PRIVATE PLACEMENT ENGAGEMENT AGREEMENT
Exhibit
2.5
PRIVATE
PLACEMENT
ENGAGEMENT
AGREEMENT
March
23,
2006
▇▇▇▇
▇.
▇▇▇▇▇▇
President
Lixte,
Inc.
▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear
▇▇.
▇▇▇▇▇▇:
This
Private Placement Engagement Agreement (the “Agreement”) shall serve to set
forth the terms and conditions by which WestPark Capital, Inc. (“WestPark”) will
provide financial advisory and other professional services to Lixte, Inc.,
its
subsidiaries and/or affiliates (the “Company”). WestPark will act as the
Company’s Exclusive Placement Agent and assist it in a private offering of its
securities (the “Offering”) on a “best-efforts” basis pursuant to the terms and
conditions as set forth herein. This Private Placement Agreement will be
concurrently effective with a separate Engagement (“RTO Agreement”) which
governs the structure, scope, and size of the Reverse Merger/Reverse Takeover
Transaction.
| 1. |
Structure
and Scope.
The Offering shall be for the purpose of raising from seven hundred
and
fifty thousand to one million dollars ($750,000 - $1,000,000) through
a
private placement structure from a sale of the Company’s common stock at a
price of thirty-seven and one half cents ($0.375) per
share.
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The
actual amount, structure and pricing of the proposed offering will be determined
by the Company and WestPark, after completion of an analysis of the business
and
market conditions for such an offering.
WestPark
will advise, and provide services to the Company on the various aspects of
a
transaction (the “Transaction”) for the Offering which will include: 1)
identifying and contacting potential investors; 2) advising the Company on
various structuring options of the Transaction; and 3) assisting the Company
with the negotiations of the financial aspects of the Transaction (the
“Services”). In Connection with the foregoing, WestPark will work with the
Company’s management, providing advice, input and review, in their development
of an appropriate overall business plan suitable for distribution to potential
investors for the circumstances dictated by the transaction contemplated
and
described herein.
| 2. |
Term.
The term of this Agreement shall be for a period of three (3) months
from
the date of execution hereof (the “Effective Date”), thereafter on a
month-to-month basis, unless otherwise notified in writing, by means
of a
notice of intent not to renew, at least 30 days prior to commencement
of
each renewal term.
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Lixte,
Inc.
Page
2
March
23,
2006
| 3. |
Company
and WestPark Responsibilities.
The Company represents and warrants to WestPark that, to the best
of its
knowledge, any and all information provided in connection with any
transaction that may be initiated under the terms and conditions
of this
agreement, in a form including but not limited to a business plan,
private
placement memorandum, correspondence and collateral material, whether
it
is for or to anyone connected with the Transaction or distributed
to
outside parties, will not contain any untrue statement of a material
fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not
misleading.
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The
Company agrees and acknowledges that any and all due diligence conducted
by
WestPark is for the sole benefit and use by WestPark and will not and can
not be
relied on by any other person or entity and all prospective investors will
conduct their own due diligence prior to participating in the
transaction.
WestPark
agrees that the form and content of any written material to be distributed
by
WestPark concerning the Company will be approved by the management of the
Company prior to distribution
| 4. |
The
Company will pay to WestPark, as consideration for the Services described
herein:
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| I. |
Cash
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| a. |
A
non-refundable retainer of zero dollars ($00.00), due on the Effective
Date of this Agreement.
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| b. |
Concurrent
with each closing under the Transaction (each such event a “Closing” and
all such events together the “Closings”), WestPark will be paid a fee of
ten percent (10%) of the funds raised in connection with the Offering.
An
escrow, trust or similar third party agent will be used for each
closing
to which WestPark shall be a party. All consideration due WestPark
shall
be paid to WestPark directly therefrom.
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WestPark,
in its sole discretion, may purchase an equity interest in the Company, under
the same terms and conditions set forth in the Transaction, in an amount
not to
exceed the total compensation earned by WestPark for the Services provided,
and;
Lixte,
Inc.
Page
3
March
23,
2006
| II. |
Warrants
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Broker
Warrants.
Five
(5) year warrants (the “Warrants”) for the purchase of an equity interest of the
Company equal to two percent (2.0%) of the securities subject to the
Transaction, including but not limited to securities issued, to be issued
through exercise of a convertible instrument and/or exercisable warrants.
These
Warrants shall be exercisable at the per share price of securities sold in
this
Offering and shall contain price anti-dilution provisions. The shares underlying
the Warrants will have standard demand registration and piggyback rights
and a
cashless exercise provision.
All
forms
of compensation set forth in this section are due and payable to WestPark
with
respect to any completed transaction for the period from the Effective date
of
this Agreement through the end of the I 8th month following the termination
date
of this agreement, after giving effect to any and all extensions to this
Agreement.
All
consideration payable to WestPark pursuant to the terms and conditions of
this
Agreement, are due and payable on or before its respective due date. WestPark,
as an accommodation may present the Company with an invoice for such amounts
due, however payment is not subject to the receipt of an invoice, this Agreement
shall serve as the Company’s documentation for payment processing and
remittances.
| 5. |
Expenses
& Unaccountable Fee.
The Company is responsible for all costs related to this Offering,
which
may include but is not limited to the preparation and production
of a PPM,
legal fees, printing and reproduction costs, accounting and other
professional services, Blue Sky registration fees, road show and
travel
related expense and miscellaneous out-of-pocket expenses incurred
in
connection with this engagement. The Company will be required to
pay for
all expenses in excess of $500 in advance by either providing for
direct
billing to the Company or Company’s credit card. Any expenses incurred by
WestPark on behalf of the Company, related to this engagement will
be
invoiced and due upon receipt.
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The
Company will pay WestPark an Unaccountable Fee equal to four percent (4%)
of the
funds raised in the Offering, concurrent with each Closing, of which no
accounting will be provided.
The
Company will pay the cost of a background check of any or all of the Company’s
officers and key management that WestPark determines to be necessary to
conduct.
| 6. |
Late
Fees and Finance Charges.
All fees and expenses not received by WestPark by the respective
due date
are subject to a late fee and interest will be charged at the rate
of 1.5%
per month on all outstanding balances. In the event that an account
becomes delinquent, WestPark employs the same prudent collection
procedures as other businesses and if it becomes necessary to file
suit or
to engage a collection agency for the collection of any fees and/or
costs,
the Company shall pay all related costs and expenses, including reasonable
attorneys’ fees.
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Lixte,
Inc.
Page
4
March
23,
2006
| 7. |
Representations
and Warranties.
The Company represents and warrants to WestPark that: the Company
will not
knowingly cause or permit any action to be taken in connection with
the
Offering which violates the Securities Act of 1933 or any state securities
laws; the Company will cooperate with WestPark so as to permit the
Offering to be conducted in a manner consistent with the applicable
state
and federal securities laws; that all information and statements
provided
by the Company and included in, but not limited to the PPM, business
plan,
correspondence and any and all collateral material will be true and
correct; that the PPM will not be misleading or violate the anti-fraud
provisions of the Securities and Exchange Act of 1934; current Company
management, as disclosed to WestPark, will continue in place after
the
Offering for a reasonable period of time; there will be included
in the
PPM financial statements of the Company for the last three fiscal
years or
for such shorter period as the Company was in existence and the latest
unaudited comparative quarterly or other interim financial statements;
the
financial statements will fairly reflect the financial condition
of the
Company and the results of its operations at a time and for the periods
covered by such financial statements, and such statements will be
substantially as heretofore represented to WestPark; the Company
does not
know of any undisclosed facts adversely affecting the PPM or the
Offering;
the Company will immediately disclose to WestPark, in writing, any
new
facts as they may arise that may adversely affect the PPM or the
Offering;
the Company will prepare and deliver to WestPark its most recent
estimate
of sales, earnings, and cash flow and agrees to update those estimates
on
a monthly basis during the term of the Offering. The Company agrees
to
indemnify and hold WestPark and its attorneys, accountants, agents
and
employees, officers and directors, free and harmless from any liability,
cost and expense, including attorneys’ fees in the event of a breach of
this representation and warranty.
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| 8. |
Indemnification.
In consideration of the services to be provided by WestPark under
this
Agreement, the Company shall:
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Indemnify
and hold harmless WestPark and any of its directors, officers, employees,
consultants or agents (each individually an “Indemnified Person”) from and
against any losses, claims, damages or liabilities to which such Indemnified
Person may become subject arising out of our in connection with the rendering
of
services by WestPark hereunder, except to the extent that such losses, claims,
damages or liabilities are determined in judicial rulings to have primarily
resulted from the gross negligence or willful misconduct of such Indemnified
Person and reimburse such Indemnified Person for reasonable legal and other
expenses as they are incurred, that arise in connection with investigating,
preparing to defend or defending any lawsuit, claim or proceeding and any
appeals therefrom arising in any manner out of or in connection with the
rendering of services by WestPark, provided, however that in the event a
final
judicial determination is made to the effect specified above, such Indemnified
Person will promptly remit to the Company any amounts reimbursed under the
section.
Lixte,
Inc.
Page
5
March
23,
2006
The
Company and WestPark agree that (i) the indemnification and reimbursement
commitments set forth above shall apply whether or not such Indemnified Person
is a named party to any such lawsuit, claim or other proceeding; and (ii)
promptly after receipt by WestPark of notice of its involvement in any action,
proceeding or investigation, shall notify the Company in writing of such
involvement. This indemnification shall survive any termination of this
Agreement.
| 9. |
Exclusive
Nature.
WestPark is hereby engaged as the Company’s exclusive placement agent
respecting services, as may be required by the Company for this Offering.
WestPark agrees to syndicate parties introduced by issuer or by its
advisor. Issuer can terminate offering as defined in the
offering.
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| 10. |
Non-Circumvent.
The Company shall not accept nor enter into any transaction, that
would be
considered a transaction included and described herein, with any
person
and/or entity introduced to the Company by WestPark, which either
intentionally or unintentionally would directly or indirectly circumvent
the payment, in full or in part, of any and all consideration that
would
be due WestPark pursuant to this Agreement, a breach of which would
be
considered a Transaction pursuant to the terms and conditions of
this
Agreement, and all consideration pursuant to this Agreement would
be
immediately due and payable to WestPark.
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| 11. |
SEC
Filings.
The Company will file a Notice of Sale of Securities Pursuant to
Regulation D Section 4(6), and/or Uniform Limited Offering Exemption
(“Form D”) with the Securities and Exchange Commission within fifteen (15)
days after the first solicitation for securities. Once filed, the
Company
will provide a copy of the Form D as filed to WestPark. Filing the
Form D
is the responsibility of the Company and failure to do so will result
in a
material breach of this Agreement.
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| 12. |
Confidentiality.
WestPark understands and agrees that it will not provide any information
to any third party concerning the Company unless said third party
has
executed a confidentiality agreement in form and content acceptable
to the
Company, unless the Company has provided a written waiver of the
confidentiality agreement requirement for such third
party.
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Lixte,
Inc.
Page
6
March
23,
2006
| 13. |
Successors.
This Agreement is binding upon the parties hereto and their respective
permissible assigns, successors, heirs and personal representatives,
and
shall inure to their benefit.
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| 14. |
Assignment.
Neither this Agreement nor any right pursuant hereto or interest
herein
shall be assignable by any of the parties hereto without the prior
written
consent of the other parties hereto, except as expressly permitted
herein.
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| 15. |
Governing
Law.
This Agreement shall be governed and construed in accordance with
the laws
of the State of California. The prevailing party in any legal action
brought under this Agreement shall be entitled to immediately recover
all
legal fees and costs.
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| 16. |
Costs
and Attorneys’ Fees.
If any action, suit, arbitration proceeding or other proceeding is
instituted arising out of these Private Placement Agreement, the
prevailing party shall recover all of such party’s costs, including,
without limitation, the court costs and attorneys’ fees incurred therein,
including any and all appeals or petitions therefrom. As used herein,
“attorneys’ fees” shall mean the full and actual costs of any legal
services actually rendered in connection with the matters involved,
calculated on the basis of the usual fee charged by the attorneys
performing such services.
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| 17. |
Waiver
and Amendment.
No waiver, amendment or modification of any provision of this Agreement
shall be effective unless consented to by both parties in writing.
No
failure of delay by either party in exercising any rights, power
or remedy
under this Agreement shall operate as a waiver of such right, power
or
remedy. Any terms and/or conditions of this Agreement may be waived
at any
time, pursuant to this section, but a waiver in one instance shall
not be
deemed to constitute a waiver in any other
instance.
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| 18. |
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 portions were
deleted.
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| 19. |
Section
Headings; Defined Terms.
Numbered and titled section headings and defined terms are for convenience
only and shall not he construed as amplifying or limiting any of
the
provisions of this Agreement.
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| 20. |
Entire
Agreement.
This Agreement and any exhibits herein incorporated and attached
hereto
supersede all prior and contemporaneous negotiations and agreements
(whether written or oral) and constitute the entire understanding
among
the parties.
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Lixte,
Inc.
Page
7
March
23,
2006
Please
confirm that the foregoing correctly sets forth our Agreement by returning
one
executed Agreement to our corporate office at 1900 Avenue of the Stars, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, and a facsimile of same to (▇▇▇)
▇▇▇-▇▇▇▇.
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Very
truly yours,
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WESTPARK
CAPITAL, INC.
By:
_____________________
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, CEO
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Approved
and agreed to this ___ day of ___________________, Los Angeles,
California.
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LIXTE,
INC.
By:
________________
▇▇▇▇
▇. ▇▇▇▇▇▇
President
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