Nephros, Inc.
Exhibit
10.5
Nephros,
Inc.
0000
Xxxxxxxx
Xxx
Xxxx,
XX 00000
September
18,
2007
National
Securities Corporation
000
X.
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Gentlemen:
Reference
is made to the transactions contemplated in those several Subscription
Agreements (each a “Subscription Agreement”) by and among
Nephros, Inc., a Delaware corporation, (the “Company”) and each
subscriber a party thereto (the “Buyers”) pursuant to which
Series A 10% Secured Convertible Notes due 2008 (collectively, the
“Securities”) are being sold to the Buyers in reliance upon the
exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (“1933 Act”) and Regulation
D promulgated by the Securities and Exchange Commission (the
“SEC”) under the 1933 Act. Reference is also made to
that certain corporate finance engagement letter agreement dated June 8, 2007,
as amended (the “Engagement Agreement”) by and between the
Company, National Securities Corporation (“NSC”) and Dinosaur
Securities LLC (“Dinosaur”) pursuant to which the Company
engaged NSC and Dinosaur with respect to a proposed capital transaction, which
has resulted in the financing contemplated in the Subscription Agreement
(“Financing”). Any terms used and not otherwise
defined herein shall have the respective meanings set forth in the Subscription
Agreement.
1. Representations
and Warranties of the Company. For the benefit of NSC and Dinosaur, the
Company hereby incorporates by reference the representations and warranties
as
set forth in Sections 3(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k),
(o), (q) and (r) of the Subscription Agreement with the same force and effect
as
if specifically set forth herein. In addition, at each
closing of the Financing (“Closing”), the Company will provide NSC with copies
of all closing documents that are furnished to the Buyers pursuant to the
Subscription Agreement, as well as the Form D promptly following its filing
with
the SEC.
2. Closing;
Fees. Simultaneously with payment for and delivery of the Securities at each
Closing, the Company shall pay to NSC and Dinosaur the compensation (cash and
placement agent warrants) and expense reimbursement (NSC only) as set forth
in
the Engagement Agreement (“General Expense Obligation”) which
the Company shall disclose to investors in Schedule 3(f) of the disclosure
schedules to the Subscription Agreement. Lastly, upon the reasonable
determination by NSC that a FINRA Rule 2710 filing is required in connection
with the registration statement relating to the resale of the shares underlying
the placement agent warrants, the Company will pay all filing fees, costs and
reasonable legal fees in connection with such filing to be prepared by the
Placement Agent’s counsel (the “2710 Filing Fee and Expense
Obligation”). Notwithstanding anything contained herein, the
aggregate General Expense Obligation and 2710 Filing Fee and Expense Obligation
shall in no event exceed $25,000 in the aggregate.
3. Miscellaneous.
(a). Survival. Notwithstanding
anything contained herein, the Engagement Agreement remains in full force and
effect in accordance with its terms.
(b). Representations,
Warranties and Covenants to Survive Delivery. The Company
acknowledges that the representations and warranties from the Subscription
Agreement incorporated by reference herein by the Company shall survive the
execution and delivery of the Subscription Agreement for a period of one year
from the First Closing (as defined in the Subscription Agreement).
(c). Applicable
Law. This Agreement shall be governed by and construed
under the laws of the State of New York as applied to agreements among New
York
residents entered into and to be performed entirely within New
York. Each of the parties hereto (1) agree that any legal suit,
action or proceeding arising out of or relating to this Agreement 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)
waive any objection which the Company may have now or hereafter to the venue
of
any such suit, action or proceeding, and (3) irrevocably consent 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. Each of the parties hereto further agrees
to accept and acknowledge service of any and all 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 agree that service of process upon it mailed by certified mail
to
its address shall be deemed in every respect effective service of process upon
it, in any such 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.
(d). Counterparts. This
Agreement may be signed in counterparts with the same effect as if both parties
had signed one and the same instrument.
(e). Entire
Agreement. This Agreement, together with the Engagement
Agreement, constitute the entire agreement between the parties hereto pertaining
to the subject matter hereof and supersede all prior and contemporaneous
agreements, understandings, documents, negotiations and discussions, whether
oral or written, of the parties hereto.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
If
you find the foregoing is in
accordance with our understanding, kindly sign and return to us a counterpart
hereof, whereupon this instrument along with all counterparts will become a
binding agreement between us.
Very
truly
yours,
NEPHROS,
INC.
By: ______________________________
Xxxxxx
X.
Xxxxx
President and Chief Executive Officer
AGREED
AND ACCEPTED TO
AS
OF THE
DATE FIRST WRITTEN ABOVE:
NATIONAL
SECURITIES CORPORATION
By:
__________________________________________
Xxxxx
Xxxxxxxx
Managing
Director and Head of Investment Banking
DINOSAUR
SECURITIES, LLC
By:
__________________________________
Xxxxx
Xxxxxxxx
President
