SUBSCRIPTION AGENT AGREEMENT December , 2006
Exhibit 99.7
December , 2006
U.S.
Stock Transfer Corporation
0000 Xxxxxxx Xxxxxx; Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxxx
Ladies and Gentlemen:
In connection with your appointment as Subscription Agent in the transaction described herein, Interleukin Genetics, Inc. (the "Company"), hereby confirms its arrangements with you as follows:
- 1.
- Rights Offering—The Company is conducting an offering (the "Rights
Offering") to the holders of shares of its common stock, par value $0.001 per share (the "Common Stock"), on August 17,
2006 (the "Record Date"), the right (each a "Right" and together the
"Rights") to subscribe for share(s) of Common Stock. Except as set forth under Paragraph 6 below, Rights shall cease to be exercisable at
5:00 p.m., Eastern Standard time, on January , 2007 or such later date of which the Company notifies you orally and confirms in writing (the "Expiration
Date"). 2,533,234 Rights are being issued for 24,336,297 shares of Common Stock held on the Record Date (excluding the 2,750,037 shares issued to Pyxis Innovations on such
date). One Right and payment in full of the subscription price of $5.6783 per share (the "Subscription Price") are required to subscribe for one share
of Common Stock. Rights are evidenced by nontransferable subscription certificates in registered form ("Subscription Certificates"). Each holder of
Subscription Certificates who exercises the right to subscribe for all shares that can be subscribed for with the Rights evidenced by such Subscription Certificates (the "Basic
Subscription Right") will have the right to subscribe for additional shares, if any, available as a result of any unexercised Rights (such additional subscription right being
referred to hereafter as the "Oversubscription Privilege"). The Rights Offering will be conducted in the manner and upon the terms set forth in the
Company's Prospectus dated December , 2006 (the "Prospectus"), which is incorporated herein by reference and made a part hereof as if set
forth in full herein.
- 2.
- Appointment of Subscription Agent—You are hereby appointed as Subscription Agent to effect the Rights Offering in accordance
with the Prospectus. Each reference to you in this letter is to you in your capacity as Subscription Agent unless the context indicates otherwise.
- 3.
- Delivery of Documents—Enclosed herewith are the following, the receipt of which you acknowledge by your execution hereof:
- (a)
- a
copy of the Prospectus;
- (b)
- a
draft form of Subscription Certificate (with instructions);
- (c)
- resolutions
adopted by the Board of Directors of the Company in connection with the Rights Offering, certified by the Secretary of the Company; and
- (d)
- Notice of Guaranteed Delivery.
As soon as is reasonably practical, you shall mail or cause to be mailed to each holder of shares of Common Stock at the close of business on the Record Date, a Subscription Certificate evidencing the Rights to which such holder is entitled (including instructions), a Notice of Guaranteed Delivery, a Prospectus and an envelope addressed to you (together, the "Subscription Documents"). Prior to mailing, you will print out a sufficient number of blank Subscription Certificates which you will prepare and issue in the names of holders of Common Stock of record at the close of business on the Record Date and for the number of Rights to which they are entitled. Prior to printing, you will send a final draft copy of a blank Subscription Certificate to the Company, for the Company's final review.
Subscription Documents will not be mailed to holders having a registered address outside the United States, or to those holders having APO of FPO addresses. The Rights to which such Subscription Documents relate will be held by you for such holders' accounts until instructions are received to exercise the Rights.
- 4.
- Subscription Procedure—
- (a)
- Upon
your receipt prior to 5:00 p.m., Eastern Standard time, on the Expiration Date (by mail or delivery), as Subscription Agent, of (i) any Subscription Certificate
completed and endorsed for exercise, as provided on the reverse side of the Subscription Certificate (except as provided in Paragraph 6 hereof), and (ii) payment in full of the
Subscription Price in U.S. funds by check, bank draft, wire transfer or money order payable at par (without deduction for bank service charges or otherwise) to the order of U.S. Stock Transfer
Corporation, you shall as soon as practicable after the Expiration Date, but after performing the procedures described in subparagraphs (b) and (c) below, mail to the subscriber's
registered address on the books of the Company certificates representing the shares duly subscribed for (pursuant to the Basic Subscription Right and the Additional Subscription Privilege) and furnish
a list of all such information to the Company.
- (b)
- As
soon as practicable after the Expiration Date you shall calculate the total number of shares that are available for the Oversubscription Privilege. The Oversubscription Privilege
may only be exercised by holders who subscribe to all the shares that can be subscribed for under the Basic Subscription Right. The shares available for additional subscriptions will be those that
have not been subscribed and paid for pursuant to the Basic Subscription Right (the "Remaining Shares"). Where there are sufficient Remaining Shares to
satisfy all additional subscriptions by holders exercising their rights under the Oversubscription Privilege, each holder shall be allotted the number of Additional Shares subscribed for. If the
aggregate number of Shares subscribed for under the Oversubscription Privilege exceeds the number of Remaining Shares, the number of Remaining Shares allotted to each participant in the
Oversubscription Privilege shall be the product (disregarding fractions) obtained by multiplying the number of Remaining Shares by a fraction of which the numerator is ownership of shares of each
participant in the Oversubscription Privilege round and the denominator is the total ownership of all stockholders participating in the Oversubscription Privilege round. Any fractional share to which
persons exercising their Oversubscription Privilege would otherwise be entitled pursuant to such allocation shall be rounded to the next whole share.
- (c)
- Upon
calculating the number of shares to which each subscriber is entitled pursuant to the Oversubscription Privilege and the amount overpaid, if any, by each subscriber, you shall,
as soon as practicable, furnish a list of all such information to the Company.
- (d)
- Upon
calculating the number of shares to which each subscriber is entitled pursuant to the Oversubscription Privilege and assuming payment for the additional shares subscribed for has
been delivered, you shall mail, as contemplated in subparagraph (a) above, the certificates representing the additional securities which the subscriber has been allotted. If a lesser number of
shares is allotted to a subscriber under the Oversubscription Privilege than the subscriber has tendered payment for, you shall remit the difference to the subscriber by check without interest or
deduction at the same time as certificates representing the securities allotted pursuant to the Oversubscription Privilege are mailed.
- (e)
- Funds received by you pursuant to the Basic Subscription Right and the Oversubscription Privilege shall be held by you in a segregated account. You shall invest and reinvest such funds in your [Time Deposit Open Account] or, if directed by the Company, a money market fund which has been placed in its highest rating category by Standard & Poors or Xxxxx'x. Upon mailing certificates representing the securities and refunding subscribers for additional shares
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subscribed for but not allocated, if any, you shall promptly remit to the Company all funds received in payment of the Subscription Price for shares sold in the Rights Offering (together with all interest earned thereon).
- 5.
- Defective Exercise of Rights; Lost Subscription Certificates—The Company shall have the absolute right to reject any
defective exercise of Rights or to waive any defect in exercise. Unless requested to do so by the Company, you shall not be under any duty to give notification to holders of Subscription Certificates
of any defects or irregularities in subscriptions. Subscriptions will not be deemed to have been made until any such defects or irregularities have been cured or waived within such time as the Company
shall determine. You shall as soon as practicable return Subscription Certificates with the defects or irregularities which have not been cured or waived to the holder of the Rights. If an exercising
holder has not indicated the number of Rights being exercised, or if the Subscription Price payment forwarded by such holder to you is not sufficient to purchase the number of shares subscribed for,
at the Company's discretion the holder may be deemed to have exercised the maximum number of whole Rights which may be exercised for the Subscription Price delivered. If any Subscription Certificate
is alleged to have been lost, stolen or destroyed, you should follow the same procedures followed for lost stock certificates representing shares of Common Stock you use in your capacity as transfer
agent for the Company's Common Stock.
- 6.
- Late Delivery—If prior to 5:00 p.m., Eastern Standard time, on the Expiration Date you receive (i) payment in
full of the Subscription Price for the shares of Common Stock being subscribed for and (ii) a guarantee notice substantially in the form of the Notice of Guaranteed Delivery delivered with the
Subscription Certificate, from a financial institution having an office or correspondent in the United States, or a member firm of any registered United States national securities exchange or of the
National Association of Securities Dealers, Inc. stating the certificate number of the Subscription Certificate relating to the Rights, the name and address of the exercising subscriber, the
number of Rights represented by the Subscription Certificate held by such exercising subscriber, the number of shares of Common Stock being subscribed for pursuant to the Rights and guaranteeing the
delivery to you of the Subscription Certificate evidencing such Rights within three American Stock Exchange ("AMEX") trading days following the date of
the Notice of Guaranteed Delivery, then the Rights may be exercised even though the Subscription Certificate was not delivered to you prior to 5:00 p.m., Eastern Standard time, on the
Expiration Date, provided that within three AMEX trading days following the date of the Notice of Guaranteed Delivery you receive the properly completed Subscription Certificate evidencing the Rights
being exercised, with signatures guaranteed if required.
- 7.
- Delivery—You shall deliver to the Company the exercised Subscription Certificates in accordance with written directions
received from the Company and shall deliver to the subscribers who have duly exercised Rights at their registered addresses certificates representing the securities subscribed for as instructed on the
reverse side of the Subscription Certificates.
- 8.
- Reports—You shall notify the Company by telephone on and before the close of business on each business day during the period commencing 5 business days after the mailing of the Subscription Certificates and ending at the Expiration Date (and in the case of guaranteed deliveries ending three AMEX trading days after the Expiration Date) (each a "Daily Notice"), which Daily Notice shall thereafter be confirmed in writing, of (i) the number of Rights exercised on the day prior to the date of such Daily Notice, (ii) the number of Rights subject to guaranteed exercises on the day prior to such Daily Notice, (iii) the number of Rights for which defective exercises have been received on the day prior to such Daily Notice, and (iv) the cumulative total of the information set forth in clauses (i) through (iii) above. At or before 5:00 p.m., Eastern Standard time, on the first AMEX trading day following the Expiration Date you shall certify in writing to the Company the cumulative total through the Expiration Date of all the information set forth in clauses (i) through
3
(iii) above. At or before 10:00 a.m., Eastern Standard time, on the sixth AMEX trading day following the Expiration Date you will execute and deliver to the Company a certificate setting forth the number of Rights exercised pursuant to a Notice of Guaranteed Delivery and as to which Subscription Certificates have been timely received. You shall also maintain and update a listing of holders who have fully or partially exercised their Rights and holders who have not exercised their Rights. You shall provide the Company or its designees with such information compiled by you pursuant to this Paragraph 8 as any of them shall request.
- 9.
- Future Instructions—With respect to notices or instructions to be provided by the Company hereunder, you may rely and act on any written instruction signed by any one or more of the following authorized officers or employees of the Company:
Xxxxxxx X. Xxxxxxxxx | Chief Executive Officer | |
Xxxxxxx X. Xxxxxxx |
President |
|
Xxxx X. XxXxxx |
Chief Accounting Officer |
- 10.
- Amendment—The Company reserves the right, in its sole discretion, to (a) terminate the Rights Offering prior to
delivery of the Common Stock for which holders have subscribed pursuant to the exercise of Rights; (b) extend the Expiration Date to a later date and time; (c) amend or modify the terms
of the Rights. If the Company materially amends the terms of the Rights, an amended Prospectus will be distributed to holders of record of Rights and to holders of Rights who have previously exercised
Rights. All holders of Rights who exercised Rights prior to such amendment or within four business days after the mailing of the amended Prospectus will be given the opportunity to confirm the
exercise of Rights by executing and delivering a consent form.
- 11.
- Payment of Expenses—The Company will pay you compensation for acting in your capacity as Subscription Agent hereunder
pursuant to the schedule attached as Exhibit A hereto.
- 12.
- Counsel—You may consult with counsel satisfactory to you, which may be counsel to the Company, and the advice or opinion of
such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by you hereunder in good faith
and in accordance with such advice and opinion of such counsel.
- 13.
- Indemnification—The Company covenants and agrees to indemnify and hold you harmless against any costs, expenses (including
reasonable fees of legal counsel), losses or damages, which may be paid, incurred or suffered by or to which you may become subject arising from or out of, directly or indirectly, any claim or
liability resulting from your actions as Subscription Agent pursuant hereto; provided that such covenant and agreement does not extend to such costs, expenses, losses and damages incurred or suffered
by you as a result of, or arising out of, your own gross negligence, misconduct or bad faith or that of any employees, agents or independent contractors used by you in connection with performance of
your duties as Subscription Agent hereunder.
- 14.
- Notices—Unless otherwise provided herein, all reports, notices and other communications required or permitted to be given hereunder shall be in writing and delivered by hand or confirmed telecopy or by first class U.S. mail, postage prepaid, shall be deemed given if by hand or telecopy,
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- (a)
- If to the Company, to:
upon receipt or if by U.S. mail, three business days after deposit in the U.S. mail and shall be addressed as follows
- (b)
- If to you, to:
Interleukin
Genetics, Inc.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
U.S.
Stock Transfer Corporation
0000 Xxxxxxx Xxxxxx; Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxxx
Fax: (000) 000-0000
- 15.
- Miscellaneous—
- (a)
- No Assignment; Delegation. Neither this Agreement nor any rights or obligations hereunder may be assigned or delegated by either party
without the prior written consent of the other party.
- (b)
- Binding Nature. This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors
and assigns. Nothing in this Agreement is intended or shall be construed to confer upon any other person any right, remedy or claim or to impose upon any other person any duty, liability or
obligation.
- (c)
- Governing Law. The validity, interpretation and performance of this Agreement shall be governed by the law of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of law. The parties agree that with respect to all unresolved disputes arising out of this Agreement they shall submit to the jurisdiction
of any state or federal court sitting in Boston, Massachusetts.
- (d)
- Severability. The parties hereto agree that if any of the provisions contained in the Agreement shall be determined invalid, unlawful
or unenforceable to any extent, such provisions shall be deemed modified to the extent necessary to render such provisions enforceable. The parties hereto further agree that this Agreement shall be
deemed severable, and the invalidity, unlawfulness or unenforceability of this Agreement or of any term or provision hereof.
- (e)
- Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
- (f)
- Captions. The captions and descriptive heading herein are for the convenience of the parties only. They do not in any way modify,
amplify, alter or give full notice of the provisions hereof.
- (g)
- Facsimile Signatures. Any facsimile signature of any party hereto shall constitute a legal, valid and binding execution hereof by such
party.
- (h)
- Further Actions. Each party agrees to perform such further acts and execute such further documents as are necessary to effect the
purposes of this Agreement.
- (i)
- Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party to this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy; nor shall it be construed to be a
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- (j)
- Section Headings. Section headings are for the convenience of the parties and do not form a part of this Agreement.
- (k)
- Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. The Agreement may not be modified or amended other than by an agreement in writing.
waiver of, or an acquiescence in any such breach or default or any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character, on the part of any party, of any breach or default under the Agreement, or any waiver, on the part of any party, of any provisions or conditions of the Agreement, must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under the Agreement or by law and otherwise afforded to any party, shall be cumulative and not alternative.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, as of the day and year first above written.
Signed by Interleukin Genetics, Inc.:
By:_______________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
Acknowledged and Agreed to by U.S. Stock Transfer Corporation
By:_______________________
Name:
Title:
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EXHIBIT A
FEE SCHEDULE
AS
RIGHTS AGENT
FOR
INTERLEUKIN GENETICS, INC.
Review of Rights Agent Agreement and Acceptance | $ | 2,500.00 | |
Prepare a Rights Class for the stockholders |
$ |
50.00 |
|
Setup Rights Shareholders @ $1.00 per registration |
$ |
133.00 |
|
Issue, Post and Mail Rights, Minimum Fee is $350.00 |
$ |
350.00 |
|
Review Returned Rights, Deposit Funds and Issue Common Certificates @ $25.00 per item |
$ |
2,825.00 |
|
Cure Irregular, Incomplete Items @ $15.00 each |
Will Xxxx |
||
Irregular Transfer Review (restricted/legended certificates) @ $15.00 ea. |
Will Xxxx |
||
Update Reports from DTC as they are Received @ $30.00 each |
Will Xxxx |
||
Process Protects from Brokers, @ $25.00 each |
Will Xxxx |
||
Prepare and Mail 1099B, Minimum Fee Annually |
N/A |
||
File Tax Information with State and IRS, Annually |
N/A |
||
*Out of Pocket Expenses (Postage, Envelopes, Copying, etc.) |
Will Xxxx |
||
Total Payable Upon Execution of Agreement |
$ |
5,858.00 |
- *
- Services and/or Out of Pocket Expenses not covered by the above fees will be billed as performed or incurred.
Estimate based on 133 accounts/Shareholders.
U.S. STOCK TRANSFER CORPORATION
August 24, 2006
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