Palladium Capital Advisors, LLC New York, New York 10169
Palladium
Capital Advisors, LLC
000 Xxxx
Xxxxxx, Xxxxx 000
Xxx Xxxx,
Xxx Xxxx 00000
Tel (000)
000-0000 Fax (000) 000-0000
Email
xx@xxxxxxxxxxxxxxxx.xxx
May 6,
2010
Xx. Xxxx
X. Xxxx, CEO
00 Xxxxx
Xxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Dear Xx.
Xxxx:
This will
confirm the understanding and agreement (the “Agreement”) between PALLADIUM
CAPITAL ADVISORS, LLC, a Delaware limited liability company (“Palladium”), and
HEPALIFE TECHNOLOGIES INC., a Florida corporation (the “Company”), as
follows:
1. The
Company hereby engages Palladium on a best efforts basis as its agent in a
private placement pursuant to which the Company is selling a minimum (the
“Minimum Number”) of 9,400,000 units and up to a maximum (the “Maximum Number”)
of 20,000,000 units (collectively, the “Units”), of the Company’s securities at
a price of $0.125 per Unit, on a “best efforts, all or none” basis with respect
to the Minimum Number and on a “best efforts” basis with respect to the
remaining 10,600,000 Units (the “Offering”) with each Unit consisting of (i) one
(1) share of common Stock; (ii) one half of one five year Series E Stock
Purchase Warrant that has an exercise price of $0.16 per share; and (iii) one
half of one five year Series F Stock Purchase Warrant that has an exercise price
of $0.20 per share (the “Offering”).
2. The
appointment and authorization of Palladium under Section 1 of this Agreement
shall commence on the date hereof and shall expire on the earlier of the
termination of (i) this Agreement or (ii) the termination of the
Offering (the “Term”).
3. The
Company acknowledges and agrees that Palladium will be using, and relying upon,
the Company to furnish Palladium, upon request, with written materials and
information, including but not limited to financial statements, to be provided
to potential Investors (the “Materials”) describing the Company and the Offering
concerning the Company’s business, operations, assets, liabilities and
receivables, and Palladium will be using, and relying upon, such Materials
supplied by the Company, its officers, agents, and others and any other publicly
available information without any independent investigation or verification
thereof or independent appraisal by Palladium of the Company or its business or
assets. (For purposes hereof, the “Investors” mean a limited number of
institutional, accredited individual or strategic investors.) Palladium does not
assume responsibility for the accuracy or completeness of the Materials,
including but not limited to any disclosure materials related to the Offering,
except for such information that is independently produced and provided in
writing by Palladium to the Company for inclusion in the Materials. The Company
shall provide Palladium with access to the Company’s officers, directors,
accountants, counsel and other advisors, and shall keep Palladium fully informed
of any events that might have a material effect on the financial condition of
the Company. The Company represents and warrants to Palladium that
all information concerning the Company, including, without limitation, all
information contained in the Materials, will be true, complete and accurate in
all material respects and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances under which such statements
are made. If at any time prior to the completion of the Offering an event occurs
which would cause
the Materials (as supplemented or amended) to contain an untrue statement of a
material fact or to 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 Company will notify Palladium immediately of such
event.
4. (a) The
Company agrees to pay Palladium, upon each closing with Investors in connection
with the Offering (each, a “Closing”), the following compensation: (i) 8% of the
aggregate cash consideration raised in such Closing from such Investors, and
(ii) warrants to purchase such number of shares of the common stock of the
Company equal to 8% of the aggregate number of fully diluted and/or converted
shares of common stock as are purchased by Investors taking into consideration
any increase in shares on the same terms and conditions as the warrants
purchased by the Investors (the “Warrants”). Half of the Warrants that Palladium
will receive will be Series E Stock Purchase Warrants and half of the Warrants
that Palladium will receive will be Series F Stock Purchase
Warrants.
(b) The
Company agrees to pay or issue to Palladium, upon and in the event of receipt by
the Company of $250,000 from Xxxxx Xxxxxx or one of his affiliates on or before
May 17, 2010, Two Million (2,000,000) fully paid and non-assessable shares of
the common stock of the Company (the “Compensation Shares”).
(c) The
Compensation Shares are payable solely upon consummation of the acquisition of
the stock or assets of AquaMed Technologies, Inc. by the Company and the
satisfaction of the conditions set forth in Section 4(b) above. The fees
set forth in Section 4(a) are payable for (i) any Closing that occurs
during the Term with respect to Investors introduced by Palladium, or (ii) any
private placement of unregistered securities by the Company (a “Private
Placement”) at any time during the 18-month period following the Term if such
Private Placement involves an Investor introduced by Palladium that has
previously concluded a Closing with the Company. Notwithstanding
anything to the contrary set forth herein (including Section 2 of this
Agreement), after the initial Closing, Palladium shall only receive the
compensation set forth in Section 4(a) above solely with respect to Investors
introduced to the Company by Palladium and shall not receive any compensation
from proceeds received by the Company from Investors that were not introduced to
the Company by Palladium.
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(d) The
Warrants will be purchased for a nominal sum and will have the same terms as the
Series E and Series F Stock Purchase Warrants, as the case may be.
(e) All
cash compensation payable hereunder by the Company to Palladium shall be paid by
wire transfer.
5. The
Company shall reimburse Palladium for its reasonable and customary out-of-pocket
and incidental expenses incurred during the Term, including the fees and
expenses of its legal counsel and those of any advisor retained by Palladium,
not to exceed $5,000 in the aggregate.
6. The
Company agrees to provide indemnification as set forth in Annex A attached
hereto and made a part hereof.
7. Upon
a Closing, the Company agrees that Palladium has the right to place notices
and/or advertisements in financial and other newspapers and journals (whether in
print or on the internet), and to publicize on its own website and/or marketing
materials, at its own expense, describing its services to the Company
hereunder.
8. The
provisions of Sections 4, 5, and 6 (including, without limitation, the
provisions of indemnification referred to in Section 6) shall survive the
expiration or termination of this Agreement.
9. The
Company represents to Palladium that there is no other person or entity that is
or will be entitled to a finder's fee or any type of brokerage commission in
connection with the transactions contemplated by this Agreement as a result of
any agreement or understanding with it; provided, however, it is understood and
agreed that Palladium may work on the Offering with one or more co-placement
agents and it shall be the sole responsibility of Palladium to compensate such
co-placement agents for their fees related to such
work.
10. Nothing
contained in this Agreement shall limit or restrict the right of Palladium or of
any member, employee, agent or representative of Palladium, to be a shareholder,
member, partner, director, officer, employee, agent or representative of, or to
engage in, any other business, whether of a similar nature or not, nor to limit
or restrict the right of Palladium to render services of any kind to any other
corporation, company, firm, individual or association.
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11. The
failure or neglect of the parties hereto to insist, in any one or more
instances, upon the strict performance of any of the terms or conditions of this
Agreement, or their waiver of strict performance of any of the terms or
conditions of this Agreement, shall not be construed as a waiver or
relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.
12. Any
notices hereunder shall be in writing, and shall be sent to the Company and to
Palladium at their respective addresses set forth above. Any notice
shall be given by registered or certified mail, postage prepaid, and shall be
deemed to have been given when deposited in the United States
mail. Either party may designate any other address to which notice
shall be given by giving written notice to the other party of such change of
address in the manner herein provided.
13. This
Agreement shall inure to the benefit of and be binding upon the respective,
Affiliates, successors and assigns of the parties hereto. The term
“Affiliates” shall mean, with respect to any person or entity, any other person
or entity who, directly or indirectly, through one or more intermediaries
controls, is controlled by, or is under common control with such person or
entity and any spouse, parent or issue of any such person; “control” means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of a person or entity whether through ownership of
voting securities, by contract or otherwise.
14. This
Agreement has been made in the State of New York and shall be construed and
governed in accordance with the laws thereof without giving effect to principles
governing conflicts of law. The parties irrevocably agree that any
legal action or proceeding under, arising out of or in any manner relating to
this Agreement shall be brought exclusively in any court of competent
jurisdiction in the County of New York, State of New York. Each of
the parties, by its execution and delivery of this Agreement, expressly and
irrevocably assents and submits to the jurisdiction of any of such courts in any
such action or proceeding. The parties further irrevocably consent to
the service of any complaint, summons, notice or other process relating to any
such action or proceeding by delivery thereof to such party by hand or by
registered or certified mail in the manner prescribed in Section 12
hereof. The parties further irrevocably consent that any judgment
rendered by such court in the State of New York may be entered in other court
having competent jurisdiction thereof.
15. This
Agreement contains the entire agreement between the parties, may not be altered
or modified, except in writing and signed by the party to be charged thereby,
and supersedes any and all previous agreements between the parties relating to
the subject matter hereof.
16. Palladium
will not have any rights or obligations in connection with the sale and purchase
of the Units contemplated by this Agreement except as expressly provided in this
Agreement. In no event will Palladium be obligated to purchase the
Securities for its own account or for the accounts of its
customers. Palladium will have the right, but not the obligation,
however, to determine the allocation of the Units among potential purchasers
introduced by Palladium (or its co-placement agents), provided that such
allocation is reasonably acceptable to the Company.
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17. Palladium
is acting as financial advisor and is not an expert on, and cannot render
opinions regarding, legal, accounting, regulatory or tax matters. The Company
should consult with its other professional advisors concerning these matters
before undertaking the Offering. All services, advice and information
and reports provided by Palladium to the Company in connection with this
assignment shall be for the sole benefit of the Company and shall not be relied
upon by any other person. Notwithstanding anything to the contrary
contained herein, it is understood and agreed that there are no third-party
beneficiaries to this Agreement.
Palladium
is delighted to accept this engagement and looks forward to working with you on
this assignment. Please confirm that the foregoing correctly sets
forth our understanding by signing the enclosed duplicate of this letter in the
space provided and returning it, whereupon this letter shall constitute a
binding agreement as of the date first above written.
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Very
truly yours,
PALLADIUM
CAPITAL ADVISORS, LLC
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By:
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/s/ Xxxx Xxxxxxxx | |
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Xxxx
Xxxxxxxx, Chief Executive Officer
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ACCEPTED
AND AGREED
AS
OF THE DATE FIRST
ABOVE
WRITTEN:
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By:
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/s/ Xxxx X. Xxxx | |
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Xxxx
X. Xxxx, Chief Executive Officer
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[Annex A
follows]
5
Annex
A
Indemnification
Provisions
In
connection with the engagement of Palladium by the Company pursuant to the
Agreement, the Company hereby agrees as follows:
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1.
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In
connection with or arising out of or relating to the engagement of
Palladium under the Agreement, or any actions taken or omitted, services
performed or matters contemplated by or in connection with the Agreement,
the Company agrees to reimburse Palladium, its affiliates and their
respective members, officers, employees, agents and controlling persons
(each an “Indemnified Party”) promptly upon demand for actual,
out-of-pocket expenses (including reasonable fees and expenses for legal
counsel) as they are incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim, or any
litigation, proceeding or other action in respect thereof (collectively, a
“Claim”). The Company also agrees (in connection with the
foregoing) to indemnify and hold harmless each Indemnified Party from and
against any and all out-of-pocket losses, claims, damages and liabilities,
joint or several, to which any Indemnified Party may become subject,
including any amount paid in settlement of any litigation or other action
(commenced or threatened) to which the Company shall have consented in
writing (such consent not to be unreasonably withheld), whether or not any
Indemnified Party is a party and whether or not liability resulted;
provided, however, that the Company shall not be liable pursuant to this
paragraph in respect of any loss, claim, damage or liability to the extent
that a court or other agency having competent jurisdiction shall have
determined by final judgment (not subject to further appeal) that such
loss, claim, damage or liability was incurred solely as a direct result of
the willful misconduct or gross negligence of such Indemnified
Party. The Company also agrees that no Indemnified Party shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company or its partners, security holders or creditors
related to or arising out of the engagement of Palladium pursuant to, or
the performance by Palladium of the services contemplated by, this
Agreement except to the extent that any loss, claim, damage or liability
is determined in a final judgment (not subject to further appeal) by a
court to have resulted solely from willful misconduct or gross negligence
of Palladium.
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2.
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The
Company will not, without the prior written consent of each Indemnified
Party, settle, compromise or consent to the entry of any judgment in any
pending or threatened Claim in respect of which indemnification may be
reasonably sought hereunder (whether or not any Indemnified Person is an
actual or potential party to such Claim), unless such settlement,
compromise or consent includes an unconditional, irrevocable release of
each Indemnified Person against whom such Claim may be brought hereunder
from any and all liability arising out of such
Claim.
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3.
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In
the event any Indemnified Party is requested or required to appear as a
witness in any action, suit or proceeding brought by or on behalf of or
against the Company or any affiliate or any participant in the Offering
covered hereby in which such Indemnified Party is not named as a
defendant, the Company agrees to reimburse Palladium and such Indemnified
Party for all reasonable disbursements incurred by them in connection with
such Indemnified Party’s appearing and preparing to appear as a witness,
including, without limitation, the fees and disbursements of their legal
counsel, and to compensate Palladium and such Indemnified Party in an
amount to be mutually agreed upon.
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4.
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All
amounts due under the Indemnification Provisions of this Annex A shall be
payable within ten (10) days after written notice of such event giving
rise to the indemnification obligations, and if not paid within such
10-day period, such amounts shall bear interest at a rate of 1.5% per
month or at the highest rate permitted under the laws of the State of New
York, whichever rate is lower.
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5.
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These
Indemnification Provisions shall remain in full force and effect in
connection with the transactions contemplated by the Agreement whether or
not consummated, and shall survive the expiration or termination of the
Agreement, and shall be in addition to any liability that the Company
might otherwise have to any Indemnified Party under the Agreement or
otherwise.
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6.
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Each
party hereto consents to personal jurisdiction and service of process and
venue in any court in the State of New York in which any claim for
indemnity is brought by any Indemnified
Person.
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PALLADIUM
CAPITAL
ADVISORS,
LLC
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By:
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/s/ Xxxx Xxxxxxxx |
By:
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/s/ Xxxx X. Xxxx | ||
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Xxxx
Xxxxxxxx
Chief
Executive Officer
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Xxxx
X. Xxxx
Chief
Executive Officer
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