Re: Engagement Agreement
September
11, 2009
GENEREX
BIOTECHNOLOGY CORPORATION
00
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx, Xxxxxx X0X0X0
Dear
Sirs:
The
purpose of this engagement letter is to outline the agreement pursuant to which
Maxim Group LLC (“Maxim”) will act as a
non-exclusive placement agent to Generex Biotechnology Corporation, I.R.S.
Employer Identification No. 00-0000000 (collectively, with its subsidiaries and
affiliates, the “Company”) in connection with
the proposed registered direct offering (the “Offering”) of warrants and
shares of common stock, par value $.001 per share (collectively, the “Securities”) of the
Company. The terms of such Offering and the Securities shall be
mutually agreed upon by the Company and the purchasers (each, a “Purchaser”
and collectively, the “Purchasers”)
and nothing herein constitutes that Maxim would have the power or authority to
bind the Company or any Purchaser or an obligation for the Company to issue any
Securities or complete the Offering. This Agreement and the documents executed
and delivered by the Company and the Purchasers in connection with the Offering
shall be collectively referred to herein as the “Transaction Documents.” The
date of the closing of the Offering shall be referred to herein as the “Closing
Date.” The Company expressly acknowledges and agrees that
Maxim’s obligations hereunder are on a reasonable best efforts basis only and
that the execution of this Agreement does not constitute a commitment by Maxim
to purchase the Securities and does not ensure the successful placement of the
Securities or any portion thereof or the success of Maxim with respect to
securing any other financing on behalf of the Company.
The terms
of our agreement in principle are as follows:
1. The
Company hereby engages Maxim, for the period beginning on the date hereof and
ending on September 15, 2009, unless sooner terminated
pursuant to the terms of this engagement letter agreement (the “Engagement Period”), to act as
the Company’s non-exclusive placement agent in connection with the proposed
Offering. Maxim agrees that, in connection with the Offering, it
will: (i) advise on pricing, and other terms and conditions of the Offering,
(ii) provide guidance on general market conditions and their impact on the
Offering, and (iii) assist the Company in drafting and assisting in
the presentation that may be used to market the Offering to existing
and potential investors, describing the proposed capital raising, the Company’s
history and performance to date, track records of key executives, highlights of
the Company’s business plan and the intended use of proceeds from the Offering,
and (iv) introduce the Company to potential investors and broker-dealers
representing potential investors, and assist with the scheduling of
presentations.
2. The
Offering shall consist of the issuance by the Company of up to $14,350,000 worth
of Securities. Maxim will act as a non-exclusive placement agent of the
Offering, subject to, among other things, completion of Maxim’s due diligence
examination of the Company and its affiliates.
{00106182.DOC.2}Members
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3. The
Company agrees that it will not hold Maxim liable or responsible for the failure
of the Offering in the event that the Offering is not consummated, either in
whole or in part, for any reason.
4. The
terms and conditions of the Offering shall be the subject of continuing
discussions between the Company and Maxim and will be based on market and
general economic conditions, the prospects and/or forecasts of the Company and
other factors.
The
Company represents and warrants to, and agrees with, Maxim that:
(A) The
Company filed with the Securities and Exchange Commission (the “Commission”) on December 22,
2006 a registration statement on Form S-3 (Registration File No.333-139637)
under the Securities Act of 1933, as amended (the “Securities Act”), as amended
by Pre-Effective Amendment No. 1 on January 1, 2007 which was declared effective
on February 23, 20007 for the registration under the Securities Act of the
Securities. At the time of such filing, the Company met the requirements of Form
S-3 under the Securities Act. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act and
complies with said Rule. The Company will file with the Commission pursuant to
Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the
Commission promulgated thereunder, a supplement to the form of prospectus
included in such registration statement relating to the placement of the
Securities and the plan of distribution thereof and has advised the placement
agent of all further information (financial and other) with respect to the
Company required to be set forth therein. Such registration statement, including
the exhibits thereto, as amended at the date of this agreement, is hereinafter
called the “Registration
Statement”; such prospectus in the form in which it appears in the
Registration Statement is hereinafter called the “Base Prospectus”; and the
supplemented form of prospectus, in the form in which it will be filed with the
Commission pursuant to Rule 424(b) (including the Base Prospectus as so
supplemented) is hereinafter called the “Prospectus Supplement.” Any
reference in this agreement to the Registration Statement, the Base Prospectus
or the Prospectus Supplement shall be deemed to refer to and include the
documents incorporated by reference therein (the “Incorporated Documents”)
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), on or before
the date of this agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be; and any reference in this agreement
to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the date of this agreement, or the issue date of the Base Prospectus
or the Prospectus Supplement, as the case may be, deemed to be incorporated
therein by reference. All references in this agreement to financial statements
and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop
order suspending the effectiveness of the Registration Statement or the use of
the Base Prospectus or the Prospectus Supplement has been issued, and no
proceeding for any such purpose is pending or has been initiated or, to the
Company's knowledge, is threatened by the Commission.
{00106182.DOC.2}Members
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(B) The
Registration Statement (and any further documents to be filed with the
Commission) contains all exhibits and schedules as required by the Securities
Act. Each of the Registration Statement and any post-effective amendment
thereto, at the time it became effective, complied in all material respects with
the Securities Act and the Exchange Act and the applicable Rules and Regulations
and did not and, as amended or supplemented, if applicable, 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. The Base Prospectus and the Prospectus Supplement, each as of its
respective date, comply, or will compy, as the case may be, in all material
respects with the Securities Act and the Exchange Act and the applicable Rules
and Regulations. Each of the Base Prospectus and the Prospectus Supplement, as
amended or supplemented, did not and will not contain as of the date thereof any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Incorporated Documents, when they were
filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the applicable Rules and Regulations, and
none of such documents, when they were filed with the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein (with respect to Incorporated Documents
incorporated by reference in the Base Prospectus or Prospectus Supplement), in
light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Base Prospectus
or Prospectus Supplement, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act
and the applicable Rules and Regulations, as applicable, and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. No post-effective amendment to the
Registration Statement reflecting any facts or events arising after the date
thereof which represent, individually or in the aggregate, a fundamental change
in the information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby that (x) have
not been filed as required pursuant to the Securities Act or (y) will not be
filed within the requisite time period. There are no contracts or other
documents required to be described in the Base Prospectus or Prospectus
Supplement, or to be filed as exhibits or schedules to the Registration
Statement, which have not been described or filed as required.
(C) [intentionally
deleted]
(D) The
Company has delivered, or will as promptly as practicable deliver, to Maxim
copies of the Base Prospectus and the Prospectus Supplement, as amended or
supplemented, in such quantities and at such places as Maxim reasonably
requests. Neither the Company nor any of its directors and officers
has distributed and none of them will distribute, prior to the Closing Date, any
offering material in connection with the offering and sale of the Securities
other than the Base Prospectus, the Prospectus Supplement, the Registration
Statement, copies of the documents incorporated by reference therein and any
other materials permitted by the Securities Act.
5.
In consideration for its services in the Offering, Maxim shall be
entitled to the following payments:
(a) a
cash fee payable immediately upon the Closing Date equal to 4% of the aggregate
gross proceeds received by the Company on the Closing Date from an investor(s)
introduced by Maxim, in connection with the Offering (but not including any
dollar amounts received by the Company subsequent to the Closing Date as a
consequence of the exercise of any warrants issued by the Company in connection
with the Offering);
(b) a
cash fee payable immediately upon the Closing Date equal to 2% of the aggregate
gross proceeds received by the Company on the Closing Date from an investor(s)
that was not introduced to the Offering by Maxim or another registered
broker-dealer (but not including any dollar amounts received by the Company
subsequent to the Closing Date as a consequence of the exercise of any warrants
issued by the Company in connection with the Offering); and
{00106182.DOC.2}Members
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(c) at
each Closing, the Company shall issue to Maxim, or its permitted assigns,
warrants (the “PA
Warrants”) to purchase that number of shares of common stock of the
Company equal to (A) two and a half percent (2.5%) of the sum of (i) the number
of shares of common stock of the Company issued at each such Closing, and (ii)
the number of shares of common stock issuable by the Company upon exercise or
conversion of any and all convertible securities issued at each such Closing,
from an investor(s) introduced by Maxim, and (B) one and one-quarter percent
(1.25%) of the sum of (i) the number of shares of common stock of the Company
issued at each such Closing, and (ii) the number of shares of common stock
issuable by the Company upon exercise or conversion of any and all convertible
securities issued at each such Closing, to an investor(s) that was not
introduced to the Offering by Maxim or another registered broker-dealer. The
shares underlying the PA Warrants shall be covered by the Registration Statement
on Form S-3, as amended by Pre-Effective Amendment No. 1 thereto (Registration
File no. 333-139637) that the Company filed with the Securities and Exchange
Commission as part of a “shelf” registration process, as supplemented by the
filing of the Prospectus Supplement on Form 424(b)5 in respect of the Closing.
The PA Warrants shall be exercisable for five (5) years, shall provide for
cashless exercise in the event there is no registration statement covering the
underlying warrant shares, and shall not be callable or redeemable by the
Company. The exercise price of the PA Warrants shall be the same exercise price
as in the Warrants issued to the Investors. The Company agrees that
Maxim may direct to whom the PA Warrants are to be issued, subject to compliance
with Federal and State securities laws.
6. The
Company shall be responsible for and pay all expenses relating to the Offering,
including, without limitation, all filing fees relating to the registration of
the Securities to be sold in the Offering with the Commission, provided that any
and all filing fees relating to the review of the Offering materials by the
Financial Industry Regulatory Authority, Inc. (“FINRA”) shall be solely for
the account of Maxim; all fees and expenses relating to the listing of such
Securities on the exchange where the Securities are (or will be) listed; all
fees, expenses and disbursements relating to the registration or qualification
of the Securities under the “blue sky” securities laws of any states or other
jurisdictions; the costs of mailing and printing all of the Offering
documents, Registration Statements, Prospectuses and all amendments, supplements
and exhibits thereto and as many preliminary and final Prospectuses as Maxim may
reasonably deem necessary; the costs and expenses of any public relations or
solicitation firm hired by the Company in connection with the Offering; the
costs of preparing, printing and delivering certificates
representing the fees and expenses of the Company’s accountants and
the fees and expenses of the Company’s legal counsel and other agents and
representatives. Any expenses in excess of $1,000 shall
be subject to the prior approval by the Company, which approval shall not be
unreasonably withheld or delayed. All of Maxim’s reasonable expenses
below the $1,000 threshold shall be reimbursed promptly by the
Company. Notwithstanding anything to the contrary contained herein,
Maxim shall be solely responsible for any legal fees payable to legal counsel
representing Maxim in connection with this Agreement and the consummation of the
transactions contemplated hereby.
7. [intentionally
deleted]
8. The
Offering shall be conditioned upon, among other things, the
following:
(a) Satisfactory
completion by Maxim of its due diligence investigation and analysis of: (i) the
Company’s arrangements with its officers, directors, employees, affiliates,
customers and suppliers, (ii) the audited historical financial statements of the
Company as may be required by the Exchange Act and rules and regulations of the
Commission thereunder for inclusion in a Registration Statement, and (iii) the
Company’s FORM 10-K for the fiscal year ended July 31, 2008;
(b) The
continued listing of the Common Stock on NasdaqCM.
9. Notwithstanding
any termination of this engagement letter pursuant to the terms hereof or
otherwise, if on or before the date that is twelve (12) months following the
consummation of the Offering, the Company enters into a commitment or letter of
intent relating to any offering of equity securities of the Company, including
any rights or securities convertible or exercisable into equity securities with
any participants in the Offering introduced by Maxim during the Engagement
Period, Maxim shall be deemed the selling agent for any such subsequent offering
(but only in respect of such participants) and shall be paid, at and subject to
the closing of any such offering or financing, the cash compensation described
in, and in accordance with the terms and provisions of, Sections 5 and 6
above.
{00106182.DOC.2}Members
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This
agreement does not create, and shall not be construed as creating rights
enforceable by any person or entity not a party hereto, except those entitled
hereto by virtue of the Indemnification Provisions hereof. The
Company acknowledges and agrees that Maxim is not and shall not be construed as
a fiduciary of the Company and shall have no duties or liabilities to the equity
holders or the creditors of the Company or any other person by virtue of this
agreement or the retention of Maxim hereunder, all of which are hereby expressly
waived.
The
obligations of Maxim and the closing of the sale of the Securities hereunder are
subject to the accuracy, when made and on the Closing Date, of the
representations and warranties on the part of the Company and its Subsidiaries
contained herein, to the accuracy of the statements of the Company and its
Subsidiaries made in any certificates pursuant to the provisions hereof, to the
performance by the Company and its Subsidiaries of their obligations hereunder,
and to each of the following additional terms and conditions:
(A) No
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the Commission, and any request for additional information on the
part of the Commission (to be included in the Registration Statement, the Base
Prospectus or the Prospectus Supplement or otherwise) shall have been complied
with to the reasonable satisfaction of Maxim. Any filings required to
be made by the Company in shall have been timely filed with the
Commission.
(B) Maxim
shall not have discovered and disclosed to the Company on or prior to the
Closing Date that the Registration Statement, the Base Prospectus or the
Prospectus Supplement or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for Maxim, is material or
omits to state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein
not misleading.
(C) All
corporate proceedings and other legal matters incident to the authorization,
form, execution, delivery and validity of each of this agreement, the
Securities, the Registration Statement, the Base Prospectus and the Prospectus
Supplement and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for Maxim, and the Company shall have furnished to
such counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
(D) Maxim
shall have received from outside counsel to the Company such counsel’s written
opinion, addressed to Maxim and the Purchasers dated as of the Closing Date, in
form and substance reasonably satisfactory to Maxim, substantially identical to
that provided to the Purchasers.
(E) Neither
the Company nor any of its Subsidiaries shall have sustained since the date of
the latest audited financial statements included or incorporated by reference in
the Base Prospectus, any loss or interference with its business from fire,
explosion, flood, terrorist act or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in or contemplated by the Base Prospectus
and (ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its Subsidiaries or any change,
or any development involving a prospective change, in or affecting the business,
general affairs, management, financial position, stockholders’ equity, results
of operations or prospects of the Company and its Subsidiaries, otherwise than
as set forth in or contemplated by the Base Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is, in the judgment of Maxim, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Securities on the terms and in the manner
contemplated by the Base Prospectus and the Prospectus Supplement.
{00106182.DOC.2}Members
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(F) The
Securities are registered under the Exchange Act and, as of the Closing Date,
the Securities shall be listed and admitted and authorized for trading on the
Nasdaq Capital Market Exchange, and satisfactory evidence of such actions shall
have been provided to Maxim. The Company shall have taken no action
designed to, or likely to have the effect of terminating the registration of the
Securities under the Exchange Act or delisting or suspending from trading the
Securities from the Nasdaq Capital Market Exchange, nor has the Company received
any information suggesting that the Commission or the Nasdq Capital Market
Exchange is contemplating terminating such registration or listing.
(G) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock
Exchange, the Nasdaq National Market or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
or Maximum prices or Maximum ranges for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by federal or state authorities or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States, (iii) the United States shall have
become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities
involving the United States, or there shall have been a declaration of a
national emergency or war by the United States, or (iv) there shall have
occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the
effect of any such event in clause (iii) or (iv) makes it, in the sole judgment
of Maxim, impracticable or inadvisable to proceed with the sale or delivery of
the Securities on the terms and in the manner contemplated by the Base
Prospectus and the Prospectus Supplement.
(H) No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any governmental agency or body which
would, as of the Closing Date, prevent the issuance or sale of the Securities or
materially and adversely affect or potentially and adversely affect the business
or operations of the Company; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale
of the Securities or materially and adversely affect or potentially and
adversely affect the business or operations of the Company.
(I) The
Company shall have prepared and filed with the Commission a Current Report on
Form 8-K with respect to the Offering, including as an exhibit thereto this
Agreement.
(J) The
Company shall have entered into subscription agreements with each of the
purchasers and such agreements shall be in full force and effect and shall
contain representations and warranties of the Company as agreed between the
Company and the purchasers.
(K) FINRA
hall have raised no objection to the fairness and reasonableness of the terms
and arrangements of this Agreement.
(L) Prior
to the Closing Date, the Company shall have furnished to Maxim such further
information, certificates and documents as the Placement Agent may reasonably
request.
{00106182.DOC.2}Members
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All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
Maxim.
10. Except
as provided in Paragraph 1 hereof, this Paragraph 10 and Paragraphs 5, 6, 9, 10,
13, 15, 16 and 17 hereof (which Paragraphs are intended to be legally binding
and enforceable on and against the Company and Maxim), this engagement letter is
not intended to be a binding legal document. Subject to the last sentence of
this Paragraph, the Company or Maxim may at any time terminate its further
participation in the proposed transactions and the party so terminating shall
have no liability to the other on account of any matters provided for
herein.
11. The
Company represents and warrants to Maxim that the entry into this engagement
letter or any other action of the Company in connection with the proposed
Offering will not violate any agreement between the Company and any placement
agent, financial advisor or other person or entity or otherwise trigger any
liability or obligation of the Company pursuant to such agreements.
12. Maxim
reserves the right to reduce any item of its compensation or adjust the terms
thereof as specified herein in the event that a determination and/or suggestion
shall be made by FINRA to the effect that Maxim’s aggregate compensation is in
excess of FINRA rules or that the terms thereof require adjustment; provided, however, the
aggregate compensation otherwise to be paid to Maxim by the Company may not be
increased above the amounts stated herein without the approval of the
Company.
13. Neither
the Company nor any of its affiliates has made any offer or sale of any
securities which are required to be “integrated” pursuant to the Act or the
regulations thereunder with the offer and sale of the Shares.
14. The
Company covenants to adhere to all “gun jumping” and “quiet period” rules and
regulations of the Commission prior to, during and following the consummation of
the Offering.
15. During
the Engagement Period or until the Closing, the Company agrees to cooperate with
Maxim and to furnish, or cause to be furnished, to Maxim, any and all
information and data concerning the Company, its subsidiaries and the Offering
that Maxim reasonably deems appropriate, including, without limitation, the
Company’s acquisition plans and plans for raising capital or additional
financing (the “Information”). The
Company shall provide Maxim reasonable access during normal business hours from
and after the date of execution of this Agreement until the date of the Closing
to all of the Company’s and its subsidiaries assets, properties, books,
contracts, commitments and records and to the Company’s and its subsidiaries
officers, directors, employees, appraisers, independent accountants, legal
counsel and other consultants and advisors. The Company represents
and warrants to Maxim that all Information: (i) made available by the Company to
Maxim or its agents and representatives, (ii) contained in any preliminary or
final Prospectus prepared by the Company in connection with the Offering, and
(iii) contained in any filing by the Company with any court or governmental
regulatory agency, commission or instrumentality, will be complete and correct
in all material respects and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not misleading in light of the circumstances under which such statements are
made. The Company further represents and warrants to Maxim that all
such Information will have been prepared by the Company in good faith and will
be based upon assumptions which, in light of the circumstances under which they
were made, are reasonable. The Company acknowledges and agrees that
in rendering its services hereunder, Maxim will be using and relying on such
information (and information available from public sources and other sources
deemed reliable by Maxim) without independent verification thereof by Maxim or
independent appraisal by Maxim of any of the Company’s assets. Except as
contemplated by the terms hereof or as required by applicable law, Maxim shall
keep strictly confidential all non-public Information concerning the Company
provided to Maxim. No obligation of confidentiality shall apply to
Information that: (a) is in the public domain as of the date hereof or hereafter
enters the public domain without a breach by Maxim, (b) was known or became
known by Maxim prior to the Company’s disclosure thereof to Maxim, (c) becomes
known to Maxim from a source other than the Company, and other than by the
breach of an obligation of confidentiality owed to the Company, (d) is disclosed
by the Company to a third party without restrictions on its disclosure or (e) is
independently developed by Maxim. Maxim’s obligations of
confidentiality hereunder shall extend to its employees.
{00106182.DOC.2}Members
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16. This
engagement letter shall be deemed to have been made and delivered in New York
City and both this engagement letter and the transactions contemplated hereby
shall be governed as to validity, interpretation, construction, effect and in
all other respects by the internal laws of the State of New York, without regard
to the conflict of laws principles thereof.
17. Each
of Maxim and the Company: (i) agrees that any legal suit, action or proceeding
arising out of or relating to this engagement letter and/or the transactions
contemplated hereby shall be instituted exclusively in New York Supreme Court,
County of New York, or in the United States District Court for the Southern
District of New York, (ii) waives any objection which it may have or hereafter
to the venue of any such suit, action or proceeding, and (iii) irrevocably
consents to the jurisdiction of the New York Supreme Court, County of New York,
and the United States District Court for the Southern District of New York in
any such suit, action or proceeding. Each of Maxim and the Company
further agrees to accept and acknowledge service of any and all process which
may be served in any such suit, action or proceeding in the New York Supreme
Court, County of New York, or in the United States District Court for the
Southern District of New York and agrees that service of process upon the
Company mailed by certified mail to the Company’s address shall be deemed in
every respect effective service of process upon the Company, in any such suit,
action or proceeding, and service of process upon Maxim mailed by certified mail
to Maxim’s address shall be deemed in every respect effective service process
upon Maxim, in any such suit, action or proceeding. Notwithstanding
any provision of this engagement letter to the contrary, the Company agrees that
neither Maxim nor its affiliates, and the respective officers, directors,
employees, agents and representatives of Maxim, its affiliates and each other
person, if any, controlling Maxim or any of its affiliates, shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement and transaction described
herein except for any such liability for losses, claims, damages or liabilities
incurred by us that are judicially determined (by an appellate court) to have
resulted from the bad faith or gross negligence of such individuals or
entities. Maxim will act under this engagement letter as an
independent contractor with duties to the Company. Because Maxim will
be acting on the Company’s behalf in this capacity, it is Maxim’s practice to
receive indemnification. A copy of Maxim’s standard indemnification
form is attached to this engagement letter.
[Signature
Page Follows]
{00106182.DOC.2}Members
FINRA & SIPC
000 Xxxxxxxxx Xxx. * Xxx
Xxxx, XX 00000 * tel (000) 000-0000 * (000) 000-0000 * fax (000) 000-0000 *
xxx.xxxxxxxx.xxx
Xxx Xxxx,
XX * Xxxx Xxxxxx, XX * Red Bank, NJ * Baltimore, MD
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Page
9
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We are
delighted at the prospect of working with you and look forward to a successful
offering. If you are in agreement with the foregoing, please execute
and return two copies of this engagement letter to the
undersigned. This engagement letter may be executed in counterparts
and by facsimile transmission.
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Yours
truly,
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MAXIM
GROUP LLC
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|
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By:
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/s/ Xxxxxxxxx Xxxxx
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Xxxxxxxxx
Xxxxx,
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Senior
Vice President
|
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By:
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/s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx
Xxxxxx
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|
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Executive
Managing Director
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ACCEPTED
AND AGREED TO AS OF THE DATE FIRSTABOVE WRITTEN:
GENEREX
BIOTECHNOLOGY CORPORATION
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By:
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/s/ Xxxx X. Xxxxxxx
|
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Xxxx
X. Xxxxxxx
|
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President,
Chief Executive Officer and Director
|
|
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By:
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/s/ Xxxx X. Xxxxxxxx
|
|
Xxxx
X. Xxxxxxxx
|
|
|
Executive
Vice-President, General
Counsel
|
[Signature
Page to Engagement Letter]
[Indemnification
Letter Begins on Next Page]
{00106182.DOC.2}Members
FINRA & SIPC
000 Xxxxxxxxx Xxx. * Xxx
Xxxx, XX 00000 * tel (000) 000-0000 * (000) 000-0000 * fax (000) 000-0000 *
xxx.xxxxxxxx.xxx
Xxx Xxxx,
XX * Xxxx Xxxxxx, XX * Red Bank, NJ * Baltimore, MD
GENEREX
BIOTECHNOLOGY CORPORATION
September
11, 2009
Maxim
Group LLC
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Gentlemen:
This
letter will confirm that Generex Biotechnology Corporation has engaged Maxim
Group LLC to advise and assist us in connection with the matters referred to in
our letter dated September 11, 2009 (the “Engagement
Letter”). In consideration of Maxim’s agreement to act on our
behalf in connection with such matters, we agree to indemnify and hold harmless
Maxim and its affiliates, and the respective officers, directors, employees,
agents and representatives of Maxim, its affiliates and each other person, if
any, controlling Maxim or any of its affiliates (Maxim and each such other
person being an “Indemnified
Person”) from and against any losses, claims, damages or liabilities
related to, arising out of or in connection with the engagement (the “Engagement”) under the
Engagement Letter, and will reimburse each Indemnified Person for all expenses
(including reasonable fees and expenses of counsel) as they are incurred in
connection with investigating, preparing, pursuing or defending any action,
claim, suit, investigation or proceeding related to, arising out of or in
connection with the Engagement, whether or not pending or threatened and whether
or not any Indemnified Person is a party. We will not, however, be
responsible for any losses, claims, damages or liabilities (or expenses relating
thereto) that are judicially determined in a final ruling not subject to appeal
(i) to have resulted from the gross negligence of any Indemnified Person or (ii)
to have arisen from any information provided by Maxim or its officers,
directors, employees, agents and representatives for use in any Prospectus
Supplement or Time of Sale Supplement containing 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.
We will
not, without Maxim’s prior written consent (which shall not be unreasonably
withheld or delayed), settle, compromise, consent to the entry of any judgment
in or otherwise seek to terminate any action, claim, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination includes a release of each Indemnified Person from any
liabilities arising out of such action, claim, suit or proceeding. No
Indemnified Person seeking indemnification, reimbursement or contribution under
this agreement will, without our prior written consent, settle, compromise,
consent to the entry of any judgment in or otherwise seek to terminate any
action, claim, suit, investigation or proceeding referred to in the preceding
paragraph.
Procedure. Upon
obtaining knowledge of any claim which may give rise to indemnification not
involving a Third Party Claim, the Indemnified Person shall, as promptly as
practicable following the date the Indemnified Person has obtained such
knowledge, give written notice (which may be delivered by facsimile
transmission, with confirmation of receipt by the receiving party) of such claim
for which indemnification is sought (each, a “Claim”) to us, but no failure
to give such notice shall relieve us of any liability hereunder (except to the
extent we have suffered actual, irreversible prejudice thereby). The
Indemnified Person, at its cost, shall furnish to us in good faith and in
reasonable detail such information as the Indemnified Person may have with
respect to such Claim.
1
Promptly
after receipt by an Indemnified Person of notice of the commencement of any
action, suit or proceeding involving a Claim by a third party (each, a “Third Party Claim”) against
it, such Indemnified Person will give written notice to us of the commencement
of such Third Party Claim, and shall give the Indemnifying Party such
information with respect thereto as we may reasonably request, but no failure to
give such notice shall relieve us of any liability hereunder (except to the
extent we have suffered actual, irreversible prejudice thereby). We
shall have the right, but not the obligation, to assume the defense and control
the settlement of such Third Party Claim, at our cost and expense (and not as a
reduction in the amount of indemnification available hereunder), using counsel
selected by us and reasonably acceptable to the Indemnified
Person. If we satisfy the requirements of this agreement and desire
to exercise our right to assume the defense and control the settlement of such
Third Party Claim, we shall give written notice (the “Notice”) to the Indemnified
Person within fourteen (14) calendar days of receipt of notice from the
Indemnified Person of the commencement of or assertion of any Third Party Claim
stating that we shall be responsible for such Third Party
Claim. Notwithstanding the foregoing, the Indemnified Person shall
have the right: (i) to assume the defense and control the settlement
(subject to our consent, which will not be unreasonably withheld or delayed) of
a Third Party Claim and (ii) to employ separate counsel at our reasonable
expense (provided that we shall not be required to reimburse the expenses and
costs of more than one law firm) and control its own defense of a Third Party
Claim if (x) the named parties to any such action (including any impleaded
parties) include both the Indemnified Person and us, and the Indemnified Person
shall have been advised by counsel that there are one or more legal or equitable
defenses available to the Indemnified Person that are different from those
available to us, (y) such Third Party Claim involves equitable or other
non-monetary damages or in the reasonable judgment of the Indemnified Person,
such settlement would have a continuing material adverse effect on the
Indemnified Person’s business (including any material impairment of its
relationships with customers and suppliers) or (z) or in the reasonable judgment
of the Indemnified Person, we may not be able to satisfy fully such Third Party
Claim. In addition, if we fail to give the Indemnified Person the
Notice in accordance with the terms hereof, the Indemnified Person shall have
the right to assume control of the defense of and settle (subject to our
consent, which will not be unreasonably withheld or delayed) the Third Party
Claim and all costs incurred in connection therewith shall constitute damages of
the Indemnified Person.
If at any
time after we assume the defense of a Third Party Claim, any of the conditions
set forth in the paragraph above are no longer satisfied, the Indemnified Person
shall have the same rights as set forth above as if we never assumed the defense
of such claim.
Notwithstanding
the foregoing, we or the Indemnified Person, as the case may be, shall have the
right to participate, at our or its own expense, in the defense of any Third
Party Claim that the other party is defending.
If we
assume the defense of any Third Party Claim in accordance with the terms hereof,
we shall have the right, upon 30 calendar days’ prior written notice to the
Indemnified Person, to consent to the entry of judgment with respect to, or
otherwise settle such Third Party Claim; provided, however, that with respect to
such consent to the entry of judgment or settlement, the Indemnified Person will
not have any liability and will be fully indemnified with respect to all Third
Party Claims. Notwithstanding the foregoing, we shall not have the
right to consent to the entry of judgment with respect to, or otherwise settle a
Third Party Claim if: (i) the consent to judgment or settlement of such
Third Party Claim involves equitable or other non-monetary damages against the
Indemnified Person, or (ii) in the reasonable judgment of the Indemnified
Person, such settlement would have a continuing effect on the Indemnified
Person’s business (including any material impairment of its relationships with
customers and suppliers), without the prior written consent of the Indemnified
Person, which consent will not be unreasonably withheld or
delayed. In addition, the Indemnified Person shall have the sole and
exclusive right to settle any Third Party Claim on such terms and conditions as
it deems reasonably appropriate, (x) if we fail to assume the defense in
accordance with the terms hereof, or (y) to the extent such Third Party
Claim involves only equitable or other non-monetary relief, and shall have the
right to settle any Third Party Claim involving monetary damages with our
consent, which consent shall not be unreasonably withheld.
2
The
provisions of this agreement shall apply to the Engagement and any modification
thereof and shall remain in full force and effect regardless of any termination
or the completion of your services under the Engagement Letter.
This
letter agreement may be executed in counterparts and by facsimile transmission
and shall be governed by and construed in accordance with the laws of the State
of New York applicable to contracts executed and to be performed in that
state.
|
Very
truly yours,
|
|
|
GENEREX
BIOTECHNOLOGY CORPORATION
|
|
|
By:
|
/s/ Xxxx X. Xxxxxxx
|
|
Xxxx
X. Xxxxxxx
|
|
|
President,
Chief Executive Officer and Director
|
|
|
By:
|
/s/ Xxxx X. Xxxxxxxx
|
|
Xxxx
X. Xxxxxxxx
|
|
|
Executive
Vice-President, General
Counsel
|
|
ACCEPTED AND AGREED TO as of
September 11, 2009
|
By:
|
/s/ Xxxxxxxx Xxxxxx
|
|
Xxxxxxxx
Xxxxxx
|
|
|
Executive
Managing Director
|
|
3
