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Exhibit 10.3
HEALTHRENU MEDICAL, INC.
PLACEMENT AGENT AGREEMENT
Dated as of: May ___, 2004
Monitor Capital, Inc.
9171 Towne Centre Drive, Suite 465
San Diego, CA 92122
Ladies and Gentlemen:
The undersigned, HealthRenu Medical, Inc., a Nevada corporation
(the
"Company"), hereby agrees with Monitor
Capital, Inc. (the "Placement Agent") and
Cornell Capital Partners, LP, a Delaware
Limited Partnership (the "Investor"),
as follows:
1. Offering. The Company hereby engages the Placement Agent to act
as
its exclusive placement agent in connection
with the Standby Equity Distribution
Agreement dated the date hereof (the
"Standby Equity Distribution Agreement"),
pursuant to which the Company shall issue
and sell to the Investor, from time to
time, and the Investor shall purchase from
the Company (the "Offering") up to
Ten Million Dollars ($10,000,000) of the
Company's common stock (the "Commitment
Amount"), par value $0.001 per share (the
"Common Stock"), at price per share
equal to the Purchase Price, as that term
is defined in the Standby Equity
Distribution Agreement. The Placement Agent
services shall consist of reviewing
the terms of the Standby Equity
Distribution Agreement and advising the Company
with respect to those terms.
All capitalized terms used herein and not otherwise defined
herein
shall have the same meaning ascribed to
them as in the Standby Equity
Distribution Agreement. The Investor will
be granted certain registration rights
with respect to the Common Stock as more
fully set forth in the Registration
Rights Agreement between the Company and
the Investor dated the date hereof (the
"Registration Rights Agreement"). The
documents to be executed and delivered in
connection with the Offering, including,
but not limited, to the Company's
latest Quarterly Report on Form 10-QSB as
filed with the United States
Securities and Exchange Commission, this
Agreement, the Standby Equity
Distribution Agreement, the Registration
Rights Agreement, and the Escrow
Agreement dated the date hereof (the
"Escrow Agreement"), are referred to
sometimes hereinafter collectively as the
"Offering Materials." The Company's
Common Stock purchased by the Investor
hereunder or to be issued in connection
with the conversion of any debentures are
sometimes referred to hereinafter as
the "Securities." The Placement Agent shall
not be obligated to sell any
Securities.
2. Compensation. Upon the execution of this Agreement, the
Company
shall issue to the Placement Agent or its
designee shares of the Company's
Common Stock in an amount equal to Ten
Thousand Dollars ($10,000) divided by the
volume weighted average price of the
Company's Common Stock, as quoted by
Bloomberg, LP, on the date hereof (the
"Placement Agent's Shares"). The
Placement Agent shall be entitled to
"piggy-back" registration rights with
respect to the Placement Agent's Shares,
which shall be triggered upon
registration of any shares of Common Stock
by the Company pursuant to the
Registration Rights Agreement dated the
date hereof.
3. Representations, Warranties and Covenants of the Placement
Agent.
A. The Placement Agent represents, warrants and covenants as
follows:
(i) The Placement Agent has the necessary power to
enter into this Agreement and to consummate
the transactions contemplated
hereby.
(ii) The execution and delivery by the Placement
Agent of this Agreement and the
consummation of the transactions contemplated
herein will not result in any violation of,
or be in conflict with, or
constitute a default under, any agreement
or instrument to which the Placement
Agent is a party or by which the Placement
Agent or its properties are bound, or
any judgment, decree, order or, to the
Placement Agent's knowledge, any statute,
rule or regulation applicable to the
Placement Agent. This Agreement when
executed and delivered by the Placement
Agent, will constitute the legal, valid
and binding obligations of the Placement
Agent, enforceable in accordance with
their respective terms, except to the
extent that (a) the enforceability hereof
or thereof may be limited by
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bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to
time in effect and affecting the rights of
creditors generally, (b) the
enforceability hereof or thereof is subject
to general principles of equity, or
(c) the indemnification provisions hereof
or thereof may be held to be in
violation of public policy.
(iii) Upon receipt and execution of this Agreement,
the Placement Agent will promptly forward
copies of this Agreement to the
Company or its counsel and the Investor or
its counsel.
(iv) The Placement Agent will not intentionally take
any action that it reasonably believes
would cause the Offering to violate the
provisions of the Securities Act of 1933,
as amended (the "Securities Act"), the
Securities Exchange Act of 1934 (the
"Exchange Act"), the respective rules and
regulations promulgated thereunder (the
"Rules and Regulations") or applicable
"Blue Sky" laws of any state or
jurisdiction.
(v) The Placement Agent is a member of the National
Association of Securities Dealers, Inc.,
and is a broker-dealer registered as
such under the Exchange Act and under the
securities laws of the states in which
the Securities will be offered or sold by
the Placement Agent unless an
exemption for such state registration is
available to the Placement Agent. The
Placement Agent is in material compliance
with the rules and regulations
applicable to the Placement Agent generally
and applicable to the Placement
Agent's participation in the Offering.
4. Representations and Warranties of the Company.
A. The Company represents and warrants as follows:
(i) The execution, delivery and performance of each
of this Agreement, the Standby Equity
Distribution Agreement, the Escrow
Agreement, and the Registration Rights
Agreement has been or will be duly and
validly authorized by the Company and is,
or with respect to this Agreement, the
Standby Equity Distribution Agreement, the
Escrow Agreement, and the
Registration Rights Agreement, will be a
valid and binding agreement of the
Company, enforceable in accordance with its
respective terms, except to the
extent that (a) the enforceability hereof
or thereof may be limited by
bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to
time in effect and affecting the rights of
creditors generally, (b) the
enforceability hereof or thereof is subject
to general principles of equity or
(c) the indemnification provisions hereof
or thereof may be held to be in
violation of public policy. The Securities
to be issued pursuant to the
transactions contemplated by this Agreement
and the Standby Equity Distribution
Agreement have been duly authorized and,
when issued and paid for in accordance
with this Agreement, the Standby Equity
Distribution Agreement and the
certificates/instruments representing such
Securities, will be valid and binding
obligations of the Company, enforceable in
accordance with their respective
terms, except to the extent that (1) the
enforceability thereof may be limited
by bankruptcy, insolvency, reorganization,
moratorium or similar laws from time
to time in effect and affecting the rights
of creditors generally, and (2) the
enforceability thereof is subject to
general principles of equity. All corporate
action required to be taken for the
authorization, issuance and sale of the
Securities has been duly and validly taken
by the Company.
(ii) The Company has a duly authorized, issued and
outstanding capitalization as set forth
herein and in the Standby Equity
Distribution Agreement. The Company is not
a party to or bound by any
instrument, agreement or other arrangement
providing for it to issue any capital
stock, rights, warrants, options or other
securities, except for this Agreement,
the agreements described herein and as
described in the Standby Equity
Distribution Agreement, and the agreements
described therein. All issued and
outstanding securities of the Company, have
been duly authorized and validly
issued and are fully paid and
non-assessable except as set forth in the
Disclosure Schedules to the Standby Equity
Distribution Agreement; the holders
thereof have no rights of rescission or
preemptive rights with respect thereto
and are not subject to personal liability
solely by reason of being security
holders; and none of such securities were
issued in violation of the preemptive
rights of any holders of any security of
the Company.
(iii) The Common Stock to be issued in accordance
with this Agreement and the Standby Equity
Distribution Agreement has been duly
authorized and, when issued and paid for in
accordance with this Agreement and
the Standby Equity Distribution Agreement,
the certificates/instruments
representing such Common Stock will be
validly issued, fully-paid and
non-assessable; the holders thereof will
not be subject to personal liability
solely by reason of being such holders;
such Securities are not and will not be
subject to the preemptive rights of any
holder of any security of the Company.
(iv) The Company has good and marketable title to, or
valid and enforceable leasehold estates in,
all items of real and personal
property necessary to conduct its business
(including, without limitation, any
real or personal property stated in the
Offering Materials to be owned or leased
by the Company), free and clear of all
liens,
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encumbrances, claims, security interests
and defects of any material nature
whatsoever, other than those set forth in
the Offering Materials and liens for
taxes not yet due and payable.
(v) There is no litigation or governmental proceeding
pending or, to the best of the Company's
knowledge, threatened against, or
involving the properties or business of the
Company, except as set forth in the
Offering Materials.
(vi) The Company has been duly organized and is
validly existing as a corporation in good
standing under the laws of the State
of Nevada. Except as set forth in the
Offering Materials, the Company does not
own or control, directly or indirectly, an
interest in any other corporation,
partnership, trust, joint venture or other
business entity. The Company is duly
qualified or licensed and in good standing
as a foreign corporation in each
jurisdiction in which the character of its
operations requires such
qualification or licensing and where
failure to so qualify would have a material
adverse effect on the Company. The Company
has all requisite corporate power and
authority, and all material and necessary
authorizations, approvals, orders,
licenses, certificates and permits of and
from all governmental regulatory
officials and bodies (domestic and foreign)
to conduct its businesses (and
proposed business) as described in the
Offering Materials. Any disclosures in
the Offering Materials concerning the
effects of foreign, federal, state and
local regulation on the Company's
businesses as currently conducted and as
contemplated are correct in all material
respects and do not omit to state a
material fact. The Company has all
corporate power and authority to enter into
this Agreement, the Standby Equity
Distribution Agreement, the Registration
Rights Agreement, and the Escrow Agreement,
to carry out the provisions and
conditions hereof and thereof, and all
consents, authorizations, approvals and
orders required in connection herewith and
therewith have been obtained. No
consent, authorization or order of, and no
filing with, any court, government
agency or other body is required by the
Company for the issuance of the
Securities or execution and delivery of the
Offering Materials except for
applicable federal and state securities
laws. The Company, since its inception,
has not incurred any liability arising
under or as a result of the application
of any of the provisions of the Securities
Act, the Exchange Act or the Rules
and Regulations.
(vii) There has been no material adverse change in
the condition or prospects of the Company,
financial or otherwise, from the
latest dates as of which such condition or
prospects, respectively, are set
forth in the Offering Materials, and the
outstanding debt, the property and the
business of the Company conform in all
material respects to the descriptions
thereof contained in the Offering
Materials.
(viii) Except as set forth in the Offering Materials,
the Company is not in breach of, or in
default under, any term or provision of
any material indenture, mortgage, deed of
trust, lease, note, loan or Standby
Equity Distribution Agreement or any other
material agreement or instrument
evidencing an obligation for borrowed
money, or any other material agreement or
instrument to which it is a party or by
which it or any of its properties may be
bound or affected. The Company is not in
violation of any provision of its
charter or by-laws or in violation of any
franchise, license, permit, judgment,
decree or order, or in violation of any
material statute, rule or regulation.
Neither the execution and delivery of the
Offering Materials nor the issuance
and sale or delivery of the Securities, nor
the consummation of any of the
transactions contemplated in the Offering
Materials nor the compliance by the
Company with the terms and provisions
hereof or thereof, has conflicted with or
will conflict with, or has resulted in or
will result in a breach of, any of the
terms and provisions of, or has constituted
or will constitute a default under,
or has resulted in or will result in the
creation or imposition of any lien,
charge or encumbrance upon any property or
assets of the Company or pursuant to
the terms of any indenture, mortgage, deed
of trust, note, loan or any other
agreement or instrument evidencing an
obligation for borrowed money, or any
other agreement or instrument to which the
Company may be bound or to which any
of the property or assets of the Company is
subject except (a) where such
default, lien, charge or encumbrance would
not have a material adverse effect on
the Company and (b) as described in the
Offering Materials; nor will such action
result in any violation of the provisions
of the charter or the by-laws of the
Company or, assuming the due performance by
the Placement Agent of its
obligations hereunder, any material statute
or any material order, rule or
regulation applicable to the Company of any
court or of any foreign, federal,
state or other regulatory authority or
other government body having jurisdiction
over the Company.
(ix) Subsequent to the dates as of which information
is given in the Offering Materials, and
except as may otherwise be indicated or
contemplated herein or therein, the Company
has not (a) issued any securities or
incurred any liability or obligation,
direct or contingent, for borrowed money,
or (b) entered into any transaction other
than in the ordinary course of
business, or (c) declared or paid any
dividend or made any other distribution on
or in respect of its capital stock. Except
as described in the Offering
Materials or the Disclosure Schedules to
the Standby Equity Distribution
Agreement, the Company has no outstanding
obligations to any officer or director
of the Company.
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(x) There are no claims for services in the nature of
a finder's or origination fee with respect
to the sale of the Common Stock or
any other arrangements, agreements or
understandings that may affect the
Placement Agent's compensation, as
determined by the National Association of
Securities Dealers, Inc.
(xi) The Company owns or possesses, free and clear of
all liens or encumbrances and rights
thereto or therein by third parties, the
requisite licenses or other rights to use
the trademark HealthRenu' and
copyrights, trade names and licenses
necessary to conduct its business
(including, without limitation, any such
licenses or rights described in the
Offering Materials as being owned or
possessed by the Company) and, except as
set forth in the Offering Materials, there
is no claim or action by any person
pertaining to, or proceeding, pending or
threatened, which challenges the
exclusive rights of the Company with
respect to any trademarks, copyrights,
trade names and licenses used in the
conduct of the Company's businesses
(including, without limitation, any such
licenses or rights described in the
Offering Materials as being owned or
possessed by the Company) except any claim
or action that would not have a material
adverse effect on the Company; the
Company's current products, services or
processes do not infringe or will not
infringe on the patents currently held by
any third party.
(xii) Except as described in the Offering Materials
or the Disclosure Schedules to the Standby
Equity Distribution Agreement, the
Company is not under any obligation to pay
royalties or fees of any kind
whatsoever to any third party with respect
to any trademarks, service marks,
copyrights, service names, trade names,
patents, patent applications, licenses
or technology it has developed, uses,
employs or intends to use or employ, other
than to their respective licensors.
(xiii) Subject to the performance by the Placement
Agent of its obligations hereunder the
offer and sale of the Securities
complies, and will continue to comply, in
all material respects with the
requirements of Rule 506 of Regulation D
promulgated by the SEC pursuant to the
Securities Act and any other applicable
federal and state laws, rules,
regulations and executive orders. Neither
the Offering Materials nor any
amendment or supplement thereto nor any
documents prepared by the Company in
connection with the Offering will contain
any untrue statement of a material
fact or omit to state any material fact
required to be stated therein or
necessary to make the statements therein,
in light of the circumstances under
which they were made, not misleading. All
statements of material facts in the
Offering Materials are true and correct as
of the date of the Offering
Materials.
(xiv) All material taxes which are due and payable
from the Company have been paid in full or
adequate provision has been made for
such taxes on the books of the Company,
except for those taxes disputed in good
faith by the Company or except as disclosed
in the Disclosure Schedules to the
Standby Equity Distribution Agreement.
(xv)
None of the Company nor any of its officers,
directors, employees or agents, nor any
other person acting on behalf of the
Company, has, directly or indirectly, given
or agreed to give any money, gift or
similar benefit (other than legal price
concessions to customers in the ordinary
course of business) to any customer,
supplier, employee or agent of a customer
or supplier, or official or employee of any
governmental agency or
instrumentality of any government (domestic
or foreign) or any political party
or candidate for office (domestic or
foreign) or other person who is or may be
in a position to help or hinder the
business of the Company (or assist it in
connection with any actual or proposed
transaction) which (A) might subject the
Company to any damage or penalty in any
civil, criminal or governmental
litigation or proceeding, or (B) if not
given in the past, might have had a
materially adverse effect on the assets,
business or operations of the Company
as reflected in any of the financial
statements contained in the Offering
Materials, or (C) if not continued in the
future, might adversely affect the
assets, business, operations or prospects
of the Company in the future.
5. Representations, Warranties and Covenants of the Investor.
A. The Investor represents, warrants and covenants as follows:
(i) The Investor has the necessary power to enter
into this Agreement and to consummate the
transactions contemplated hereby.
(ii)
The execution and delive
