FINANCIAL CONSULTING AGREEMENT
THIS AGREEMENT IS MADE AS OF THIS 10TH DAY OF NOVEMBER, 1998, BETWEEN
INTERTREND MANAGEMENT, LTD., (HEREINAFTER REFERRED TO AS "IML") WITH OFFICES AT
XXXXXXXXXXXXX. 0, 000000 XXXXXX XXXXXXXX, XXXXXXX AND AXONYX INC., (HEREINAFTER
REFERRED TO AS "AXONYX") WITH OFFICES AT 000 XXXX 00XX XXXXXX, XXX XXXX, XXX
XXXX 00000.
WHEREAS, IML IS A FINANCIAL CONSULTING COMPANY THAT SPECIALIZES IN
PROVIDING A VARIETY OF PROFESSIONAL SERVICES TO PUBLIC AND PRIVATE COMPANIES.
THESE SERVICES INCLUDE, BUT ARE NOT LIMITED TO: 1) DEVELOPMENT OF CAPITAL
FORMATION PLANS; 2) PROCUREMENT OF PRIVATE INVESTMENT CAPITAL; 3) GENERAL
INVESTMENT BANKING, 4) ARRANGING MERGERS AND ACQUISITIONS; 5) IDENTIFYING AND
NEGOTIATING UNDERWRITING AGREEMENTS FOR PUBLIC AND PRIVATE COMPANIES; 6)
CREATION OF BUSINESS DEVELOPMENT STRATEGIES; 7) BUSINESS AND SPECIAL PROJECT
ADMINISTRATION; 8) DEVELOPMENT OF INTEGRATED FINANCIAL PUBLIC RELATIONS PROGRAMS
FOR PUBLICLY TRADED COMPANIES; 9) FORMULATION OF INVESTOR RELATIONS PROGRAMS;
10) RETAINING OTHER OUTSIDE CONSULTANTS FOR SPECIALIZED PROJECTS RELATED TO
DEVELOPMENT OF INVESTOR COMMUNICATIONS AND REPORTS; AND 11) DESIGNING AND
IMPLEMENTING MULTI-PHASED MEDIA PROGRAMS TO INTRODUCE NEWLY LISTED ,PUBLIC
COMPANIES TO THE BROKERAGE COMMUNITY IN THE U.S. AND TO FOREIGN INSTITUTIONAL
INVESTOR GROUPS IN EUROPE.
WHEREAS, AXONYX IS A PRIVATELY HELD CORPORATION AND IS DESIROUS OF
RETAINING IML TO PERFORM CERTAIN SERVICES AS OUTLINED IN SECTION 2.3 OF THIS
AGREEMENT; AND
WHEREAS, IT IS THE DESIRE OF AXONYX TO DEVELOP A TOTAL FINANCIAL AND
OPERATING PLAN FOR THE EXPRESS PURPOSE OF ASSISTING AXONYX TO MAKE THE
TRANSITION FROM A PRIVATELY OWNED CORPORATION TO A PUBLICLY TRADED CORPORATION.
THE PARTIES HEREBY AGREE THAT THIS CONTRACT MAY INCLUDE SERVICES TO BE RENDERED
BY IML ON BEHALF OF AXONYX AND/OR A COMPANY THAT RESULTS FROM A CONSOLIDATION OF
AXONYX AND A PUBLICLY TRADED COMPANY; AND
WHEREAS, AXONYX IS THE OWNER OF CERTAIN RIGHTS AND HAS EXCLUSIVE LICENSES
PERTAINING TO SEVERAL PHARMACEUTICAL COMPOUNDS (HEREINAFTER REFERRED TO AS THE
"PRODUCTS"), IT IS THE INTENT OF AXONYX, ON A WORLDWIDE BASIS TO EITHER
MANUFACTURE, MARKET AND SELL THESE PROPRIETARY PATENTED PRODUCTS TO BE USED IN
THE MEDICAL AND HEALTHCARE INDUSTRY OR TO DEVELOP STRATEGIC ALLIANCES WITH
LARGER PHARMACEUTICAL COMPANIES. THESE STRATEGIC ALLIANCES WILL BE IN THE FORM
OF JOINT VENTURES OR SUBLICENSE AGREEMENTS TO TEST, OBTAIN REGULATORY APPROVAL
AND COMMERCIALIZE THE PHARMACEUTICAL COMPOUNDS CONTROLLED BY AXONYX; AND
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN
AND OTHER GOOD AND VALUABLE CONSIDERATIONS, IT IS AGREED BETWEEN THE PARTIES AS
FOLLOWS:
ARTICLE 1
1.1 INDEPENDENT CONTRACTOR STATUS
THE PARTIES TO THIS CONTRACT INTEND THAT THE RELATION BETWEEN THEM
CREATED BY THIS FINANCIAL CONSULTING AGREEMENT WILL RESULT IN IML BEING
CONSIDERED AN INDEPENDENT CONTRACTOR. NO AGENT, EMPLOYEE OR SERVANT OF THE
INDEPENDENT CONTRACTOR SHALL BE, OR SHALL BE DEEMED TO BE AN EMPLOYEE, AGENT: OR
SERVANT OF AXONYX. AXONYX IS INTERESTED ONLY IN THE RESULTS OBTAINED UNDER THIS
CONTRACT; THE MANNER AND MEANS OF ACCOMPLISHING THE AGREED UPON OBJECTIVE IS
UNDER THE SOLE CONTROL OF THE INDEPENDENT CONTRACTOR, SUBJECT TO EXECUTION OF AN
AGREEMENT WITH A PUBLICLY TRADED COMPANY THAT CONTAINS TERMS AND CONDITIONS
ACCEPTABLE TO AXONYX. NONE OF THE BENEFITS PROVIDED BY AXONYX TO ITS EMPLOYEES,
OFFICERS AND/OR DIRECTORS, WHICH MAY INCLUDE, BUT ARE NOT LIMITED TO,
COMPENSATION, HEALTH INSURANCE, UNEMPLOYMENT INSURANCE OR VARIOUS STOCK OPTION
PLANS WILL BE AVAILABLE TO THE CONTRACTOR, OR ITS EMPLOYEES. IML AS AN
INDEPENDENT CONTRACTOR WILL BE SOLELY AND ENTIRELY RESPONSIBLE FOR ITS ACTS AND
FOR THE ACTS OF ITS AGENTS, EMPLOYEES, AFFILIATES AND SUBCONTRACTORS DURING THE
PERFORMANCE OF THIS CONTRACT. EACH PARTY AGREES TO INDEMNIFY THE OTHER AND HOLD
THE OTHER HARMLESS, FOR ANY AND ALL ACTIONS, REGARDLESS OF THE NATURE,
DESCRIPTION OR TYPE.
ARTICLE 2
2.1 STATEMENT OF CONTRACT INTENT
IML IS PRIMARILY ENGAGED AS A FINANCIAL CONSULTING AND CORPORATE
DEVELOPMENT COMPANY ON AN INDEPENDENT CONTRACTOR BASIS AND DERIVES ITS REVENUES
FROM CONSULTING FEES CHARGED CLIENT COMPANIES AND FROM CAPITAL APPRECIATION OF
SECURITIES OBTAINED AS PART OF THE CONSULTING FEES FROM THE CLIENT COMPANIES
THAT ENGAGE IML TO GUIDE THEM IN THEIR CORPORATE DEVELOPMENT, FINANCING
ACTIVITIES, VARIOUS FINANCIAL SERVICES AND WITH THE SPECIFIC INTENT TO UNDERTAKE
ALL REQUIREMENTS TO FACILITATE AXONYX TO BECOME A PUBLICLY TRADED COMPANY. THE
OBJECTIVES WILL BE OUTLINED IN DETAIL IN OTHER ARTICLES OF THIS AGREEMENT.
2.2 DOCUMENTATION AVAILABLE TO IML AND OBJECTIVES TO BE ACCOMPLISHED
AXONYX WILL MAKE AVAILABLE OR PROVIDE TO THE MANAGEMENT AND CONSULTANTS
OF IML, SUBJECT TO CONFIDENTIALITY AGREEMENTS TO BE ENTERED INTO BETWEEN AXONYX
AND IML AND ANY SUCH CONSULTANTS, THE FOLLOWING INFORMATION AND AGREES TO TAKE
WHATEVER REASONABLE STEPS REQUIRED TO ACCOMPLISH THE FOLLOWING:
A. PREPARATION OF AUDITED FINANCIAL STATEMENTS OF AXONYX FROM
INCEPTION TO DECEMBER 31, 1997 AND UNAUDITED STATEMENTS ENDING SEPTEMBER 30,
1998. TO BE INCLUDED, IF REQUIRED, A CASH FLOW ANALYSIS AND A PROFIT AND LOSS
PROJECTION FOR A PERIOD OF THREE YEARS. THESE AUDITED AND UNAUDITED FINANCIAL
STATEMENTS WILL COMPLY WITH GENERALLY ACCEPTABLE ACCOUNTING PROCEDURES COMMONLY
REFERRED TO AS THE GAAP METHOD OF ACCOUNTING REQUIRED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE "SEC").
B. THE PREPARATION OF A COMPREHENSIVE BUSINESS, MARKETING AND
FINANCIAL PLAN PREPARED BY THE MANAGEMENT OR CONSULTANTS OF AXONYX.
C. AXONYX AGREES TO INFORM IML OF ALL MATERIAL BUSINESS TRANSACTIONS
AND DEVELOPMENTS, AND FURTHER AGREES TO MAKE AVAILABLE ALL INFORMATION AND
DOCUMENTATION REQUESTED BY IML THAT IS IN AXONYX'S CONTROL AND IS NOT SUBJECT TO
A CONFIDENTIALITY AGREEMENT WITH A THIRD PARTY.
D. AXONYX AGREES TO FULLY AND ACCURATELY DISCLOSE ALL INFORMATION THAT
IS NOT SUBJECT TO A CONFIDENTIALITY AGREEMENT WITH A THIRD PARTY TO IML RELATING
TO AXONYX'S BACKGROUND, HISTORY, PRINCIPALS, INVESTORS, PRODUCTS, DEBTS AND ANY
OTHER INFORMATION WHICH IML REASONABLY DEEMS NECESSARY TO PERFORM ITS
OBLIGATIONS CONCERNING THIS CONTRACT.
E. AXONYX REPRESENTS TO IML THAT A MAJORITY OF THE BOARD OF DIRECTORS
OF AXONYX HAVE APPROVED THIS CONTRACT WITH IML AND HAVE EXECUTED A CORPORATE
RESOLUTION REFLECTING THEIR APPROVAL AND THIS RESOLUTION HAS BEEN MADE A PART OF
THE CORPORATE RECORDS AND FILED IN THE MINUTE BOOK OF THE CORPORATION.
2.3 DUTIES TO BE PERFORMED BY IML ON BEHALF OF AXONYX
IML HEREBY AGREES TO ACCOMPLISH THE ITEMS LISTED BELOW ON BEHALF OF
AXONYX IN EXCHANGE FOR THE COMPENSATION DESCRIBED IN ARTICLE 4 OF THIS CONTRACT.
A. PREPARATION OF THE CORPORATE STOCK STRUCTURE AND ACTING AS THE
CONSULTANT TO ASSIST IN THE DETERMINATION OF THE ISSUING PRICE FOR ANY FUTURE
PRIVATE OFFERINGS, SECONDARY OFFERINGS OR AN INITIAL PUBLIC OFFERING ("IPO").
B. EVALUATE SEVERAL U.S. PUBLIC CORPORATIONS TO SEEK A VIABLE
CANDIDATE AS A PUBLICLY TRADED HOLDING COMPANY (HEREINAFTER THE "PUBLIC
COMPANY") TO ACQUIRE 100% OF THE SHARES OF AXONYX AS A WHOLLY OWNED SUBSIDIARY
CORPORATION OR ACQUIRE ALL OF THE SHARES AS PART OF A STATUTORY MERGER.
IDENTIFY AND EVALUATE POTENTIAL UNDERWRITERS FOR AN IPO AND ASSIST IN
NEGOTIATION OF AN UNDERWRITING AGREEMENT.
C. ASSIST IN LOCATING A SECURITIES ATTORNEY TO COMPLETE THE PROPOSED
TRANSACTION, SUBJECT TO REVIEW AND APPROVED BY THE BOARD OF DIRECTORS OF AXONYX.
D. PREPARE FOR THE CALL OF A SPECIAL STOCKHOLDERS MEETING OF THE
PUBLIC COMPANY.
E. INCREASE THE CAPITALIZATION OF THE PUBLIC COMPANY IF NECESSARY OR
RESTRUCTURE THE PUBLIC COMPANY TO MAKE IT CONDUCIVE FOR A MERGER WITH AXONYX.
F. PREPARE DOCUMENTS TO CHANGE THE NAME OF THE POST MERGER OR POST
ACQUISITION CONSOLIDATED COMPANY (HEREINAFTER THE "CONSOLIDATED COMPANY") TO
AXONYX INC.
G. ASSIST IN SECURING CERTIFIED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE PUBLIC COMPANY AND AXONYX.
H. PREPARE THE NECESSARY AMENDMENTS AND ASSIST THE FILING IN THE STATE
OF DOMICILE FOR THE CONSOLIDATED COMPANY.
I. ASSIST THE ATTORNEYS FOR THE CONSOLIDATED COMPANY IN PREPARING AND
FILING ALL NECESSARY CURRENT STATE AND FEDERAL SECURITIES FILINGS, INCLUDING THE
PREPARATION OF A FORM 10 REGISTRATION STATEMENT IN THE EVENT THE CANDIDATE
COMPANY IS NON-REPORTING AND 10Q AND 10K) AFTER THE CONSOLIDATION OR ACQUISITION
HAS TAKEN PLACE, IF THE PUBLIC COMPANY IS A REPORTING COMPANY.
J. SUPERVISE THE PREPARATION OF THE ACQUISITION AGREEMENT, SUPPORT
DOCUMENTS, EXHIBITS AND ALL ANCILLARY LEGAL DOCUMENTS BETWEEN AXONYX AND THE
PUBLIC COMPANY.
K. SUPERVISE THE PREPARATION AND MAILING OF THE LETTER TO AXONYX
SHAREHOLDERS, NOTICE OF SPECIAL MEETING AND THE PROXY STATEMENT, IF REQUIRED.
L. ASSIST IN ORDERING NEW UP-DATED STOCK CERTIFICATES FOR THE
CONSOLIDATED COMPANY.
M. ASSIST IN SELECTING A STOCK REGISTRAR AND TRANSFER AGENT FOR THE
CONSOLIDATED COMPANY.
N. ASSIST IN FILING FOR A NEW CUSIP NUMBER FOR THE CONSOLIDATED
COMPANY.
O. PREPARE FILING WITH XXXXX'X FINANCIAL SERVICES OR STANDARD & POOR'S
FINANCIAL SERVICE.
P. ASSIST IN ESTABLISHMENT OF RESIDENT AGENT, STATE OF DOMICILE.
Q. PREPARE OR AMEND FOR FILING A 15c2-11 DISCLOSURE DOCUMENT WITH THE
NASD AND MARKET MAKERS.
R. PREPARE FOR FILING A DUE DILIGENCE PACKAGE WITH A MINIMUM OF AT
LEAST THREE (.3) MARKET MAKERS TO INITIATE TRADING OF THE SHARES OF THE
CONSOLIDATED COMPANY.
S. PREPARE A CERTIFICATE OF MERGER FOR THE CONSOLIDATED COMPANY AND
ASSIST IN FILING IN THE STATE OF DOMICILE, IF NECESSARY.
T. ASSIST IN THE ESTABLISHMENT OF THE INITIAL MARKET AND SHAREHOLDER
RELATIONSHIPS FOR THE CONSOLIDATED COMPANY.
U. MAINTAIN INITIAL FINANCIAL AND PUBLIC RELATIONS ON BEHALF OF THE
CONSOLIDATED COMPANY EFFECTIVE THE DAY THAT THE CONSOLIDATED COMPANY BEGINS TO
TRADE PUBLICLY OR DESIGNATE A FIRM TO PERFORM THESE SERVICES IN THE U.S.
V. ACT AS GENERAL FINANCIAL ADVISOR WITH REGARD TO SUCH MATTERS AS A
LIAISON TO THE INVESTMENT AND BROKERAGE COMMUNITY, BUSINESS DEVELOPMENT,
CONSULTATION AND AS AN ADVISOR FOR ALL NEGOTIATIONS WITH POTENTIAL UNDERWRITING
FIRMS OR FIRMS SPECIALIZING IN RAISING PRIVATE EQUITY AND/OR VENTURE FUNDS.
W. AT AXONYX'S OPTION, CONTINUING FINANCIAL PUBLIC RELATIONS SERVICES
AND GENERAL FINANCIAL CONSULTING SUBSEQUENT TO AXONYX BECOMING A PUBLIC
CORPORATION OR COMPLETING AN INITIAL PUBLIC OFFERING.
X. Assist the corporate securities attorney in preparation of any
required registration statements to be filed with the SEC.
Y. TO ACT As AN INDEPENDENT FINANCIAL CONSULTANT THROUGH ITS
AGENTS, SERVANTS AND EMPLOYEES, TO PERFORM SUCH SERVICES FOR AXONYX THAT ARE
CONSISTENT WITH THE INTENT OF THIS AGREEMENT AND AS SUCH ARE GENERALLY CUSTOMARY
TO THE SERVICES PERFORMED BY A FINANCIAL CONSULTANT.
ARTICLE 3
3.1 TERM OF CONTRACT
AXONYX HEREBY CONTRACTS WITH IML COMMENCING THE 10TH DAY OF NOVEMBER,
1998, AND CONTINUING FOR A PERIOD OF ONE (1) YEAR OR UNTIL IML HAS PERFORMED THE
ABOVE MENTIONED SERVICES, WHICHEVER EVENT SHALL COME FIRST.
ARTICLE 4
4.1 COMPENSATION TO IML
IN CONSIDERATION OF THE FINANCIAL CONSULTING SERVICES ENUMERATED ABOVE,
TO BE PROVIDED TO AXONYX BY IML, AS SET FORTH IN ARTICLE 2, AXONYX AGREES TO
PROVIDE COMPENSATION TO IML AS OUTLINED BELOW.
A. IML, FOR SERVICES UNDER THIS AGREEMENT, SUBJECT TO AXONYX MERGING
WITH A PUBLIC COMPANY DURING THE TERM OF THIS AGREEMENT, OR CONSUMMATING AN IPO,
WILL BE GRANTED A TWO YEAR STOCK OPTION (THE "STOCK OPTION") TO PURCHASE FIFTEEN
THOUSAND (15,000) SHARES OF COMMON STOCK OF AXONYX (THE "OPTION SHARES"),
EXERCISABLE AT: $2.50 PER SHARE. THE DATE OF THE GRANT OF THE STOCK OPTION
SHALL BE CONCURRENT WITH AXONYX CONSOLIDATING WITH A PUBLIC COMPANY, THE
ACQUISITION OF AXONYX BY A PUBLIC COMPANY, OR AXONYX'S IPO WHICHEVER OCCURS
FIRST. IML MAY DISBURSE SOME OR ALL OF THE STOCK OPTION OR THE OPTION SHARES TO
OTHER THIRD PARTIES, PURSUANT TO COMPLIANCE WITH APPLICABLE SECURITIES
EXEMPTIONS. THESES SHARES WILL
HAVE PIGGYBACK REGISTRATION RIGHTS, IN THE EVENT AXONYX FILES A SUBSEQUENT
REGISTRATION STATEMENT WITH THE SEC.
IT IS AGREED BY THE PARTIES THAT WHEN THE OPTION SHARES ARE AVAILABLE FOR
DELIVERY, THE CERTIFICATES WILL BE DELIVERED TO INTERTREND MANAGEMENT:, LTD.,
XXXXXXXXXXXXX 0, 000000 XXXXXX XXXXXXXX, XXXXXXX OR SUCH OTHER ADDRESSES TO BE
PROVIDED IN THE FUTURE.
AT SUCH POINT IN TIME AS THE CONSOLIDATED COMPANY OR AXONYX AND THE BOARD
OF DIRECTORS OF CONSOLIDATED COMPANY OR AXONYX, AT ITS OPTION, AT SOME FUTURE
DATE, DECIDE TO PREPARE A REGISTRATION STATEMENT FOR FILING WITH THE SEC, IT
WILL NOTIFY IML OF ITS INTENT, BY REGISTERED MAI1, A MINIMUM OF FORTY FIVE (45)
DAYS IN ADVANCE OF THE ANTICIPATED FILING DATE OF THE REGISTRATION STATEMENT TO
DETERMINE IF IML WOULD LIKE TO INCLUDE A PORTION OR ALL OF ITS OPTION SHARES IN
THE REGISTRATION STATEMENT. IML MUST RESPOND IN WRITING, BY CERTIFIED MAIL,
WITHIN FIFTEEN (15) DAYS, WITH REGARD TO WHETHER IML DESIRES TO HAVE A PORTION
OR ALL OF THEIR OPTION SHARES INCLUDED IN THE PROPOSED REGISTRATION STATEMENT.
IN EFFECT, AXONYX IS GRANTING "PIGGY BACK REGISTRATION RIGHTS" TO IML, AT NO
EXPENSE TO IML. NOTHING IN THIS AGREEMENT SHOULD BE CONSTRUED TO SUGGEST THAT
AXONYX OR THE CONSOLIDATED COMPANY IS REQUIRED TO FILE A REGISTRATION STATEMENT.
B. AS FURTHER CONSIDERATION FOR CONSULTING SERVICES RENDERED TO AXONYX
BY IML, IML WILL RECEIVE A TOTAL DEPOSIT IN THE AMOUNT OF FIFTY THOUSAND
($50,000) DOLLARS AT THE TIME THIS AGREEMENT IS EXECUTED. IT IS UNDERSTOOD THAT
IN THE EVENT A MERGER OR IPO IS NOT CONSUMMATED DURING THE TERM OF THIS
AGREEMENT, IML WILL RETURN FORTY THOUSAND DOLLARS ($40,000) TO AXONYX.
C. FUTURE ADDITIONAL FINANCIAL CONSULTING AND FINANCIAL PUBLIC
RELATIONS WORK TO BE PROVIDED BY IML OR THEIR AGENTS WILL BE AT THE OPTION OF
AXONYX.
D. DIRECT EXPENSES RELATING TO AXONYX BEING ACQUIRED BY A PUBLIC
COMPANY WILL BE AT THE EXPENSE OF AXONYX. THE DIRECT EXPENSES WILL INCLUDE, BUT
ARE NOT LIMITED TO, ALL STATE AND FEDERAL SECURITIES FILINGS, LEGAL EXPENSES OF
THE PUBLIC COMPANY RELATED TO THE ACQUISITION OF OR MERGER WITH AXONYX (NOT TO
EXCEED $1000.00), ACCOUNTING AND AUDITING COSTS, VARIOUS FEES AND ADMINISTRATIVE
COSTS RELATED TO BEING A PUBLIC CORPORATION POST MERGER OR ACQUISITION AND THE
COST RELATED TO PROVIDING INFORMATION TO THE BROKERAGE COMMUNITY AND THE PUBLIC
SHAREHOLDERS OF THE ACQUIRING COMPANY. AT SUCH TIME AS A PROPOSED MERGER OR
ACQUISITION HAS BEEN COMPLETED, ALL POST MERGER COSTS OF THE TYPE AND KIND
DESCRIBED ABOVE WILL BE THE SOLE RESPONSIBILITY OF AXONYX.
E. IF IML OR ANY OF ITS AFFILIATES PARTICIPATE IN ANY CAPITAL
FORMATION, IT IS UNDERSTOOD THAT ANY EQUITY OR SHARES SOLD BY IML OR ITS
AFFILIATES WILL BE SOLD SUBJECT TO A SELLING COMMISSION TO BE NEGOTIATED. THE
PRICE OF ANY SHARES OR EQUITY SOLD BY IML IN AXONYX WILL BE APPROVED IN WRITING
BY AN AUTHORIZED OFFICER OF AXONYX. THE PRICE OF THE SHARES WILL BE ESTABLISHED
BY MUTUAL AGREEMENT BETWEEN THE REPRESENTATIVES AXONYX AND IML.
F. EXPENSES DIRECTLY INCURRED IN REGARD TO PERFORMING THE DUTIES
OUTLINED AND RELATED TO ITEMS A THROUGH Y, ARTICLE 2 OF THIS AGREEMENT, WILL BE
THE SOLE RESPONSIBILITY OF IML, UNLESS APPROVED IN ADVANCE BY AXONYX.
G. IML RESERVES THE RIGHT TO ACQUIRE STOCK OPTIONS FROM SHAREHOLDERS
OF THE PUBLIC COMPANY AND/OR FROM SHAREHOLDERS OF AXONYX, PRIOR TO AN
ACQUISITION BY OR CONSOLIDATION WITH A PUBLIC COMPANY.
ARTICLE 5
5.1 AXONYX AND IML COOPERATION, IML USE OF AXONYX PERSONNEL
FOR THE SOLE PURPOSE OF ACCOMPLISHING A MERGER, ACQUISITION OR IPO ON
BEHALF OF AXONYX, AXONYX AGREES TO ACTIVELY ASSIST IML UTILIZING AXONYX
PERSONNEL AND CONSULTANTS, IF NECESSARY TO ACCOMPLISH THE PROPOSED MERGER OR
ACQUISITION OF AXONYX OR AN IPO. ANY AND ALL COSTS INCURRED BY AXONYX OR THE
CONSOLIDATED COMPANY NOT SPECIFICALLY IDENTIFIED OR PROVIDED FOR IN THIS
AGREEMENT, THAT ARE REQUIRED TO ACCOMPLISH THE OBJECTIVE OF AXONYX OF BECOMING A
PUBLICLY TRADED CORPORATION OR DOING AN IPO SHALL BE ASSUMED BY AXONYX. THIS
MAY INCLUDE OUCH TASKS AS WORD PROCESSING, TYPING, PRINTING, BINDING, ACCOUNTING
AND LEGAL FEES, TRAVEL AND COSTS INCIDENTAL TO AXONYX'S SHAREHOLDER
COMMUNICATIONS AND PROXY STATEMENT AND THE COST OF AN INDEPENDENT AUDIT.
ARTICLE 6
6.1 OWNERSHIP PERCENTAGE OF CONSOLIDATED COMPANY
IN THE EVENT A MERGER OR ACQUISITION IS ACCOMPLISHED BETWEEN AXONYX AND A
PUBLIC COMPANY, IT IS THE INTENT OF BOTH PARTIES THAT SHAREHOLDERS OF AXONYX
SHALL OWN NOT LESS THAN NINETY (90%) PERCENT OF THE CONSOLIDATED COMPANY.
ARTICLE 7
INVALIDATION OF AGREEMENT
IF ANY PORTION OF THIS AGREEMENT IS DETERMINED TO BE VOID AS AGAINST THE
LAW OR PUBLIC POLICY, SUCH PROVISION SHALL NOT RENDER THE ENTIRE AGREEMENT VOID,
BUT ONLY THE INVALID PORTION SHALL BE SO CONSTRUED, AND THOSE PROVISIONS OF THIS
AGREEMENT WHICH ARE VALID AND MAY BE CARRIED OUT WITHOUT DISTORTING THE INTENT
OF THE PARTIES, AS EVIDENCED BY THIS AGREEMENT, SHALL BE ENTERED INTO AND
CARRIED OUT.
7.2 INJUNCTIVE RELIEF
THE PARTIES AGREE THAT IN THE EVENT ANY PARTY TO THIS AGREEMENT SHALL
FAIL OR REFUSE TO PERFORM ANY OF THE PROVISIONS OF THIS AGREEMENT, THE OTHER
PARTY HERETO SHALL BE ENTITLED TO
INJUNCTIVE RELIEF ENJOINING AND RESTRAINING THE VIOLATIONS OF ANY OF THE
PROVISIONS OF THIS AGREEMENT AND COMPELLING SPECIFIC PERFORMANCE OF THIS
AGREEMENT AS HEREIN SET FORTH.
7.3 WAIVERS
THE WAIVER OF EITHER PARTY OF A BREACH OR VIOLATION OF, OR FAILURE TO
COMPLY WITH, ANY TERM CONDITION OR PROVISION OF THIS AGREEMENT BY THE OTHER
PARTY SHALL NOT EFFECT THIS AGREEMENT AND SHALL NOT OPERATE OR BE CONSTRUED AS A
WAIVER OF ANY SUBSEQUENT BREACH, VIOLATION OR FAILURE, AND SHALL NOT EFFECT ANY
OF THE RIGHTS OR REMEDIES OF THE PARTIES HERETO. NO DEPARTURE FROM THIS
AGREEMENT WILL CONSTITUTE A WAIVER OR MODIFICATION OF ANY OF THE PROVISIONS OR
CONDITIONS, OR OF THE RIGHTS, OR REMEDIES OF EITHER OF THE PARTIES HERETO.
7.4 JURISDICTION OF AGREEMENT
THIS AGREEMENT IS MADE WITH REFERENCE TO THE LAWS OF THE STATE OF NEW
YORK.
7.5 SUCCESSORS IN INTEREST
IT IS EXPRESSLY UNDERSTOOD THAT THIS AGREEMENT SHALL BIND ANY SUCCESSORS,
ASSIGNS, SUBSIDIARIES OR EXTENSIONS TO THE PARTIES HERETO.
7.6 RELATIONSHIP OF THE PARTIES
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT AXONYX AND IML ARE COMPLETELY
SEPARATE ENTITIES AND ARE NOT PARTNERS, JOINT VENTURES, NOR AGENTS FOR EACH
OTHER IN ANY SENSE WHATSOEVER AND NEITHER PARTY HAS THE POWER OR THE -RIGHT TO
OBLIGATE OR BIND THE OTHER. IT IS ALSO EXPRESSLY UNDERSTOOD THAT IML HAS NOT
REPRESENTED ITSELF AS A BROKER DEALER AS DEFINED BY THE SECURITIES LAWS OF THE
UNITED STATES.
7.7 NATURE OF THE AGREEMENT
THIS AGREEMENT IS COMPLETE AND CONSTITUTES THE ENTIRE AND ONLY CONTRACT
BETWEEN ALL PARTIES HERETO AND IT IS MUTUALLY AGREED AND UNDERSTOOD THAT NO
OTHER AGREEMENTS, STATEMENTS, INDUCEMENTS OR REPRESENTATIONS, WRITTEN OR VERBAL
HAVE BEEN MADE OR RELIED UPON BY EITHER PARTY. ANY MODIFICATIONS HERETO OR
AMENDMENTS HERETO SHALL BE BINDING WHEN PRESENTED IN WRITING AND SIGNED BY BOTH
PARTIES.
7.8 EXECUTION IN COUNTERPART
THIS AGREEMENT MAY BE SIGNED IN COUNTERPART.
THIS AGREEMENT MADE AND ENTERED INTO AS OF DECEMBER 10, 1998.
INTERTREND MANAGEMENT LTD. AXONYX INC.
BY: /s/ XXXXX XXXXX BY: /s/ XXXXXX X. XXXXXXX, M.D.
------------------------ -----------------------------------
XXXXX XXXXX, PRESIDENT XXXXXX X. XXXXXXX, M.D. PRESIDENT & CEO
