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XXXXXXX XXXXX & CO., INC.
Member NASD, SIPC
000 XXXXXXXX XXXX
XXXXX 000
XXXXXXXXXX, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
September 15, 1998
Xxxxxxxx Xxxxxx, M.D.
Infectech, Inc.
00 Xxxxxxxxx Xxxxxx, Xxxxx 0
Xxxxxx, XX 00000
Dear Xx. Xxxxxx:
This will confirm the understanding and agreement (the "Agreement")
between Xxxxxxx Xxxxx & Co., Inc. ("MWC") and Infectech, Inc. (The
"Company") as follows:
1. Scope of Engagement
The Company hereby engages MWC as its advisor in assisting the Company
to establish an identity in the investment community and to raise funds
for corporate purposes. Specifically, the Company has requested that
MWC:
(a) Act on behalf of the Company in obtaining the services of a
qualified market maker to commence making a market for the Company's
common stock in the OTC Bulletin Board ("OTCBB").
(b) Assist, if requested in preparation and review of the Company's
documentation prepared in connection with Rule 15c2-11 promulgated
under the Securities Exchange Act of 1934, as amended.
(c) Assist the Company in selecting a financial public relations firm
to disseminate information about the Company to news media and the
investment community.
(d) Review proposed additions to the Company's scientific advisory
board.
(e) Act as the Company's exclusive agent in the private placement of
securities of the Company (the "Placement Transaction") to financial
investors, strategic corporate investors, individual investors and/or
others that are directly solicited by MWC (collectively, the "MWC
Investors"), as more fully described in Section 8 hereof, in the form
of common stock, convertible preferred stock, convertible debt
securities or any equity-linked securities, including high-yield notes
issued in connection with the issuance by the Company of equity-linked
securities (collectively, the "Securities").
2. Term of Engagement
The term of MWC's exclusive engagement as provided in Section 1 hereof
shall be for a period that ends six months from the date hereof, unless
extended by mutual agreement of the parties, provided, that if the
Company's stock is not first listed for trading on the OTCBB on or
prior to November 15, 1998, then the Company may terminate this
Agreement at any time on or after that date.
3. Offering Process
MWC hereby accepts the engagement and, in connection with items (a)
through (d) of paragraph (1), above, agrees to perform such actions as
shall be reasonably requested by the company. With respect to item (e)
of the paragraph (1) above, MWC agrees to:
(a) obtain and review sufficient information about the Company
to enable MWC to introduce the Company to MWC Investors,
(b) use its best efforts to privately place the Securities,
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(c) if appropriate, prepare, with the assistance and approval
of the Company, and disseminate any other communications to be used in
placing the Securities, whether in the form of a letter, circular,
notice or otherwise; and
(d) assist with negotiation of the final terms and conditions
for the sale of the Securities to the MWC Investors.
4. Company's Responsibilities, Representations and Warranties
In connection with MWC's engagement, the Company will furnish MWC on a
confidential basis with any information concerning the Company that MWC
reasonably deems appropriate and will provide MWC with access to the
Company's officers, directors, accountants, counsel and other advisors.
The Company represents and warrants to MWC that, to the best of the
Company's knowledge, all such information concerning the Company is and
will be true and accurate in all material respects and does not and
will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein
not misleading in light of the circumstances under which such
statements are made. The Company acknowledges and agrees that MWC will
be using and relying upon such information supplied by the Company and
its officers, agents and others and any other publicly available
information concerning the Company without any independent
investigation or verification thereof or independent appraisal by MWC
of the Company or its business or assets. The company can accept or
reject any investment at its sole discretion.
5. Compensation
As compensation for the services to be rendered by MWC hereunder, the
Company shall pay MWC as follows:
(a) Upon execution of this Agreement, the Company shall pay to
MWC $5,000 in cash, by wire transfer of immediately-available funds.
Thereafter, the Company shall pay to MWC $5,000 on the 15th day of
October, November and December 1998 and January 1999.
(b) Upon commencement of display of real-time quotes on the
OTCBB, the Company shall issue to MWC warrants for a nominal price to
purchase 60,000 shares of common stock of the Company, exercisable for
a period of five years from the date of commencement of such trading,
at an exercise price per share equal to the bid price initially shown
on the OTCBB for such securities. The terms of the warrants shall be
set forth in a warrant agreement in form and substance reasonably
satisfactory to MWC and the Company, which shall contain terms
reasonably equivalent to those applicable to the Securities issued in
the Placement Transaction, including, without limitation, anti-dilution
provisions, piggy-back registration rights and cashless exercise
provisions.
(c) At any closing of any Placement Transaction, a cash fee
equal to 6% of the aggregate consideration paid for the Securities by
MWC Investors, and
(d) At any closing of any Placement Transaction, the Company
shall issue to MWC warrants for a nominal price to purchase such number
of shares of common stock of the Company equal to 6% of the aggregate
number of fully diluted and/or converted shares of common stock as are
purchased or ultimately received by MWC Investors, exercisable for a
period of five years from the date of such closing, at an exercise
price per share equal to that paid b the MWC Investors in the Placement
Transaction. The terms of the warrants shall be set forth in a warrant
agreement, in form and substance reasonably satisfactory to MWC and the
Company, which shall contain terms reasonably equivalent to those
applicable to the Securities issued in the Placement Transaction,
including, without limitation, anti-dilution provisions, piggy-back
registration rights and cashless exercise provisions.
6. Reimbursable Expenses
The Company shall reimburse MWC for its out-of-pocket and incidental
expenses incurred during the term of its engagement hereunder including
fees and expenses of its legal counsel and those of any advisor(s)
retained by MWC. MWC shall xxxx the company monthly for expenses, and
the Company shall reimburse MWC for such expenses within 30 days of
receiving a xxxx.
