EXHIBIT 10.6.1
XXXXXXX & CO. (UK) LTD.
00 XXXX XXXXXX
XXX XXXX, XX 00000
January 11, 2005
Caprius, Inc.
0 Xxxxxx Xxxxx
Xxxx Xxx, XX 00000
Attention: Xxxxxx Xxxxx, Chief Executive Officer
RE: FINANCIAL ADVISORY AGREEMENT
Dear Xxxxxx:
Xxxxxxx & Co. (UK) Ltd. ("Xxxxxxx") is pleased to act as the non-exclusive
placement agent for Caprius, Inc. (stock symbol: CAPR) (the "Company") a
Delaware corporation, in connection with your proposed capital transaction. The
terms of our engagement are set forth below. We look forward to working with
you.
1. THE OFFERING.
We understand you wish to raise between one million dollars
($1,000,000) and three million dollars ($3,000,000) through a private
placement of certain securities involving the sale of such securities
to Institutional Investors (the "Offering"). You understand the actual
terms of the Offering will depend on market conditions, and will be
subject to negotiation between the Company and prospective investors.
2. FEES AND EXPENSES.
Concurrently with the closing of any part of the Offering, the Company
will pay Xxxxxxx in cash, a fee equal to 10% of the gross proceeds
received from the sale of securities.
(a) In addition, the Company agrees to reimburse Xxxxxxx for its
actual expenses, as well as the fees of its legal counsel of
up to $25,000.
(b) Furthermore, upon the closing of the minimum amount
contained in the Offering, the Company shall xxxxx Xxxxxxx 5
year warrants for the purchase of 500,000 shares of common
stock at an exercise price of $0.15. The Warrants shall
contain the same registration rights afforded to the
investors.
3. TERMS.
(a) The term of this agreement shall be three months, however,
either party may terminate this agreement at any time upon
10 days written notice to the other party. Upon termination,
we will be entitled to collect all fees and warrants earned
and expenses incurred through the date of termination.
(b) If any part of the Offering is not closed during the term,
for reasons other than termination of this agreement by
Xxxxxxx, and during the six months following termination of
the agreement, any person which we introduced, directly or
indirectly, to the Company or with which we have had
discussions or negotiations during the term on behalf of the
Company, purchase securities from the Company (other than
through an underwritten public offering), you agree to pay
Xxxxxxx upon the close, a cash fee and warrants in the
amount that would otherwise have been payable to Xxxxxxx had
such transaction occurred during the term.
(c) Subsequent to the closing of at least the minimum amount,
Xxxxxxx will have the right to name two members to the Board
of Directors. Such members will need to be approved by the
Company.
4. REPRESENTATIONS AND WARRANTIES.
(a) You hereby authorize Xxxxxxx to transmit to the prospective
purchasers of the securities material prepared by the
Company with such exhibits and supplements as may from time
to time be required or appropriate and/or copies of the
Company's most recent filings with the Securities and
Exchange Commission together with summary materials prepared
by the Company, if we deem them appropriate (collectively
"Material"). The Company authorizes materials to be sent out
to prospective investors provided the prospective investor
executes a confidentiality agreement in such cases as may be
required in the form of Schedule A. The Company represents
and warrants the Material (i) will be prepared by the
management of the Company and reviewed and approved by its
Board of Directors; and (ii) will not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein or previously made, in light of the
circumstances under which they made not misleading. The
Company will advise Xxxxxxx immediately of the occurrence of
any event or any other change known to the Company which
results in the Material containing an untrue statement of a
material fact or omitting to state a material fact required
to be stated therein or necessary to make the statements
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therein or previously made, in light of the circumstance
under which they were made, not misleading.
(b) You agree that you will enter into subscription,
registration rights and other customary agreements, and that
your counsel will supply an opinion letter on the
transaction, and comfort letter on the non-financial
portions of the material and your auditors will supply a
"comfort" letter on the financial information in the
material all of which will be in form and substance
reasonably acceptable to, and addressed to the investors.
5. NO CONFLICT.
Neither the execution and delivery of this letter by the Company nor
the enumeration of the transactions contemplated hereby will, directly
or indirectly, with or without the giving notice or lapse of time, or
both: (i) violate any provisions of the Certificate of Incorporation
or By-Laws of the Company, or (ii) violate, or be in conflict with, or
constitute a default under, any agreement, lease, mortgage, debt or
obligations of the Company or require the payment or pre-payment or
other penalty with respect thereto.
6. INDEMNIFICATION, CONTRIBUTION, AND CONFIDENTIALITY.
The Company agrees to indemnify Xxxxxxx and its controlling persons,
representatives and agents in accordance with the indemnification
provisions set forth in Schedule B. Said indemnification shall apply
regardless of whether the proposed offering is consummated.
7. GOVERNING LAW.
This agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts executed and
to be wholly performed therein without giving effect to its conflicts
of laws principles or rules. This letter, including Schedule A,
constitutes the entire understanding of the parties with respect to
the subject matter hereof and may not be altered or amended except in
writing signed by both parties. This Agreement shall be deemed to have
been made and delivered in New York City and shall be governed as to
validity, interpretation, construction, affect and in all other
respects by the internal laws of the State of New York. The Company
(1) agrees that any legal suit, action or proceeding arising out of or
relating to this letter shall be instituted exclusively in New York
State Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York, (2) waives any
objection which the Company may have now or hereafter to the venue of
any such suit, action or proceeding, and (3) irrevocably consents to
the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District
of New York in any such suit, action or proceeding. The Company
further agrees to accept and acknowledge service of any and all
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process which may be served in any such suit, action or proceeding in
the New York State Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York and agrees
that service and process upon the Company mailed by certified mail to
the Company's address shall be deemed in every respect affective
service of process upon the Company, in any suit action or proceeding.
THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
8. ANNOUNCEMENT OF OFFERING.
If the Offering is consummated, Xxxxxxx may at its expense, place an
announcement in such newspapers and periodicals as Xxxxxxx may desire.
The Company reserves the right to review and comment on any
announcement that Xxxxxxx intends to publish with respect to any
financing contemplated here under that clause.
9. ADVICE TO THE BOARD.
The Company acknowledges that any advice given by Xxxxxxx to you is
solely for the benefit and use of the Board of Directors of the
Company and may not be used, reproduced, disseminated, quoted or
referred to, without our prior written consent, except as may be
required by law or in connection with any action or proceeding under
paragraph 7.
10. ENTIRE AGREEMENT.
This Agreement constitutes the entire Agreement between the parties
and supercedes and cancels any and all prior or contemporaneous
arrangements, understandings and agreements, written or oral between
them relating to the subject matter hereof.
We look forward to working with you and developing a long-term relationship with
the Company.
Very truly yours,
XXXXXXX & CO. (UK) LTD.
By:
--------------------------------
Xxxxxx Xxxxxxxxxxx, President
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Confirmed and accepted as of
the 14th day of January, 2005
CAPRIUS, INC.
By:
-------------------------------------
Xxxxxx Xxxxx, Chief Executive Officer
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SCHEDULE A
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INFORMATION TO BE SUPPLIED; CONFIDENTIALITY
In connection with Xxxxxxx'x activities on behalf of the Company, the Company
will furnish Xxxxxxx with all financial and other information regarding the
Company that Xxxxxxx reasonably believes appropriate to its assignment (all such
information so furnished by the Company, whether furnished before or after the
date of this Agreement, being referred to herein as the "Information"). The
Company will provide Xxxxxxx with access to the officers, directors, employees,
independent accountants, legal counsel and other advisors and consultants of the
Company. The Company recognizes and agrees that Xxxxxxx (i) will use and rely
primarily on the Information and information available from generally recognized
public sources in performing the services contemplated by this Agreement without
independently verifying the Information or such other information, (ii) does not
assume responsibility for the accuracy of the Information or such information,
and (iii) will not make an appraisal of any assets or liabilities owned or
controlled by the Company or its market competitors.
For the purpose of the Agreement, "Information" shall mean and include all
contracts and agreements and the terms thereof, to which the Company may be a
party; all internal non-public business and financial information, analyses,
forecasts and projections of the business of the Company and any direct or
indirect operating subsidiary; all business plans of the Company and its
subsidiaries; all pending or proposed proposals for new or renewed contracts,
including responses by the Company to RFPs; the names, business and financial
arrangements with all parties and which relates directly or indirectly to
profitability of any contract to which the Company is a party; the names and
terms of employment relationships between the Company and any of its operating
subsidiaries with any employees; all detail and back up information relating to
actual, pro forma or forecasted operations; and all data or information prepared
by the Company at the request.
Xxxxxxx will maintain the confidentiality of the Information and, unless and
until such information shall have been made publicly available by the Company or
by others without breach of a confidentiality agreement, shall disclose the
information only as authorized by the Company or as required by law or by order
of a governmental authority or court of competent jurisdiction. In the event
that Xxxxxxx is legally required to make disclosure of any of the Information,
Xxxxxxx will give notice to the Company prior to such disclosure, to the extent
that Xxxxxxx can practically do so.
The foregoing paragraph shall not apply to information that:
(i) at the time of disclosure by the Company is, or thereafter
becomes, generally available to the public or within the
industries in which the Company or Xxxxxxx or its affiliates
conduct business, other than as a direct result of a breach by
Xxxxxxx of its obligations under this Agreement.
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(ii) prior to or at the time of disclosure by the Company, was
already it in the possession of, or, conceived by, Laidalw or
any of its affiliates, or could have been developed by them
from information then in their possession, by the application
of other information or techniques in their possession,
generally available to the public, or available to Xxxxxxx or
its affiliates other than from the Company;
(iii) at the time of disclosure by the Company or thereafter, is
obtained by Xxxxxxx or any of its affiliates from a third
party who Xxxxxxx reasonably believes to be in possession of
the information not in violation of any contractual, legal or
fiduciary obligation to the Company with respect to that
information; or
(iv) is independently developed by Xxxxxxx or its affiliates.
Nothing in this Agreement shall be construed to limit the
ability of Xxxxxxx or its affiliates to pursue, investigate,
analyze, invest in, or engage in investment banking, financial
advisory or any other business relationship with entities
other than the Company, notwithstanding that such entities may
be engaged in a business which is similar to or competitive
with the business of the Company, and notwithstanding that
much entities may have actual or potential operations,
products, services, plans, ideas, customers or supplies
similar or identical to the Company's, or may have been
identified by the Company as potential merger or acquisition
targets or potential candidates for some other business
combination, cooperation or relationship. The Company
expressly acknowledges and agrees that it does not claim any
proprietary interest in the identity of any other entity in
its industry or otherwise, and that the identity of any such
entity is not confidential information.
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SCHEDULE B
----------
INDEMNIFICATION
Recognizing that matters of the type contemplated in this engagement sometimes
result in litigation and that Xxxxxxx'x role is advisory, the Company agrees to
indemnify and hold harmless Xxxxxxx'x, its affiliates and their respective
officers, directors, employees, agents and controlling persons (collectively,
the "Indemnified Parties"), from and against any losses, claims, damages and
liabilities, joint or several, related to or arising in any manner out of any
transaction, financing, proposal or any other matter (collectively, the
"Matters") contemplated by the engagement of Xxxxxxx hereunder, and will
promptly reimburse the Indemnified Parties for all expenses (including fees and
expenses of legal counsel) as incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim related to or
arising in any manner out of any Matter contemplated by the engagement of
Xxxxxxx hereunder, or any action or proceeding arising therefrom (collectively,
"Proceedings"), whether or not such Indemnified Party is a formal party to any
such Proceeding. Notwithstanding the foregoing, the Company shall not be liable
in respect of any losses, claims, damages, liabilities or expenses that a court
of competent jurisdiction shall have determined by final judgment resulted
solely from the gross negligence or willful misconduct of an Indemnified Party
or with respect to information furnished by Xxxxxxx to the Company. The Company
further agrees that it will not, without the prior written consent of Laidlaw,
settle, compromise or consent to the entry of any judgment in any pending or
threatened Proceeding in respect of which indemnification may be sought
hereunder (whether or not Xxxxxxx or any Indemnified Party is an actual or
potential party to such Proceeding), unless such settlement, compromise or
consent includes an unconditional release of Xxxxxxx and each other Indemnified
Party hereunder from all liability arising out of such Proceeding. As money
damages may not be a sufficient remedy in the event of any breach or threatened
breach of this Schedule B by the Company or Xxxxxxx, the Company or Xxxxxxx may
seek injunctive relief or other equitable relief in addition to any other
available remedy.
The Company agrees that if any indemnification or reimbursement sought pursuant
to this letter were for any reason not to be available to any Indemnified Party
or insufficient to hold it harmless as and to the extent contemplated by this
letter, then the Company shall contribute to the amount paid or payable by such
Indemnified Party in respect of losses, claims, damages and liabilities in such
proportion as is appropriate to reflect the relative benefits to the Company and
its stockholders on the one hand, and Xxxxxxx on the other, in connection with
the Matters to which such indemnification or reimbursement relates or, if such
allocation is not permitted by applicable law, not only such relative benefits
but also the relative faults of such parties as well as any other equitable
considerations. It is hereby agreed that the relative benefits to the Company
and/or its stockholders and to Xxxxxxx with respect to Xxxxxxx'x engagement
shall be deemed to be in the same proportion as (i) the total value paid or
received or to be paid or received by the Company and/or its stockholders
pursuant to the Matters (whether or not consummated) for which Xxxxxxx is
engaged to render financial advisory services bears to (ii) the fees paid to
Xxxxxxx in connection with such engagement. In no event shall the Indemnified
Parties contribute or otherwise be liable for an amount in excess of the
aggregate amount of fees actually received by Xxxxxxx pursuant to such
engagement (excluding amounts received by Xxxxxxx as reimbursement of expenses).
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The Company further agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company
for or in connection with Xxxxxxx'x engagement hereunder except for losses,
claims, damages, liabilities or expenses that a court of competent jurisdiction
shall have determined by final judgment resulted solely from the gross
negligence or willful misconduct of such Indemnified Party or from information
furnished by Xxxxxxx to the Company. The indemnity, reimbursement and
contribution obligations of the Company shall be in addition to any liability
which the Company may otherwise have and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Company or an Indemnified Party.
The indemnity, reimbursement, contribution provisions set forth herein shall
remain operative and in full force and effect regardless of (i) any withdrawal,
termination or consummation of or failure to initiate or consummate any Matter
referred to herein, (ii) any investigation made by or on behalf of any party
hereto or any person controlling (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended) any party hereto, (iii) any termination or the completion
or expiration of this letter or Xxxxxxx'x engagement and (iv) whether or not
Xxxxxxx shall, or shall not, be called upon to render any formal or informal
advice in the course of such engagement.
The obligations of the Company and Xxxxxxx under this Schedule B shall survive
the termination of the Agreement, regardless of the reason for the termination.
