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TRIPOINT
GLOBAL EQUITIES, LLC
MEMBER: NASD/SIPC
July 12, 2007
CONFIDENTIAL
BioForce Nanosciences Holdings, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxxx
CEO
This letter agreement (this "Agreement") confirms the engagement of TriPoint
Global Equities, LLC ("TGE") by BioForce Nanosciences Holdings, Inc. ("BFNH" or
the "Company") as a non-exclusive placement agent to arrange the sale of equity
or equity-linked securities including convertible debt (the "Securities") on
behalf of the Company to certain potential investors pre-approved by the
Company. The sale of Securities (the "Financing" or "Financings") may be
completed under an effective shelf registration statement, if applicable, or may
occur through a private placement pursuant to one or more exemptions from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), and in compliance with applicable securities laws of states and other
jurisdictions ("Blue Sky Laws").
1. Retention. Subject to the terms and conditions of this Agreement, BFNH hereby
engages TGE to act on behalf of the Company as a non-exclusive placement agent
during the Authorization Period (as defined below) to arrange the sale of
Securities in an amount and on terms and conditions satisfactory to the Company
and TGE hereby accepts such engagement. TGE acknowledges that the Company has
engaged other placement agents who have introduced and are introducing the
Company to potential investors. To avoid conflicts, TGE agrees to confirm in
advance its ability to present a particular potential investor to the Company.
The Company retains the right to reject any potential investor or transaction
proposed by TGE for any or no reason.
2. Authorization Period. TGE's engagement shall become effective on the date
first written above and, unless extended by BFNH and TGE, shall expire ninety
(90) days thereafter unless terminated upon the earlier to occur of the entry by
the Company into a Financing or either party providing the other with ten (10)
days prior written notice. The period from the effective date through the
expiration or termination of this Agreement is called the "Authorization
Period."
3. Compensation. BFNH shall pay TGE the compensation set forth below, but only
in respect to and to the extent an investor introduced to the Company by TGE in
accordance with the terms of this Agreement participates in a Financing. In no
event shall TGE shall be owed any compensation in respect to the participation
by other investors in a Financing.
a. Cash Fee. BFNH shall pay TGE a cash placement fee equal to 7.5% on any
gross cash proceeds received by the Company from La Jolla Cove Investors, Inc.,
or 9.0% from any other investor introduced by TGE to the Company, in connection
with a Financing, including any equity linked or convertible debt financing. The
00 Xxxxx Xxxxxx, 00xx Floor Phone: 000 000 0000
New York, NY xxx.xxxxxxxxxxxxxxxxxxxxxx.xxx Fax: 000 000 0000
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TRIPOINT
GLOBAL EQUITIES, LLC
MEMBER: NASD/SIPC
cash placement fee shall be paid by wire transfer on the date on which the
Company actually receives consideration.
b. Placement Agent Warrants. On each date of a Financing on which BFNH
issues Securities to an investor (the "Purchaser"), BFNH shall issue to TGE or
its permitted assigns warrants (the "Warrants") to purchase such number of
shares of the common stock of the Company equal to 7.5% of the aggregate number
of shares of common stock of the Company issued and issuable by the Company
under and in connection with that portion of the Financing received from La
Jolla Cove Investors, Inc., or 10% in connection with that portion of the
Financing received from any other investor introduced by TGE to the Company. The
number of shares of common stock issuable upon exercise of the Warrants shall
include all shares of common stock issuable under the Securities, including,
without limitation, shares issuable upon conversion or exercise of the
Securities. The Warrants shall provide for cashless exercise provided that BFNH
does not meet the Registration requirement as defined in the term sheet, (even
if the Purchasers do not have such right). In the event BFNH does meet the
Registration requirement, TGE hereby agrees to waive the cashless exercise
provision in connection with the Warrants. In addition, the Warrants shall have
terms and conditions identical to the Securities purchased by the Purchasers.
The exercise price per share of the Warrants shall be equal to the effective
price per share paid by the Purchasers for the Securities (or in the event of a
convertible security, the conversion price or exercise price per share of common
stock on the closing date). The Warrants shall be exercisable after the date of
issuance and shall expire five years after the date of issuance, unless
otherwise extended by the Company. The Warrants shall include registration
rights identical to those of the Securities issued in the Financing. The
Warrants shall be transferable within TGE or to its assigns or designees, at
TGE's discretion.
c. Tail Period. BFNH shall and shall cause its affiliates to, pay to TGE
all compensation described in this Section 3 with respect to all Securities sold
to a purchaser or purchasers at any time prior to the expiration of twelve (12)
months after the expiration of this Agreement (the "Tail Period") if (i) such
purchaser or purchasers were identified to the Company by TGE during the
Authorization Period in accordance with the terms of this Agreement, or (ii)
upon the company's written request, TGE advised the Company with respect to such
purchaser or purchasers during the Authorization Period
d. Other Member Firms. In connection with the Financing, TGE shall have
the right to associate itself with other members of the National Association of
Securities Dealers, Inc. ("NASD") and/or agents who will share in compensation.
The selection of other agents and their compensation shall be at TGE's sole
discretion, and TGE shall ensure such other members and agents shall satisfy the
representations, warranties, covenants and obligations required of TGE under
this Agreement. TGE shall be solely responsible for any compensation owed to
these members and agents.
4. Reimbursements. Regardless of whether the Financing or sales of Securities
are consummated, the Company shall reimburse TGE for all of its reasonable
out-of-pocket expenses not to exceed $20,000, which amount includes $15,000 for
fees and disbursements of TGE's legal counsel, incurred in connection with TGE's
engagement, all of which expenses are to be pre-approved by the Company in
writing and which may include TGE's travel that may be necessary. The Company
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TRIPOINT
GLOBAL EQUITIES, LLC
MEMBER: NASD/SIPC
shall be responsible for, and shall bear, all expenses directly and necessarily
incurred in connection with the activities it directs in association with a
Private Placement, including, without limitation, the costs of preparing,
printing, mailing and filing any documents to be provided to investors and all
amendments and supplements thereto; registrar and transfer taxes, if any,
preparing, printing, and delivering any other Information or Company Data; blue
sky fees and filing fees.
5. Representations, Warranties and Covenants of BFNH. BFNH represents and
warrants to, and covenants with, TGE as follows:
a. Neither the Company nor, to the Company's knowledge any person acting
on its behalf has taken, and BFNH shall not and shall not knowingly permit its
affiliates to take, directly or indirectly, any action so as to cause any of the
transactions contemplated by this Agreement to fail to be entitled to exemption
from registration or qualification under all applicable securities laws or which
constitutes general advertising or general solicitation (as those terms are used
in Regulation D under the Securities Act) with respect to the Securities.
b. BFNH shall take and shall cause its affiliates to take such actions as
may be required to cause compliance with this Agreement. TGE acknowledges that
BFNH may cause its affiliates to perform any of its obligations hereunder;
provided, however, that BFNH's intention to do so (or any action by BFNH or TGE
in respect thereof) shall not relieve BFNH from its obligation to perform such
obligations when due.
c. The Company understands that TGE will be providing potential investors
with Company-furnished materials and materials publicly available regarding the
Company (collectively, the "Information"). Company acknowledges that TGE has no
obligation to independently verify the accuracy or completeness of the
Information. Provided TGE complies with these restrictions, TGE will be entitled
to rely on and use the Information without independent verification, and the
Company will not hold TGE responsible in any respect for the accuracy or
completeness of all such Information.
d. The Company represents that none of the Company, its predecessors or
affiliates has been subject to any order, judgment or decree of any court of
competent jurisdiction temporarily, preliminary or permanently enjoining such
person for failing to comply with Section 503 of Regulation D.
6. Representations, Warranties and Covenants of TGE. TGE represents and warrants
to, and covenants with, BFNH as follows:
a. None of TGE, its affiliates or any person acting on behalf of TGE or
any of such affiliates has engaged or will engage in any general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) with respect to the Securities.
b. TGE will use its best efforts to conduct the offering and sale of
Securities so that Securities are sold in a transaction or series of
transactions exempt from registration under the Securities Act.
00 Xxxxx Xxxxxx, 00xx Floor Phone: 000 000 0000
New York, NY xxx.xxxxxxxxxxxxxxxxxxxxxx.xxx Fax: 000 000 0000
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GLOBAL EQUITIES, LLC
MEMBER: NASD/SIPC
c. TGE will send Information only to persons that the TGE reasonably
believes are "accredited investors" (as defined under Rule 501(a) of the
Securities Act). TGE shall not give any Information or make any representations
in connection with a Financing or the Securities other than those contained in
the Information. TGE agrees not to publish, circulate or otherwise use any other
advertisement or solicitation material or give any information or make any
representation with respect to the Company or its business or affairs other than
those contained in the Information or such information as is specifically
authorized in writing by the Company. If and when the Company supplies TGE with
copies of any supplement to an offering memorandum, TGE shall affix copies of
the supplement to the offering memorandum already in TGE's possession.
Thereafter, TGE shall only distribute offering memorandum containing the
supplement and TGE shall accept subscriptions only from potential investors who
have received offering memorandum containing the supplement. TGE shall comply
with all instructions from the Company concerning the destruction of out-dated
offering memoranda and the use of supplemented or amended offering memoranda.
d. TGE agrees that, except as otherwise required by law, regulation or
court order or as contemplated by its engagement hereunder, the non-public
Information furnished to TGE by the Company shall be held by TGE as confidential
and shall not be used for any purposes other than those contemplated by this
Agreement. TGE shall not announce its involvement in any Financing without the
Company's prior written consent, which consent shall not be unreasonably
withheld.
e. TGE is: a broker-dealer duly registered pursuant to the provisions of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); a member
in good standing of the NASD; and duly registered as a broker-dealer under the
applicable statutes and regulations of each state in which the Securities will
be offered and sold, except such states in which TGE is exempt from registration
or such registration is not otherwise required. TGE will maintain its
registration in good standing, or its exemption from such registration,
throughout the term in which TGE may be entitled to compensation hereunder and
it will comply with all statutes and other requirements applicable to it with
respect to its brokerage activities as they relate to a Financing within those
jurisdictions.
f. TGE shall comply with all applicable broker-dealer registration
requirements, applicable federal and state securities laws, and all NASD
regulations, with respect to a Financing.
g. TGE covenants to the Company that at no time has or will TGE, its
agents, representatives or affiliates engage in or effect, in any manner
whatsoever, directly or indirectly, any (i) "short sale" (as such term is
defined in Section 242.200 of Regulation SHO of the Exchange Act) of the
Securities or (ii) hedging transaction, which establishes a net short position
with respect to the Securities.
h. TGE represents and warrants it is an "accredited investor" as that term
is defined in Rule 501(a)(3) of Regulation D of the Securities Act, and that it
is entering into this Agreement and will be acquiring Securities hereunder for
its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, unless and until
the Securities are subsequently registered. TGE understands that the Securities
are being offered and initially sold to it in reliance upon specific exemptions
00 Xxxxx Xxxxxx, 00xx Floor Phone: 000 000 0000
New York, NY xxx.xxxxxxxxxxxxxxxxxxxxxx.xxx Fax: 000 000 0000
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TRIPOINT
GLOBAL EQUITIES, LLC
MEMBER: NASD/SIPC
from the registration requirements of Federal and state securities laws and that
the Company is relying in part upon the truth and accuracy of, and TGE's
compliance with, the representations, warranties, agreements, acknowledgements
and understandings of TGE set forth herein in order to determine the
availability of such exemptions and the eligibility of TGE to acquire the
Securities. TGE has been furnished with materials relating to the business,
finances and operations of the Company and materials relating to the offer and
sale of the Securities that has been reasonably requested by TGE, including,
without limitation, the Information. TGE understands that its investment in the
Securities involves a high degree of risk.
7. Indemnification.
a. The Company agrees to indemnify and hold harmless TGE from and against
any losses, claims, damages, or liabilities, joint or several, to which TGE
becomes subject, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of and to the extent of a material breach
by the Company of an obligation under this Agreement.
b. TGE agrees to indemnify and hold harmless the Company against any
losses, claims, damages, or liabilities, joint or several, to which the Company
becomes subject, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of and to the extent of a material breach
by TGE of an obligation under this Agreement.
c. The party claiming indemnification (the "Indemnitee") shall provide the
party from whom indemnification is sought (the "Indemnitor") with prompt notice
of an indemnifiable loss, claim, damage or liability ("Claim"). If a third party
asserts a Claim against the Indemnitee that, if successful, might result in an
obligation of the Indemnitor to pay indemnifiable damages pursuant to this
Section, the Indemnitor, at its sole expense, may assume the primary defense
thereof with counsel reasonably acceptable to the Indemnitee. If the Indemnitor
fails or is unable to elect to assume the primary defense of a Claim after
receiving prompt notice of the Claim, the Indemnitee may (but need not) do so;
in which event the Indemnitee may defend, settle or compromise the Claim, and
the Indemnitor agrees to reimburse the Indemnitee for legal or other expenses
reasonably incurred by the Indemnitee in connection with investigating and
defending itself against the Claim.
d. The foregoing provisions shall survive termination of this Agreement
and any investigation with respect thereto by any party hereto.
8. Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, EXEMPLARY, PUNITIVE OR OTHER
SPECIAL DAMAGES, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN INFORMED OF THE
POSSIBILITY OF SUCH DAMAGES IN ADVANCE.
9. Tombstone Advertisements. Following the final Closing of the Private
Placement, the Company shall pay for the reasonable costs of placing "tombstone
advertisements," prepared in compliance with SEC Rule 135(c), in any
publications which may be selected by TGE.
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TRIPOINT
GLOBAL EQUITIES, LLC
MEMBER: NASD/SIPC
10. Relationship. TGE is an independent contractor under this Agreement and not
an employee or agent of the Company. TGE shall have no right or authority to
assume or create any obligation on behalf of the Company.
11. Survival of Certain Provisions. Provisions which by their terms or to be
given effect as anticipated by this Agreement shall survive the expiration or
termination of the Agreement.
12. Notices. Notice given pursuant to any of the provisions of this Agreement
shall be given in writing and shall be sent by pre-paid certified mail, return
receipt request or recognized overnight courier for next day delivery or
personally delivered (a) if to the Company, to 0000 Xxxxxx Xxxxx Xxxxx, Xxxxx
000, Xxxx, Xxxx 00000, Attention, Xxxx Xxxxxxxxx, CEO; and (b) if to TGE, to its
office at 00 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000. Attention: Xxxx
Xxxxxxxxx. Notices shall be deemed given: three days after being sent by
certified mail; the next day when sent overnight; or immediately when personally
delivered.
13. Miscellaneous. This Agreement sets forth the entire agreement between the
parties, supersedes and merges all prior written or oral agreements with respect
to the subject matter hereof, may only be amended in writing and shall be
governed by the laws of the State of Delaware applicable to agreements made and
to be performed entirely within such State. The parties shall make reasonable
efforts to resolve any dispute concerning this Agreement, its construction or
its alleged breach by face-to-face negotiations. If such negotiations fail to
resolve the dispute, the dispute shall be finally decided by arbitration in
accordance with the rules then in effect of the American Arbitration
Association, unless a third party initiates an action related to the Financing
in a court of competent jurisdiction. Any arbitration will be conducted in the
Chicago metropolitan area. Except as otherwise provided herein, BFNH and TGE
each hereby irrevocably waives any right it may have to trial by jury in respect
of any claim arising out of this Agreement or the transactions contemplated
hereby. This Agreement may be assigned by either party with the prior written
consent of the other party. If any provision of this Agreement is determined to
be invalid or unenforceable in any respect, such determination will not effect
such provision in any other respect or any other provision of this Agreement.
Please confirm that the foregoing correctly sets forth our agreement by signing
and returning to TGE the enclosed duplicate copy of this Agreement.
Very truly yours,
TriPoint Global Equities, LLC
By: /s/ Xxxx Xxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxx
Title: CEO
ACCEPTED AND AGREED TO this 24th day of July 2007 BIOFORCE NANOSCIENCES
HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxx
Title: CEO
00 Xxxxx Xxxxxx, 00xx Floor Phone: 000 000 0000
New York, NY xxx.xxxxxxxxxxxxxxxxxxxxxx.xxx Fax: 000 000 0000
