OccuLogix, Inc. (d/b/a TearLab Corporation) 11025 Roselle St., Suite 100 San Diego, CA 92121
Exhibit
10.1
OccuLogix,
Inc. (d/b/a TearLab Corporation)
00000
Xxxxxxx Xx., Xxxxx 000
Xxx
Xxxxx, XX 00000
November
3, 2009
Greybrook
Capital Inc.
0000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx,
XX X0X 0X0
Ladies
and Gentlemen:
1. Agreement. This
letter agreement (this “Agreement”) confirms that
OccuLogix, Inc. (the “Company”), a Delaware
corporation, has engaged Greybrook Capital Inc. (“Greybrook”), an Ontario
corporation, on a non-exclusive basis to act as its business advisor as of the
date first written above (the “Effective
Date”). Greybrook has rendered, and shall continue to render,
corporate finance advisory services to the Company and, for that purpose, shall
make available to the Company the services of certain of its employees or third
party contractors and/or those of one or more of its affiliates (collectively,
the “Greybrook Service
Providers”) to advise the Company with respect to corporate finance
matters, within the scope and to the extent mutually agreed upon by the parties
hereto from time to time. Such services are referred to hereinafter
as the “Services”. The
Services include providing advice with respect to the development and
implementation of financing strategies, providing advice with respect to the
structuring and implementation of financing transactions, rendering assistance
in the Company’s evaluation of strategic opportunities such as possible
acquisitions, performing certain investor relations functions and such other
advisory services as may be agreed to by the parties hereto from time to
time. The Services have not heretofore included, and under no
circumstances will the Services include, the provision of financial intermediary
services of a non-advisory nature that are customarily provided by
broker-dealers. To the extent that the Company shall engage Greybrook
to provide such services, the terms and conditions of any such engagement shall
be set forth in a separate, legally binding agreement. For greater
certainty, nothing in this Agreement shall be construed as obligating the
Company to engage Greybrook to provide such services or as obligating Greybrook
to accept any such engagement.
2. Fees and
Expenses.
(a) Advisory
Fee. Within 90 days of the Effective Date and again on or
before the first anniversary of the Effective Date, the Company shall pay or
deliver to Greybrook (as applicable) the Advisory Fee. The Advisory
Fee shall consist (in Greybook’s sole discretion) of (i) U.S.$100,000 in cash or
(ii) shares of the Company’s common stock (“Common Shares”) equal to the
quotient of (A) US$100,000 and (B) the volume weighted average per share trading
price of the Company’s common stock on the NASDAQ Capital Market (“NASDAQ”) (or, if the
Company’s common stock is no longer listed on NASDAQ, such other exchange on
which the Company’s common stock is then listed or quoted) for the ten-day
trading period immediately preceding the date of issuance.
(b)
Registration Rights.
(i) Registration
Statement. At any time after the delivery of Common Shares
pursuant to Section 2(a) hereof, within 30 days of delivery of a written request
by Greybrook, the Company shall prepare and file with the U.S. Securities and
Exchange Commission (the “SEC”) a registration
statement (the “Registration
Statement”) covering the resale of all Common Shares issued to Greybrook
in payment of the Advisory Fee (the “Registrable Securities”) for
an offering to be made on a continuous basis pursuant to Rule 415, promulgated
by the SEC pursuant to the Securities Act of 1933, as amended (the “Securities
Act”). The Registration Statement shall be on Form S-3 (except
if the Company is not then eligible to register the Registrable Securities for
resale on Form S-3, in which case such registration shall be on another
appropriate form in accordance with the Securities Act and the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) that allows
the Company to incorporate by reference its periodic filings required under the
Exchange Act). The Company shall use commercially reasonable efforts
to cause the Registration Statement to be declared effective by the SEC as
promptly as possible after the filing thereof and shall use commercially
reasonable efforts to keep the Registration Statement continuously effective
under the Securities Act (including, without limitation, by preparing and filing
with the SEC any necessary or advisable post-effective amendments) until the
earlier of (A) the date that all of the Registrable Securities covered by the
Registration Statement have been sold or otherwise disposed of by Greybrook to a
non-affiliate of Greybrook and (B) the date that is 180 days after the effective
date of the Registration Statement (subject to extension for each day that the
distribution of Registrable Securities covered by the Registration Statement has
been suspended in accordance herewith); provided that, upon notification by the
SEC that the Registration Statement will not be reviewed or is no longer subject
to further review and comments, the Company shall request acceleration of the
Registration Statement within five trading days following receipt of such
notice. For greater certainty, the Registrable Securities shall
include any securities issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to the Common
Shares issued to Greybrook in payment of the Advisory Fee. In
connection with the offer and sale of the Registrable Securities, the parties
hereto shall comply, in all material respects, with the provisions of the
Securities Act and the Exchange Act, and all applicable rules and regulations of
the SEC promulgated thereunder, and Greybrook agrees to provide all such
information and materials and take all such actions as may be required in order
to permit the Company to comply therewith and obtain any desired acceleration of
the effective date of the Registration Statement.
(ii) Stock Exchange
Listings. If any portion of the Advisory Fee consists of
Common Shares, the Company shall prepare and file with each of NASDAQ and the
Toronto Stock Exchange (the “TSX”) a listing application
covering such shares and take all steps necessary to cause such shares to be
approved for listing on each of NASDAQ and the TSX as soon as possible
thereafter.
(iii) Registration
Expenses. The Company shall pay all fees and expenses incident
to the performance of its obligations under this Section 2(b), including,
without limitation, (a) all registration and filing fees and expenses and
listing fees (including, without limitation, those related to filings with the
SEC, NASDAQ or the TSX and in connection with applicable state securities laws),
(b) printing expenses, (c) messenger, telephone and delivery expenses and (d)
fees and disbursements of the Company’s counsel, but excluding any underwriting,
placement agent, broker or similar fees.
(iv)
Registration Restrictions.
(A) If
the Company receives a registration request at a time when the Company (1) shall
have filed, or has a bona fide intention to file, a registration statement with
respect to a proposed public offering of equity or equity-linked securities, (2)
has commenced, or has a bona fide intention to commence, a public offering of
equity or equity-linked securities pursuant to an existing effective shelf or
other registration statement or (3) has commenced, or has a bona fide intention
to commence, a private placement of equity or equity-linked securities, then the
Company shall be entitled to suspend, until the later of (x) the consummation or
abandonment of such transaction and (y) the expiration of any “lock-up,” market
stand-off or similar agreement applicable to such transaction, the filing of any
Registration Statement.
(B) The
Company shall not be required to file a Registration Statement or to cause a
Registration Statement to be declared effective and may suspend any distribution
of Registrable Securities pursuant to any effective Registration Statement
(1) during any period during which persons are generally restricted from
trading in Common Shares pursuant to the Company’s then-applicable xxxxxxx
xxxxxxx policy or (2) if the Company shall have determined in good faith
that because of valid business reasons, including plans for a financing, an
acquisition or other proposed or pending corporate developments and similar
events or because of filings with the SEC, it is in the best interests of the
Company to delay such effectiveness or suspend such use. Prior to
such delay or suspension with respect to clause (2) above, the Company
shall provide Greybrook with notice of such delay or suspension, which notice
need not specify the nature of the event giving rise to such suspension (and,
upon receipt of such notice, Greybrook agrees not to sell any Registrable
Securities pursuant to a Registration Statement until it is advised in writing
that the applicable prospectus may be used, which notice the Company agrees to
provide promptly following the lapse of the event or circumstances giving rise
to such suspension). Greybrook shall keep confidential any
communications received by it from the Company regarding the suspension of the
use of any prospectus (including, without limitation, the fact of the
suspension), except as required by applicable law. The Company may
delay the effectiveness of any Registration Statement pursuant to
clause (2) above for up to 90 days and may suspend any distribution of
Registrable Securities pursuant to clause (2) above for up to 60 days in
any one time; provided that such
right to delay the effectiveness of or suspend a Registration Statement shall be
exercised by the Company not more than twice or for more than 120 days in the
aggregate in any 12-month period.
(C) In no
event shall the Company be required to cause to become effective more than two
Registration Statements pursuant to this Section 2. If on the date
that Greybrook submits a registration request, the Company determines that the
expenses payable by the Company in connection therewith would exceed an amount
equal to the product of (1) the number of outstanding Registrable Securities and
(2) the last sale price of the Company’s common stock on NASDAQ (or such other
exchange or market on which the Company’s shares of Common Stock then trade) on
such date (such price, the “Call Option Price”), then the
Company may, at its option, elect to purchase such Registrable Securities, and
Greybrook shall sell such securities to the Company, at a per share price equal
to the Call Option Price.
(v) Termination.
This Section 2 shall be terminated and be of no further force and effect on the
earliest of (A) the date on which all the Registrable Securities issued or
issuable to Greybrook have been sold or otherwise disposed of to a non-affiliate
of Greybrook, (B) the date on which all the Registrable Securities issued or
issuable to Greybrook are saleable under Rule 144 promulgated under the
Securities Act without being subject to any restrictions imposed thereunder as a
result of the affiliate relationship between the Company and Greybrook
(including, without limitation, volume restrictions) and (C) the second
anniversary of the Effective Date (subject to extension for each day that the
filing of a Registration Statement has been delayed in accordance herewith or
the distribution of Registrable Securities covered by the Registration Statement
has been suspended in accordance herewith).
(e) Expenses.
(i) Out-of-pocket
Expenses. The Company shall reimburse Greybrook, promptly upon
request, for all documented out-of-pocket expenses reasonably incurred by
Greybrook in connection with the provision of the Services, including, without
limitation, out-of-pocket expenses incurred by the Greybrook Service Providers
to attend meetings of the Company’s board of directors or any committee thereof
at the Company’s request, such expenses not to exceed $5,000 without the prior
written consent of the Company.
(ii) Legal and Other Professional
Fees and Expenses. Without limiting the generality of Section
2(e)(i) (and without duplication thereof), the Company shall reimburse
Greybrook, upon request, for the reasonable fees and disbursements of outside
legal counsel, accountants, consultants and other advisors that Greybrook may
retain from time to time, as it deems necessary or appropriate, to enable it to
render the Services, such expenses not to exceed $10,000 without the prior
written consent of the Company.
3. Payments. All
cash fees that are payable from time to time pursuant to this Agreement and all
other amounts payable hereunder in cash, including, without limitation, expenses
payable pursuant to Section 2(e), shall be paid by wire transfer of immediately
available funds to Greybrook or, at Greybrook’s written direction, to one or
more of its designees and, in consideration of the Services heretofore provided
by Greybrook to the Company, the first Advisory Fee shall be paid irrespective
of the quality of the Services or the timeliness of their delivery.
4. Term. The
Company shall have the right to terminate the engagement of Greybrook at any
time upon ten days’ prior written notice, subject to the Company’s obligation to
(a) pay the Advisory Fee or deliver Common Shares in respect thereof as provided
in Section 2(a) of this Agreement and (b) reimburse Greybrook for all out
of-pocket-expenses incurred prior to the date of such notice. For
clarity, the parties hereto hereby acknowledge and agree that, notwithstanding
any termination of this Agreement by the Company pursuant to this Section 4
prior to the first anniversary of the Effective Date, the Advisory Fee that is
payable on or prior to the first anniversary of the Effective Date pursuant to
Section 2(a) of this Agreement shall remain payable and the payment thereof
shall remain an obligation of the Company until fulfilled in accordance with
this Agreement. This Section 4 and Sections 6 though 12 of this
Agreement shall survive the termination of this Agreement. Unless the
parties agree in writing to extend the term of this Agreement, this Agreement
shall automatically terminate as of 5:00 p.m. Pacific Time as of the day
immediately prior to the second anniversary of the Effective
Date.
5. Accuracy of
Information. In providing the Services, Greybrook will rely on
information prepared and provided by the Company and other sources approved by
the Company’s management. In all circumstances, Greybrook shall be
entitled to rely on, and assumes no obligation to verify, the accuracy or
completeness of such information and, under no circumstances, will be liable to
the Company or its securityholders for any damages arising out of the inaccuracy
of, or omission from, any such information (except to the extent arising out of
any inaccuracy or omission in reliance upon and in conformity with information
provided by Greybrook). In addition, the Company represents and
warrants to Greybrook that all information and documentation relating to the
Company that will be provided to Greybrook in connection with its engagement
hereunder shall be accurate and complete in all material respects and will not
include any untrue statement of material fact or omit to state a material fact
necessary in order to make the statements, in light of the circumstances under
which they were made, not misleading.
6. Indemnity. The
Company hereby agrees to, and it shall, indemnify and hold harmless Greybrook
and its affiliates and shareholders and their respective directors, officers,
employees, partners, agents, representatives and advisors in accordance with
Schedule “A” hereto, which Schedule forms an integral part of this Agreement and
the consideration for which is the entering into of this Agreement by
Greybrook. Such indemnity (the “Indemnity”) is in addition
to, and not in substitution for, any liability that the Company or any other
person may owe, apart from the Indemnity, to Greybrook or to the other persons
indemnified pursuant to the Indemnity. The Indemnity will apply to
all of the Services.
7. Limitation of
Liability. Under no circumstances, will either party hereto be
liable to the other party hereto for, or in respect of, any indirect, special,
incidental or consequential damages (including, without limitation, lost profits
or savings), regardless of whether such damages were foreseeable.
8. Greybrook as
Independent Contractor. Greybrook and the Company hereby
acknowledge and agree that Greybrook shall perform the Services as an
independent contractor and will retain control over, and full responsibility
for, its own operations and personnel, including, without limitation, the
Greybrook Service Providers. None of the Greybrook Services Providers
shall be considered employees or agents of the Company as a result of this
Agreement. In addition, nothing in this Agreement shall be construed
as creating an agency, partnership or joint venture relationship between the
parties hereto. Neither party hereto shall have the power or
authority to bind the other party hereto in any manner whatsoever, and neither
party hereto shall hold itself out as having such power or
authority.
9. Acknowledgements. The
Company hereby acknowledges and agrees that (a) no provision of this Agreement
(i) shall be construed so as to prohibit or restrict the ability of any of
Greybrook, its affiliates or shareholders or any of their respective
shareholders, directors, officers, employees and partners (collectively, the
“Greybrook Group
Members” and, individually, a “Greybrook Group Member”) from
having business interests and engaging in business activities or transactions
that do not relate to, or involve, the Company (the “Greybrook Group’s Deals”),
notwithstanding the fact that some of the Greybrook Group’s Deals may be
competitive with the business of the Company or otherwise contrary to the
Company’s interests; (ii) shall give the Company any right, title or interest in
or to any of the Greybrook Group’s Deals, including, without limitation, any
income or proceeds earned or derived therefrom; (iii) give rise to any
obligation on the part of any Greybrook Group Member to present any particular
investment or business opportunity to the Company even if such opportunity is of
a kind or nature which the Company reasonably would consider undertaking for
itself; (iv) shall be construed as prohibiting or restricting the ability of any
Greybrook Group Member to exploit any such opportunity for himself, herself or
itself, or for or on behalf of another person, or to recommend any such
opportunity to other persons; and (b) each Greybrook Group Member, on his, her
or its own behalf, may enter into contracts or other business arrangements with
the Company and/or its affiliates at any time and from time to time, provided
that such contracts or other business arrangements are pre-approved by the
Company’s board of directors. The Company hereby waives, to the
fullest extent permitted by applicable law, any claims and rights that the
Company, but for this Section 9, may otherwise have against any of the Greybrook
Group Members in connection with the matters described in this Section
9.
10. Governing Law and
Attornment. This Agreement shall be governed by, and construed
in accordance with, the laws of the Province of Ontario and the federal laws of
Canada applicable therein. The parties hereto hereby attorn to the
non-exclusive jurisdiction of the courts located in the Province of
Ontario.
11. Confidentiality. Greybrook,
on behalf of itself, the Greybrook Service Providers and their respective
employees and agents, agrees to maintain the confidentiality of all information
provided to it by the Company regarding the Company and shall not disclose any
such information to any person other than employees and agents of Greybrook (who
shall be subject to comparable confidentiality obligations) without the prior
consent of the Company. The obligations regarding confidentiality of
information received hereunder shall not apply to any such information which:
(a) is or becomes part of the public domain, prior to or after the time of the
maintenance of the confidentiality of such information, or is or becomes
publicly available without breach hereof by Greybrook or any of the Greybrook
Service Providers or their respective employees and agents; (b) is lawfully
acquired by Greybrook from a source not under obligation to the Company
regarding disclosure of such information; (c) is developed by or on behalf of
Greybrook without reference to or reliance upon Company confidential
information; (d) was in Greybrook’s possession before receipt from the
Company without Greybrook’s being bound by a confidentiality agreement or to be
otherwise prohibited from transmitting or
disclosing the information by a confidential, legal or fiduciary
obligation with respect to such information; or (e) the Company excepts from
these confidentiality obligations in writing. Greybrook shall be liable for any
breach of this Section 11 by any Greybrook Service Provider or any employee or
agent of Greybrook or a Greybrook Service Provider.
12. Other
Matters. This Agreement may not be amended or otherwise
modified except by a written instrument, signed by the parties hereto. If any
provision hereof is determined to be invalid or unenforceable, such
determination shall not affect any other provision of this Agreement, each of
which shall remain in full force and effect. This Agreement may be
executed in one or more counterparts, all of which shall constitute one and the
same agreement. The inclusion of headings in this Agreement is for
convenience of reference only and shall not affect the construction or
interpretation hereof.
If the
foregoing correctly sets forth the mutual understanding of Greybrook and the
Company, please indicate so by signing below and returning an executed copy of
this Agreement to Greybrook.
Yours
very truly,
GREYBROOK
CAPITAL INC.
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Name:
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Xxxx
Xxxx
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Title:
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Chief
Financial Officer
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The
foregoing is in accordance with the Company’s understanding of the subject
matter in question and is agreed to by the Company as of the Effective
Date.
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Name:
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Xxxxxxx
X. Dumencu
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Title:
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CFO
& Treasurer
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SCHEDULE
“A”
INDEMNITY
In
consideration of Greybrook Capital Inc. (“Greybrook”) entering into the
letter agreement to which this Schedule “A” is attached (the “Agreement”), OccuLogix, Inc.
(the “Company”) hereby
agrees to, and it shall, indemnify Greybrook and its affiliates and shareholders
and their respective directors, officers, employees, partners, agents,
representatives and advisors (collectively, the “Indemnified Parties” and,
individually, an “Indemnified
Party”) from and against any and all losses, damages, liabilities or
expenses of whatsoever nature or kind (subject to Section 7 of the Agreement)
(collectively, the “Losses”), including the
aggregate amount paid in reasonable settlement of any actions, suits
proceedings, investigations or claims that may be made or threatened against any
Indemnified Party or to which an Indemnified Party may become subject or
otherwise involved in any capacity (collectively, the “Claims” and, individually, a
“Claim”), together with
reasonable fees, disbursements and taxes of their counsel in connection with any
such Claim, insofar as the Losses relate to, are caused by, result from, arise
out of or are based upon, directly or indirectly, the Services (as such term is
defined in the Agreement) and to reimburse each Indemnified Party forthwith,
upon demand, for any legal or other expenses reasonably incurred by such
Indemnified Party in connection with any Claim and/or in connection with
enforcing this indemnity.
In the
event and to the extent that a court of competent jurisdiction, in a final
judgment that has become non-appealable, determines that an Indemnified Party
was grossly negligent or guilty of willful misconduct in connection with a Claim
in respect of which the Company has advanced funds to the Indemnified Party
pursuant to this indemnity, such Indemnified Party will reimburse such funds to
the Company and thereafter this indemnity will not apply to such Indemnified
Party in respect of such Claim. The Company hereby agrees to, and it
shall, waive any right it might have of first requiring the Indemnified Party to
proceed against, or enforce, any other right, power, remedy, security or claim
payment from any other person before claiming under this indemnity.
In case
any action, suit, proceeding or claim is brought against any Indemnified Party
or an Indemnified Party has received notice of the commencement of any
investigation in respect of which indemnity may be sought against the Company,
the Indemnified Party will give the Company prompt written notice of any such
action, suit, proceeding, claim or investigation and the Company will undertake
the investigation and defence thereof on behalf of the Indemnified Party,
including the prompt employment of counsel reasonably acceptable to the
Indemnified Parties affected and the payment of all expenses. Failure
by the Indemnified Party to so notify will not relieve the Company of its
obligation of indemnification hereunder unless (and only to the extent that)
such failure results in forfeiture by the Company of substantive rights or
defences.
No
admission of liability and no settlement, compromise or termination of any
action, suit, proceeding, claim or investigation will be made without the
Company’s consent and the consent of the Indemnified Parties affected, such
consents not to be unreasonably withheld, delayed or conditioned. The
Company shall not be required to indemnify any Indemnified Party for any amount
paid or payable by such person in the settlement or compromise of any Claim
without the Company’s prior written consent.
Notwithstanding
that the Company will undertake the investigation and defence of any Claim, an
Indemnified Party will have the right to employ separate counsel with respect to
any Claim and participate in the defence thereof, but the fees and expenses of
such counsel will be at the expense of the Indemnified Party
unless:
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(a)
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employment
of such counsel has been authorized in writing by the
Company;
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(b)
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the
Company has not assumed the defence of the Claim within a reasonable
period of time after receiving notice
thereof;
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(c)
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the
named parties to any Claim include both the Company and the Indemnified
Party and the Indemnified Party will have been advised by his, her or its
counsel that there may be a conflict of interest between the Company and
him, her or it; or
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(d)
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there
are one or more defences available to the Indemnified Party which are
different from, or in addition to, those available to the
Company;
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in which
case the fees and expenses of such counsel will be for the Company’s account;
provided, however that the Company shall not, in connection with any one such
Claim or separate but substantially similar Claims arising out of the same
general allegations, be liable for the fees and expenses of more than one
separate firm of attorneys (plus local counsel) at any time for all Indemnified
Parties. The rights accorded to the Indemnified Parties hereunder
will be in addition to, and not in substitution for, any rights an Indemnified
Party may have at common law or otherwise.
Each of
the Company and Greybrook agrees that Greybrook shall act as trustee for each of
the other Indemnified Parties with respect to the Company’s covenants under this
indemnity, and Greybrook hereby agrees to accept such trust and to hold and
enforce such covenants on behalf of such persons.
