Exhibit 1.01
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Medical Capital
BROKER-DEALER AGREEMENT
THIS BROKER-DEALER AGREEMENT (the "Agreement") is entered into on this day
of, 2003, by and between Medical Capital Management, Inc. a Delaware corporation
("Issuer") and ______________ ("Broker-Dealer") for the purpose of engaging
Broker-Dealer to offer, sell and distribute the Issuer's Redeemable Secured
Notes, Series I (the "Notes"), as hereinafter provided.
RECITALS
A. Broker-Dealer is a securities dealer certified with the State of
_____________, registered with the Securities Exchange Commission ("SEC"),
and a member of the National Association of Securities Dealers ("NASD").
Broker-Dealer has experience in the sale and distribution of securities
similar to the Notes.
B. The Issuer has prepared a certain note issuance and security agreement and
has filed a Registration Statement on Form SB-2 relating to the Notes under
the Securities Act of 1933 (collectively, the "Offering").
C. The Issuer has been advised by the SEC that the Offering was declared
effective by the SEC on _________, 2002.
D. Broker-Dealer desires to sell and distribute the Notes in the Offering on
behalf of Issuer.
NOW, THEREFORE, in consideration of their mutual covenants and
undertakings, the parties agree as follows:
1. SERVICES OF BROKER-DEALER. Broker-Dealer, through its agents and sales
employees, agrees to use its best efforts to sell and distribute the Notes
to prospective investors pursuant to the terms of the Offering. A maximum
of One Hundred Million Dollars ($100,000,000) in Notes for all brokers
participating in the Offering will be offered for sale, with a minimum
purchase of Five Thousand Dollars ($5,000), with additional incremental
purchases of One Thousand Dollars ($1,000) over that minimum amount, per
investor, plus accrued interest. A maximum of Twenty Million Dollars
($20,000,000) in Class C Notes for all brokers participating in the
offering will be offered for sale.
2. EFFECTIVE TERM. This Agreement shall be effective on the date first
above written and shall continue in effect for one year, and shall be
automatically extended for successive one year terms unless either party
provides written notice to the other party of its intent to terminate this
Agreement at least sixty (60) days prior to the end of any such term.
3. OBLIGATIONS OF BROKER-DEALER:
(a) BEST EFFORTS BASIS. The Notes will be sold solely on a "best
efforts" basis. Broker-Dealer makes no warranty as to its ability to
sell and distribute any minimum dollar amount of Notes. In this
context, "best efforts" means that Broker-Dealer will staff the sales
effort of the Notes in a manner not less favorable than other projects
in which Broker-Dealer has undertaken to sell securities on a "best
efforts" basis.
(b) INVESTOR SUITABILITY. Broker-Dealer shall offer and sell the Notes
only to investors who Broker-Dealer in good faith believes meet
applicable State suitability standards. Broker-Dealer shall use its
reasonable efforts to ascertain the suitability of all prospective
investors.
(c) REGISTERED SECURITIES. Broker-Dealer understands that the offering
of Notes is being offered pursuant to a Registration Statement under
the Securities Act of 1933.
(d) MINIMUM PURCHASE. Broker-Dealer shall not sell fewer than $5,000
in Notes to any purchaser without the prior written consent of Issuer.
(e) RECORDS. Broker-Dealer shall deliver to Issuer copies of all
records relevant to the sale of Notes, which records shall include,
but not be limited to, subscription agreements and investor data
records relating to purchases of Notes.
4. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer represents and
warrants to Broker-Dealer that upon execution of this Agreement:
(a) On the date hereof, the Registration Statement is true, complete
and correct and does not contain any untrue statement of a material
fact or omit to state a material fact required by any applicable law
or regulation or necessary in order to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading;
(b) The Issuer is validly organized, existing and in good standing,
and this Agreement has been duly authorized by all necessary actions
of the Issuer;
(c) The performance of this Agreement will not violate or constitute a
default under the terms of any agreement or arrangement to which the
Issuer is a party; and
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(d) The Registration Statement relating to the Notes, on Form SB-2,
was declared effective by the Securities and Exchange Commission on
_______________, 2003.
5. REPRESENTATIONS AND WARRANTIES OF BROKER-DEALER. Broker-Dealer
represents and warrants to the Issuer that upon execution of this Agreement
and at all times during the term of this Agreement:
(a) Broker-Dealer is validly organized, existing and in good standing
in its state of incorporation or organization, and that this Agreement
has been duly authorized by the responsible party of Broker-Dealer;
(b) The performance of this Agreement will not violate or constitute a
default under the terms of any agreement or arrangement to which
Broker-Dealer or any of its affiliates is a party;
(c) Broker-Dealer is a member in good standing of the National
Association of Securities Dealers, Inc.;
(d) Broker-Dealer is a Broker-Dealer registered with the Securities
and Exchange Commission; and
(e) Broker-Dealer is registered as a Broker- Dealer with, and has
obtained all licenses and consents necessary to sell the Notes in, all
States listed on the attached Schedule "A".
6. COVENANTS. Issuer covenants and agrees, for the specific benefit of
Broker-Dealer, that:
(a) If at any time an event shall have occurred as a result of which
the Registration Statement will include any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading, or if
it is necessary at any time to amend or supplement the Registration
Statement in order to comply with applicable law, Issuer shall notify
Broker-Dealer promptly in writing and will prepare and deliver to
Broker-Dealer an appropriate amendment or supplement; and
(b) The Issuer shall notify Broker-Dealer promptly, in writing, of any
material adverse change in the financial condition or business of
Issuer.
7. INDEMNIFICATION. Broker-Dealer shall indemnify and hold harmless the
Issuer against any and all losses, claims, damages, liabilities, and
expenses (including reasonable attorneys' fees and costs of investigation)
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to which the Issuer may become subject insofar as such losses, claims,
damages, liabilities, or expenses arise out of or are based upon:
a. Any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement to the extent, and only to the
extent, that any such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by or on
behalf of Broker-Dealer specifically for use with reference to the
Registration Statement in the preparation of the Registration
Statement;
b. The violation by Broker-Dealer, or any of its employees, agents,
independent contractors or other personnel of any of the provisions of
the Securities Act of 1933, or any State securities laws applicable to
the offering; or
c. The sale of the Notes to any investor who does not meet applicable
State suitability standards.
The obligations of the parties to this Agreement under the preceding
indemnification provisions shall be in addition to any liability that they
otherwise may have.
8. WITHDRAWAL. Broker-Dealer, in its sole discretion, may withdraw from
this Agreement without penalty at any time upon 48-hours written notice to
the Issuer, for the following causes:
(a) If, after diligently reviewing the contents of the Registration
Statement, the Broker-Dealer finds that there exist terms or
assumptions that do not fairly represent the facts of the Offering or
the Issuer's business to prospective investors.
9. COMPENSATION. Issuer shall compensate Broker-Dealer in a base amount up
to 7.00% of the principal amount of the notes sold by that Broker-Dealer,
as set forth on Exhibit A. Issuer will compensate Broker-Dealer in an
additional amount of up to 1.50% of the principal amount of the notes sold
by that Broker-Dealer if Broker-Dealer sells at least $200,000 in notes in
one calendar month during every three calendar months, as provided on
Exhibit A, to be mutually agreed upon by the Issuer and Broker-Dealer. Said
compensation shall be due and payable within ten days of receipt of good
funds by the Issuer as payment in full of the purchase price of the Notes
sold by the Broker-Dealer. Broker-Dealer shall not be entitled to any
reimbursement of expenses or any other compensation hereunder, except for
the foregoing commissions described in this section 9.
10. CONFIDENTIALITY. All business, financial and other proprietary
information given by any party to the other in connection with the sale and
distribution of the Notes shall be received in confidence and used only for
the purposes of the Offering. The parties shall undertake reasonably
appropriate safeguards to assure the non-dissemination of such information
to third parties.
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11. SURVIVAL. The representations, warranties, covenants and agreements
contained in this Agreement shall be continuing representations,
warranties, covenants and agreements and shall survive and remain in full
force and effect after the date of this Agreement. No investigation by or
on behalf of any party to this Agreement shall constitute a waiver of any
representation, warranty, covenant or agreement contained herein.
12. NO WAIVER. The failure on the part of any party to this Agreement to
exercise, or the delay in the exercise of, any right, power or remedy
hereunder shall not operate as a waiver thereof. Any single or partial
exercise of any right, power or remedy hereunder shall not preclude any
other or further exercise thereof or the exercise of any other right, power
or remedy.
13. ENFORCEABILITY. If any provision or any portion of any provision of
this Agreement is held to be unenforceable or invalid by a court of
competent jurisdiction, the validity and enforceability of the enforceable
portion of any such provision and the remaining provisions of this
Agreement shall not be adversely affected thereby.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
15. NOTICES. All notices, requests, demands and communications that are
required, provided for one or contemplated in this Agreement must be in
writing and will be deemed to have been given when personally delivered to
the party to whom addressed or forty-eight (48) hours after deposit in any
United States post office, sent by registered or certified mail, return
receipt requested, postage prepaid to the parties at the following
addresses:
If to Issuer: Medical Capital Management, Inc.
Xxxxx 000
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxx X. Field, Chief Executive Officer
If to Broker-Dealer: ______________________________________________
______________________________________________
______________________________________________
______________________________________________
16. DISPUTE RESOLUTION. Any controversy or dispute arising out of, or in
connection with, this Agreement shall be resolved exclusively by the
American Arbitration Association of Los Angeles, which decision shall be
binding.
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17. ATTORNEYS' FEES. In the event of any litigation or other dispute
resolution between the parties to enforce any provision of this Agreement
or otherwise with respect to the subject matter hereof (including any
bankruptcy proceeding), the unsuccessful party in such litigation shall pay
to the successful party all costs and expenses, including reasonable
attorneys' fees incurred by the successful party.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understanding of
the parties in connection therewith. No supplement, modification or
amendment of this Agreement shall be binding unless executed writing by the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ISSUER: MEDICAL CAPITAL MANAGEMENT, INC.
By:
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Xxxxxx X. Field, Chief Executive Officer
BROKER-DEALER:
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By:
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Name:
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Title:
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EXHIBIT A
BROKER-DEALER AGREEMENT
MEDICAL CAPITAL MANAGEMENT, INC.
CLASS A Commission paid at the rate of: 2.5%
CLASS B Commission paid at the rate of: 5.0%
CLASS C Commission paid at the rate of: 7.0%
Additional Compensation may be paid at the discretion of Issuer pursuant to
section 9 hereof for Broker-Dealer having a minimum sales volume as
specified therein. Such additional compensation, if any, will be set forth
on a separate schedule to this Agreement, signed by both parties to this
Agreement, and will not exceed 1.50% of the principal amount of the Notes
sold by Broker-Dealer.
SCHEDULE A - AS OF _________, 2003
BROKER-DEALER AGREEMENT
MEDICAL CAPITAL MANAGEMENT, INC.
Broker-Dealer(s) are registered to sell the Medical Capital Management,
Inc. Notes in the following States:
1. California
2. Colorado
3. Florida
4. Hawaii
5. Idaho
6. Minnesota
7. Montana
8. New Jersey
9. Nevada
10. Oregon
11. South Dakota
12. Utah
