REFERENCE 10.9
E B I SECURITIES CONSULTING AGREEMENT
176
EBI
SECURITIES CORPORATION
Nova Pharmaceutical Inc
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
March 29, 1999
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇
Gentlemen:
The purpose of this letter is to confirm the engagement of EBI Securities
Corporation (the "Consultant") by Nova Pharmaceutical Inc. (the "Company") on
an exclusive basis to render financial advisory and investment banking
services to the Company.
1. Engagement of Consultant. The Company hereby engages Consultant and
Consultant hereby agrees to render services to the Company as a
corporate finance consultant.
2. Services. The Company is examining methods of obtaining liquidity for
its stock and various methods of obtaining additional capital.
During the term of this Agreement, Consultant shall provide
advice to, and consult with, the Company concerning business and
financial planning, corporate organization and structure, private
and public equity and debt financing, the Company's relations
with its securities holders, and the preparation and distribution
of periodic reports; and it shall periodically provide to the
Company analyses of the Company's financial statements as
requested by the Company. Such advice and consultation are
hereinafter referred to as "Financial Services". The Consultant,
in conjunction with the Company, shall schedule meetings between
the Company's management and certain of the Consultant's
brokerage representatives to introduce the Company and its
operations. The Company shall make key management available to
make presentations as reasonably requested by the Consultant.
The Financial Services shall be provided to the Company in such
form, manner and place as the Company reasonably requests.
Consultant shall not by this Agreement be prevented or barred
from rendering services of the same or similar nature, as herein
described, or services of any nature whatsoever for, or on behalf
of, persons, firms, or corporations other than the Company.
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3 Term. This Agreement shall be for an initial term of six (6) months
commencing on the date of this Agreement. The term shall
automatically be extended for an additional three (3) month term
unless one party notifies the other of its desire not to renew prior
to the commencement of the additional three (3) month term.
4. Compensation. The Company agrees to issue to the consultant, or its
designees, warrants to purchase a total of 100,000 shares of its
Common Stock (the "Warrants"), exercisable at $1.00 per share
within thirty days upon the signing of this agreement. These
warrants will be exercisable at any time within three years of
the date of their issuance. The warrants shall contain standard
anti-dilution provisions; and shall also provide the Consultant
with a cashless exercise provision and "piggy-back" registration
rights at the Company's cost. During the term of this agreement,
the Company also agrees to pay the Consultant a monthly
consulting fee of $5,000. The first $5,000 payment shall be due
upon the signing of this agreement. Monthly consulting fees for
the remaining term of the agreement will be $5,000. All monthly
consulting fees will be made no later than the third day of each
month.
5. Merger and Acquisition. If the Company contemplates the purchase of
assets, a merger, acquisition, joint venture or significant
investment by the Company in another entity, the Company will, in
its discretion, engage Consultant to assist it in negotiating,
structuring and evaluating the transaction and upon consummation of
such transaction, and will pay a fee to Consultant for its services
calculated as follows:
(iii) 5% of the value of the transaction to the Company up to and including
$1,000,000;
(iv) 4% of the value of the transaction to the Company greater than
$1,000,000 and up to and including $3,000,000;
(v) 3% of the value of the transaction to the Company greater than
$3,000,000 and up to and including $4,000,000;
(vi) 2% of the value of the transaction to the Company greater than
$4,000,000 and up to and including $5,000,000; and
(vii) 1% of the value of the transaction to the Company in excess of
$5,000,000.
Value of the transaction (consideration) is defined as:
A. The total proceeds and other consideration (including cash,
securities or installments) issued by the Company in connection with
an acquisition of, or merger with, another company.
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B. If a portion of such consideration includes contingent payments
(whether or not related to future earning or operations), aggregate
consideration will be paid as the Company or its shareholders issue
or receive payment, but not in advance of receiving same
C. In the event that the aggregate consideration for the transaction
consists in whole or in part of securities, for the purpose of
calculating the amount of aggregate consideration, the value of
such securities will be the average bid of closing prices for
five consecutive days preceding the announcement of the
transaction or, in the absence of a public trading market
thereof, the fair market value thereof as the Company and the
Consultant agree on the day preceding the consummation of the
transaction.
D. The Consultants merger and acquisition fee will be reduced by fifty
percent (50%) for merger and acquisition projects introduced to the
Company by some source other than the Consultant, during the term of
this agreement.
6. Disclaimer of Responsibility for Acts of the Company. The obligations
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of the Consultant described in this Agreement consist solely of
Financial Services to the company. In no event shall Consultant
be required by this Agreement to act as the agent of the Company
or otherwise to represent or make decisions for Company. All
final decisions with respect to acts of Company or its
affiliates, whether or not made pursuant to or in reliance on
information or advice furnished by Consultant hereunder, shall be
those of Company or such affiliates and Consultant shall under no
circumstances be liable for any expense incurred or loss suffered
by Company as a consequence of such decisions.
7. Expenses. In addition to the payment of Consultants fees hereunder,
the Company will reimburse Consultant for all reasonable
pre-approved, travel and other out-of-pocket expenses incurred, in
behalf of the Company, during the term of this agreement.
8. Amendment. No amendment to this Agreement shall be valid unless such
amendment is in writing and is signed by authorized representatives
of all the parties to this Agreement.
9. Termination. This Agreement may be terminated after three (3) months
by either party upon giving fifteen (15) days prior written notice
to the other party.
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10. Waiver. Any of the terms and conditions of this Agreement may be
waived at any time and from time to time in writing by the party
entitled to the benefit thereof, but a waiver in one instance shall
not be deemed to constitute a waiver in any other instance. A
failure to enforce any provision of this Agreement shall not operate
as a waiver of this provision or of any other provision hereof.
11. Severability. In the event that any provision of this Agreement
shall be held to be invalid, illegal, or unenforceable in any
circumstances, the remaining provisions shall nevertheless remain in
full force and effect and shall be construed as if the unenforceable
portion or portions were deleted.
12. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted
assigns. Any attempt by either party to assign any rights, duties,
or obligations which may arise under this Agreement without the
prior written consent of the other party shall be void.
13. Governing Law. The validity, interpretation and construction of this
Agreement and each part thereof will be governed by the laws of the
State of Colorado.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of
which together will constitute one and the same instrument.
15. Arbitration. The parties agree that all controversies which may arise
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between them concerning any transaction, the construction,
performance or beach of this or any other agreement between the,
whether entered into prior, on, or subsequent to the date hereof,
or any other matter, including but not limited to, securities
activity, investment advice or in any way, related thereto, shall
be determined by arbitration in accordance with the rules of the
NASD. This shall inure to the benefit of and be binding on the
Company, its officers, directors, agents, independent
contractors, employees, sureties, controlling persons and shall
inure to the benefit of and be binding on the consultant, its
officers, directors, registered representatives, agents,
independent contractors, employees, sureties, controlling persons
and any person acting on its behalf in relation to the
Agreement. Any award rendered in arbitration may be enforce in
any court of competent jurisdiction.
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EBI SECURITIES CORPORATION
"CONSULTANT"
/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇
By___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
Nova Pharmaceutical Inc
"COMPANY"
By_/s/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
President
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EBI
SECURITIES CORPORATION
Nova Pharmaceutical Inc
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▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Private Equity Placement
April 1, 1999
Mr. ▇▇▇▇▇ ▇▇▇▇
Per our recent discussions, we are pleased to submit this letter with respect to
a proposed public or private offering by Nova Pharmaceutical Inc., a Nevada
corporation of such number of shares of the Company's common stock ("shares")
which when sold would result in gross proceeds, to the Company, of a minimum of
$2.0 million and a maximum of $4.0 million.
The offering price of the shares will ultimately depend upon, among other
things, the Company's financial condition, market conditions, liquidity for the
Company's common stock, the market price of the Company's common stock at the
time of the offering, and other factors relating to the business of the Company
including its revenues, net income, business growth, business prospects and
attainment of milestones. The offering price of the shares will be priced
relative to the representative bid price of the Company's common stock
immediately prior to the Effective Date or from the moving average of the
closing representative bid prices of the Company's common stock for a period not
to exceed 60 business days immediately preceding the Effective Date.
It is understood that this letter is merely a statement of intent, while the
parties hereto agree in principle to the contents hereof and to proceed promptly
and in good faith to negotiate the terms of the Offering contemplated herein,
any legal obligations between the parties hereto shall be only pursuant to the
terms and conditions set forth in an executed underwriting agreement (the
"Underwriting Agreement") in connection with the Offering.
If the foregoing is acceptable to you, please sign and return two copies of this
letter to my office, at the address shown below. Upon receipt of the executed
copies a representative of EBI Securities Corporation will begin work on the due
diligence investigation and preparation of the appropriate documents and
materials prepared by the Company and its counsel in connection with the
proposed offering. Thank you.
Sincerely,
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
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