Exhibit 10.1
STERLING FINANCIAL INVESTMENT GROUP XXXXXXX X. XXXXX
225 N.E. Xxxxxx Boulevard, 4th Floor Managing Director
Boca Raton, FL 33432 Investment Banking Division
Tel 000.000.0000
xxxxxx@xxxxxxxxxx.xxx
CONFIDENTIAL
May 3, 2004
Xx. Xxxxx Xxxxx
President & CEO
New York Health Care, Inc.
0000 XxXxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Xx. Xxxxx,
This letter confirms our agreement (the "Agreement") that Sterling Financial
Investment Group, Inc. ("Sterling") will, except as otherwise set forth herein,
act as the exclusive placement agent to New York Health Care, Inc., ("NYHC" or
the "Company") as provided herein in connection with a proposed private
placement to "accredited investors" as such term is defined in Regulation D
under the Securities Act of 1933, as amended (the "1933 Act"), of the Company's
Common Stock and Warrants to purchase Common Stock (the "Securities") as set
forth in the attached summary of Indicative Terms and Conditions, the net
proceeds of which shall be used to fund the capital requirements of The
BioBalance Corporation, a wholly-owned subsidiary of the Company.
Notwithstanding any contrary provision herein, the Placement Agent will not be
entitled to any fees, other compensation or expense allowance in respect of
Securities sold to officers and directors of the Company.
Based on our various discussions, we understand that the Company is seeking to
raise up to $6 million through a private placement of Securities to fund its
operations (the "Placement"). It is expressly understood and acknowledged that
Xxxxxxxx's engagement does not constitute any firm commitment, express or
implied, on the part of Sterling or any of its affiliates to purchase or place
the Securities or to provide any type of financing. It is further understood
that Xxxxxxxx's services hereunder shall be subject to, among other things,
satisfactory completion of due diligence by Sterling, market conditions, the
absence of adverse changes to the Company's business or financial condition,
approval of Xxxxxxxx's internal committee and any other conditions that Xxxxxxxx
may deem appropriate for placements of such nature. After the completion of
Xxxxxxxx's due diligence of the Company, Xxxxxxxx reserves the right to
terminate the engagement. Xxxxxxxx will not have the power or the authority to
bind the Company to any sale of the Securities. This will not waive the
Company's obligations under Schedule I of this Agreement or for the
reimbursement of out of pocket expenses incurred by Xxxxxxxx pursuant to
paragraph 4 below.
1. PLACEMENT AGENT SERVICES
Xxxxxxxx will perform the following financial advisory and investment
banking services as shall be reasonably necessary and appropriate in
connection with the Placement:
a. advise the Company as to the specific terms of the Securities and
the Placement;
b. review the business and operations of the Company and its
historical and projected financial condition;
c. assist the Company and its counsel in the drafting, preparation
and distribution of an offering memorandum (the "Memorandum") and
other related documentation (together with the Memorandum, the
New York Health Care
May 3, 2004
Page 2
"Offering Materials") describing the Company, the Securities and
the terms of the Placement;
d. develop a list of potential purchasers of the Securities;
e. assist the Company in identifying and contacting prospective
purchasers of the Securities, and consult with the Company from
time to time as to such prospective purchasers;
f. advise the Company as to the strategy and tactics of negotiations
with prospective purchasers of the Securities and, if requested
by the Company, participate in such negotiations;
g. advise the Company as to the timing of the Placement; and
h. render such other financial advisory and investment banking
services as may from time to time be agreed upon in writing by
Sterling and the Company.
2. TERM
Xxxxxxxx's engagement shall terminate four (4) months from the date of
this Agreement, unless extended in writing by Xxxxxxxx and the
Company. Either Sterling or the Company may terminate this Agreement
at any time on 10 days prior written notice. A "Residual Period" shall
extend for six (6) months from the date of termination or expiration
of this Agreement. The Company reserves the right to utilize
additional placement agents if Xxxxxxxx fails to raise gross proceeds
of $2,500,000 by June 30, 2004 or $4,000,000 by July 31, 2004,
provided however that said agents have been approved by Xxxxxxxx, ,
and that they work with Xxxxxxxx through a "Selected Placement Agent's
Agreement", in form and substance reasonably acceptable to the
Company. Approval by Xxxxxxxx of said agents shall not unreasonably
withheld or delayed.
FEES
The Company agrees to pay Xxxxxxxx as compensation for its services
under this engagement the following fees:
RETAINER FEE. A non-refundable cash Retainer Fee of US $35,000 (the
"Retainer Fee") which shall be payable upon execution of this
Agreement. The Retainer will be deducted from any Placement Fee.
PLACEMENT FEE. A Placement Fee payable at each closing of a Placement
equal to (i) cash in an amount equal to ten percent (10%) of the
aggregate gross proceeds from the Securities sold in the Placement,
other than the proceeds of Securities sold to officers and directors
of the Company, and (ii) warrants to purchase that number of shares of
the common stock of the Company (the "Common Stock") equal to fifteen
percent (15%) of the number of shares of Common Stock (including
warrants) sold in the Placement (or if convertible Securities are
sold, then equal to 15% of the number of shares of Common Stock into
which the Securities shall be convertible), other than in respect of
Securities sold to officers and directors of the Company. Such
warrants shall have a five year term, an exercise price equal to the
price per share of the Securities sold in the Placement, or, in the
case of convertible securities, the conversion price of said
securities, and the same other terms, conditions, rights and
preferences as the Securities sold in the Placement.
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CONFIDENTIAL 2 STERLING FINANCIAL
INVESTMENT GROUP
New York Health Care
May 3, 2004
Page 3
The Company shall also pay Sterling a Placement Fee as described above
on all Securities sold by the Company through a Placement during the
Residual Period to clients Sterling introduces to the Company.
UNACCOUNTABLE EXPENSE FEE. In addition to the above-referenced fees,
the Company will pay an Unaccountable Expense Fee of three percent
(3%) of the gross proceeds of the Securities sold at each closing to
cover expenses incurred by Xxxxxxxx in connection with its engagement
hereunder, other than the proceeds of Securities sold to officers and
directors of the Company.
A Placement may be consummated in one or a series of closings at the
sole discretion of the Company. The Company acknowledges that at
closing of the Placement, simultaneously with the receipt by the
Company of the gross proceeds of the Securities sold in the Placement
at closing, the Escrow Agent shall wire to Sterling (pursuant to wire
transfer instructions to be given by Xxxxxxxx) the cash pro rata
portion of the Placement Fee (calculated on the gross proceeds
received at such closing). In addition, the Company shall within a
reasonable time after closing of the Placement, deliver the Securities
to the investors in the Placement and deliver the Common Stock portion
of the Placement Fee to Sterling (calculated on the gross proceeds
received at closing).
3. OUTSIDE LEGAL COUNSEL EXPENSES
In addition to the fees described in paragraph 3, the Company will
promptly reimburse Xxxxxxxx's external legal counsel ("Xxxxxx & Xxxx")
periodically upon request for all reasonable expenses incurred in
connection with this engagement, whether or not a transaction is
consummated, provided that, unless otherwise agreed by the Company in
writing, such expenses shall not exceed $40,000.
4. INFORMATION
The Company acknowledges that Xxxxxxxx will be using information
provided by others, including, without limitation, information
provided by or on behalf of the Company, and that Xxxxxxxx does not
assume responsibility for and may rely, without independent
verification, on the accuracy and completeness of any such
information.
The Company hereby warrants that the Memorandum and the other Offering
Materials, and any other information relating to the Company or the
Placement, will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
contained therein, in the light of circumstances under which they were
made, not misleading. The Company agrees to provide Sterling with (i)
prompt notice of any material development affecting the Company or the
occurrence of any event or other change known to the Company that
could result in the Memorandum or the other Offering Materials
containing an untrue statement of a material fact or omitting to state
any material fact necessary to make the statements contained therein,
in the light of the circumstances under which they were made, not
misleading, (ii) copies of any financial reports as soon as reasonably
practicable and (iii) such other material information concerning the
business and financial condition of the Company as Xxxxxxxx may from
time to time reasonably request. Xxxxxxxx will have the right to
approve the Memorandum and the other Offering Materials and other
written communications furnished by or on behalf of the Company in
connection with the Placement, which approval shall not be
unreasonably withheld or delayed.
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CONFIDENTIAL 3 STERLING FINANCIAL
INVESTMENT GROUP
New York Health Care
May 3, 2004
Page 4
5. COMPLIANCE WITH LAW
The Company has not taken, and will not take, any action, directly or
indirectly, that may cause the Placement to fail to be entitled to
exemption from registration under the U.S. federal securities laws, or
applicable state securities or "blue sky" laws, or the applicable laws
of the foreign countries in which the Securities will be offered or
sold. The Company shall be responsible for any costs and expenses
associated with filings, applications or registrations with any
governmental or regulatory body, including, without limitation, those
associated with any sales pursuant to Regulation D under the 1933 Act,
"blue sky" laws, and the laws of the foreign countries in which the
Securities will be offered or sold. Xxxxxxxx shall comply with all
applicable laws in connection with the Placement. Xxxxxxxx has not
taken, and will not take, any action, directly or indirectly, that may
cause the Placement to fail to be entitled to exemption from
registration under the U.S. federal securities laws, or applicable
state securities or "blue sky" laws, or the applicable laws of the
foreign countries in which the Securities will be offered or sold.
6. COORDINATION
The Company covenants and agrees that it shall cooperate fully with
Xxxxxxxx, make available to Sterling all material information
concerning the Company and the Placement that Sterling reasonably
requests. In addition, in order to coordinate most effectively
Xxxxxxxx's efforts to assist with the Placement, the Company agrees
that neither it nor its management will initiate, enter into or
further any discussions with any third party regarding the Placement
without the prior knowledge and consent of Xxxxxxxx. In the event that
the Company or its management receives an inquiry concerning the
Placement, they will promptly inform Xxxxxxxx of such inquiry in order
that Xxxxxxxx can assist the Company in any resulting discussions or
negotiations. The Company also agrees that it will not publicize the
Placement, directly or indirectly, without prior written consent of
Sterling, which consent shall not be unreasonably withheld, except to
the extent that counsel for the Company determines that public
disclosure of the Placement or any aspect thereof is required under
applicable federal securities laws. Notwithstanding the foregoing,
Xxxxxxxx acknowledges and agrees that it has only been engaged by
Company hereunder in connection with the Placement and that the
Company may engage other financial advisors and/or investment bankers
in connection with (i) a private placement of the Company's securities
to institutional investors, except the Placement, (ii) the merger,
sale or joint venture of the Company with any third party or (iii) any
other transaction except the Placement.
7. CLOSING MATTERS
On the final closing date of the Placement, the Company will cause to
be delivered to Sterling a customary and satisfactory opinion of
counsel addressed to the purchasers of the Securities and a copy of
the Company's Certificate of Incorporation.
8. NO THIRD PARTY BENEFICIARIES
The Company acknowledges and agrees that Xxxxxxxx has been retained to
act as exclusive placement agent to the Company, and not as an advisor
to or agent of any other person, and that the Company's engagement of
Xxxxxxxx is not intended to confer rights upon any person not a party
to this Agreement (including shareholders, employees or creditors of
the Company) as against Sterling or its affiliates, or their
respective directors, officers, employees or agents.
9. INDEPENDENT CONTRACTOR
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CONFIDENTIAL 4 STERLING FINANCIAL
INVESTMENT GROUP
New York Health Care
May 3, 2004
Page 5
Sterling shall act as an independent contractor under this Agreement,
and any duties arising out of its engagement shall be owed solely to
the Company. It is understood that Xxxxxxxx's responsibility to the
Company is solely contractual in nature and Xxxxxxxx does not owe the
Company, or any other party, any fiduciary duty as a result of this
Agreement. Xxxxxxxx acknowledges that Xxxxxxxx has no authority to
consummate the Placement or bind the Company in any way. In no event
shall any investment in connection with the Placement be completed
without the written consent of the Company.
10. DISCLOSURE
The Company agrees that any information or advice rendered by Xxxxxxxx
or its representatives in connection with the Agreement is solely for
the confidential use of the Company and, except as otherwise required
by applicable law, regulation or legal process, the Company will not
and will not permit any third party to disclose, reproduce,
disseminate, quote or otherwise refer to such advice or information in
any manner without Xxxxxxxx's prior written consent, which consent
shall not be unreasonably withheld or delayed, other than to such of
its employees and advisors as the Company reasonably determines have a
need to know.
11. CONFIDENTIALITY
Sterling agrees that, except as otherwise required by law, regulation
or legal process (in which case Sterling shall, prior to disclosing
any confidential information, provide the Company with prompt written
notice that it has received a request or that it intends to disclose
such information and a reasonable amount of time to apply to court of
competent jurisdiction for a protective order, is case such request is
made pursuant to legal process), Xxxxxxxx shall keep confidential all
material non-public information provided to it by the Company, and
shall not disclose such information to any third party without the
Company's prior written consent, other than to such of its employees
and advisors as Sterling reasonably determines have a need to know,
and Xxxxxxxx shall be responsible that such employees and advisors
maintain the confidentiality of such information. Additionally,
Xxxxxxxx agrees that it will not use any of the Company's confidential
information for any reason or purpose except in connection with its
obligations hereunder as a financial advisor in connection with the
Placement.
12. STERLING AFFILIATES
Any right set forth herein may be exercised, and any services to be
provided by Xxxxxxxx may be provided, by an affiliate of Sterling, but
only after receipt of the Company's prior written approval and subject
to the confidentiality provisions and other terms set forth herein.
The Company hereby agrees that if Sterling and/or any affiliate or
employee of Sterling purchases Securities for its own account, such
purchase will not constitute a conflict of interest for purposes of
Xxxxxxxx's engagement hereunder.
13. INDEMNIFICATION
The Company and Xxxxxxxx agree to the provisions with respect to the
Company's indemnity of Sterling and other matters set forth in
Schedule I, the terms of which are incorporated herein in their
entirety.
14. PUBLICITY
The Company acknowledges that upon completion of the Placement,
Sterling may, at its own expense, place an announcement in such
newspapers and periodicals as it may choose, stating that Xxxxxxxx has
acted as exclusive placement agent to the Company in connection with
such
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CONFIDENTIAL 5 STERLING FINANCIAL
INVESTMENT GROUP
New York Health Care
May 3, 2004
Page 6
Placement, subject to prior review and approval by the Company of any
such advertisement described above, which approval shall not be
unreasonably withheld or delayed.
15. AMENDMENTS AND SUCCESSORS
This Agreement may not be waived, amended, modified or assigned, in
any way, in whole or in part, including by operation of law, without
the prior written consent of the Company and Sterling, any attempted
assignment without such consent shall be null and void. The provisions
of this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Company and Xxxxxxxx.
16. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between Sterling and
the Company, and supersedes any prior agreements and understandings,
with respect to the subject matter of this agreement.
17. NO BROKERS
The Company acknowledges and agrees that there are no brokers, agents,
representatives or other parties that have an interest in compensation
paid or payable to Xxxxxxxx hereunder.
18. TERMINATION & EXPIRATION
Upon termination or expiration, this Agreement shall have no further
force or effect, except that the provisions concerning the Company's
obligations to Sterling and certain related persons provided in
Schedule I, the Company's obligation to pay Sterling fees and expenses
as described in this Agreement, the status of Sterling as an
independent contractor, obligations regarding compliance with
applicable laws, the limitation on to whom Xxxxxxxx shall owe any
duties, governing law, choice of forum, successors and assigns, and
waiver of the right to trial by jury shall survive any such
termination or expiration of this Agreement.
19. GOVERNING LAW AND JURISDICTION
This letter and any claim or dispute of any kind or nature whatsoever
arising out of or in any way relating to this Agreement, directly or
indirectly (including any claim concerning advice provided pursuant to
this Agreement), shall be governed by and construed in accordance with
the laws of the State of Florida. No such claim or dispute may be
commenced, presented or continued in any other court other than the
courts of the State of Florida located in the City and County of Miami
or in the United State District Court for the Southern District of
Florida, which courts shall have exclusive jurisdiction over the
adjudication of such matters, and the Company and Sterling consent to
the jurisdiction of such courts and personal service. ANY RIGHTS TO
TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO, OR
ARISING OUT OF, THIS AGREEMENT ARE WAIVED BY XXXXXXXX AND THE COMPANY.
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CONFIDENTIAL 6 STERLING FINANCIAL
INVESTMENT GROUP
New York Health Care
May 3, 2004
Page 7
We are pleased to accept this engagement and look forward to working with you
and the Company. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
letter on or before 5:00 PM Eastern time, May 6th, 2004, which shall thereupon
constitute a binding Agreement.
Very truly yours,
STERLING FINANCIAL INVESTMENT GROUP, INC.
By /s/ Xxxxxxx Xxxxx
--------------------------------
Xxxxxxx Xxxxx
Head of Investment Banking
Agreed as of the date hereof
NEW YORK HEALTH CARE
By /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Name Xxxxx Xxxxxxxxx
------------------------------------
Title COO/CFO
-----------------------------------
Date May 6, 2004
------------------------------------
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CONFIDENTIAL 7 STERLING FINANCIAL
INVESTMENT GROUP
New York Health Care
May 3, 2004
Page 8
SCHEDULE I
INDEMNIFICATION PROVISIONS
The Company agrees to indemnify and hold harmless Sterling, its affiliates, the
directors, officers and employees of Xxxxxxxx and its affiliates, and each other
person or entity, if any, controlling Sterling or any of its affiliates
(collectively, "Indemnified Persons"), from and against, and the Company agrees
that except for any Losses (as defined herein) that are finally judicially
determined to have resulted from the bad faith or gross negligence of such
Indemnified Person, no Indemnified Person shall have any liability to the
Company or its owners, parents, affiliates, securityholders or creditors for,
any losses, claims, damages, liabilities or reasonable expenses (including
actions, claims or proceedings in respect thereof (collectively, "Actions")
brought by or against any person, including stockholders of the Company, and the
cost of any investigation and preparation therefore and defense thereof)
(collectively, "Losses") (A) related to or arising out of (i) the Company's
action or failure to act in connection with the Transaction or Xxxxxxxx's Role
(as determined herein), (ii) any statements or omissions made in any written
disclosure or other written information or materials used in connection with the
transaction(s) described in or contemplated by this letter (collectively, the
"Transactions") or the services, commitment or other obligations undertaken by
Xxxxxxxx in this letter agreement (collectively, "Xxxxxxxx's Role"), or (iii)
the action or failure to act by an Indemnified Person with the Company's consent
or in reasonable reliance on the Company's action or failure to act or (B)
otherwise related to or arising out of the Transactions or Xxxxxxxx's Role, or
any other matter referred to in this letter agreement, except that the forgoing
shall not apply to the Losses of an Indemnified Person that are determined by a
court of competent jurisdiction in a final judgment not subject to appeal to
have resulted from the bad faith or gross negligence of such Indemnified Person.
If such indemnification is judicially determined to be unavailable (other than
by reason of the bad faith or gross negligence of any such Indemnified Party) in
respect of any such Losses, the Company agrees to contribute to the Losses
involved in such proportion as is appropriate to reflect the relative benefits
received by the Company in the Transactions, on the one hand, and Xxxxxxxx, on
the other, if such allocation is judicially determined by a court of competent
jurisdiction in a final judgment not subject to appeal to be unavailable, in
such proportion as is appropriate to reflect not only such relative benefits,
but also other equitable consideration such as the relative fault of the
Company, on the one hand, and of Sterling, on the other hand.
The Company will reimburse each Indemnified Person for all reasonable expenses
(including reasonable fees and disbursements of counsel) as they are incurred by
such Indemnified Person in connection with investigating, preparing for or
defending any Action (or enforcing this letter agreement), in connection with
pending or threatened litigation in which any Indemnified Person is a party, and
whether or not such Action is brought by Xxxxxxxx. The Company agrees that it
will not settle or compromise or consent to the entry of any judgment in any
pending or threatened Action in respect of which indemnification may be sought
hereunder (whether or not an Indemnified Person is a party therein) unless the
Company has given Sterling reasonable prior written notice thereof and obtained
an unconditional release of each Indemnified Person from all liability arising
therefrom. No Indemnified Person seeking indemnification, reimbursement or
contribution hereunder will, without the prior written consent of the Company,
settle, compromise, consent to the entry of any judgment in or otherwise
terminate any Action.
The Company's reimbursement, indemnity and contribution obligations hereunder
shall be in addition to any liability that it may otherwise have, and shall
inure to the benefit of any successors, assigns, heirs and representatives of
any Indemnified Person. Solely for the purpose of enforcing the letter
agreement, the Company hereby consents to personal jurisdiction and venue in any
court in which any Action is brought.
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CONFIDENTIAL 8 STERLING FINANCIAL
INVESTMENT GROUP
New York Health Care
May 3, 2004
Page 9
In the event that an arbitration is commenced against an Indemnified Person in
which a claim is asserted that relates to or arises out of any of the matters
referred to in clause (A) or (B) of the first sentence of this Schedule I, the
Company agrees to arbitration of any claims Indemnified Persons may have against
the Company pursuant to this letter agreement under the same rules as, and under
the auspices of the same organization as, the arbitration in which the claim is
asserted against the Indemnified Person. The Company acknowledges that, in
connection with Xxxxxxxx's Role, Xxxxxxxx is acting as an independent contractor
with duties owing solely to the Company. The provisions of this Schedule I
shall survive any termination of the letter agreement or completion of the
Transaction or Xxxxxxxx's Role. XXXXXXXX XXXXXX AGREES AND THE COMPANY HEREBY
AGREES, ON ITS OWN BEHALF AND ON BEHALF OF ITS SECURITYHOLDERS, TO WAIVE ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION
ARISING OUT OF XXXXXXXX'S ROLE OR THIS LETTER AGREEEMENT.
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CONFIDENTIAL 9 STERLING FINANCIAL
INVESTMENT GROUP
CONFIDENTIAL
May 3, 2004
NEW YORK HEALTH CARE, INC.
SUMMARY OF INDICATIVE TERMS AND CONDITIONS
$6,000,000 MAXIMUN/$2,500,000 MINIMUM OFFERING SIZE
The issuance and sale of such securities is subject to, among other things,
completion of due diligence to Sterling Financial Investment Group's'
satisfaction and the preparation of definitive documentation to effect the
Transaction.
ISSUER: New York Health Care, Inc. (the "Company").
PLACEMENT AGENT: Sterling Financial Investment Group, Inc. (the
"Placement Agent"). In exchange for its services, the
Placement Agent is entitled to receive a cash placement
fee equal to 10% of total gross proceed raised in this
offering.
In addition to the above fee, the Company will pay an
Unaccountable cash Expense Fee of three percent (3%) of
the gross proceeds. In addition, the Company will pay
for Xxxxxxxx's outside legal counsel fee, provided
that, unless otherwise agreed by the Company in
writing, such expenses shall not exceed $40,000.
The Company will grant to the Placement Agent,
five-year warrants ("placement Agent Warrants") to
purchase that number of shares of Common Stock equal to
15% of the shares of Common Stock issuable (including
warrants) in connection to this Offering at the same
Exercise Price in the Offering.
The Placement Agent will also receive a non-refundable
retained fee of $35,000, which will be credited toward
the first cash payment of the placement fees.
ISSUE: Common Shares (the "Common Stock" or the "Offering").
The Common Stock is traded under the symbol "XXXX.XX."
AMOUNT TO BE RAISED: Up to $6,000,000.
ISSUE PRICE: The purchase price of the Common Stock and associated
Warrants will be equal to a 15% discount applied to the
average of the Volume Weighted Average Price ("VWAP")
of the Common Stock for the 20 trading days ending on
the business day prior to the Closing Date, but in no
case will be less than $1.
CLOSING: The Company expects to accept subscriptions, in its
discretion, on an ongoing basis, subject to a minimum
Offering size of $2,500,000 and up to a maximum of
$6,000,000 in gross Offering proceeds (without regard
to the Over-Subscription Allowance); provided, however,
that the Offering will terminate in all events no later
than four (4) months from the date of this Agreement,
unless extended in writing by Xxxxxxxx and the Company.
Either Sterling or the Company may terminate this
Agreement at any time on 10 days prior written notice.
A "Residual Period" shall extend for six (6) months
from the date of termination or expiration of this
Agreement.
SUITABILITY STANDARDS: The Common Shares and associated Warrants are being
offered only to "Accredited Investors," as defined in
Regulation D under the Securities Act of 1933, and the
Placement Agent (as defined below) and their immediate
family members.
WARRANTS: On the Closing Date the Holders will receive 5 year
warrants to purchase that number of Common Stock equal
to 50% of the Common Stock issued upon Closing. The
exercise price of the Warrants will be 150% of the
Issue Price (the "Exercise Price").
REGISTRATION RIGHTS: The Company shall file to register the Common Shares
and Warrants issued in each Closing under Form S-1 or
other appropriate Form within forty-five (45) days from
the final Closing. If the registration statement is not
filed as mentioned or declared effective within 180
days following Closing, then cash delay payments equal
to 1.5% of the Offering proceeds per month shall apply.
OTHER CONDITIONS: The Company shall execute a definitive agreement for
the divestiture of its home healthcare business subject
to the satisfaction of certain conditions, including
shareholder and regulatory approvals.
Appointment of a new Board of Directors, with the
exception of the BioBalance President, upon closing of
the sale of the home healthcare business.
Execution of an employment agreement for the BioBalance
President
Other conditions that might arise after completing
Xxxxxxxx's due diligence
Any conflict between the provisions of this Summary of Indicative Terms and
Conditions and the letter agreement between the Placement Agent and the Company
to which it is attached, shall be governed by the terms of the letter agreement.
