1
September 30, 1993
Xxxxxx X. Low,
President
Sunrise Financial Group, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Investor Relations Retainer Agreement
Gentlemen:
As we discussed, DUSA Pharmaceuticals, Inc. (the "Company") is interested
in retaining Sunrise Financial Group, Inc. ("Sunrise") as its consultant for
financial public relations.
Services
The services Sunrise will provide include the following: preparing a fact
sheet on the Company at the request of and subject to the approval of the
Company (for which the Company will pay for design, printing, postage, list
rental, etc. US$9000 in advance, as well as approve the artwork, content, and
layout); assistance to the Company in planning and supervision of such financial
communication activities as the annual report, quarterly reports and other
financial presentations (except a slide show for which a separate proposal shall
be made); performance of public relations and corporate communications projects
as are mutually agreed on; planning meetings with institutional investors,
research analysts and retail brokers; preparing and disseminating press
releases; updating institutional investors, research analysts, and retail
brokers regularly on new developments concerning the Company; handling all
inquires about the Company; maintaining a mailing list of all those interested
in Company literature; distributing business reply cards and contacting those
brokers who return them to ascertain their interest in meeting management of the
Company; seeking additional market makers for Company securities; and handling
medial relations. Sunrise shall provide a quarterly report to the Company
outlining its progress and plans to further deliver the foregoing services.
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As compensation for Sunrise's services, the Company will pay Sunrise the
following fees:
1. A monthly consulting fee of US$5,000.00 payable upon execution of
this engagement letter and before the first day of each month
thereafter; and
2. Subject to applicable securities regulatory requirements, including
the consent of the Toronto Stock Exchange ("TSE"), the Company will
issue, as soon as practicable after signing this letter, to Sunrise
or its principal Xxxxxx Low a warrant to purchase up to 50,000
shares of the authorized stock of the Company at US$6.00 per share.
The warrant vests immediately and is non-cancellable. The warrant
shall be exercisable for five years from issuance.
Warrant
The Company understands that Deprenyl Research Limited has undertaken to
issue to Sunrise a warrant to purchase 50,000 shares of the Company from its
holdings. Unless otherwise specified, references hereinafter to the "warrant"
shall be deemed to include the warrant issued by Deprenyl Research Limited to
Sunrise. During the term of the warrant and upon written demand from Sunrise,
the Company shall, on one occasion only, and provided that the warrant has been
exercised prior thereto, promptly register the common stock underlying the
warrant at Company expense (excluding Sunrise's counsel's fees and any
underwriting or selling commissions) on Form S-8, or comparable or successor
Registration Statement. The Company further agrees that during the term of the
warrant, if the Company intends to file a Registration Statement for the public
sale of its securities (other than a Form X-0, X-0 or comparable Registration
Statement) it will notify Sunrise and, if so requested, subject to the approval
of its underwriter will include in that Registration Statement the common stock
underlying the warrant, provided that the warrant has been exercised prior
thereto, at Company expense (excluding prorated SEC registration fees, Sunrise's
counsel's fees and any underwriting or selling commissions). For purposes of
exercise of the warrant issued by the Company prior to registration, Sunrise
shall be entitled to pay for the common shares by promissory note which note
shall be payable within 10 business days of completion of registration of such
common stock. The note shall be secured only against the common shares thereby
purchased. The number of shares and exercise price per share subject to the
warrant shall be adjusted in the case of any dividend, stock split or other
recapitalization or reorganization so that the warrant shall not be diminished
or diluted. The warrant is non-assignable.
The Company and its officers hereby commit (subject to fulfilling their
fiduciary obligations) to propose, recommend approval, and vote all shares under
their voting control in favor of a resolution covering the issuance of the
warrant at its next annual shareholders meeting. The company shall use its
reasonable best efforts to ensure that Deprenyl Research Limited also votes its
shares of the Company in favour of such resolution.
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If, by September 30, 1994, the warrant has not been issued and fully
approved, the Company shall compensate Sunrise in cash for what would have been
its fair market value on October 1, 1994, which shall be equal to the difference
between the average closing price of DUSA common shares for the month of
September 1994 and US$6.00 times the number of shares underlying the warrant or
part thereof not then issued and fully approved.
Sunrise understands that neither the warrant nor the underlying shares of
common stock are qualified for sale in Ontario or Canada or registered in the
United States or any of the states thereof. Sunrise undertakes not to offer or
sell such securities directly or indirectly in Ontario or Canada or anywhere in
the United States without registration under the Securities Act of 1933, as
amended, or exemption from such registration. For clarification, if such
underlying shares are registered or otherwise exempt from registration in the
United States, sales made by Sunrise through US based NASDAQ market makers will
not be deemed to be indirect sales in Ontario or Canada, provided that neither
Sunrise nor Xxxxxx Low has actual knowledge that the purchaser is a resident of
Ontario or Canada.
Expense Reimbursement
In addition to the fees payable hereunder, the Company shall reimburse
Sunrise, upon request from time to time, for all reasonable out-of-pocket
expenses incurred by Sunrise (including but not limited to printing and graphic
design, travel, postage, copying, secretarial, legal, and phone expenses) in
connection with Sunrise's services pursuant to this agreement. Individual
out-of-pocket expenses will not exceed US$250.00 without the consent of the
Company. The Company will prepay US$5,000 to Sunrise which Sunrise will draw
against for expenses. The Company will replenish this account monthly to the
US$5,000 level. Upon expiration of this agreement, any balance in this expense
account will be returned to the Company less any fees outstanding.
Term
This agreement shall be for a term of at least one year. Thereafter,
either party may terminate this agreement at any time upon thirty (30) days'
prior written notice, without liability or continuing obligation to the other
party, except that termination shall not affect (a) the reimbursement and
indemnification provisions contained in this agreement, nor (b) The Company's
obligation for the fees called for above. However, if the Company enters in to a
letter of intent for a public offering or a private placement of its securities
in the United States during the term of this agreement and any extension
thereof, and Sunrise shall have been instrumental in arranging such, then this
Agreement shall be automatically renewed for an additional year.
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Confidentiality
Each of the Company and Sunrise possesses confidential information with
respect to its business and affairs which it has acquired through the
expenditure of time and money. Each of the Company and Sunrise shall use all
reasonable efforts to protect the confidential information of the other and keep
such information confidential, using a standard of care that the Company or
Sunrise, as the case may be, would reasonably expect to employ for its own
similar confidential information.
Indemnification
The Company agrees it will indemnify and hold harmless Sunrise, its
officers, directors, employees, agents and controlling persons from and against
any and all losses, claims, damages, liabilities and expenses, joint or several
(including all reasonable fees and expenses of counsel) arising out of Sunrise's
services pursuant to this agreement. However, the Company will not be liable
under this paragraph to the extent that any loss, claim, damage, liability or
expense is found in a final judgment by a court of competent jurisdiction to
have resulted from Sunrise's gross negligence or willful misconduct, or
violation of American laws. The Company agrees to notify Sunrise promptly of the
assertion against it or any other person of any claim or the commencement of any
action or proceeding relating to any matter which involved Sunrise.
Miscellaneous
The benefits of this agreement shall inure to the respective successors
and assigns of the parties, and the obligations and liabilities assumed in this
agreement by the parties shall be binding upon their respective successors and
assigns.
The validity and interpretation of this agreement shall be governed by the
laws of the State of New York as applied to agreements made and to be fully
performed therein.
This agreement shall not come into effect until consent to the issuance of
the warrant, satisfactory to the Company, has been obtained from the TSE.
Sunrise undertakes to refer any inquires or requests with respect to the
Company from residents of Canada to the Company or as it may direct.
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If the foregoing correctly sets forth our agreement, please sign, date and
return to us the enclosed copy of this letter, whereupon this letter shall
constitute a binding agreement between us.
Sincerely,
DUSA PHARMACEUTICALS, INC.
By: S/ D. Xxxxxxxx Xxxxxxx
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Dr. D. Xxxxxxxx Xxxxxxx, Chairman
Confirmed and Agreed to this
14 day of October, 1993
Sunrise Financial Group, Inc.
by: S/ N. LOW
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Xxxxxx X. Low, President
