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EXHIBIT 1.1
CUIDAO HOLDING CORP.
A Florida Corporation
260,000 Units Consisting of 260,000 Shares of Common
Stock and Warrants to Purchase 260,000
Shares of Common Stock
PLACEMENT AGENT AGREEMENT
Westlake Village,California
, 1998
West America Securities Corp.
0000 X. Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
The undersigned, Cuidao Holding Corp., a Florida corporation (the
"Company"), hereby confirms its agreement with West America Securities Corp.
(the "Placement Agent") as follows:
SECTION 1. Description of Units. The Company is offering for sale an
aggregate of 260,000 units, each unit consisting of one share of the Company's
common stock, $.0001 par value ("Share") and one redeemable common stock
purchase warrant ("Warrant")(the aggregate of such 260,000 units being
hereinafter referred to as the "Units"). The offering of the Units is further
described in the Company's Registration Statement (File No. 33- )filed on Form
SB-2 with the United States Securities and Exchange Commission ("Commission").
The Placement Agent, as a licensed broker-dealer capable of participating in the
offering of the Units is invited to assist the Company in the offer and sale of
the Units by using its best efforts to solicit offers for the purchase of the
Units, and in this regard, the Placement Agent has agreed to act in such
capacity on the terms and conditions set forth in this Placement Agent Agreement
(the "Agreement").
SECTION 2. Representations and Warranties of the Company. In order to
induce the Placement Agent to enter into this Agreement, and to further the
offering of the Units, the Company hereby represents and warrants as follows:
(a) The Company has filed a Registration Statement (No. 33- ) on
Form SB-2 relating to the Units with the Commission pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), and the Registration Statement
was declared effective on ________________, 1998. As used in this Agreement, the
term "Registration Statement" means the Registration Statement,
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including the Prospectus, the exhibits and the financial statements, and all
amendments thereto, including any amendments after the effective date of the
Registration Statement. The term "Prospectus" means the prospectus filed as a
part of Part I of the Registration Statement, including all pre-effective and
post-effective amendments and supplements thereto.
(b) The Registration Statement and all other documents previously
filed or filed after the date hereof with the Commission conform and will
conform with all of the requirements of the Securities Act in all material
respects. Neither the Registration Statement, the Prospectus nor the material
filed or to be filed with the Commission contains nor will contain any untrue
statements of material fact nor are there or will there be any omissions of
material facts required to be stated therein or that are necessary to make the
statements therein not misleading, except that this warranty does not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by and with respect to the
Placement Agent, or any dealer through the Placement Agent, expressly for use in
the Registration Statement or Prospectus or any amendment or supplement thereto.
(c) The Company has obtained a CUSIP number for its common stock.
The materials previously filed or filed after the date hereof with any state do
not and will not contain any untrue statements of material fact nor are there or
will there be any omissions of material facts required to be stated therein or
that are necessary to make the statements therein not misleading.
(d) The Company has been legally incorporated and is now and
always during the period of the offering will be, a validly existing corporation
under the laws of the state of Florida, lawfully qualified to conduct the
business for which it was organized and which it proposes to conduct. The
Company will always during the period of the offering be qualified to conduct
business as a foreign corporation in each jurisdiction where the nature of its
business requires such qualification.
(e) The outstanding capital stock of the Company has been duly
and validly authorized, issued and is fully paid and non-assessable and conforms
to all statements made in the Registration Statement and Prospectus with respect
thereto. The Units, Shares, Warrants, shares underlying the Warrants (the
"Warrant Shares"), Placement Agent Unit Purchase Option (as defined in Section
4(e)(ii) hereof) and the shares of common stock underlying the Placement Agent
Unit Purchase Option (the "Placement Agent Option Shares") have been duly and
validly authorized and, when issued and delivered against payment as provided in
this Agreement, will be validly issued, fully paid and nonassessable. The Shares
and Warrant Shares, upon issuance, will not be subject to the preemptive rights
of any shareholders of the Company. The Warrants
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and Placement Agent Unit Purchase Option, when sold and delivered, will
constitute valid and binding obligations of the Company enforceable in
accordance with their terms. A sufficient number of shares of common stock have
been reserved for issuance upon exercise of the Warrants and Placement Agent
Unit Purchase Option. The Units, Shares, Warrant Shares, Placement Agent Unit
Purchase Option and the Placement Agent Option Shares will conform to all
statements in the Registration Statement and Prospectus. Upon delivery of the
payment for the Placement Agent Unit Purchase Option to be sold by the Company
as set forth in this Agreement, the Placement Agent and its designees will
receive good and marketable title thereto, free and clear of all liens,
encumbrances, charges and claims except those created by, through or under the
Placement Agent and except restrictions on transfer arising under federal and
state securities laws and the rules and regulations promulgated thereunder. The
Company will have on the Effective date (as hereinafter defined in subsection
(h) of this Section 2) of the Registration Statement and at the time of delivery
of such Placement Agent Unit Purchase Option full legal right and power and all
authorization and approval required by law to sell, transfer and deliver such
Placement Agent Unit Purchase Option in the manner provided thereunder.
(f) The Company has an authorized capitalization of 100,000,000
shares of Common Stock, $.0001 par value, and 10,000,000 shares of Preferred
Stock, $.0001 par value. If all of the Units are sold, the Shares will represent
at least 10% of the Company's shares of common stock outstanding after the
public offering. Common stock underlying outstanding options and warrants except
options issued pursuant to the Company's 1997 Incentive Stock Option Plan and
1997 Directors' Stock Option Plan described in subsection (g) of this Section 2
and except the Warrants and Placement Agent Unit Purchase Option will be deemed
to be outstanding for purposes of determining the number of shares of the
Company's common stock outstanding after the public offering. There are no
outstanding options, warrants or other rights to purchase securities of the
Company, however characterized, except as described in the Registration
Statement. There are no securities of the Company, however characterized, held
in its treasury. With respect to the sell, sale, offer to purchase or purchase
of any of its securities, the Company has not made any intentional or reckless
violations of the antifraud provisions of the federal securities laws, rules or
regulations promulgated thereunder or the laws, rules or regulations of any
jurisdiction wherein such securities transactions or solicitation occurred.
(g) The Board of Directors of the Company and the shareholders of
the Company have adopted a 1997 Incentive Stock Option Plan designed to qualify
under Section 422A of the Internal Revenue Code. The Board of Directors of the
Company and the shareholders of the Company have also adopted a 1997 Directors'
Stock Option Plan which is designed to attract and reward non-
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employee directors. The Incentive Stock Option Plan relates to 750,000 shares of
the Company's common stock. The 1997 Directors' Stock Option Plan relates to
250,000 shares of the Company's common stock.
(h) During the period of the offering of the Units and for one
year from the date the Commission declares the Registration Statement to be
effective (the "Effective Date"), the Company will not sell any equity or
long-term debt securities (except options issued pursuant to the Company's 1997
Incentive Stock Option Plan and 1997 Directors' Stock Option Plan, except any
shares issued upon the exercise of such options, except any shares issued upon
the exercise of any other options or warrants outstanding on the Effective Date
and except the Warrants and Placement Agent Unit Purchase Option) without the
Placement Agent's prior written consent, which will not be unreasonably
withheld.
(i) The Company has caused each of its officers, directors,
promoters and principal stockholders to enter into a Promotional Share Lock-In
Agreement in the form attached hereto as Exhibit "A". The Company has obtained
such an agreement from shareholders owning at least 1,750,000 shares of the
Company's outstanding common stock.
(j) The Company has caused each of its shareholders, other than
its officers, directors, promoters and principal stockholders, to enter into a
Lock-Up Agreement with the Placement Agent in the form attached hereto as
Exhibit "B". The Company has obtained such an agreement from shareholders owning
at least 441,200 shares of the Company's outstanding common stock.
(k) The audited financial statements, together with related
schedules and notes, included in the Registration Statement and Prospectus
present fairly the financial condition of the Company and are reported upon by
independent public accountants according to generally accepted accounting
principles and as required by the rules and regulations of the Commission.
(l) Except as disclosed in the Registration Statement and the
Prospectus, the Company does not have any contingent liabilities, obligations,
or claims nor has it received threats of claims or regulatory action. Further,
except as disclosed in the Registration Statement and the Prospectus, subsequent
to the date information is given in the Registration Statement and definitive
Prospectus, and prior to the close of the offering: (a) there shall not be any
material adverse change in the management or condition, financial or otherwise,
of the Company or in its business taken as a whole; (b) there shall not have
been any material transaction entered into by the Company other than
transactions in the ordinary course of business; (c) the Company shall not have
incurred any material obligations, contingent or otherwise, which are not
disclosed in the Registration Statement
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and the Prospectus; (d) there shall not have been nor will there be any change
in the capital or long-term debt (except current payments) of the Company; and
(e) the Company has not and will not have paid or declared any dividends or
other distributions on its common stock.
(m) The Company will have the legal right and authority to enter
into this Agreement upon its execution, to effect the proposed sale of the
Units, and to effect all other transactions contemplated by this Agreement.
(n) The Company knows of no person who rendered any services in
connection with the introduction of the Company to the Placement Agent. No
broker's or other finder's fees are due and payable by the Company and none will
be paid by it.
(o) The Company is eligible to use Form SB-2 for the offering of
the Units.
(p) The Company and its affiliates are not currently offering any
securities nor has the Company or its affiliates offered or sold any securities
except as required to be described in the Registration Statement.
(q) The Company will not file any amendment or supplement to the
Registration Statement, Prospectus, or exhibits if the Placement Agent and its
counsel have not been previously furnished a copy, or if the Placement Agent or
its counsel have objected in writing to the filing of the amendment or
supplement.
(r) The Company possesses adequate certificates or permits issued
by the appropriate federal, state or local regulatory authorities necessary to
conduct its business and to retain possession of its properties. The Company has
not received any notice of any proceeding relating to the revocation or
modification of any of these certificates or permits.
(s) The Company has filed all tax returns required to be filed
and is not in default in the payment of any taxes which have become due pursuant
to any law or any assessment.
(t) The Company has marketable title to all properties including
intellectual properties described in the Registration Statement as owned by it.
The properties are free and clear of all liens, charges, encumbrances or
restrictions, however characterized, except as described in the Registration
Statement. All of the contracts, leases, subleases, patents, copyrights,
licenses, and agreements, however characterized, under which the Company holds
its properties as described in the Registration Statement are in full force and
effect. The Company is not in default under any of the material terms or
provisions of any contracts, leases, subleases, patents, copyrights, licenses or
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agreements under which the Company holds its properties. There are no known
claims against the Company concerning the Company's rights under the leases,
subleases, patents, copyrights, licenses and agreements and concerning its right
to continued possession of its properties.
(u) All original documents and other information relating to the
Company's affairs has and will continue to be made available upon request to the
Placement Agent and to the Placements Agent's counsel at the Placement Agent's
office or at the office of the Placement Agent's counsel and copies of any such
documents will be furnished upon request to the Placement Agent and to the
Placement Agent's counsel. Included within the documents made available have
been at least the Articles of Incorporation and any amendments thereto, minutes
of all of the meetings of the Incorporators, Directors and Shareholders of the
Company, all financial statements and copies of all contracts, leases, patents,
copyrights, licenses or agreements to which the Company is a party or in which
the Company has an interest.
(v) The Company has appointed Florida Atlantic Stock Transfer,
Tamarac, Florida, as the Company's transfer agent and warrant agent. The Company
will continue to retain a transfer agent for so long as the Company is subject
to the reporting requirements under Section 12(g) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company
will make arrangements to have available at the office of the transfer agent
sufficient quantities of the Company's common stock certificates and Warrant
certificates as may be needed for the quick and efficient transfer of the Units.
(w) The Company will use the proceeds from the sale of the Units
as set forth in the Registration Statement and Prospectus.
(x) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement which have not been described or filed as required.
(y) The Company is not in material default under any of the
contracts, leases, licenses or agreements to which it is a party. The proposed
offering of the Units will not cause the Company to become in material default
under any of its contracts, leases, subleases, patents, copyrights, licenses or
agreements nor will it create a conflict between the Company and any of the
contracting parties to the contracts, leases and other agreements. Further, the
Company is not in material default in the performance of any obligation,
agreement or condition contained in any debenture, note or other evidence of
indebtedness or any indenture or loan agreement of the Company. The execution
and delivery of this Agreement and the consummation of the transactions herein
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contemplated and compliance with the terms of this Agreement will not conflict
with or result in a breach of any of the material terms, conditions or
provisions of, or constitute a material default under, the Articles of
Incorporation or Bylaws of the Company, as amended, or any note, indenture,
mortgage, deed of trust, or other agreement or instrument to which the Company
is a party or by which it or any of its property is bound, or any existing law,
order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality, agency or body, arbitration, tribunal or court,
domestic or foreign, having jurisdiction over the Company or its property. The
consent, approval, authorization, or order of any court or governmental
instrumentality, agency or body is not required for the consummation of the
transactions herein contemplated except such as may be required under the Act,
under the Blue Sky or securities laws of any state or jurisdiction, or the rules
of the NASD (as defined in Section 3(c) hereof).
Each contract to which the Company is a party has been duly and
validly executed, is in full force and effect in all material respects in
accordance with its respective terms, and no contracts have been assigned by the
Company, except as disclosed in the Registration Statement and Prospectus by the
Company. The Company knows of no present situation, condition or fact which
would prevent compliance with the terms of such contracts. Except for amendments
or modifications of contracts in the ordinary course of business and except as
disclosed in the Registration Statement and Prospectus, the Company has no
intention of exercising any right which would cancel any of its obligations
under any contract, and has no knowledge that any other party to any contract,
in which the Company has an interest, has any intention not to render full
performance under such contract.
(z) Except as disclosed in the Registration Statement and
Prospectus, there is, and prior to the close of the offering of the Units to the
public there will be, no action, suit or proceeding before any court or
governmental agency, authority or body pending or to the knowledge of the
Company threatened which might result in judgments against the Company not
adequately covered by insurance or which collectively might result in any
material adverse change in the condition (financial or otherwise), the business
or the prospects of the Company, or would materially affect the properties or
assets of the Company.
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SECTION 3. Representations and Warranties of the Placement Agent.
The Placement Agent hereby represents and warrants to the Company and agrees as
follows:
(a) This Agreement has been duly and validly authorized, executed
and delivered by the Placement Agent and is a valid, binding and enforceable
agreement of the Placement Agent.
(b) Neither the execution and delivery of this Agreement, and the
performance and consummation of the transactions contemplated in this Agreement
will result in any breach of any of the terms and conditions of, or constitute a
default under, the Placement Agent's Articles of Incorporation or Bylaws, or any
indenture, agreement, or instrument by which the Placement Agent is a party or
violate any order directed to the Placement Agent of any court or any federal or
state regulatory body or administrative agency having jurisdiction over the
Placement Agent or its affiliates.
(c) The Placement Agent represents that it is a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD") and
registered as a broker-dealer with the Commission, or that it is a foreign
broker-dealer not eligible for membership under Section 1 of the Bylaws of the
NASD who agrees to make no sales within the United States, its territories or
possessions or to persons who are nationals thereof or residents therein. The
Placement Agent's attention is called to the following: (a) Article III, Section
1 of the Rules of Fair Practice of the NASD and the interpretations of said
Section promulgated by the Board of Governors of the NASD; (b) Section 10(b) of
the Exchange Act and Rule 10b-9 of the general rules and regulations promulgated
under the Exchange Act; (c) Section 15 of the Exchange Act and Rule 15c2-4 of
the general rules and regulations promulgated under the Exchange Act; and (d)
Rule 15c2-8 of the general rules and regulations promulgated under the Exchange
Act and Securities Act Release No. 4968 requiring the distribution of a
Preliminary Prospects to all persons reasonably expected to be purchasers of
Units from the Placement Agent at least 48 hours prior to the time it expects to
mail confirmations of purchase. The Placement Agent, if a member of the NASD, by
signing this Agreement, acknowledges that its is familiar with the cited law,
rules and releases and agrees that it will not directly and/or indirectly
violate any provisions of applicable law in connection with its participation in
the distribution of the Units.
(d) The Placement Agent will not, until advised by the Company in
writing or by wire that the offering of Units has been distributed and closed,
bid for or purchase Shares or Warrants in the open market or otherwise make a
market in the Shares or Warrants or otherwise attempt to induce others to
purchase Shares or Warrants in the open market.
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(e) Neither the Placement Agent nor its directors or officers (or
any other person serving in a similar capacity):
(1) Has been convicted within ten years prior hereto of
any crime or offense involving the purchase or sale, or any conduct or practice
in connection with the purchase or sale, of any security; involving the making
of a false statement with the Commission; or has been convicted or charged with
a crime or offense arising out of the Placement Agent engaging in the business
of an underwriter, broker, dealer, municipal securities dealer, or investment
adviser.
(2) Is subject to any order, judgment, or decree of any
court of competent jurisdiction temporarily or permanently enjoining or
restraining such person from engaging in or continuing any conduct or practice
in connection with the purchase or sale of any security; involving the making of
a false statement with the Commission; or has been convicted or charged with a
crime or offense arising out of such person engaging in the business of an
underwriter, broker, dealer, municipal securities dealer, or investment adviser.
(3) Is subject to an order of the Commission entered
pursuant to Section 15(b), 15B(a) or 15B(c) of the Exchange Act; has been found
by the Commission to be a cause of any such order which is still in effect; or
is subject to an order of the Commission entered pursuant to Section 203(e) or
(f) of the Investment Advisers Act of 1940.
(4) Has been and is suspended or expelled from membership
in a national or regional securities dealers association or a national
securities exchange or a Canadian securities exchange for conduct inconsistent
with just and equitable principles of trade.
(5) Is subject to a United States Postal Service fraud
order or is subject to any restraining order or preliminary injunction entered
under Section 3007 of Title 30, United States Code, with respect to any conduct
alleged to constitute postal fraud.
(6) Has been an underwriter or named as an underwriter of
any securities covered by any registration statement which is the subject of any
proceeding or examination under Section 8 of the Securities Act, or is the
subject of any refusal order or stop order entered thereunder within five (5)
years prior to the date hereof.
(f) To the Placement Agent's knowledge, no action or proceeding
is pending against it or any of its officers or directors concerning its
activities as a broker or dealer that would affect the Company's offering of the
Units.
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(g) The Placement Agent will offer the Units only in those states
and in the quantities that are identified in the Blue Sky Memorandum from the
Company's counsel to the Placement Agent that the offering of the Units has been
qualified for sale under applicable state statutes and regulations.
(h) The Placement Agent, in connection with the offer and sale of
the Units, and in the performance of its duties and obligations under this
Agreement, agrees to use its best efforts to comply with all applicable federal
laws, the laws of the states or other jurisdictions in which the Units are
offered and sold, and the Rules and Regulations of the NASD.
(i) The Placement Agent will not make any offer or sale of Units
unless the offer or sale is made in compliance with the Securities Act, the
Rules of Fair Practice of the NASD, and the applicable securities or Blue Sky
laws of jurisdictions in which offers or sales are made, and the rules and
regulations thereunder. The Placement Agent agrees that it will not offer or
sell Units to any subscriber unless it has reasonable grounds to believe that
the investment in Units is suitable for the subscriber.
(j) The Placement Agent will, reasonably promptly after the
closing of the offering of the Units, supply the Company with all information as
the Company may reasonably request to be supplied to the securities commission
of such states in which the Units have been qualified for sale.
All of the above representations and warranties shall survive the
performance or termination of this Agreement.
SECTION 4. Retention of Placement Agent. In reliance upon the
representations and warranties set forth herein, and subject to the terms and
conditions of this Agreement:
(a) The Placement Agent xxxxxx agrees to solicit, as an
independent contractor and not as the Company's agent, persons who will acquire
the Units. The Placement Agent will be promptly advised when the Registration
Statement becomes effective. The Placement Agent, in selling Units pursuant
hereto, agrees that it will comply with the applicable requirements of the
Securities Act and the Exchange Act and any applicable rules and regulations
issued under the Securities Act and/or the Exchange Act. Neither the Placement
Agent nor any other person is or has been authorized to give any information or
to make any representations other than those contained in the Prospectus in
connection with the sale of the Units, and the Placement Agent hereby agrees not
to give any such information or make any such representations.
(b) The Company shall have full authority to take such action as
it may deem advisable in respect of all matters pertaining to the offering or
arising thereunder. The Company
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shall be under no liability to the Placement Agent, except such as may be
incurred under the Securities Act and the rules and regulations thereunder,
except for lack of good faith and except for obligations expressly assumed by
the Company in this Agreement, and no obligation on the Company's part shall be
implied or inferred herefrom.
(c) The Placement Agent will be informed by the Company as to the
states in which the Company has been advised by counsel that the Units have been
qualified for sale or are exempt under the respective securities or blue sky
laws of such states, but the Company has not assumed and will not assume any
obligation or responsibility as to the right of the Placement Agent or any other
participating broker-dealer to sell Units in any states.
(d) An escrow account shall be established for the Company's
offering at __________ Bank, __________, California (the "Escrow Agent"). The
Placement Agent shall deliver all checks received from purchasers of the Units
solicited by it to the Escrow Agent by twelve o'clock noon of the next business
day after the date of receipt, and all checks should be made payable to " Bank,
as Escrow Agent for Cuidao Holding Corp."
(e) Subject to the sale of 95,000 of the Units to be offered by
the Company, the Company agrees to:
(i) pay a cash commission equal to ten percent (10%) of
the purchase price of all Units sold by the Placement Agent. In the event that a
sale of a Unit for which the Placement Agent has solicited a purchaser shall not
occur, no payment with respect to such Unit shall be paid to the Placement
Agent. Payment of commissions due the Placement Agent will be made promptly
after the release of the funds which have been deposited in the escrow account;
and
(ii) simultaneously with the payment of the cash
commission set forth in subsection (i) hereinabove, sell, at a price of $260,
and issue and deliver to the Placement Agent or its designees, a Placement Agent
Unit Purchase Option to purchase up to 26,000 Units. Such Placement Agent Unit
Purchase Option shall be in the form and substance of the Placement Agent Unit
Purchase Option attached hereto as Exhibit "C" and shall represent the right to
purchase up to an aggregate of 26,000 Units for the four-year period commencing
on the first and ending on the fifth anniversary of the effective date of the
Registration Statement, at a price of $7.00 per Unit. The Placement Agent Unit
Purchase Option shall not be sold, transferred, assigned or hypothecated for a
period of twelve (12) months from the effective date of the Registration
Statement except to partners or officers of the Placement Agent.
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SECTION 5. Expenses.
(a) Subject to the sale of all of the Units offered by the
Company, the Company shall reimburse the Placement Agent for its expenses on a
nonaccountable basis in an amount equal to two and one-half percent (2.5%) of
the aggregate gross dollar amount of Units sold by the Placement Agent. Subject
to the provisions of this Section, the nonaccountable expense allowance shall be
due on the release of the funds in the escrow account to the Company.
(b) Except as stated elsewhere in this Agreement, the Placement
Agent agrees that out of its nonaccountable expense allowance, it will pay all
costs incurred or to be incurred by it or its personnel in connection with the
offering of the Units, except those to be paid by the Company as described in
Section 6 hereof.
SECTION 6. Payment of Expenses and Fees. The Company agrees that
it will pay the following fees and expenses:
(a) All fees and expenses of its legal counsel who will be
engaged to prepare certain information, documents and papers for filing with the
Commission, and with state or local securities authorities;
(b) All fees and expenses of its accountants incurred in
connection with the offering of the Units and preparation of all documents and
filings made as part of the offering;
(c) All costs in issuing and delivering the Units;
(d) All costs of printing and delivering to the Placement Agent
as many copies of the Registration Statement and amendments thereto, Preliminary
Prospectuses and definitive Prospectuses as reasonably requested by the
Placement Agent;
(e) All of the Company's mailing, telephone, travel, clerical and
other office costs incurred or to be incurred in connection with the offering of
the Units;
(f) All fees and costs which may be imposed by the various state
or local securities authorities and the NASD for review of the offering of the
Units; and
(g) All other expenses incurred by the Company in performance of
its obligations under this Agreement.
SECTION 7. Company Indemnification. The Company agrees to
indemnify, defend and hold the Placement Agent harmless against any losses,
claims, damages or liabilities, joint or several:
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(a) To which the Placement Agent may become subject under
applicable law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, Prospectus, or any amendment or supplement thereto or in any sales
literature, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; or
(b) To which the Placement Agent may become subject due to the
misrepresentation by the Company or its agents (other than the Placement Agent
or any other participating broker-dealer) of material facts in connection with
the sale of the Units, unless the misrepresentation of such material facts was
the direct result of misleading information provided to the Company or its
agents by the Placement Agent; or
(c) To which the Placement Agent may become subject as a result
of any breach by the Company of the representations and warranties contained in
this Agreement.
The Company will reimburse the Placement Agent for any legal or
other expenses reasonably incurred in connection with investigating or defending
any such loss, claim, damage or liability (or actions in respect thereof);
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, Prospectus or such amendment or
supplement or in any sales literature, in reliance upon and in conformity with
written information furnished to the Company by the Placement Agent specifically
for use in the preparation thereof. This indemnity agreement shall be in
addition to any liabilities which the Company may otherwise have in connection
with this offering.
The foregoing indemnity agreement shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls the Placement Agent.
SECTION 8. Placement Agent Indemnification. The Placement Agent agrees
to indemnify, defend and hold the Company harmless against any losses, claims,
damages or liabilities, joint or several to which the Company may become subject
under applicable law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, Prospectus, or any amendment or supplement thereto or in any sales
literature, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
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necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, Prospectus, or any amendment or supplement thereto or in any sales
literature, in reliance upon and in conformity with written information
furnished to the Company by the Placement Agent specifically for use in the
preparation thereof; and will reimburse the Company for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such loss, claim, damage or liability (or actions in respect thereof). This
indemnity agreement shall be in addition to any liabilities which the Company
may otherwise have in connection with this offering.
The foregoing indemnity agreement shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls the Company.
SECTION 9. Indemnification Procedures: Promptly after receipt by
an indemnified party of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under Section 7 or Section 8 of this Agreement, notify the
indemnifying party in writing of the commencement thereof; but the omission to
so notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such Sections. In case
any such action shall be brought against such indemnified party, it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party, similarly notified, assume the defense
thereof, with counsel satisfactory to such indemnifying and indemnified parties.
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (a) the
employment thereof has been specifically authorized by the indemnifying party in
writing, or (b) the indemnifying party has failed to assume the defense and
employ counsel or (c) the named parties to any such action (including any
impleaded parties) include both such indemnified party and the indemnifying
party, and such indemnified party shall have been advised by such counsel that
representation of such indemnified party and the indemnifying party by the same
counsel would be inappropriate under applicable standards of professional
conduct due to actual or potential differing interests between them, in which
case the indemnifying party shall not have the right to assume the defense of
such action on behalf of such indemnified party; provided, however, that the
indemnifying party shall, in connection with any one such action or separate or
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of
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only one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in any settlement of any such action
effected without the written consent of the indemnifying party, but if settled
with such written consent, or if there be a final judgment or decree for the
plaintiff in any such action by a court of competent jurisdiction and the time
to appeal shall have expired or the last appeal shall have been denied, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
SECTION 10. Termination. This Agreement may be terminated by
either party hereunder at any time upon five days' written notice to the other
party. The Placement Agent's participation in the offer and sale of the Units
will be governed by the conditions herein set forth until this Agreement is
terminated. If this Agreement is not terminated sooner as provided in this
Section, then this Agreement will terminate when the offering is completed.
SECTION 11. Notices. Except as otherwise expressly provided in
this Agreement:
(a) Whenever notice is required by the provisions of this
Agreement to be given to the Company, such notice shall be in writing addressed
to the Company as follows:
Cuidao Holding Corp.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xx. Lauderdale, Florida 33312-6900
Attention: Mr. X. Xxxxxxx Xxxxxx, President
With a copy to:
Xxxx X. Xxxxxx, Esq.
0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
(b) Whenever notice is required by the provisions of this
Agreement to be given to the Placement Agent, such notice shall be given in
writing addressed to the Placement Agent as follows:
West America Securities Corp.
0000 X. Xxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxx, President
With a copy to:
Xxxxx X. Xxxxx, Esq.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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SECTION 12. Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the Placement Agent and the Company and the
Company's respective successors. Nothing expressed in this Agreement is intended
to give any person other than the persons mentioned in the preceding sentence
any legal or equitable right, remedy or warranties included in this Agreement.
SECTION 13. Miscellaneous Provisions.
(a) Nothing contained herein shall constitute the relationship
between the Placement Agent and the Company as an association, partnership,
unincorporated business or other separate entity.
(b) This Agreement shall be construed according to the laws of
the State of California.
(c) The representations and warranties made in this Agreement
shall survive the termination of this Agreement and shall continue in full force
and effect regardless of any investigation made by the party relying upon any
such representation or warranty.
(d) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Please confirm your agreement to solicit persons to acquire Units on the
foregoing terms and conditions by signing and returning the form enclosed
herewith.
Very truly yours,
CUIDAO HOLDING CORP.
a Florida corporation
By
---------------------------------
X. Xxxxxxx Xxxxxx, President
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Cuidao Holding Corp.
0000 Xxxx Xxxxxxx Xxxx
Xxxxx 000
Xx. Lauderdale, Florida 33312-6900
Gentlemen:
The undersigned confirms its agreement to act as Placement Agent
as referred to in the foregoing Placement Agent Agreement, subject to the terms
and conditions of such agreement. The undersigned confirms that it is a member
in good standing of the National Association of Securities Dealers, Inc.
WEST AMERICA SECURITIES CORP.
By
----------------------------------
(Signature)
-----------------------------------
(Print Name and Title of
Authorized Representative)
-----------------------------------
(NASD Firm Number)
Dated:_____________________ , 1998 0000 X. Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Telephone (000) 000-0000
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NO SALE, OFFER TO SELL OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE OR ANY INTEREST THEREIN SHALL BE MADE UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH
TRANSACTION IS THEN IN EFFECT, OR THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO IT THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THAT
ACT.
This Unit Purchase Option will be void after 5:00 p.m. New York time on
______________, _______ (i.e. five years from the effective date of the
Registration Statement).
CUIDAO HOLDING CORP.
PLACEMENT AGENT UNIT PURCHASE OPTION
THIS CERTIFIES THAT WEST AMERICA SECURITIES CORP. (herein
sometimes called "West America") is entitled to purchase from CUIDAO HOLDING
CORP., a Florida corporation (hereinafter called the "Company"), at the price
and during the period hereinafter specified, 26,000 Units ("Units"), each Unit
consisting of one (1) share of the Company's common stock, $.0001 par value
("Common Stock"), and one (1) Common Stock Purchase Warrant (the "Warrant").
Each Warrant entitles the holder thereof to purchase one share of the Company's
Common Stock at a price of $8.00 per share of Common Stock for a period of three
years after the effective date of the Registration Statement. The Units have
been registered under a Registration Statement on Form SB-2 (File No. 33- ),
declared effective by the Securities and Exchange Commission on ___________,
19__ (the "Registration Statement"). The option (the "Option") herein granted
(the document granting the Option and the rights represented thereby are
sometimes hereinafter
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referred to as "this Option") to purchase 26,000 Units was originally issued at
an aggregate price of $260 pursuant to a Placement Agent Agreement between the
Company and West America in connection with a public offering of up to 260,000
Units (the "Offering") through West America. Except as otherwise specially
provided herein the Common Stock and the Warrants issued pursuant to the option
herein granted shall bear the same terms and conditions as described under the
caption "Description of Securities" in the Registration Statement. The Warrants
shall have the same terms as the Warrants contained in the Units sold to the
public. In the event the number of shares of Common Stock into which the
Warrants may be exercised is changed, or there are any other adjustments in the
terms or conditions of the Warrants included in the Units sold pursuant to the
Registration Statement, the terms and conditions of the Warrants issued pursuant
to this Option shall likewise be adjusted.
1. During the period from ____________, 19__ to ___________,
200__, inclusive, West America shall have the option to purchase the Units
hereunder at a price per Unit of $7.00 (equal to approximately 120% of the
offering price of the Units to the public (the "Exercise Price")).
2. The rights represented by this Option may be exercised at any
time within the period above specified, in whole or in part, by (i) the
surrender of this Option (with the purchase form at the end hereof properly
executed) at the principal
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executive office of the Company, located at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000,
Xx. Lauderdale, Florida 33312-6900 (or such other office or agency of the
Company as it may designate by notice in writing to West America at the address
of West America appearing on the books of the Company) and (ii) payment to the
Company of the Exercise Price for the number of Units specified in the
above-mentioned purchase form together with applicable stock transfer taxes, if
any. This Option shall be deemed to have been exercised, in whole or in part to
the extent specified, immediately prior to the close of business on the date
this Option is surrendered and payment is made in accordance with the foregoing
provisions of this paragraph 2, and the person or persons in whose name or names
the certificates for shares of Common Stock and the Warrants shall be issuable
upon such exercise shall become the holder or holders of record of such Common
Stock and Warrants at that time and date. The Common Stock and Warrants and the
certificates for the Common Stock and Warrants so purchased shall be delivered
to West America within a reasonable time, not exceeding ten (10) days, after the
rights represented by this Option shall have been so exercised.
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3. This Option shall not be transferred, sold, assigned or
hypothecated for a period of one year commencing ___________, 19__, except that
it may be assigned during such period, in whole or in part to an officer of West
America or to a related person of any broker/dealer participating in the
Offering. Any such assignment shall be effected by West America (i) executing a
form of assignment at the end hereof and (ii) surrendering this Option for
cancellation at the office or agency of the Company referred to in paragraph 2
hereof, accompanied by a certificate (signed by an officer of West America),
stating that each transferee is a permitted transferee under this paragraph 3
hereof; whereupon the Company shall issue, in the name or names specified by
West America (including West America) a new Option or Options of like tenor and
representing in the aggregate rights to purchase the same number of Units as are
purchasable hereunder.
4. The Company covenants and agrees that all shares of Common
Stock which are sold as part of the Units purchased hereunder and the Common
Stock which may be issued upon exercise of the Warrants will, upon issuance, be
duly and validly issued, fully paid and nonassessable and no personal liability
will attach to the holder thereof. The Company further covenants and agrees that
during the periods within which this Option may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of its
Common Stock to provide for the exercise of this Option and that it will have
authorized and reserved a
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sufficient number of shares of Common Stock for issuance upon exercise of the
Warrants included in the Units.
5. This Option shall not entitle West America or any other holder
thereof to any voting rights or other rights as a stockholder of the Company.
6. In the event that the Warrants or the outstanding shares of
Common Stock of the Company are at any time increased or decreased or changed
into or exchanged for a different number or kind of share or other security of
the Company or of another corporation through reorganization, merger,
consolidation, liquidation, recapitalization, or, in the case of Common Stock,
stock split, combination of shares or stock dividends payable with respect to
such Common Stock, appropriate adjustments in the number and kind of such
securities then subject to this Option shall be made effective as of the date of
such occurrence so that the position of the holder of this Option, upon
exercise, will be the same as it would have been had he owned immediately prior
to the occurrence of such events the Warrants and Common Stock subject to this
Option. Such adjustment shall be made successively whenever any event listed
above shall occur.
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IN WITNESS WHEREOF, Cuidao Holding Corp. has caused this
Placement Agent Unit Purchase Option to be signed by its duly authorized
officers under its corporate seal, and this Placement Agent Unit Purchase Option
to be dated ___________, 19___.
CUIDAO HOLDING CORP.
By:
--------------------------------
, President
(Corporate Seal)
Attest:
----------------------------
, Secretary
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PURCHASE FORM
Dated: , 199
The undersigned hereby irrevocably elects to exercise the within
Placement Agent Unit Purchase Option to the extent of purchasing _______ Units
and hereby makes payment of $_______ in payment of the actual exercise price
thereof.
-----------------------------
INSTRUCTIONS FOR REGISTRATION OF
COMMON STOCK AND WARRANTS
COMPRISING UNITS
Name____________________________________________________________________________
(please typewrite or print in block letters)
Address_________________________________________________________________________
Signature_______________________________________________________________________
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________ hereby
sells, assigns and transfers unto
Name____________________________________________________________________________
(please typewrite or print in block letters)
Address_________________________________________________________________________
the right to purchase Units represented by this Placement Agent Unit Purchase
Option as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________________________________________________
attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.
Signature__________________________
Dated:___________________, 199_.
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