EXHIBIT 4.5
Engagement Letter Dated December 20, 2001 Between the Registrant and
Sunrise Securities Corp.
December 20, 2001
Matritech, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Dear Xx. Xxxxx:
1. This letter agreement (the "Agreement") confirms our understanding that
Matritech, Inc. ("Company") has engaged Sunrise Securities Corp.
("Sunrise") to act as exclusive agent in connection with a best efforts
private placement of a minimum of 2 million and a maximum of 5 million
shares (but in no event, more than 19.9% of outstanding shares, inclusive
of warrants and shares issued as fees for services) of common stock (the
"Securities" or the "Shares") of the Company at $2.25 per share (the
"Proposed Financing"), upon the terms, and subject to the conditions, set
forth in this Agreement.
The Proposed Financing will be made pursuant to the exemptions afforded by
Section 4(2) of the Securities Act of 1933, as amended (the "Act") and
Regulation D promulgated thereunder and applicable state securities laws.
Our undertaking herein shall be subject to, among other things, the terms
and conditions set forth in this Agreement, our due diligence
investigation of the Company, the continuance of the Company without
material adverse change, the absence of unfavorable market conditions in
general and our continued satisfaction with the results of our ongoing
review of the Company's business and affairs. It is understood that
execution of this Agreement does not assure the successful completion of
the Proposed Financing or any portion thereof.
2. Our services will include: (i) assistance in the preparation of the
Offering Materials described below; (ii) assistance in structuring the
Proposed Financing and its terms; (iii) identifying and contacting
selected qualified purchasers (the "Purchasers") of the Proposed Financing
and furnishing them, on behalf of the Company, with copies of the Offering
Materials; and (iv) negotiating under your guidance the financial aspects
of the Proposed Financing.
3. As compensation for the services to be provided by Sunrise hereunder, the
Company agrees to pay to Sunrise a fee equal to 8% of the gross proceeds
of the Proposed Financing payable in cash or shares, valued net of the
commission, and three year warrants to purchase at $2.81 per share a
number of shares equal to 10% of those sold in the Proposed Financing,
payable to Sunrise at the closing of the Proposed Financing (the
"Closing"). If the Proposed Financing is consummated by means of more than
one Closing, Sunrise shall be entitled to the fees provided herein with
respect to each such Closing. The Company shall reimburse Sunrise for all
out-of-pocket expenses incurred by Sunrise in connection with its
engagement hereunder, including reasonable fees and expenses of its
counsel up to $20,000, whether or not a closing occurs.
4. The Company acknowledges and agrees that Sunrise has been retained solely
to provide the advice or services set forth in this Agreement. Sunrise
shall act as an independent contractor, and any duties of Sunrise arising
out of its engagement hereunder shall be owed solely to the Company. As
Sunrise will be acting on your behalf in such capacity, it is our firm
practice to be indemnified in connection with engagements of this type and
the Company agrees to the indemnification agreement attached hereto as
Exhibit A and the other obligations as set forth in paragraph 12 of this
Agreement.
5. The Company will promptly and from time to time take such action as
Sunrise may reasonably request to qualify the Securities as a private
placement under the securities laws of the United States and of each of
the states, as applicable, as Sunrise may reasonably request and to comply
with such laws so as to permit such offers and sales.
6. The Company will prepare and furnish a private placement memorandum
(which, together with the appendices and exhibits thereto and any
amendments or supplements thereto, is herein referred to as the "Offering
Materials") relating to the Proposed Financing. The Company authorizes
Sunrise to transmit the Offering Materials to prospective purchasers of
the Proposed Financing, and represents and warrants that the information
that it provides to be included in the Offering Materials, at all times
through the Closing, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The Company
shall not transmit the Offering Materials to prospective purchasers
without first consulting Sunrise. Sunrise will not make statements of
material fact about the Company that are not contained in the offering
materials or approved by the Company.
7. The Company will also make available to Sunrise all financial and other
information concerning its business and operations and the Proposed
Financing which Sunrise reasonably requests and will provide access to
their officers, directors, employees, independent accountants and legal
counsel. Sunrise shall be entitled to rely without investigation upon all
information that is available from public sources as well as all other
information supplied to Sunrise by or on behalf of the Company or its
other advisors and Sunrise shall not in any respect be responsible for the
accuracy or completeness of, or have any obligation to verify, the same or
to conduct any appraisal of assets. To the extent consistent with legal
requirements and except as otherwise set forth in the Offering Materials,
all information given to Sunrise by the Company, unless publicly available
or otherwise available to Sunrise without restriction or breach of any
confidentiality agreement ("Confidential Information"), will be held by
Sunrise in confidence and will not be disclosed to anyone other than
Sunrise's agents and advisors without the prior approval of the Company or
used for any purpose other than those referred to in this Agreement;
provided that nothing herein shall, in itself, prevent Sunrise from
engaging in future transactions involving companies in a similar industry
to the Company or, provided no Confidential Information is directly used
in connection with such engagement, be deemed to violate any of the terms
hereof.
8. The parties acknowledge that it is their intention that the Proposed
Financing shall be conducted so as to be exempt from the registration
requirements of the Act. The Company has not taken, and will not take, any
action, directly or indirectly, so as to cause the transactions
contemplated by this Agreement to fail to be entitled to exemption under
the Act. It is understood that investors in the Proposed Financing shall
be "accredited investors" or fall within other categories sanctioned by
Rule 506 of Regulation D under the Act. In effecting the Proposed
Financing, the Company and Sunrise agree to comply in all material
respects with applicable provisions of the Act and any regulations
thereunder and any applicable state laws and requirements. The Company
shall execute and/or deliver such other instruments, documents and
agreements and take such other action as Sunrise may reasonably request in
connection with the provision of its services hereunder and the
consummation of the Proposed Financing, including without limitation,
opinions of counsel to the effect that the placement of the Securities was
exempt from registration under the Act and as to the accuracy of the
Offering Materials. Additionally, if requested by Fidelity Investments or
Mazama Capital as Investors in the Proposed Financial as a condition to
Closing, the Company agrees that a registration statement on Form S-3
covering the Securities, including Securities received by Sunrise or
underlying its warrants, shall have been declared effective, and the
Company will use its best efforts to keep such registration statement
effective.
9. Any advice, written or oral, provided by Sunrise pursuant to this
Agreement will be treated by the Company as confidential, will be solely
for the information and assistance of the Company in connection with the
Proposed Financing and may not be quoted, nor will any such advice or the
name of Sunrise be referred to, in any report, document, release or other
communication, whether written (including, without limitation, the
Offering Materials) or oral, prepared, issued or transmitted by the
Company or any affiliate, director, officer, employee, agent or
representative of any thereof, without, in each instance, Sunrise 's prior
written consent.
10. This Agreement shall expire on March 31, 2002, provided that Matritech may
terminate this Agreement, at any time after January 31, 2002 and prior to
the Closing, on 10 business days written notice to Sunrise ("Early
Termination") unless subscriptions from accredited investors for at least
2 million shares have been received prior to January 31, 2002 and provided
further that if Matritech rejects such subscriptions, then Matritech shall
pay Sunrise its fees with respect thereto as if such subscriptions had
been accepted and Sunrise will be entitled to prompt reimbursement from
the Company of all its out-of-pocket expenses and fees as described above
not to exceed $20,000. In addition, if at any time prior to 18 months
after the Early Termination of this Agreement or 12 months after a
termination other than an Early Termination, the Company consummates a
financing transaction, including the Proposed Financing, with any party
contacted regarding the Proposed Financing during the term of our
engagement (and identified in writing for Matritech within 30 days after
termination), Sunrise will be entitled to payment in full of the
compensation described in the third paragraph of this Agreement, together
with reimbursement from the Company of all its out-of-pocket expenses and
fees as described above not to exceed $20,000. The indemnity and other
provisions contained in Exhibit A and in paragraph 12 will also remain
operative and in full force and effect regardless of any expiration or
termination of this Agreement.
11. This Agreement shall not give rise to any express or implied commitment by
Sunrise to purchase or place any securities of the Company.
12. The Company acknowledges that Sunrise is acting only as placement agent in
the transactions contemplated by this engagement. The Company agrees to
indemnify Sunrise, and its officers, directors, agents, employees and
controlling persons in accordance with Exhibit A.
13. This Agreement incorporates the entire understanding of the parties
relating to the subject matter hereof. The benefits of this Agreement
shall inure to the parties hereto, their respective successors and assigns
and to the Indemnified Persons under Exhibit A and their respective
successors and assigns, and the obligations and liabilities assumed in
this Agreement shall be binding upon the parties hereto and their
respective successors and assigns. Notwithstanding anything contained
herein to the contrary, none of the parties hereto shall assign any of its
obligations hereunder without the prior written consent of each of the
other parties hereto.
14. All notices provided hereunder shall be given in writing and either
delivered personally or by overnight courier service or sent by certified
mail, return receipt requested, if to Sunrise, to Sunrise Securities
Corp., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Low;
with a copy to Xxxxx Xxxxx Xxxx Xxxxxxx and Xxxxx, PC, 000 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxx, and if
to the Company, to Matritech, Inc.,330 Nevada Street, Newton,
Massachusetts, Attention: Xxxxxxx X. Xxxxx with a copy to Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Xxxxx
X. Xxxx. Any notice delivered personally shall be deemed given upon
receipt; any notice given by overnight courier shall be deemed given on
the next business day after delivery to the overnight courier; and any
notice given by certified mail shall be deemed given upon the second
business day after certification thereof.
15. The failure or neglect of either 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 its 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 by such
party, but the same shall continue in full force and effect. Any waiver
must be in writing.
16. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
fully performed therein, without regard to conflicts of law principles.
Each of the parties irrevocably submits to the exclusive jurisdiction of
any court of the State of New York or the United States District Court for
the Southern District of the State of New York for the purpose of any
suit, action or other proceeding arising out of this Agreement, or any of
the agreements or transactions contemplated hereby, and agrees that
service of process in connection with any such suit, action or proceeding
may be made in accordance with Section 14 hereof. The parties hereby
expressly waive all rights to trial by jury in any suit, action or
proceeding arising under this Agreement.
17. This Agreement may not be modified or amended except in a writing duly
executed by the parties hereto.
18. At any time after the final closing of the Proposed Financing, Sunrise may
place an announcement in such newspapers and publications as it may
choose, stating that Sunrise has acted as exclusive financial advisor
and/or placement agent in connection with the Proposed Financing.
19. For the convenience of the parties, this Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
instrument, but all of which taken together shall constitute one and the
same agreement. Facsimile signatures shall be deemed to be original
signatures for all purposes.
20. After reviewing this Agreement, please confirm that the foregoing is in
accordance with your understanding by signing and returning the duplicate
of this letter attached hereto, whereupon it shall be our binding
Agreement.
Very truly yours,
SUNRISE SECURITIES CORP.
By:
---------------------------------------
Accepted and agreed to
this ___ day of December, 2001.
MATRITECH, INC.
By:
--------------------------
EXHIBIT A
This Exhibit A is entered into pursuant to, and is made a part of, the
attached Agreement among Sunrise and the Company. Capitalized terms used and not
defined in this Exhibit A shall have the meanings assigned them in the attached
Agreement.
The Company agrees to indemnify and hold harmless Sunrise, its affiliates,
and each of its partners, directors, officers, consultants, employees, advisors,
representatives and controlling persons (each an "Indemnified Person") from and
against any claims, losses, damages, expenses or liabilities (collectively,
"Losses"), (subject to the limitations set forth below), incurred in connection
with investigating, preparing, defending, paying, settling or compromising any
action, claim or proceeding to which any Indemnified Person may become subject
and which is related to or arises out of the engagement set forth in the
Agreement or the transactions contemplated thereby. The Company will, however,
not be responsible to an Indemnified Person with respect to any Losses to the
extent that a court of competent jurisdiction shall have determined by a final
judgment not subject to further appeal that such Losses resulted substantially
from actions taken or omitted to be taken by such or any other Indemnified
Person due to the Indemnified Person's or any other Indemnified Person's gross
negligence or willful misconduct.
The Company will reimburse each Indemnified Person for Losses as such
Losses are incurred or paid, notwithstanding the absence of judicial
determination as to the propriety or enforceability of the Company's obligation
to reimburse such Indemnified Person for such Losses and the possibility that
such payments might later be held by a court of competent jurisdiction to have
been improper. To the extent that any such reimbursement is so held to have been
improper, the Indemnified Person shall promptly return it to the Company
together with interest, compounded annually, equal to the prevailing prime rate
as published from time to time by The Wall Street Journal.
If the indemnification provided for herein should be, for any reason
whatsoever, unenforceable, unavailable or otherwise insufficient to hold each
Indemnified Person harmless, the Company shall pay to or on behalf of each
Indemnified Person contributions for Losses so that the Indemnified Person
ultimately bears only a portion of such Losses as is appropriate (i) to reflect
the relative benefits received by such Indemnified Person on the one hand and
the Company on the other hand in connection with this engagement and any
transactions contemplated hereby or (ii) if the allocation on the basis set
forth in the immediately preceding clause (i) is not permitted by applicable
law, to reflect not only the relative benefits referred to in such clause (i)
but also the relative fault of the Indemnified Person and the Company as well as
any other relevant equitable considerations; provided, however, that in no event
shall the aggregate contribution of all Indemnified Persons to all Losses exceed
the amount of the fees actually received by Sunrise pursuant to the Agreement.
The respective relative benefits received by all Indemnified Persons and the
Company shall be deemed to be in the same proportion as the aggregate fee paid
to Sunrise pursuant to the Agreement bears to the total consideration paid or
contemplated to be paid to or received by the Company in connection with
transactions contemplated by the Agreement, whether or not such transactions are
consummated. The relative fault of each Indemnified Person and of the Company
shall be determined by reference to, among other things, whether the actions or
failures to act were by such Indemnified Person or the Company, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action or failure to act. Notwithstanding the foregoing, no
Indemnified Person shall have any obligation to investigate or verify the
information provided to Sunrise in connection with their providing financial
advisory services under the engagement letter, and the Company shall be liable
for any Losses related to or arising out of the use of such information that is
inaccurate for any reason.
The Company also agrees that no Indemnified Person shall have any
liability to the Company or its affiliates, directors, officers, employees,
Sunrise, consultants, advisors, representatives, control persons or
stockholders, directly or indirectly, related to or arising out of the Agreement
or any transactions contemplated thereby, in connection with claims by third
parties except Losses incurred by the Company to the extent a court of competent
jurisdiction shall have determined by a final judgment not subject to further
appeal that such Losses resulted primarily from actions taken or the failure to
take actions by such Indemnified Person due to such Indemnified Person's gross
negligence or willful misconduct. In no event, regardless of the legal theory
advanced, shall any Indemnified Person be liable for any consequential,
indirect, incidental or special damages of any nature. Sunrise likewise
indemnifies the Company in the event of gross negligence or willful misconduct
on the part of any Sunrise party, subject to the limit of the fees actually paid
to Sunrise hereunder. Sunrise will reimburse the Company for Losses related to
the foregoing as such Losses are paid, notwithstanding the absence of judicial
determination as to the propriety or enforceability of Sunrise's obligation to
reimburse the Company for such Losses and the possibility that such payments
might later be held by a court of competent jurisdiction to have been improper.
To the extent that any such reimbursement is so held to have been improper, the
Company shall promptly return it to Sunrise, together with interest, compounded
annually, equal to the prevailing prime rate as published from time to time by
The Wall Street Journal.
In case any proceeding shall be instituted involving any Indemnified
Person, such Indemnified Person shall promptly notify the Company in writing.
The failure of an Indemnified Person to provide such prompt notice shall not
reduce such Indemnified Person's right to indemnification or contribution
hereunder to the extent that such failure does not materially prejudice the
ability to defend such proceeding. The Company shall retain counsel reasonably
satisfactory to Sunrise to represent the Indemnified Persons and any others the
Company may designate in such proceeding, shall have sole control of the defense
of any such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person, except to the extent
that (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel at either the Company's expense, as applicable, or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the Company or any others the Company may designate and one or more
Indemnified Persons, and representation of the Indemnified Persons and such
other parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. In any case in which one or more
Indemnified Persons are entitled to separate counsel due to such actual or
potential differing interests, the Company shall not be liable for the expenses
of more than one separate counsel, and such counsel shall be designated in
writing by Sunrise. The Company shall have sole control of any settlement of any
proceeding for which it is obligated to provide indemnification hereunder.
Notwithstanding the foregoing the Company shall not, without the prior written
consent of the Indemnified Person, effect any settlement of, or consent to the
entry of any judgment in connection with, any pending or threatened proceeding
in respect of which such Indemnified Person is or could have been a party and
indemnity or contribution could have been sought hereunder by such Indemnified
Person, unless such settlement or judgment includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of the proceeding.
Nothing in this Exhibit A shall affect Sunrise's potential liability to
the Company for any breach by Sunrise of the Agreement.
The obligations of the Company referred to above shall be in addition to
any rights that any Indemnified Person may otherwise have and shall inure to the
benefit of and be binding upon any successors, assigns, heirs and personal
representatives of any Indemnified Person or the Company.
SUNRISE SECURITIES CORP.
By: ________________________________
Agreed to and Accepted:
MATRITECH, INC.
By:_____________________________
Date: December 20, 2001
