X.X. XXXXXX & COMPANY, LLC
INVESTMENT BANKING
November 25, 2003 (the "Effective Date")
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Xx. Xxxxx X. Xxxxx
Chief Executive Officer
CytoDyn, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Re: Financial Representative Agreement with X.X. Xxxxxx & Company, LLC
Dear Xx. Xxxxx,
This letter (the "Agreement") is to confirm the engagement of X.X. Xxxxxx
& Company, LLC (the "Agent") by CytoDyn, Inc, (the "Company") on the above date,
for purposes of providing services as detailed herein in consideration for the
fees and compensation described below.
1.0 THE PARTIES
1.1 The Company, with its principal office at 0000 Xxxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxx Xxxx, XX 00000, XXX, Phone: 000-000-0000 and Fax: 000-000-0000
1.2 Agent, a Georgia limited liability company, with its principal
office at 0000 Xxxxxxxxx Xxxx, 00xx Xxxxx, Xxxxxxx, XX, XXX, 00000; Phone:
000-000-0000 and-Fax: 000-000-0000.
1.3 The persons executing this Agreement represent to each other that
they have full and complete authority to do so.
2.0 THE AGREEMENT
2.1 The Company desires to consider selling securities (the "Offering").
The Offering shall be on terms and conditions satisfactory to the Company. As a
result of an introduction made through Agent to an investor, either single
investor, several investors, or a related entity (collectively the "Investor"),
should al1 or any part of the Offering be placed with the Investor, the Company
shall owe Agent the fees described herein. Should the Company close on any
introduced transactions under this Agreement, it shall be understood that the
Offering met terms and conditions satisfactory to the Company.
2.2 It is acknowledged by the Company that it has relied upon its own
advisors in evaluating all aspects of this Offering. The Company represents that
is has not relied upon any representations or statements made by Agent or its
employees concerning this Offering. Furthermore, the Company intentionally
waives and releases Agent from any and all claims or causes of action for any
losses or damages that the Company may sustain as a result of entering into this
Offering.
2.3 The terms of this Agreement shall be 12 months from the Effective
Date (the "Term"). Upon expiration of this Agreement, Agent shall be entitled to
receive all accrued compensation, including any unpaid Cash Fees (as defined
below), Warrants (as defined below), an un-reimbursed expenses, if any.
0000 XXXXXXXXX XXXX, XXXXX 0000, XXXXXXX, XXXXXXX, 00000 XXX
PHONE: 000-000-0000 FAX: 000-000-0000
2.4 The Company shall be under no obligation to pay any fees or other
monies whatsoever to Agent unless the purchase of all or part of the Offering
contemplated by this Agreement has closed with the Investor (the "Closing"). If
the Offering is concluded through multiple fundings or stepped milestones, then
each separate funding shall be deemed a Closing and the fees shall be paid to
Agent at each Closing as described. The total amount of the fee due Agent shall
be due and payable on the date of Closing and delivered simultaneous to the
Agent with the delivery of the funds to the Company. The Company shall be under
no obligation to consummate any such Offering, except upon such terns as shall
be acceptable to the Company in its sole discretion.
2.5 The Company represents and warrants to the Agent that with respect
to the Offering: (i) the Company has consulted its own legal counsel on all
aspects of the Offering; (ii) Agent has not made any representations to the
Company to induce it to execute this Agreement other than expressly and directly
made herein; (iii) the Company has performed its own due diligence investigation
and had the opportunity to ask questions of the Investor and its management team
and analyze their responses; (iv) the Company has not relied on any information,
representations or warranties of any individual or entity, including without
limitation the Agent, in connection with the Offering but for those made
directly, personally and epressly by the Investor in the definitive transaction
documents memorializing the Offering; and (v) the Company acknowledges that
Agent has acted solely as a finder and introduced the Company to the Investor.
2.6 Prior to introduction to any particular Investor, Agent will first
disclose the identity of the proposed Investor to the Company. The Company, at
its sole discretion, can approve or decline whether such introduction can be
made to the proposed Investor. If the Company does not disapprove in writing
whether such an introduction can be made to Investor within 48 hours of the
disclosure of an Investor by Agent to the Company, then such inaction shall be
deemed an approval. It is expressly agreed that the Company shall promptly
respond to all such introduction proposals. If approved, any proposed Investor
shall be deemed a proposed investor (the "Agent Proposed Investor").
Compensation, shall be triggered if an Agent's Proposed Investor, or parties
referred by an Agent's Proposed Investor, invest during the Term of the
Agreement, as amended, plus 180 days. If the Company in its sole discretion
agrees to a term sheet provided by Agent via one of Agent's Proposed Investors
by mutually executing the said term sheet, the Company will grant to Agent a
30-day exclusive period from the date at which the term sheet was consummated.
3.0 THE FEE
3.1 The Company shall pay Agent cash fee equal to 10.00% of the gross
proceeds of the Offering (the "Cash Fee"} as received by the Company from
Agent's Proposed Investors. The Company shall also issue the Agent a warrant to
purchase a number of the Company's common shared equal to 7.00% of the gross
proceeds of the Offering (the "Warrant") as received by the Company from Agent's
Proposed Investors. The Warrant shall have an exercise price equal to the
closing bid price of the Company's common shares on the prior trading date to
the Closing (the "Strike Price").
3.2 In further consideration for the services described herein, the
Company shall issue and deliver to Agent a non-refundable common stock purchase
warrant (the "Investment Warrant" collectively with the Warrant, the "Warrants")
for the purchase of three hundred thousand (300,000) shares of the Company's
common stock. The Investment Banking Warrant shall have an exercise price of
thirty tents ($.30) per share upon issuance, be fully paid, non-assessable, and
free of any restrictions on transfer, but for those restrictions that are the
result of state or federal securities law. The Investment Banking Warrant shall
immediately and completely vest in favor of the Agent.
The Warrants upon issuance, shall immediately vest in favor of the
Agent, be fully paid, non-assessable, and free of any restrictions on transfer,
but for those restrictions that are the result of state or
0000 XXXXXXXXX XXXX, XXXXX 0000, XXXXXXX, XXXXXXX, 00000 XXX
PHONE: 000-000-0000 FAX: 000-000-0000
federal securities laws. The Warrants shall be issued to Agent in the form of a
a warrant agreement (the "Warrant Agreement"), which shall be in a form and
content reasonably satisfactory to Agent and its counsel. The Warrant Agreement
shall provide for, among other provisions, the above terms and the following:
(1) The Warrants shall expire five years after the date that the Warrant
Agreement is issued (2) The Warrants shall have customary anti-dilution
provisions for stock dividends, splits, mergers, and sale of substantially all
assets of the Company (3) Agent may exercise the Warrants at any time after
signing the Warrant Agreement (4) The Warrants shall contain a "Cashless
Exercise" provision (5) The Company shall reserve, and at all times have
available, a sufficient number of shares of its common stock to be issued upon
the exercise of the Warrants and (6) The Company shall grant unlimited "piggy
back" registration rights, at the Company's expense, to include the shares of
the underlying common stock in any registration statement filed by the Company
under the Securities Act of 1933 relating to an underwriting of the sale of
shares of common stock or other security of the Company.
4.0 OTHER
4.1 Any arrangements made by the Company with any broker or other
persons with whom the Company is or may be involved are the total responsibility
of the Company. Upon payment made by the Company to Agent of Agent's fee, Agent
will hold the Company free and harmless from any and all claims, liabilities,
commissions, fees, or expenses in connection with the transaction from any party
who alleges a relationship with or through Agent and the Investors.
4.2 The Company shall also prepay or reimburse Agent for all necessary
expenses which are preapproved by the Company, including, without limitation,
acceptable travel and lodging, printing, legal, and mailing cost, that Agent may
incur in performance of the Services under this Agreement.
4.3 The Company shall supply to Agent, logos, trademarks, slogans, and
similar designs of itself and all subsidiaries and agrees to Agent's perpetual
use thereafter in "Tombstones" that reflect the Agent's fundraising efforts.
4.4 Either the Company or the Agent can terminate this Agreement for any
reason by providing not less than 45 days prior written notice to the other
party.
4.5 In the event of any dispute between the Company and Agent arising
under or pursuant to the terms of this Agreement, or any matters arising under
the terms of this Agreement, the same shall be settled only by arbitration
through NASD Dispute Resolution in Xxxxxx City of Atlanta, State of Georgia, in
accordance with the Code of Arbitration Procedure published by NASD Dispute
Resolution. The determination of the arbitrators shall be final and binding upon
the Company and Agent and may be enforced in any court of appropriate
jurisdiction. This Agreement shall be construed by and governed exclusively
under the laws of the State of Georgia, without regard to its conflicts of law
provisions. The venue shall be in Xxxxxx County, GA
4.6 This Agreement contains the entire agreement between Agent and the
Company concerning the introduction of Investors to the Company and correctly
sets forth the rights and duties of each of the parties to each other concerning
that matter as of this date. Any agreement or representation concerning the
subject matter of this Agreement or the duties of Agent to the Company in
relation thereto, not set forth in this Agreement, is null and void.
4.7 The Company agrees that upon the Closing the Agent will be paid
simultaneously with the funding of the Company from the Offering. The Company
shall include in any agreement executed by the Company with any Investor
regarding the Offering a covenant requiring Agent to be paid its fees hereunder
either from the funds held in escrow pending the Closing or directly from the
Investors in accordance with the following wiring instructions:
0000 XXXXXXXXX XXXX, XXXXX 0000, XXXXXXX, XXXXXXX, 00000 XXX
PHONE: 000-000-0000 FAX: 000-000-0000
Account Name: X.X. Xxxxxx & Company, L.L.C.
Bank: Wachovia Bank of Georgia
Address: 0000 Xxxxxxxx Xxxx, Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
ABA Routing #: 000-000-000
Account #: 000-000-00
The Warrant shall be assigned to X.X. Xxxxxx & Company, L.L.C. and
emailed or mailed to the following address:
xxxxx@xxxxxxxx.xxx
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or
X.X. Xxxxxx & Company, L.L.C.
Attention: Xxxxxxx X. Xxxxx, Managing Director of Investment Banking
0000 Xxxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Phone:000-000-0000
Fax: 000-000-0000
4.8 The Company agrees to indemnify and hold harmless Agent and each
person, if any, who controls Agent within the meaning of the Securities Act of
1933, as amended (the "Act"), its officers, employees, Agent's counsel
(collectively, the "Agent and its Personnel") from and against any losses,
claims, damages or liabilities, joint or several (which shall, for all purposes
of this Agreement, include, but not be limited to, all reasonable costs of
defense, investigation and collection and all attorneys' fees), to which Agent
and its Persoonel may become subject, under the Act or otherwise, insofar, as
such losses, claim, damages or liabilities (or actions in respect thereof); (i)
arising out of or are based upon any untrue statement or alleged untrue
statement of any material fact made by the Company its officers, employees,
agents, and the legal counsel; (ii) arising out of or are based upon any
omission or alleged omission of material fact necessary to make any statement
not misleading, made by the Company its officers, employees, agents, and its
legal counsel,, (iii) arising in any manner out of or in connection with the
performing of services by Agent hereunder; (iv) arising out of or based upon any
violation of the representations and warranties of the Investor; and (v) arising
out of or are based upon any untrue statement or alleged untrue statement of any
material fact made by the Company their officers, employees, agents, and the
legal counsel.
4.9 The Company shall include in any agreement executed by the Company
with any Investor regarding the Offering, the following representation:
"Investor has performed its own due diligence investigation and had the
opportunity to ask questions of the Company and its management team and analyze
their responses. Investor has not relied on any representations not made by the
Company and that are not expressly set forth in the purchase agreement. The
Company has performed its own due diligence investigation and, had the
opportunity to ask questions of the Investor and its management team and analyze
their responses. The Company has not relied on any representations not made by
the Investor and that are not expressly set forth in the purchase agreement.
Both parties to the purchase agreement shall release and hold harmless X.X.
Xxxxxx & Company, L.L.C. from and against any losses, claims, damages or
liabilities related to the Offering. Furthermore, both parties recognize that
the Agent only act as a finder and other than introducing them, the Agent had
and will have no further role."
0000 XXXXXXXXX XXXX, XXXXX 0000, XXXXXXX, XXXXXXX, 00000 XXX
PHONE: 000-000-0000 FAX: 000-000-0000
If the foregoing is in accordance with you understanding, kindly confirm
your acceptance by signing and returning the Agreement, which will thereupon
constitute an agreement between us.
Yours very truly,
Xxxxxxx Xxxxx
President
X.X. Xxxxxx & Company, LLC
Accepted and approved this 7th day of December, 2003
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By: /s/ Xxxxx X. Xxxxx
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Xx. Xxxxx X. Xxxxx
Chief Executive Officer
CytoDyn, Inc.
0000 Xxxxxxxxx Xxxxxx
Phone: 000-000-0000
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Fax: 000-000-0000
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0000 XXXXXXXXX XXXX, XXXXX 0000, XXXXXXX, XXXXXXX, 00000 XXX
PHONE: 000-000-0000 FAX: 000-000-0000
