Investment Banking Service Agreement - Axm Pharma Inc. and Great Eastern Securities Inc.
GREAT EASTERN SECURITIES, INC.
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2 Seaview Blvd.
Port Washington, NY 11050
1-866-258-5200
Tel: 516-484-5111
Fax: 516-484-5335
www.getrader.com
December 18, 2003
Mr. Peter Cunningham
President and CEO
Axm Pharma, Inc.
4695 Macarthur Court, 11th Floor
Newport Beach, California 92660
Dear Mr. Cunningham:
This will confirm the arrangements, terms and conditions pursuant to
which Great Eastern Securities Corporation ("Advisor") has been retained to
serve as an investment banker to Axm Pharma, Inc.(the "Company") for a twelve
(12) month period, with a mutual extension clause for an additional twelve (12)
months, commencing on the date hereof, subject to the termination provisions set
forth in Paragraph 2 hereof. For good and valuable consideration, the
sufficiency of which is hereby acknowledged, the undersigned hereby agree to the
following terms and conditions:
1. Duties of Advisor. Advisor shall, as more fully set forth
below in this Paragraph 1, assist the Company in broker
relations and distribution channels for the Company's stock,
Advisor agrees to:
(a) assist the Company in its presentation to the
brokerage community and the introduction to security
firms and brokers;
(b) assist the Company in identifying analysts in the
brokerage community to initiate coverage on the
Company;
(c) sponsor the Company to at least two small cap or
investment conferences;
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(d) coordinate a comprehensive Investor Relations
campaign including featured profiles by several
reputable groups, Internet advertising, lead
generation, print advertising, among other
activities;
(e) be available on request, on appropriate notice, to
meet with the Company's Management and/or Board of
Directors for quarterly management meetings; and
(f) market intelligence
The services described in Paragraph 1 may be rendered by Advisor
without any direct supervision by the Company and at such time and place in such
manner (whether by conference, telephone, letter or otherwise) as Advisor may
reasonably determine.
2. Term. The term of Advisor's engagement hereunder shall be for
twelve (12) months and may be extended for an additional
twelve (12) months upon mutual written consent, commencing on
the date hereof (the "Term"). Notwithstanding the foregoing,
however, this Agreement can be terminated by either party upon
45 days written notice.
3. Compensation and Expense Reimbursement.
(a) $10,000.00 non-refundable retainer payable upon
execution of this Agreement;
(b) 50,000 Warrants, expiring 5 years from the date of
this Agreement, with piggy-back registration rights
exercisable at 120% of the closing bid price on the
date of execution of this Agreement; and
(c) 100,000 Restricted Shares that will vest in equal
installments of 25,000 shares quarterly from the date
of this Agreement
Company will be responsible for any expenses incurred
in connection with this Agreement, i.e. road shows,
travel, marketing materials to name a few and shall
promptly reimburse Advisor for all reasonable
out-of-pocket expenses incurred in connection with
its engagement hereunder. All expenses incurred by
Advisor on behalf of Company over $500 shall be borne
by the Company only after it has authorized such
expenses in writing.
4. No Agency Authority. The Advisor shall not have and shall not
hold itself out as having any authority to act as agent for
the Company or bind it in any way.
5. Company's Responsibilities, Representations and Warranties.
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In connection with Advisor's engagement, the Company will
furnish Advisor with any information concerning the Company
that Advisor deems reasonable and appropriate and will provide
Advisor with access to the Company's officers, directors,
accountants, counsel and other advisors. The Company
represents and warrants to Advisor that all such information
concerning the Company, does not and will not contain any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein not misleading in light of the circumstances under
which such statements are made. The Company represents and
warrants to Advisor that any financial projections or
forecasts provided to Advisor are "forward looking statements"
as that term is used in Section 21E of the Securities Exchange
Commission Act of 1934 and represent the best currently
available estimates by the management of the Company of the
future financial performance by the Company (or its business)
and are based upon reasonable assumptions. The Company
acknowledges and agrees that Advisor will be using and relying
upon such information supplied by the Company and its
officers, agents and others and upon any other publicly
available information concerning the Company without any
independent investigation or verification thereof or
independent appraisal by Advisor of the Company or its
business or assets; and
6. Available Time. Advisor shall make available such time as it,
in its reasonable discretion, shall deem appropriate for the
performance of its obligations under this Agreement.
7. Relationship. Nothing herein shall constitute Advisor as an
employee or agent of the Company, except to such extent as
might hereinafter be agreed upon in writing for a particular
purpose. Except as might hereinafter be expressly agreed,
Advisor shall not have the authority to obligate or commit the
Company in any manner whatsoever.
8. Confidentiality Relating to this Agreement. Neither the
Company nor Advisor shall disclose (except to its partners,
accountants and attorneys), without specific consent from the
other party, any information relating to this Agreement or any
Transactions contemplated hereby, including without
limitation, the existence of this Agreement.
9. Assignment. This Agreement shall not be assignable by any
party except to successors to all or substantially all of the
business of either party for any reason whatsoever without the
prior written consent of the other party, which consent may
not be unreasonably withheld by the party whose consent is
required.
10. Amendment. This Agreement may not be amended or modified
except in writing signed by both parties.
11. Governing Law. This Agreement shall be deemed to have been
made and delivered in New York, and this Agreement shall be
governed as to validity, interpretation, construction, effect,
and in all other respects by the internal laws of the State of
New York.
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Advisor is delighted to accept this engagement and looks forward to
working with you on this assignment. Please confirm that the foregoing correctly
sets forth our agreement by signing this enclosed duplicate of this letter in
the space provided and returning it, whereupon this letter shall constitute a
binding agreement as of the date first above written.
Very truly yours,
GREAT EASTERN SECURITIES, INC.
By: /s/ Jeffrey S. Ramson
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Jeffrey S. Ramson
CEO
AGREED AND ACCEPTED AS OF
THE DATE FIRST ABOVE WRITTEN:
AXM PHARMA, INC.
By: /s/ Peter Cunningham
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Peter Cunningham
President and CEO
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