adverse effect upon the operations, business, properties, assets,
liabilities or future prospects, of the Company; nor must the Company take
any action in order to avoid any such violation or default.
The Company has good title to all properties and assets which the
Prospectus indicates are owned by it, free and clear of all liens, claims,
security interests, pledges, charges, encumbrances and mortgages (except as
may be properly described in the Prospectus).
The Company is not, nor, to the best knowledge of the Company, is any other
party, in violation or breach of, or in default with respect to, any
material provision of any contract, agreement, instrument, lease, license,
arrangement or understanding which is material to the Company, and each
such contract, agreement, instrument, lease, license, arrangement, and
understanding is in full force and is the legal, valid, and binding
obligation of the parties thereto and is enforceable as to each party
thereto in accordance with its terms. The Company has no actual knowledge
that any party to any such contract, agreement, instrument, lease, license,
arrangement or understanding which is material to the Company has any
intention of canceling, not renewing or not performing with respect
thereto. The Company enjoys peaceful and undisturbed possession under all
leases and licenses under which it is operating. The Company is not a party
to or bound by any contract, agreement, instrument, lease, license,
arrangement or understanding, or subject to any charter or other
restriction, which has had or may in the future have a material adverse
effect on the financial condition, results of operations, business,
properties, assets, liabilities or future prospects of the Company. The
Company is not in violation or breach of, or in default with respect to,
any term of its articles of incorporation (or other charter document) or
by-laws.
All patents, patent applications, trademarks, trademark applications, trade
names, service marks, copyrights, franchises, and other intangible
properties and assets (all of the foregoing being herein called
"Intangibles") that the Company owns or has pending, or under which it is
licensed, are in good standing and, to the Company's knowledge,
uncontested. There is no right under any Intangible necessary to the
business of the Company as presently conducted or as the Prospectus
indicates it contemplates conducting except as may be so designated in the
Prospectus. The Company has not infringed, is not infringing, nor has
received notice of infringement with respect to asserted Intangibles of
others. To the knowledge of the Company, there is no infringement by others
of Intangibles of the Company.
Neither the Company, nor any director, officer, agent, employee, or other
person associated with or acting on behalf of the Company has, directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; [violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended;] or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment.
The Company has all requisite corporate power and authority to execute,
deliver, and perform its obligations under this Agreement upon its
execution. All necessary corporate proceedings of the Company have been
duly taken to authorize the execution, delivery, and performance of this
Agreement by the Company. This Agreement has been duly authorized,
executed, and delivered by the Company, is the legal, valid, and binding
obligation of the Company, and is enforceable as to the Company in
accordance with its terms. No consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing with,
any federal, state, local, or other governmental authority or any court or
other tribunal is required by the Company for the execution, delivery, or
performance by the Company of this Agreement (except filings under the Act
which have been or will be made before the Effective Date and such consents
consisting only of consents under "blue sky" or state securities laws). No
consent of any party to any contract, agreement, instrument, lease,
license, arrangement, or understanding to which the Company is a party, or
to which any of its properties or assets are subject, is required for the
execution, delivery, or performance of this Agreement; and the execution,
delivery, and performance of any of this Agreement will not violate, result
in a breach of, conflict with, or (with or without the giving of notice or
the passage of time or both) entitle any party to terminate or call a
default under any such contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any term
of the
certificate of incorporation (or other charter document) or by-laws of the
Company or violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on the Company or to which
any of its operations, businesses, properties, or assets are subject.
The Securities are validly authorized and, when issued and delivered in
accordance with this Agreement, will be validly issued, fully paid, and
nonassessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive rights of
stockholders.
The Securities conform to all statements relating thereto contained in the
Registration Statement or the Prospectus.
Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as may otherwise be
properly described in the Prospectus, the Company has not (i) issued any
securities or incurred any liability or obligation, primary or contingent,
for borrowed money, (ii) entered into any transaction not in the ordinary
course of business, or (iii) declared or paid any dividend on its capital
stock.
The Company has obtained from each of its directors, officers and
affiliates (as defined in the Regulations), and from each other person or
entity who beneficially owned as of the effective date of the Registration
Statement shares of Common Stock of the Company (each an "Original
Stockholder"), enforceable written agreements, in form and substance
satisfactory to counsel for the Placement Agent, that for a period of
twelve (12) months from the Effective Date such person will not, without
your prior written consent, offer, pledge, issue, sell, contract to sell,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any security or other instrument
which by its terms is convertible into, exercisable for, or exchangeable
for shares of Common Stock or other securities of the Company, including,
without limitation, any shares of Common Stock issuable under any
outstanding stock options or warrants. The foregoing restriction shall not
apply to: (i) the Units; (ii) the issuance of Common Stock issuable (except
to directors, officers and affiliates (as defined in the Regulations)) upon
the exercise of stock options and warrants and conversion of other
convertible securities outstanding on the Effective Date and pursuant to
the plans, (iii) the issuance of any securities in connection with any
merger or acquisition approved by a majority of the independent directors
of the Company; or (iv) the issuance of any securities to unaffiliated
third parties at fair market value approved by a majority of the
independent directors of the Company.
Except as may have been registered in the Registration Statement or waived,
no person or entity has the right to require registration of shares of
Common Stock or other securities of the Company because of the filing or
effectiveness of the Registration Statement.
Except as may be set forth in the Prospectus, the Company has not incurred
any liability for a fee, commission or other compensation on account of the
employment of a broker or finder in connection with the transactions
contemplated by this Agreement.
(c) Except as contemplated herein or therein or as may have been
waived, no person or entity has any right of first refusal, preemptive right,
right to any compensation, or other similar
right or option, in connection with the offering or this Agreement, or any of
the transactions contemplated hereby or thereby.
Except as may be set forth in the Prospectus, no officer, director,
employee or stockholder of the Company is affiliated with any NASD member.
3. Offering. The Placement Agent is to make a best efforts public offering
of the Units as soon, on or after the Effective Date of the Registration
Statement, as the Placement Agent deems it advisable so to do. The Units are to
be initially offered to the public at the initial public offering price as
provided for in the Prospectus (such price being herein called the "public
offering price"). The offering will continue until the earliest of (a) December
31, 2004 (b) all of the Units have been sold or (c) such date as the Company and
the Placement Agent shall agree.
Covenants of the Company. The Company covenants that it will:
(a) Use its best efforts to cause the Registration Statement to become
effective as promptly as possible. If filing of the Prospectus is required under
Rule 424(b), the Company will file the Prospectus, properly completed, pursuant
to Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Placement Agent of such timely filing.
Notify the Placement Agent immediately by telephone, and confirm such
notice in writing, (i) when the Registration Statement and any
post-effective amendment thereto become effective, (ii) of the receipt of
any comments from the Commission or the "blue sky" or securities authority
of any jurisdiction regarding the Registration Statement, any
post-effective amendment thereto, the Prospectus, or any amendment or
supplement thereto, and (iii) of the receipt of any notification with
respect to a Stop Order or the initiation or threatening of any proceeding
with respect to a Stop Order. The Company will use its best efforts to
prevent the issuance of any Stop Order and, if any Stop Order is issued, to
obtain the lifting thereof as promptly as possible.
During the time when a prospectus relating to the Units is required to be
delivered hereunder or under the Act or the Regulations, comply so far as
it is able with all requirements imposed upon it by the Act, as now
existing and as hereafter amended, and by the Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales of or
dealings in the Units, as the case may be, in accordance with the
provisions hereof and the Prospectus. If, at any time when a prospectus
relating to the Units is required to be delivered hereunder or under the
Act or the Regulations, any event shall have occurred as a result of which,
in the reasonable opinion of counsel for the Company or counsel for the
Placement Agent, the Registration Statement or the Prospectus as then
amended or supplemented contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or if, in the opinion of
either of such counsel, it is necessary at any time to amend or supplement
the Registration Statement or the Prospectus to comply with the Act or the
Regulations, the Company will immediately notify the Placement Agent and
promptly prepare and file with the Commission an appropriate amendment or
supplement (in form and substance satisfactory to the Placement Agent)
which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any such amendment
declared effective as soon as possible.
Deliver without charge to the Placement Agent such number of copies of each
Prospectus as may reasonably be requested by the Placement Agent and, as
soon as the Registration Statement, or any amendment thereto, becomes
effective or a supplement is filed, deliver without charge to the Placement
Agent two (2) signed copies of the Registration Statement, including
exhibits, or such amendment thereto, as the case may be, and two (2) copies
of any supplement thereto, and deliver without charge to the Placement
Agent such number of copies of the Prospectus, the Registration Statement,
and amendments and supplements thereto, if any, without exhibits, as the
Placement Agent may request for the purposes contemplated by the Act.
Endeavor in good faith, in cooperation with the Placement Agent, at or
prior to the time the Registration Statement becomes effective, to qualify
the Units for offering and sale under the "blue sky" or securities laws of
such jurisdictions as the Placement Agent may designate. In each
jurisdiction where such qualification shall be effected, the Company will,
unless the Placement Agent agrees in writing that such action is not at the
time necessary or advisable, file and make such statements or reports at
such times as are or may be required by the laws of such jurisdiction and
will keep all filings current.
(b) Use its best efforts to keep the Prospectus and the Registration
Statement current and effective by filing post-effective amendments, as
necessary, during the Offering Period.
(c) Make generally available (within the meaning of Section 11(a) of
the Act and the Regulations) to its security holders as soon as practicable, but
not later than sixteen (16) months after the Effective Date, an earnings
statement (which need not be certified by independent certified public
accountants unless required by the Act or the Regulations, but which shall
satisfy the provisions of Section 11(a) of the Act and the Regulations) covering
a period of at least twelve (12) months beginning after the Effective Date.
(d) For a period of three (3) years after the Effective Date, furnish
the Placement Agent, without charge, the following:
(i) Within ninety (90) days after the end of each fiscal year,
financial statements certified by the independent certified public accountants
for the Company, including a balance sheet, statement of income, and statement
of cash flows of the Company and its then existing subsidiaries, with supporting
schedules, prepared in accordance with generally accepted accounting principles,
consistently applied, as at the end of such fiscal year and for the twelve (12)
months then ended, which may be on a consolidated basis;
(ii) as soon as practicable after they have been sent to
stockholders of the Company or filed with the Commission, three (3) copies of
each annual and interim financial and other report or communication sent by the
Company to its stockholders or filed with the Commission;
(iii) as soon as practicable, a copy of every press release
and every material news item and article in respect of the Company or its
affairs which was released by the Company; and
(iv) such additional documents and information with respect to
the Company and its affairs and the affairs of any of its subsidiaries as the
Placement Agent may from time to time reasonably request.
(e) Apply the net proceeds received by it from the offering in the
manner set forth under "Use of Proceeds" in the Prospectus.
(f) Furnish to the Placement Agent as early as practicable prior to the
Effective Date, but no less than two (2) full business days prior thereto, a
copy of the latest available unaudited interim consolidated financial statements
of the Company and its consolidated subsidiaries which have been read by the
Company's independent certified public accountants.
File no amendment or supplement to the Registration Statement or Prospectus
at any time, whether before or after the Effective Date of the Registration
Statement, unless such filing shall comply with the Act and the Regulations
and unless the Placement Agent shall previously have been advised of such
filing and furnished with a copy thereof, and the Placement Agent and
counsel for the Placement Agent shall have approved such filing in writing.
Comply with all registration, filing, and reporting requirements of the
Exchange Act which may from time to time be applicable to the Company.
Comply with all provisions of all undertakings contained in the
Registration Statement.
File timely with the Commission an appropriate form to register the Common
Stock pursuant to Section 12(g) under the Exchange Act.
Use its best efforts to cause the application for quotation of the Common
Stock to be approved as soon as possible on the OTC Bulletin Board.
Use its best efforts to maintain the quotation and provide the Placement
Agent with price information for the Common Stock issued hereunder.
Until three (3) years after the Effective Date, retain a transfer agent
acceptable to the Placement Agent. Upon the request of the Placement Agent,
the Company shall provide the Placement Agent, for a period of three years
following the Effective Date, with copies of the Company's daily stock
transfer sheets and lists of the beneficial and record holders of the
Company's Securities, from such transfer agent and from the Depository
Trust Company, at the Company's sole cost and expense
4. Covenants of the Placement Agent. The Placement Agent covenants and
agrees:
(a) To use its best efforts to preserve the confidentiality of any
proprietary or not publicly available information or data provided to the
Placement Agent by the Company.
(b) To fully disclose to those parties that the Placement Agent
contacts on the Company's behalf the capacity in which the Placement Agent is
contacting them and the Placement Agent's relationship with the Company and to
perform all its responsibilities.
(c) Subject to the limitations set forth above and in compliance with
applicable federal and state securities laws, rules and regulations as well as
in accordance with applicable rules and regulations of the National Association
of Securities Dealers, Inc. and NASDAQ, the Placement Agent shall indemnify and
hold harmless the Company and its affiliates from and against claims relating to
any material breach by the Placement Agent of the foregoing covenants or any
other
agreements of the Placement Agent contained in this Agreement or resulting from
the Placement Agent's gross negligence or willful misconduct, provided that the
Company promptly notifies the Placement Agent of any such claim and offers the
Placement Agent the opportunity to defend against or settle such claim with
counsel of the Placement Agent's choice.
(d) That it has been informed of the jurisdictions in which the Company
has been advised by counsel acceptable to the Placement Agent that the Units
have been qualified or registered for sale or are exempt under the respective
securities or "Blue Sky" laws of such jurisdictions; but the Company has not
assumed, nor will they assume, any obligation or responsibility concerning the
Placement Agent's right to act as broker with respect to the Units in any such
jurisdiction. No offer to sell, solicitation of an offer to buy, or sale of
Units in a state or other jurisdiction shall be made by the Placement Agent
until the Company has notified the Placement Agent that the Units have been so
registered or qualified or are exempt from registration or qualification with
the securities authority in such state or other jurisdiction.
(e) That it is a broker-dealer properly registered or licensed under
applicable federal and securities laws and regulations and under the securities
laws and regulations of the states in which the Units will be offered or sold by
it and it shall maintain such registration and/or license in full force and
effect at all times hereunder.
(f) That it will comply with the applicable requirements of the Act
(including the delivery of a Prospectus to each prospective subscriber as
required by the Act) and the Securities Exchange Act of 1934 (the "1934 Act").
(g) That neither it nor any person acting for it will give any
information or make any representations relating to the Company or the Offering,
other than those contained in the Prospectus and it is not authorized to act as
agent for the Company for any purpose other than as expressly set forth herein.
(h) That it will comply with ▇▇▇▇▇ stock procedures set forth in the
1934 Act and rules and regulations promulgated thereunder which include (i)
determining suitability of the security for each customer, (ii) obtaining a
written agreement from each customer to purchase the security, (iii) setting
forth the identity and quantity of the ▇▇▇▇▇ stock to be purchased and (iv)
delivering a risk disclosure document to the purchaser prior to the initial
transaction in ▇▇▇▇▇ stocks.
5. Representations and Warrants of the Placement Agent. The Placement Agent
represents and warrants:
(a) It has the necessary corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated by this
Agreement.
(b) It is a corporation duly organized and validly existing under the
laws of the state of its incorporation; is duly authorized to execute this
Agreement and to perform duties hereunder, and execution and delivery of this
Agreement and consummation of the transactions herein contemplated 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 knowledge, any statue, rule or regulation applicable to Placement
Agent.
(c) The information contained in the Prospectus relating to the
Placement Agent is complete and correct and does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading.
(d) It is a member of the National Association of Securities Dealer,
Inc., and is registered as a broker-dealer under the 1934 Act and under the
securities laws of the states in which the Units will be offered or sold by the
Placement Agent. It is not subject to any order or regulation which in any way
relates to any violation of law and it is not committed any act or is subject to
any state of fact described in the "bad boy" provisions of any state "blue sky
law."
(e) It shall make no representations concerning the Offering.
6. Compensation and Payment of Expenses.
(a) As compensation for the Placement Agent's services, the Company (in
accordance with the terms of the Prospectus) shall pay and/or deliver to the
Placement Agent (i) an eight percent (8%) commission for all Units placed by the
Placement Agent pursuant to this Agreement; (ii) Warrants to purchase a number
of Units equal to eight percent (8%) of the Units sold in the Offering pursuant
to the terms set forth in the Placement Agent's Warrant dated as of even date
herewith; and (iii) a non-accountable expense allowance equal to three percent
(3%) of the Units placed by the Placement Agent.
(b) The Company hereby agrees to pay all expenses (other than fees of
counsel for the Placement Agent except in connection with blue sky as set forth
below) in connection with (1) the preparation, printing, filing, distribution,
and mailing of the Registration Statement and the Prospectus and the printing,
filing, distribution, and mailing of this Agreement, any Selected Dealers
Agreement, any Blue Sky Surveys, and if appropriate, any Power of Attorney, and
related documents, including the cost of all copies thereof and of the
Preliminary Prospectuses and of the Prospectus and any amendments or supplements
thereto supplied to the Placement Agent in quantities as hereinabove stated; (2)
the issuance, sale, transfer, and delivery of the Units, including any transfer
or other taxes payable thereon; (3) the qualification of the Units under state
or foreign "blue sky" or securities laws, including the costs of printing and
mailing the preliminary and final "Blue Sky Survey" and the fees of counsel for
the Placement Agent and the disbursements in connection therewith; (4) the
filing fees payable to the Commission, the NASD, and the jurisdictions in which
such qualification is sought; (5) the reasonable fees and disbursements of the
Placement Agent relating to all filings with the NASD; (6) the quotation of the
Common Stock on the OTC Bulletin Board; (7) the fees and expenses of the
Company's transfer agent and registrar, if any; and (8) the fees and expenses of
the Company's legal counsel and accountants.
7. Closing Procedures.
(a) From time to time, but no less frequently than every other Thursday
commencing with the second Thursday after the Effective Date, and until the end
of the Offering Period, there shall be a closing with respect to the Units in
accordance with the terms and procedures set forth in this Section 8. Any date
upon which a closing shall occur is referred to in this Agreement as a "Closing
Date." Notwithstanding the foregoing, (i) if any such Thursday shall not be a
Business Day, such closing shall be held on the next succeeding Business Day and
(ii) if the total amount of subscriptions for Units not yet remitted to the
Company ("Pending Subscription") as of any
scheduled Closing Date shall be less than $25,000, no closing shall be held on
such date, and (iii) the Placement Agent shall give notice to the Company at any
time that there shall be Pending Subscriptions of at least $25,000 and a closing
shall then be held within two (2) Business Days after such notice is given. This
Section 8 shall be subject to the terms and restrictions contained in the escrow
agreement among the Placement Agent, the Company and HSBC Bank USA, National
Association (the "Escrow Agent"). As used herein, Business Day shall mean any
day other than Saturday, Sunday or other day on which commercial banks in New
York City are authorized or permitted by law to close.
(b) Payment of the net proceeds of the Pending Subscriptions and
delivery of the Units to the Placement Agent for transmittal to the purchaser
thereof shall take place as set forth on Schedule A attached to this Agreement.
(c) At least two (2) full Business Days prior to each Closing Date, the
certificates for the Units sold hereunder shall be registered in such name or
names and shall be in such denominations as the Placement Agent may request from
the Company. For purposes of expediting the checking and packaging of
certificates for the Units, the Company agrees to make such certificates
available for inspection at the offices of the transfer agent at least
twenty-four (24) hours prior to each respective Closing Date.
8. Conditions of Placement Agent's Obligations. The obligations of the
Placement Agent to cause the placement of the Units, as provided herein, shall
be subject, in its reasonable discretion, to the continuing accuracy of the
representations and warranties of the Company contained herein and in each
certificate and document contemplated under this Agreement to be delivered to
the Placement Agent, as of the date hereof and as of each Closing Date to the
performance by the Company of its obligations hereunder, and to the following
conditions:
(a) The Placement Agent shall have received the favorable opinion of
▇▇▇▇▇▇▇▇▇▇ Helpern Syracuse & Hirschtritt LLP, counsel for the Company, dated
the date of each Closing Date, addressed to the Placement Agent, with such
number of reproduced copies or signed counterparts thereof for the Placement
Agent as shall be satisfactory to the Placement Agent, to the effect that:
(i) the Company is a corporation, duly organized and validly
existing, and in good standing under the laws of Delaware with full power and
authority, to own, lease, license, and use its properties and assets and to
conduct its business in the manner described in the Prospectus;
(ii) the authorized capital stock of the Company consists of
750,000,000 Shares of Common Stock, of which 283,650,000 Shares are outstanding.
Each outstanding Share of Common Stock, is duly authorized and validly issued,
and has not been issued and is not owned or held in violation of any preemptive
right of stockholders. To the knowledge of such counsel, there is no commitment,
plan, or arrangement to issue, and no outstanding option, warrant, or other
right calling for the issuance of, any share of capital stock of the Company, or
any security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for, capital stock of the Company, except as
shall be properly described in the Prospectus. To the knowledge of such counsel,
there is outstanding no security or other instrument which by its terms is
convertible into or exchangeable for capital stock of the Company, except as may
be properly described in the Prospectus;
(iii) the Company has obtained from each of its directors,
officers and affiliates (as defined in the Regulations), and from each other
person or entity who beneficially owned as of the Effective Date Shares of
Common Stock of the Company, other than persons listed on EXHIBIT A enforceable
written agreements, in form and substance satisfactory to counsel for the
Placement Agent, that for a period of twelve (12) months from the Effective Date
such person will not, without your prior written consent, offer, pledge, issue,
sell, contract to sell, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, any Shares of Common Stock or any security or other
instrument which by its terms is convertible into, exercisable for, or
exchangeable for Shares of Common Stock or other securities of the Company,
including, without limitation, any Shares of Common Stock issuable under any
outstanding stock options or warrants. The foregoing restriction shall not apply
to: (i) the Units; (ii) the issuance of Common Stock issuable (except to
directors, officers and affiliates (as defined in the Regulations)) upon the
exercise of stock options and warrants and conversion of other convertible
securities outstanding on the date hereof and pursuant to the plans, (iii) the
issuance of any securities in connection with any merger or acquisition approved
by a majority of the independent directors of the Company; or (iv) the issuance
of any securities to unaffiliated third parties at fair market value approved by
a majority of the independent directors of the Company;
(iv) except as described in the Registration Statement, the
Securities are validly authorized and, when issued and delivered in accordance
with this Agreement, will be validly issued, fully paid, and nonassessable,
without any personal liability attaching to the ownership thereof, and to the
knowledge of such counsel will not be issued in violation of any preemptive
rights;
(v) to the knowledge of such counsel, the Company is not
currently offering any securities for sale except as described in the
Registration Statement;
(vi) there is no litigation, arbitration, claim, governmental
or other proceeding (formal or informal), or investigation pending or to the
knowledge of such counsel, threatened with respect to the Company, or its
operations, business, properties, or assets except as may be properly described
in the Prospectus or as individually or in the aggregate do not now have and
cannot reasonably be expected in the future to have a material adverse effect
upon the operations, business, properties, or assets of the Company. To the
knowledge of such counsel, the Company is not in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, or decree, except
as may be properly described in the Prospectus or such as in the aggregate do
not now have and cannot reasonably be expected in the future to have a material
adverse effect upon the operations, business, properties, or assets of the
Company, nor, to the knowledge of such counsel, must the Company take any action
in order to avoid any such violation or default;
(vii) to the knowledge of such counsel, neither the Company,
nor any other party is now in violation or breach of, or in default with respect
to, complying with any material provision of any contract, agreement,
instrument, lease, license, arrangement, or understanding known to such counsel
which is material to the Company;
(viii) the Company is not in violation or breach of, or in
default with respect to, any term of its certificate of incorporation (or other
charter document) or bylaws;
(ix) the Company has all requisite power and authority to
issue and deliver the Securities; necessary corporate proceedings of the Company
have been taken to authorize the execution and delivery of the Securities;
(x) this Agreement has been duly executed and delivered by the
Company. No consent, authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any federal, state, local, or
other governmental authority or any court or other tribunal is required by the
Company for the execution, delivery, or performance by the Company of any of
this Agreement or any other agreements (except filings under the Act which have
been made prior to each Closing Date and consents consisting only of consents
under "blue sky" or state securities laws). No consent of any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
known to such counsel and listed as an exhibit to the Registration Statement, to
which the Company is a party; and the execution, delivery, and performance of
this Agreement will not violate, result in a breach of, conflict with, or (with
or without the giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract, agreement,
instrument, lease, license, arrangement, or understanding, or violate or result
in a breach of any term of the certificate of incorporation (or other charter
document) or by-laws of the Company;
(xi) the Securities conform to all statements relating thereto
contained in the Registration Statement or the Prospectus;
(xii) to the knowledge of such counsel, the descriptions of
any contract, agreement, instrument, lease, or license required to be described
in the Registration Statement or the Prospectus are correct in all material
respects. To the knowledge of such counsel, any contract, agreement, instrument,
lease, or license required to be filed as an exhibit to the Registration
Statement has been filed with the Commission as an exhibit to the Registration
Statement or has been incorporated as an exhibit by reference into the
Registration Statement;
(xiii) the conditions for use of Form SB-2 have been satisfied
with respect to the Registration Statement;
(xiv) to the knowledge of such counsel, no person or entity
has the right to require registration of the Securities of the Company because
of the filing or effectiveness of the Registration Statement;
(xv) the Registration Statement has become effective under the
Act. To the knowledge of such counsel, no Stop Order has been issued and no
proceedings for that purpose have been instituted or threatened; the
Registration Statement has become effective under the Act. To the knowledge of
such counsel, no Stop Order has been issued and no proceedings for that purpose
have been instituted or threatened;
(xvi) the Registration Statement and the Prospectus, and any
amendment or supplement thereto (other than financial statements and other
financial data and schedules contained therein, as to which such counsel need
express no opinion), comply as to form in all material respects with the
requirements of the Act and the Regulations; and
(xvii) to the knowledge of such counsel, since each Closing
Date, no event has occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has not been
set forth in such an amendment or supplement.
(a) In rendering such opinion, counsel for the Company may rely (A) as to
matters involving the application of laws other than the laws of the
United States, and the laws of the State of Delaware, to the extent
counsel for the Company deems proper and to the extent specified in
such opinion, upon an opinion or opinions (in form and substance
satisfactory to counsel for the Placement Agent) of other counsel,
acceptable to counsel for the Placement Agent, familiar with the
applicable laws, in which case the opinion of counsel for the Company
shall state that the opinion or opinions of such other counsel are
satisfactory in scope, form, and substance to counsel for the Company
and that reliance thereon by counsel for the Company and the Placement
Agent is reasonable; (B) may rely as to matters of fact, to the extent
proper, on certificates of responsible officers of the Company; and
(C) may rely to the extent proper, upon written statements or
certificates of officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good
standing of the Company, provided that copies of any such opinions,
statements or certificates shall be delivered to counsel for the
Placement Agent.
(b) As of each Closing Date, the Placement Agent shall have received a
certificate of the chief executive officer and of the chief financial
officer of the Company, dated the Closing Date to the effect that as
of the date of this Agreement and as of the Closing Date, the
representations and warranties of the Company contained herein were
and are accurate, and that as of the Closing Date, the obligations to
be performed by the Company hereunder on or prior thereto have been
fully performed.
(c) At the time this Agreement is executed and at each Closing Date, as
the case may be, the Placement Agents shall have received a letter
from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Co., certified public accountants,
dated each Closing Date, and addressed to the Placement Agent, and in
form and substance satisfactory to the Placement
(d) All proceedings taken in connection with the issuance, sale, transfer,
and delivery of the Units shall be satisfactory in form and substance
to the Placement Agent and to counsel for the Placement Agent, and the
Placement Agent shall have received from such counsel for the
Placement Agent a favorable opinion, dated as of each Closing Date
with respect to such of the matters set forth under Section 9(b), and
(e) The NASD, upon review of the terms of the public offering of the
Units, shall not have objected to the Placement Agent's participation
in such offering.
(f) Prior to or on each Closing Date, the Company shall have issued or
delivered the Placement Agent's Warrant.
(g) Prior to or on each Closing Date, the Company shall have provided to
the Placement Agent copies of the agreements referred to in Section
2(q) and such additional certificates or documents that the Placement
Agent reasonably requests as to the accuracy, as to the representation
and warranties of the Company and as to the performance of the Company
or its obligations hereby.
(h) Any certificate or other document signed by any officer of the Company
and delivered to the Placement Agent or to counsel for the Placement
Agent shall be deemed a representation and warranty by such officer
individually and by the Company hereunder to
the Placement Agent as to the statements made therein. If any
condition to the Placement Agent's obligations hereunder to be
fulfilled prior to or at any Closing Date is not so fulfilled, the
Placement Agent may terminate this Agreement or, if the Placement
Agent so elects, in writing, waive any such conditions which have not
been fulfilled or extend the time for their fulfillment.
9. Indemnification and Contribution.
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Placement Agent, its officers,
directors, partners, employees, agents, and counsel, and each person,
if any, who controls the Placement Agent within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against any and
all loss, liability, claim, damage, and expense whatsoever (which
shall include, for all purposes of this Section 10, but not be limited
to, attorneys' fees and any and all expense whatsoever incurred in
investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation) as and when
incurred arising out of, based upon, or in connection with (i) any
untrue statement or alleged untrue statement of a material fact
contained (A) the Registration Statement, or the Prospectus (as from
time to time amended and supplemented), or any amendment or supplement
thereto or (B) in any application or other document or communication
(in this Section 10 collectively called an "application") executed by
or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in
order to qualify any of the Securities under the "blue sky" or
securities laws thereof or filed with the Commission or any securities
exchange; or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to
the Company as stated in Section 10(b) with respect to the Placement
Agent by or on behalf of the Placement Agent through the Placement
Agent expressly for inclusion in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company
contained in this Agreement. The foregoing agreement to indemnify
shall be in addition to any liability the Company may otherwise have,
including liabilities arising under this Agreement.
(b) If any action is brought against the Placement Agent or any of its
officers, directors, partners, employees, agents, or counsel, or any
controlling persons of any Placement Agent (an "indemnified party") in
respect of which indemnity may be sought against the Company pursuant
to the foregoing paragraph, such indemnified party or parties shall
promptly notify the Company in writing of the institution of such
action (but the failure so to notify shall not relieve the Company
from any liability it may have other than pursuant to this Section
10(b), except to the extent it may have been prejudiced in any
material respect by such failure) and the Company shall promptly
assume the defense of such action, including the employment of counsel
(satisfactory to such indemnified party or parties) and payment of
expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party or parties unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of
such action or the Company shall not have promptly employed counsel
satisfactory to such indemnified party or parties to have charge of
the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be one or more legal defenses
available to it or them or to other indemnified parties which are
different from or additional to those available to the Company, in any
of which events such fees and expenses shall be borne by the Company
and the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties. Anything in this
paragraph to the contrary notwithstanding, the Company shall not be
liable for any settlement of any such claim or action effected without
its written consent, which shall not be unreasonably withheld. The
Company shall not, without the prior written consent of each
indemnified party that is not released as described in this sentence,
settle or compromise any action, or permit a default or consent to the
entry of judgment in or otherwise seek to terminate any pending or
threatened action, in respect of which indemnity may be sought
hereunder (whether or not any indemnified party is a party thereto),
unless such settlement, compromise, consent, or termination includes
an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify the
Placement Agent of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in connection
with the sale of the Units, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or any
application.
(c) The Placement Agent agrees to indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who shall
have signed the Registration Statement, and each other person, if any,
who controls the Company within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Placement Agent in Section
10(a), but only with respect to statements or omissions, if any, made
in the Registration Statement or the Prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, or
in any application in reliance upon and in conformity with written
information furnished to the Company as stated in this Section 10(c)
with respect to the Placement Agent by or on behalf of the Placement
Agent through the Placement Agent expressly for inclusion in the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or in any application, as the case may be;
provided, however, that the obligation of the Placement Agent to
provide indemnity under the provisions of this Section 10(c) shall be
limited to the amount which represents the discounts received by the
Placement Agent hereunder. If any action shall be brought against the
Company or any other person so indemnified based on the Registration
Statement or the Prospectus, or any amendment or supplement thereto,
or in any application, and in respect of which indemnity may be sought
against the Placement Agent pursuant to this Section 10(c), the
Placement Agent shall have the rights and duties given to the Company,
and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions
of Section 10(a).
(d) To provide for just and equitable contribution, if (i) an indemnified
party makes a claim for indemnification pursuant to Section 10(a),
10(b) or 10(c) (subject to the limitations thereof) but it is found in
a final judicial determination, not subject to further appeal, that
such indemnification may not be enforced in such case, even though
this Agreement expressly provides for indemnification in such case or
(ii) any indemnified or
indemnifying party seeks contribution under the Act, the 1934 Act, or
otherwise, then the Company (including for this purpose any
contribution made by or on behalf of any director of the Company, any
officer of the Company who signed the Registration Statement, and any
controlling person of the Company), as one entity, and the Placement
Agent (including for this purpose any contribution by or on behalf of
an indemnified party), as a second entity, shall contribute to the
losses, liabilities, claims, damages and expenses whatsoever to which
any of them may be subject, so that the Placement Agent is responsible
for the proportion thereof equal to the percentage which the
underwriting discount per Unit set forth on the cover page of the
Prospectus represents of the initial public offering price per share
set forth on the cover page of the Prospectus and the Company is
responsible for the remaining portion; provided, however, that if
applicable law does not permit such allocation, then other relevant
equitable considerations such as the relative fault of the Company and
the Placement Agent, in connection with the facts which resulted in
such losses, liabilities, claims, damages and expenses shall also be
considered. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission, or alleged omission, shall be
determined by, among other things, whether such statement, alleged
statement, omission, or alleged omission relates to information
supplied by the Company or by the Placement Agent, and the parties,
relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement, alleged statement, omission, or
alleged omission. The Company and the Placement Agent agree that it
would be unjust and inequitable if the respective obligations of the
Company and the Placement Agent for contribution were determined by
pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages, and expenses (even if the Placement
Agent and the other indemnified parties were treated as one entity for
such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section
10(d). No person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 10(d), each person, if
any, who controls the Placement Agent within the meaning of Section 15
of the Act or Section 20(a) of the 1934 Act and each officer,
director, partner, employee, agent, and counsel of the Placement Agent
shall have the same rights to contribution as such Placement Agent and
each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration
Statement, and each director of the Company shall have the same rights
to contribution as the company, subject in each case to the provisions
of this Section 10(d). Anything in this Section 12(d) to the contrary
notwithstanding, no party shall be liable for contribution with
respect to the settlement of any claim or action effected without its
written consent. This Section 10(d) is
10. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Effective Date, and such representations, warranties,
covenants, and agreements of the Placement Agent and the Company, including the
indemnity and contribution agreements contained in Section 10, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Placement Agent or any indemnified person, or by or on
behalf of the Company or any person or entity which is entitled to be
indemnified under Section 10(c), and shall survive termination of this
Agreement.
In addition, the provisions of Sections 7, 10, and 12 shall survive termination
of this Agreement, whether such termination occurs before or after the Effective
Date.
11. Effectiveness of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at 9:30 A.M., New York City Time, on
the first full business day following the Effective Date. The Placement
Agent or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except as noted below in
this Section 12, by giving the notice indicated in Section 12(c) before the
time this Agreement becomes effective.
(b) In addition to the right to terminate this Agreement pursuant to this
Section 12, the Placement Agent shall have the right to terminate this
Agreement at any time prior to any Closing Date by giving notice to the
Company if any domestic or international event, act, or occurrence has
materially disrupted, or in the Placement Agent's reasonable opinion will
in the immediate future materially disrupt, the securities markets; or if
there shall have been a general suspension of, or a general limitation on
prices for, trading in securities on the New York Stock Exchange, NASDAQ,
the American Stock Exchange, the Boston Stock Exchange, or the Philadelphia
Stock Exchange, or in the over-the-counter market; or if there shall have
been an outbreak of major hostilities or other national or international
calamity; or if a banking moratorium has been declared by a state or
federal authority; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have
been a material interruption in the mail service or other means of
communication within the United States; or if the Company shall have
sustained a material or substantial loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage, or other calamity or malicious act
which, whether or not such loss shall have been insured, will, in your
opinion, make it inadvisable to proceed with the offering, sale, or
delivery of the Units, as the case may be; or if there shall have been such
change in the market for securities in general or in political, financial,
or economic conditions as in your judgment makes it inadvisable to proceed
with the offering, sale, and delivery of the Units, as the case may be, on
the terms contemplated by the Prospectus.
(c) If the Placement Agent elects to prevent this Agreement from becoming
effective, as provided in this Section 12, or to terminate this Agreement
pursuant to this Section 12, the Placement Agent shall notify the Company
promptly by telephone, telex, facsimile or telegram, confirmed by letter.
If the Company elects to prevent this Agreement from becoming effective, as
provided in this Section 12, the Company shall notify the Placement Agent
promptly by telephone, telex, facsimile, or telegram, confirmed by letter.
(d) Anything in this Agreement notwithstanding other than Section 12(e), if
this Agreement shall not become effective by reason of an election pursuant
to this Section 12 or if this Agreement shall terminate or shall otherwise
not be carried out within the time specified herein by reason of any
failure on the part of the Company to perform any covenant or agreement or
satisfy any condition of this Agreement by it to be performed or satisfied,
the sole liability of the Company to the Placement Agent, in addition to
the obligations the Company assumed pursuant to Section 4, will be to
reimburse the Placement Agent for such out-of-pocket expenses (including
the fees and disbursements of their counsel) as shall have been incurred by
them in connection with this Agreement or the proposed offer, sale, and
delivery of the Units, and the Company agrees to pay promptly upon demand
the full amount thereof to the
Placement Agent for the account of the Placement Agent less amounts
previously paid to the Placement Agent in reimbursement of such expenses.
(e) Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 7, 10 and 12 shall not be in any way affected by
such election or termination or failure to carry out the terms of this
Agreement or any part hereof.
12. Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or by Federal Express, Express Mail or similar
overnight delivery or courier service or delivered (in person or by telecopy,
telex or similar telecommunications equipment) against receipt to the party to
whom it is to be given, (i) if to the Company, at its address at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Syracuse & Hirschtritt LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. (ii) if to the
Placement Agent, Wien Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇ with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇, P.A., ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇, Esq., or (iii) in either case, to such other address as the party
shall have furnished in writing in accordance with the provisions of this
Section 13. Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof, except for a notice changing
a party's address which shall be deemed given at the time of receipt thereof.
Any notice given by other means permitted by this Section 13 shall be deemed
given at the time of receipt thereof.
13. Binding Agreement. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Placement Agent and the Company and the persons
and entities referred to in Section 13 who are entitled to indemnification or
contribution, and their respective successors, legal Placement Agent, and
assigns (which shall not include any buyer, as such, of the Units), and no other
person shall have or be construed to have any legal or equitable right, remedy,
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
14. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York, without giving effect to conflict of law
principles.
15. Consent to Jurisdiction. The Company irrevocably consents to the
jurisdiction of the courts of the State of New York and of any federal court
located in such State in connection with any action or proceeding arising out of
or relating to this Agreement, any document or instrument delivered pursuant to,
in connection with or simultaneously with this Agreement, or a breach of this
Agreement or any such document or instrument. In any such action or proceeding,
the Company waives personal service or any summons, complaint or other process
and agrees that service thereof may be made in accordance with Section 13.
Within 30 days after such service, or such other time as may be mutually agreed
upon in writing by the attorneys for the parties to such action or proceeding,
the Company shall appear or answer such summons, complaint or other process.
16. Captions. Paragraph captions contained in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit,
or extend or describe the scope of this Agreement or the intent of any provision
hereof.
If the foregoing correctly sets forth the understanding between the
Placement Agents and the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
MARC PHARMACEUTICALS, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer,
Chief Financial Officer
and President
Accepted as of the date first above written.
New York, New York
WIEN SECURITIES CORP.
By:
---------------------------------
Name:
Title:
EXHIBIT A
SCHEDULE A
1. The Placement Agent will be responsible for clearing each investor, by
reviewing the subscription agreement to make sure it is completed properly
(checking name, ss#, etc.) and by determining that the investor is
qualified, both from an overall suitability viewpoint and pursuant to the
relevant blue sky laws. The Placement Agent must make sure the investor's
check is properly made payable to the escrow account for the correct amount
as provided in the subscription agreement or that the wire has hit the
escrow account for the correct amount as provided in the subscription
agreement. Also, the Placement Agent must make sure that all ▇▇▇▇▇ stock
disclosure requirements are complied with.
2. The Placement Agent must make sure that the investor resides in a state in
which the Company is permitted to sell its Investor Units, based upon the
latest blue-sky memorandum. The Company's counsel will provide the
Placement Agent and the Company with a blue-sky memorandum that will set
forth all the states in which the Company is allowed to sell its Investors
Units and will update the memorandum periodically. If a prospective
investor resides in a state in which sales are not permitted, the Placement
Agent must notify the Company and the Company's counsel so that the Company
and the Company's counsel can seek to register in that state immediately.
3. The Placement Agent must keep a complete ledger in hard copy and
computerized form of all of the investors which must include: (i) the exact
name of the investor, (ii) the address, (iii) the social security number or
employer identification number, (iii) the amount invested, (iv) how many
shares subscribed for, (v) how many warrants are subscribed for, and (v) if
there are two parties to the investment, how are they holding the stock and
warrant (as joint tenants, tenant in common, etc.).
4. The Placement Agent must turn over the investor's check to HSBC Bank USA,
National Association ("Escrow Agent") by noon of the next business day
after of receiving the check. (via federal express - priority next morning)
(Assuming the investor is qualified and the subscription document, ▇▇▇▇▇
stock disclosure forms and check or wire transfer are properly completed).
5. The Placement Agent will hold the original subscription document until the
relevant closing.
6. Every Tuesday, starting with the first Tuesday after the date the
registration statement becomes effective and until the ending date of the
offering period (which is scheduled to be December 31, 2004 but may be
earlier if the Company and Placement Agent agree), a closing with respect
to the Investor Units is scheduled to be held.
7. The Friday before each closing date, the Placement Agent must furnish a
list of all the investors in the form and content stated in 3 above.
8. This list, together with a copy of the subscription agreement and ▇▇▇▇▇
stock documents must be faxed and emailed on Friday to the Company, the
Company's counsel, the transfer agent and the Placement Agent's counsel.
9. On that same Friday, the Placement Agent and the Company must give the
Escrow Agent written notice by facsimile that 92% of the monies in the
escrow account pertaining to the investors that are admitted on that
specific closing date shall be released and delivered to an account
specified by the Company on the closing date and the other 8% shall be
released to the Placement Agent. Each notice shall specify the exact
amounts to be disbursed to the Company and to the Placement Agent and shall
provide the necessary wiring instructions to the Escrow Agent.
10. If any subscription, for which monies have already been wired to the Escrow
Agent or sent to the Escrow Agent by the Placement Agent, is rejected,
canceled or withdrawn, then the Placement Agent and the Company shall give
joint notice to the Escrow Agent to disburse such monies on each closing
date directly to the applicable subscriber at the address set forth in his
or her subscription agreement.
11. American Stock Transfer and Trust Company (the "Transfer Agent") will
prepare the stock certificates and warrant certificates and send them out
directly to the investors. The other parties will receive a stockholder
list from the transfer agent of the shares and warrants that were issued.
