Bioral Nutrient Delivery, LLC
0000 Xxxxxxx Xxxxxx Xxxxx, #000
Xxxxx, XX 00000
June 1, 2003
DISTRIBUTION AGENT AGREEMENT
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Xxxxxxx Xxxxxxxx Securities Corporation
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxx
Gentlemen:
This Agreement sets forth the terms and conditions under which Xxxxxxx
Xxxxxxxx Securities Corporation ("Agent") has been retained by Bioral Nutrient
Delivery, LLC ("BND") to act as Distribution Agent in connection with the
distribution, from time to time, by BND's parent, BioDelivery Sciences
International, Inc. ("BDSI"), to stockholders (the "Distribution") of rights
("Rights") to purchase Class B Membership Shares (the "Class B Shares") of BND
held by BDSI, as contemplated that certain Registration Statement on Form SB-1
of BND, Registration No. 333-103431, relating to the Rights, the Class B Shares
and the Distribution (as amended from time to time, the "Registration
Statement"). The term of the Agreement shall be the later of (i) December 31,
2003, and (ii) 60 days from the date the Registration Date becomes effective
under the Securities Act of 1933, as amended.
1. Services. Agent will provide to BND the following services (the "Services"):
(a) Assistance in the coordination of the Distribution;
(b) Facilitation with the distribution of materials to the registered and
beneficial owners of shares BDSI common stock (the "Stockholders");
(c) Answer inquires from Stockholders regarding the Distribution;
(d) Advice to BND regarding the form and content of the Registration
Statement; and
(e) Assistance to BND with document review.
2. Compensation. In consideration of the Services to be provided to BND, BND
hereby grants Agent a right to purchase 200,000 Class B Shares as follows:
100,000 as of the date that Rights are initially distributed to BDSI
stockholders (the "Distribution Date") and the balance in twelve (12), equal
quarterly installments beginning with the first fiscal quarter
following the six (6) month period following the distribution date. The purchase
price for the Class B Shares shall be the fair market value thereof (as
determined by a third-party valuation firm selected by BND) at the time the
right is exercised. The distribution agent will receive no additional cash or
other consideration for its services, but shall be reimbursed for reasonable out
of pocket expenses incurred by Agent in connection with the performance of the
Services upon the submission of verifiable receipts therefor.
3. Certain Understandings and Agreements. It is expressly understood and agreed
by BND and Agent that Agent (i) is not acting as an underwriter, broker or
dealer in connection with the Distribution (by nature of the fact that, among
other things, the Distribution is being made as a dividend to BDSI stockholders
as of a set date), (ii) is only providing informational and advisory services to
or on behalf of BND in connection with the Distribution and to no other person
or entity, and (iii) Agent is not authorized to undertake any solicitation,
brokerage, underwriting or any similar activities on behalf of BND, BDSI or any
other person or entity in connection with the Distribution. BND and Agent
further agree that this agreement is intended to qualify as services provided in
connection with an exempted offering as contemplated by NASD Rule 2710(b)(8)(I).
4. Compliance with Law. Agent represents and warrants to BND that it will comply
with, and BND represents and warrants to Agent that it will comply with,
applicable requirements of law relating to the performance of this Agreement.
5. Indemnification. BND agrees to indemnify and hold Agent harmless from and
against any loss, damage, expense (including, without limitation, reasonable
legal and other related fees and expenses), liability or claim (collectively,
"Claims") incurred by Agent arising out of Agent's performance of its
obligations under this Agreement (except for any loss, damage, expense,
liability or claim resulting out of Agent's own negligence or misconduct). At
its election, BND may assume the defense of any such Claim. Agent hereby agrees
to advise BND of any such Claim promptly after receipt of the notice thereof;
provided however, that Agent's right to indemnification hereunder shall not be
limited by its failure to promptly advise BND of any such Claim, except to the
extent that BND is prejudiced by such failure.
Agent agrees to indemnify and hold BND, BDSI and their respective
employees, officers, directors, agents or representatives (the "BND Parties")
from and against Claims incurred by any BND Party arising out of Agent's
performance of its obligations under this Agreement (except for any loss,
damage, expense, liability or claim resulting out of the negligence or
misconduct of the applicable BND Party). At its election, Agent may assume the
defense of any such Claim. BND hereby agrees to advise Agent of any such Claim
promptly after receipt of the notice thereof; provided however, that the BND
Parties' rights to indemnification hereunder shall not be limited by BND's
failure to promptly advise Agent of any such Claim, except to the extent that
Agent is prejudiced by such failure.
The indemnification provisions contained in this paragraph 5 will survive
the term of this Agreement.
6. Confidentiality. Agent agrees to preserve the confidentiality of all
non-public information regarding and provided by BND, BDSI or their respective
employees, officers, directors, agents or representatives for its use in
providing Services under this agreement, or information (whether oral, written
or electronic) developed by Agent based upon such non-public information. It is
understood and agreed that damages may not be an adequate remedy for BND the
event of a breach or threatened breach of this section 6 and, accordingly, Agent
agrees that BND will be entitled to seek injunctive or other appropriate
equitable relief against Agent and its representatives in the event of such a
breach or threatened breach without proof of actual damages and without any
requirement to post a bond or provide other security.
7. Governing Law. This Agreement shall be made in, governed by, and construed in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of law.
8. Jurisdiction. Agent and BND, on behalf of themselves and their respective
representatives, hereby: (i) agree that any suit, action or other legal
proceeding arising out of or relating to this agreement shall be brought in the
State of New York, County of New York or in the Courts of the United States of
America located in the Southern District of New York; (ii) consent to the
jurisdiction of each such court in any such suit, action or proceeding; (iii)
waive any objection which it may have to the laying of venue of any such suit,
action or proceeding in any of such courts and any claim that any such suit,
action or proceeding has been brought in an inconvenient forum; and (iv)
irrevocably consent to the service of any and all process in any such suit,
action or proceeding by service of copies of such process at its address first
indicated above.
9. No Waiver. No failure or delay by BND or Agent in exercising any right or
remedy provided for hereunder shall operate as a waiver thereof.
10. Amendments. This Agreement may be not modified, altered, supplemented or
amended in any manner except with the written approval of BND and Agent.
11. No Third Party Rights. Nothing in this Agreement, expressed or implied, is
intended to confer any rights or remedies upon any person or entity, other than
BND, Agent and their respective affiliates, successors and assigns.
12. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof, and supersedes all
prior understandings or agreements between the parties.
13. Counterparts. This Agreement and any amendment hereto may be executed in any
number of counterparts and by facsimile, each of which, when taken together,
shall be deemed an original of this Agreement and one and the same Agreement.
If the above is agreed to by Agent, please sign and return the enclosed
duplicate of this Agreement to BND, Attention: Xxxxx X. XxXxxxx, 0000 Xxxxxxx
Xxxxxx Xxxxx, #000, Xxxxx, XX 00000. Your execution hereof shall indicate your
acceptance of the terms hereof.
Sincerely,
BIORAL NUTRIENT DELIVERY, LLC
By:
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Name: Xxxxx X. XxXxxxx
Title: Secretary, Treasurer and
Chief Financial Officer
AGREED TO AND ACCEPTED:
XXXXXXX XXXXXXXX SECURITIES CORPORATION
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: President
[End of Distribution Agent Agreement]
