EXHIBIT 10.16
-------------
Amendment No. 2 to Placement Agency Agreement
AMENDMENT NO. 2 TO THE
PLACEMENT AGENCY AGREEMENT
This AMENDMENT NO. 2 TO THE PLACEMENT AGENCY AGREEMENT (this
"Amendment"), made effective as of the 13th day of September, 2004 (the
"Effective Date"), by and among Vyteris, Inc., a Delaware corporation (the
"Company"), Xxxxxxx Xxxxx Ventures, Inc., a Delaware corporation ("Xxxxxxx
Xxxxx") and Xxxxxx & Xxxxxxx, LLC, a Delaware limited liability company ("R&R,"
each of Xxxxxxx Xxxxx and R&R being referred to herein individually as a
"Placement Agent" and collectively as the "Placement Agents").
WITNESSETH:
WHEREAS, the Company and the Placement Agents are parties to that
certain Placement Agency Agreement dated June 18, 2004, as amended by Amendment
No. 1 dated July 8, 2004 (the "Placement Agency Agreement"); and
WHEREAS, the Company and the Placement Agents now desire to amend the
Placement Agency Agreement to reflect mutually agreed upon revised terms in
accordance with the provisions of this Amendment.
NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS.
Capitalized terms used herein, but not otherwise defined, shall have the
meanings ascribed to them in the Placement Agency Agreement.
2. AMENDMENTS. The parties hereby agree as follows:
(a) the term "Minimum Amount" as defined in Section 1(a) of,
and used throughout the, Placement Agency Agreement is hereby amended to be
$15,000,000;
(b) the term "Offering Period" as defined in Section 1(b)
of, and used throughout the, Placement Agency Agreement is hereby amended to be
the period commencing on the date of the Memorandum and ending on September 30,
2004, unless terminated earlier;
(c) the second paragraph of Section 1(b) of the Placement
Agency Agreement is deleted in its entirety and replaced with the following:
"XXXXXXX XXXXX SHALL HAVE THE RIGHT TO PLACE $10,000,000 OF THE
MINIMUM AMOUNT AND R&R SHALL HAVE THE RIGHT TO PLACE $5,000,000 OF THE
MINIMUM AMOUNT (THE "ALLOCATED AMOUNTS"), IN EACH CASE PURSUANT TO THE
TERMS OF A CO-PLACEMENT AGENCY AGREEMENT TO BE ENTERED INTO BETWEEN
XXXXXXX XXXXX AND R&R IN CONNECTION WITH THE OFFERING. TO THE EXTENT
THAT EITHER PLACEMENT AGENT HAS NOT
RECEIVED SUBSCRIPTIONS FOR ITS ALLOCATED AMOUNT ON OR BEFORE THE DATE
WHICH IS THREE BUSINESS DAYS PRIOR TO THE CLOSING, SUCH PLACEMENT AGENT
SHALL PROVIDE THE OTHER PLACEMENT AGENT WITH NOTICE THEREOF AND THE
OTHER PLACEMENT AGENT MAY PLACE ANY SUCH SHORTFALL IN ORDER TO REACH THE
MINIMUM AMOUNT. UPON THE MUTUAL AGREEMENT OF THE COMPANY AND THE
PLACEMENT AGENTS, THE PLACEMENT AGENTS MAY OFFER FOR SALE UP TO AN
ADDITIONAL $5,000,000 OF UNITS TO COVER OVER-SUBSCRIPTIONS, IF ANY. BY
MUTUAL AGREEMENT, THE PLACEMENT AGENTS AND THE COMPANY MAY DECIDE TO
INCREASE THE SIZE OF THE OFFERING."
(d) the second sentence of Section 5(f) is deleted in its
entirety and replaced with the following:
"THE NET PROCEEDS OF THE OFFERING SHALL NOT BE USED TO REPAY
INDEBTEDNESS TO OFFICERS, DIRECTORS OR STOCKHOLDERS OF THE COMPANY
WITHOUT THE PRIOR WRITTEN CONSENT OF THE PLACEMENT AGENTS: PROVIDED,
HOWEVER, (I) A PORTION OF THE NET PROCEEDS OF THE OFFERING WILL BE USED
FOR THE PAYMENT OF ACCRUED INTEREST OWED TO XXXXXXX XXXXX, XXXXXX X.
XXXXXX AND QUBIT HOLDINGS, LLC UPON CONVERSION INTO UNITS PLACED BY
XXXXXXX XXXXX OF UP TO $2,000,000 PRINCIPAL AMOUNT OF THOSE CERTAIN 8%
CONVERTIBLE PROMISSORY NOTES, (II) THE PAYMENT OF ACCRUED INTEREST OWED
UPON CONVERSION OF THE BRIDGE NOTES (AS DEFINED IN THE MEMORANDUM)AND
(II) IN THE EVENT THAT THE COMPANY BORROWS FUNDS FROM A RELATED PARTY OF
XXXXXXX XXXXX, OR ITS RELATED PARTIES, PURSUANT TO A WORKING CAPITAL
FACILITY DESCRIBED IN THE MEMORANDUM, A PORTION OF THE NET PROCEEDS MAY
BE USED TO PAY INTEREST OR PRINCIPAL ON SUCH BORROWINGS.
(e) Section 5(l) is deleted in its entirety.
(f) the second sentence of Section 9(a) is deleted in its
entirety and replaced with the following:
"IN THE EVENT OF ANY SUCH TERMINATION OCCASIONED BY OR ARISING
OUT OF OR IN CONNECTION WITH THE MATTERS SET FORTH IN CLAUSES (I) OR
(II) ABOVE, OR OCCASIONED BY OR ARISING OUT OF OR IN CONNECTION WITH A
MATTER SET FORTH IN CLAUSE (III) ABOVE DUE TO THE COMPANY'S FAILURE TO
PERFORM ANY OF ITS MATERIAL OBLIGATIONS HEREUNDER, EACH PLACEMENT AGENT
SHALL BE ENTITLED TO RECEIVE, IN ADDITION TO OTHER RIGHTS AND REMEDIES
THEY MAY HAVE HEREUNDER, AT LAW OR OTHERWISE, A PRO RATA AMOUNT (BASED
ON THE ALLOCATED AMOUNTS) EQUAL TO THREE PERCENT (3%) OF THE PURCHASE
PRICE OF ALL UNITS SOLD IN THE OFFERING BY SUCH PLACEMENT AGENT
("PLACEMENT AGENT'S EXPENSES") (DEEMING, FOR THIS PURPOSE, THAT $15
MILLION OF UNITS HAVE BEEN SOLD), LESS ANY AMOUNTS THERETOFORE PAID IN
RESPECT OF SUCH PLACEMENT AGENT'S PLACEMENT AGENT EXPENSES, AND ALL
UNPAID BLUE SKY FEES AND OTHER EXPENSES SET FORTH IN SECTION 5(I)
HEREOF".
3. REFERENCE TO AND EFFECT ON THE PLACEMENT AGENCY AGREEMENT.
(a) On and after the Effective Date, each reference to "this
Agreement," "hereunder," "hereof," "herein," or words of like import shall mean
and be a reference to the
-2-
Placement Agency Agreement as amended by Amendment No. 1 and hereby. No
reference to this Amendment need be made in any instrument or document at any
time referring to the Placement Agency Agreement, a reference to the Placement
Agency Agreement in any such instrument or document to be deemed to be a
reference to the Placement Agency Agreement as amended hereby.
(b) Except as expressly amended by amendment No. 1 and this
Amendment, the provisions of the Placement Agency Agreement shall remain in full
force and effect.
4. COUNTERPARTS; FACSIMILE SIGNATURES.
This Amendment may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
a single instrument. This Agreement may be executed by facsimile signatures.
*******
-3-
IN WITNESS WHEREOF, the undersigned have caused this Amendment to the
Placement Agency Agreement to be executed and delivered on the date first
written above.
VYTERIS, INC.
By: /s/ Xxxxxxx Xx Xxxxxx
---------------------
Name: Xxxxxxx Xx Xxxxxx
Title: President
XXXXXXX XXXXX VENTURES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
XXXXXX & XXXXXXX, LLC
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: Managing Director
