Exhibit 10.08
December 20, 2000
Xxxxxxxx Xxxxxxx
President
BioPulse International, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxx Xxxxxx, Xxxx 00000
CONFIDENTIAL
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RE: Private Placement Engagement Agreement
Dear Xxxxxxxx,
We are pleased to submit this letter of agreement (the "Agreement") which
confirms the understanding between BioPulse International, Inc. (the
"Company") and Xxxx Capital Partners, Inc. ("RCP"), pursuant to which the
Company has retained RCP as an exclusive financial advisor and placement
agent, on the terms and subject to the conditions set forth herein, in
connection with a proposed Private Placement (the "Placement") of
Securities. The final purchase price and other terms of the Securities
shall be as agreed upon by the Company and the purchasers of the
Securities. The date on which any Securities referred to herein are sold
id referred to herein as the "Closing Date". In addition, RCP will provide
BioPulse with advisory services relating to possible Mergers and
Acquisition transactions that the Company may consider during the terms of
this engagement.
1. Scope of Services
In connection with this engagement, RCP shall perform the following
services:
(a) analyze the Company, its business, industry,
competition, anticipated cash flow requirements and
future operating prospects as the relate to (i) the
value of the Company and the Company's securities, and
(ii) the structure and pricing of private securities to
be issued in a placement;
(b) assist in structuring the terms of the Placement taking
into account the Company's need and market conditions;
(c) identify a select group of investors and/or partners
("Investors") interested in the Placement;
(d) coordinate meeting between Company management and
Investors;
(e) analyze and review th economic and business
considerations associated with counteroffers made by
and/or received by the Company with respect to a
Placement;
(f) assist the Company in negotiating the final terms and
conditions of the Placement;
(g) assist the Company counsel with other matters related
to the closing of the Placement;
(h) if needed, provide assistance in the preparation of an
offering memorandum describing the business and
financial condition and prospects of the Company in a
manner satisfactory to RCP and distribution of such a
memorandum to potential participants in the Placement;
(i) such other activities as may be mutually agreed to from
time to time between the Company and RCP including the
analysis and valuation of possible Merger and
Acquisition transaction that are presented to the
Company during the term of this engagement.
The Company understands that RCP will not be responsible for rendering
legal, accounting or tax advice and agrees to retain its own legal counsel
and accountants for any necessary legal, accounting and tax advice.
2. Retention
The Company hereby retains RCP as the Company's exclusive financial advisor
and placement agent in connection with the Placement of the Securities,
subject to Section 7 hereof, for a six (6) month period (the "Offering
Period") commencing on the date hereof. RCP agrees to use its best efforts
consistent with similar transactions to place th Securities, on the terms
and subject to the conditions set forth herein, pursuant to one or more
subscription, purchase, or other similar agreements customary for
transactions of this type. During the Offering Period, except as outlined
below, the Company will not contact potential investors for the purpose of
selling the Securities or any other securities of the Company substantially
similar to the Securities in a private placement and will direct all
inquiries from potential purchasers of the Securities, whether solicited or
not, to RCP.
3. Compensation for Services
(a) On the Closing Date, the Company agrees to pay RCP a
cash fee equal to nine percent (9%) of the aggregate
purchase price of the Securities sold in the Placement,
payable promptly at closing. Also on the Closing Date,
the Company agrees to issue to RCP warrants to purchase
the Company's Common Stock equal to 10% of the shares
sold in the Placement. The warrants shall have a term
of five years, and an exercise price equal to the price
per share paid by the purchasers of the Securities, and
will contain customary provisions including
registration and "net issuance" rights.
(b) If prior to the consummation of the Placement, the
Company is acquired, merges, sells all or substantially
all of its assets or otherwise effects a corporate
reorganization or consolidation with any other entity
and, as a result, the Placement contemplated hereby is
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abandoned by the Company, the Company agrees to pay RCP
a cash fee, payable at closing, equal to 5.0% of the
aggregate consideration paid to the Company or its
shareholders. RCP will also be entitled to all fees
associated with this engagement (on an individual
basis), for all Securities or Merger and Acquisition
transactions during the terms of this engagement.
(c) In addition, RCP will receive all fees provided for
herein in the event that, at any time within the twelve
month period immediately following the expiration or
termination of the Agreement, any consideration is
received by the Company from any party with whom RCP
has made contact within the context of this Agreement
during the Offering Period.
(d) The Company agrees to reimburse RCP for all reasonable
out of pocket expenses associated with the offering.
4. Right of First Refusal
RCP will have the right of first refusal to act as placement agent,
managing underwriter or advisor with respect to any private financing or
public offering (:Follow-on Transaction(s)") the Company may pursue within
the 24-month period following the successful completion of a Placement.
The structure and fees for any Follow-on Transaction(s) will be such as are
mutually agreeable at the time such Follow-on Transaction(s) is
entertained. The Company shall provide notice to RCP in writing of any
proposed Follow-on Transaction(s) and RCP shall have thirty (30) days to
commit to act on the proposed Follow-on Transaction(s). If RCP fails to
commit within such thirty day period, the Company shall be free to retain
another investment banking firm for the same or similar purpose at terms
not less favorable to the Company than those agreed upon with RCP.
5. Covenants of the Company
The Company agrees as follows:
(a) This Agreement is duly authorized and validly executed
and delivered by the Company, and constitutes a legal,
valid and binding agreement of the Company.
(b) The Company is authorized to enter into the Placement
as contemplated by this Agreement.
In connection with RCP's activities hereunder, the
Company agrees to prepare and furnish RCP with all
information concerning the Company and its business,
prospects, operations and financial results and
condition as RCP reasonable deems appropriate or as may
be considered material to any potential investor's
decision. Such information, and any other documents
supplied to RCP, ("Offering Materials") shall have been
created, reviewed, and approved by the Company and
shall be accurate and complete in all material respects
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to the Company's best knowledge, which knowledge shall
include the Company's obligation to investigate and
research the validity and completeness of the related
data to the extent reasonable possible and shall not
contain any untrue statement of a material fact or omit
to state a material fact. The Company shall promptly
advise RCP of any material development affecting the
Company or the Offering Materials and will be solely
responsible for updating the Offering Materials to
reflect such developments. In addition, the Company
agrees to provide RCP with access to the Company's
accountants, attorneys' consultants, and other
appropriate agents and representatives. The Company
acknowledges that RCP may rely upon the completeness
and accuracy of information and data furnished to it by
the Company's officers, directors, employees, agents,
and representatives without an independent verification
of such information and data or an appraisal of the
Company's assets.
6. Confidentiality
Except to the extent authorized by the Company or required by any federal
or state law, rule, or regulation or any decision or order of any court of
regulatory authority, RCP agrees that it will not disclose to any person,
other than to any agents, attorneys, accountants, employees, officers and
directors of RCP who need to know such information in connection with RCP's
engagement hereunder, any confidential and non-public information relating
to the Company that RCP receives from the Company or its agents, attorneys,
or accountants in connection with the services rendered hereunder. Any
advice offered by RCP hereunder shall not be disclosed publicly win any
manner without RCP's prior written approval and will be treated by the
Company and RCT as confidential. In addition, RCP's advice is not intended
for, and should not be relied upon by, other third parties. The Company
also agrees that any reference to RCP or any affiliate of RCP in any news
release or other communication to any party outside the Company are subject
to RCP's prior written approval, which approval shall not be unreasonably
withheld or delayed. If RCP resigns or is terminated prior to any release
or communication, no reference shall be made therein to RCP without its
prior written permission.
7. Term of Engagement
The Company hereby retains RCP on an exclusive basis for a period of three
(3) months from the date of this Agreement ("Expiration Date"), unless
extended by the mutual written agreement of both parties. The Agreement
may be terminated unilaterally at the option of RCP if at any time there is
a material adverse change in the Company's business or RCP determines that
information provided by the Company contains material misstatements or
omissions. Furthermore, either party may for any reason cancel this
Agreement upon thirty (30) days written notice to the other (the
"Cancellation Date").
Provided, however, to the extent this Agreement expires or is terminated by
the Company prior to the consummation of a Placement, and within twelve
(12) months after expiration or termination the Company consummates the
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contemplated Placement, then the Company hereby agrees to pay RCP its full
compensation as would have been due under Paragraph 2 of this Agreement as
if such Placement had been consummated prior to expiration or termination
hereof for all investors previously solicited by RCP and identified to the
Company at closing. In any event, the Company shall continue to be liable
to RCP under the expense provisions contained in Paragraph 3 and the
provisions of Exhibit I shall likewise remain operative and in full force
and effect regardless of termination, expiration, or consummation of any
Placement.
8. Conditions Precedent
Various conditions precedent and conditions subsequent shall apply to the
parties' performance hereunder, including, but not limited to, the
following:
(a) RCP shall conduct a due diligence investigation of the
Company and shall be satisfied with the conclusions and
observations derived therefrom;
(b) the Company shall acknowledge that it does not know of
any facts that it believes are reasonably likely to
adversely affect its sales, prospects, or business,
which shall have not been fully disclosed to RCP;
(c) prior to and following the closing of a Placement, the
Company will, to the extent possible and applicable,
use its best efforts to proceed with its gusiness plan
and the use or proceeds in a manner substantially
similar to the which is described to the Investor.
(d) The Company shall certify that all of its
representations and warranties hereunder and in the
offering documents are true and correct as of the
closing date.
9. Notices
Notice given pursuant to any of the provisions of this Agreement shall be
in writing and shall be mailed or delivered to the Company at BioPulse
International, Inc., 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxx Xxxxxx,
Xxxx 00000, Attention: Xxxxxxxx Xxxxxxx, President, and to RCP at 00
Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx,
Managing Director.
10. Advertisements
The Company agrees that RCP shall have the right to place advertisements in
financial and other newspapers and journals at its won expense describing
its services to the Company hereunder; provided that RCP shall have
submitted a copy of any such proposed advertisement to the Company for its
prior approval, which approval shall not be unreasonably withheld or
delayed.
11. Construction
This Agreement incorporates the entire understanding of the parties and
superseded all previous agreements and shall be governed by, and construed
in accordance with, the laws of the State of California as applied to
contracts made and performed in such State, without regard to principles of
conflicts of laws.
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12. Arbitration
Any controversy arising out of or relating to this Agreement or the alleged
breach thereof shall be settled by submission of the matter to arbitration
in Orange County, California, such arbitration to be in accordance with the
rules, then in effect of the National Association of Securities Dealers,
Inc. (NASD).
13. Severability
Any determination that any provision of this Agreement may be, or is,
unenforceable shall not affect the enforceability of the remainder of this
Agreement.
14. Counterparts
The Agreement may be executed simultaneously in two or more counterparts,
each of which shall de deemed an original, but all of which shall
constitute one and the same instrument.
15. Third Party Beneficiaries
This Agreement has been and is made solely for the benefit of the Company,
RCP and the other Indemnified Persons referred to in Paragraph 5 hereof and
their respective successors and assigns, and no other person shall acquire
or have any rights under or by virtue of this Agreement.
16. Indemnification
In consideration of RCP's agreement to perform services under this
Agreement, the Company shall:
17. Succession
This Agreement shall be binding upon and inure to the benefit of the
Company, RCP, the Indemnified Persons and their respective successors,
assigns, heirs, and personal representatives.
If the foregoing terms correctly set for the our Agreement, please confirm
this by signing and returning to RCP the duplicate copy of this letter.
Thereupon this letter, as signed counterpart, shall constitute our
Agreement on the subject matter herein.
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XXXX CAPITAL PARTNERS, INC.
By: /S/ Xxxx X. Xxxxx
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Xx. Xxxx X. Xxxxx
Managing Director
Confirmed and Agreed to this day
of December 2000. ----------
BIOPULSE INTERNATIONAL, INC.
By: /s/ Xxxxxxxx Xxxxxxx
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Xx. Xxxxxxxx Xxxxxxx
CEO
Confirmed and Agreed to this 20th day
of December 2000 -----------
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