Watchout!
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
August 26, 1997
Sands Brothers & Co., Ltd.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Amendment to Selling Agreement; Bridge Financing
Gentlemen:
The parties hereto, Watchout!, a California corporation (the "Company")
and Sands Brothers & Co., Ltd. ("Sands Brothers") have heretofore entered into a
letter agreement dated November 19, 1996 (the "Letter Agreement") and a selling
agreement dated February 5, 1997 (the "Selling Agreement" and together with the
Letter Agreement, the "Agreements").
In connection therewith, the parties hereto agree as follows:
1. The first paragraph of the Selling Agreement is hereby deleted in its
entirety and in its place and stead the following is inserted:
"The undersigned, Watchout!, a California Corporation (the
"Company"), proposes to offer for sale to certain "accredited
investors", through Sands Brothers & Co., Ltd., as placement agent
("Sands Brothers" or the "Placement Agent") in a private placement,
a minimum of $6,000,000 (the "Minimum Amount") in minimum increments
of $500,000, in any combination of (a) the Company's capital stock
(whether Common Stock, Preferred Stock or any combination thereof)
(collectively, the "Capital Stock") and (b) capital lease, operating
lease or equipment lease financing on behalf of the Company or any
form of commercial, institutional or bank debt financing
transactions (hereinafter, collectively "Other Financing"). The
Securities (as hereinafter defined) to be offered pursuant to the
Offering Documents (as hereinafter defined) and Other Financing
transactions to be consummated are sometimes hereinafter referred to
collectively as the "Financing" or the "Offering"." Notwithstanding
the foregoing, at least $3,000,000 of the Financing shall be
available to the Remaining Company (as hereinafter defined) as of
the Closing Date (as hereinafter defined) subject to no specified
and directed use of proceeds.
2. The parties acknowledge that in anticipation of a contribution
transaction between, among other parties, the Company and White Cloud
Exploration, Inc. ("White Cloud"), the Company and White Cloud have requested
that Sands Brothers arrange a bridge financing of up to $200,000 (the "Bridge
Financing"). Subject to the provisions of Section 3 below, White Cloud hereby
agrees, and the Company consents to such agreement, to (i) pay to the Placement
Agent the sales commission
(10%) and non-accountable expense allowance (3%) with respect to the Bridge
Financing and (ii) issue to the Placement Agent or its designees, upon
consummation of the Bridge Financing, 50,000 warrants to purchase shares of
White Cloud's common stock at $.01 per share.
3. The Placement Agent hereby defers payment of (i) the $20,000 fee which
was payable upon signing of the Selling Agreement, and (ii) the sales
commissions and non-accountable expenses allowance payable with respect to the
Bridge Financing until the earlier of (i) the closing of the first increment of
$500,000 raised or (ii) February 21, 1998.
4. Except as set forth herein, the Agreements shall remain in full force
and effect.
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If you find the foregoing is in accordance with our understanding, kindly
sign and return to us a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement between us.
Very truly yours,
Watchout!
By: /s/ Xxxxxx Xxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxx Xxxxxx
Title: President
Agreed:
SANDS BROTHERS & CO., LTD.
By: /s/ Xxxx X. Xxxxx
-----------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
Sections 2 and 3 hereof agreed to:
WHITE CLOUD EXPLORATION, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: President
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