September 8th 2009 Mr. Aaron Whiteman, President and CEO GENova Biotherapeutics, Inc. London W1G 9QR United Kingdom
September 8th 2009
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President and CEO
GENova Biotherapeutics, Inc.
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London W1G 9QR
United Kingdom
Dear ▇▇▇▇▇,
In accordance with our most recent discussions regarding your company’s desire to secure additional capital (the “Funds”), this letter agreement (the “Agreement”) shall serve as our full and complete understanding relative to your engagement of our firm, PacificWave Partners Limited (“PacificWave”),
as financial advisors to GENova Biotherapeutics, Inc. (the “Company”). The Company acknowledges that the Funds may be provided through single or multiple tranche investments consisting of, without limitation, one or more of the following: conventional debt, convertible debt, secured debt, participating debt, warrants, equity, preferred equity, equity draw-down facilities, lines of credit, letters of credit and/or any other forms of financing (each, an “Investment”).
In consideration of the mutual representations, warranties and covenants contained herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, PacificWave and the Company hereby agree to the following terms and conditions:
Role of PacificWave Partners Limited and Independent Contractor Status
1. The Company hereby engages PacificWave as its exclusive financial advisors to facilitate introductions to one or more persons, partnerships, corporations or other entities or groups, satisfactory to the Company, who would be interested
in entering into a Transaction with the Company, as well as such other consultants and/or professionals as may be necessary or appropriate in effecting a Transaction. A “Transaction” shall mean the payment of Funds to the Company by way of any Investment or Investments. The Company shall have the absolute right to refuse to consummate a Transaction for any reason or no reason. The Company acknowledges and agrees that PacificWave and its officers, directors, employees,
agents and representatives are not acting as an agent or broker of the Company or otherwise acting in a fiduciary capacity on behalf of the Company and are acting solely as an independent contractor. PacificWave and its officers, directors, employees, agents, and representatives shall not be empowered to act for or bind the Company to any contractual arrangement with any third parties. The Company acknowledges and agrees that PacificWave will introduce potential investors to the Company,
but will not solicit any Transaction, participate in the negotiation or execution of any Transaction or advise on the merits of any Transaction.
Term of Engagement
2. The term of this Agreement shall be for a period of sixty (60) days (the “Term”) commencing from the date that PacificWave receives a copy of this Agreement executed by the Company. PacificWave shall be the exclusive
financial advisors to the Company during the Term. Thereafter, this Agreement shall renew automatically for successive terms of sixty (60) days (each, a “Renewal Term”) unless either party shall give twenty (20) days’ written notice of termination to the other party before the commencement of any Renewal Term. Any termination of this Agreement pursuant to this paragraph 2 shall be without liability of any character (including, but not limited to, loss of anticipated profits
or consequential damages) on the part of any party thereto, except that the Company shall remain obligated to pay all fees and expenses provided to be paid by it specified in paragraphs 3, 4, 5 and 6 of this Agreement.
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Introductions
3. Prior to the introduction of the Company to any particular investor or investors, PacificWave will provide the investor’s name or investors’ names (each, a “Named Investor”) to the Company for approval by the
Company. The Company agrees to accept every potential Named Investor except where the Company has already been introduced to a Named Investor or where the Company in good faith believes that the Company’s reputation may be harmed by entering into a Transaction with the Named Investor. If the Company does not provide its approval or rejection of a Named Investor within 24 hours of the disclosure of the identity of that Named Investor, then such inaction shall be deemed an approval of
that Named Investor by the Company.
PacificWave Compensation
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(a)As partial consideration for the services to be provided by PacificWave under this Agreement, the Company shall pay, upon receipt of Funds by the Company from a Transaction, whether such Transaction was closed during the Term, a Renewal Term or within one (1) year from the termination of this Agreement,
with any Named Investor introduced to or caused to be introduced to the Company by PacificWave, a cash fee of ten percent (10%) (the “Cash Fee”) of the gross value of such Transaction. The Company agrees to wire to PacificWave the Cash Fee within forty-eight (48) hours of receipt of such Funds by the Company. |
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(b)In the event that all or a portion of the consideration paid in a Transaction is other than cash, then the value of such non-cash consideration shall be deemed to be the fair market value of such non-cash consideration on the date such Transaction is consummated. In the event the Company refers an investor or investors to PacificWave during the Term or a Renewal Term and such investor or investors subsequently
participate in a Transaction, PacificWave shall be paid fifty percent (50%) of the Cash Fee calculated in accordance with paragraph 4 of this Agreement. |
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(c)The Company agrees to maintain the confidentiality of each Named Investor, except as required by applicable law. For a period of one (1) year from the termination of this Agreement, the Company will not solicit or enter into any Transaction with any Named Investor without the written consent of PacificWave and payment to PacificWave of compensation of no less than the compensation that PacificWave would
have received pursuant to the terms of this Agreement. |
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5. In consideration of PacificWave agreeing to enter into this Agreement, the Company further agrees to pay PacificWave a non-refundable cash engagement fee of $10,000 (the “Engagement Fee”) to be paid at the time of execution
of this Agreement by the Company. The Engagement Fee shall be credited against the Cash Fee. The Company agrees to wire to PacificWave the Engagement Fee within twenty-four (24) hours of the execution by the Company of this Agreement.
Additional or Future Transaction(s) by Investor(s)
6. In the event any Named Investor successfully completes a Transaction subject to the terms of this Agreement, and the same Named Investor completes another Transaction or is a participant in another Transaction with the Company within
one (1) year from the termination of this Agreement, the Company shall pay PacificWave a ten percent (10%) cash fee on any and all Funds received by the Company or on the portion of Funds contributed by such Named Investor if part of a group or syndicate of investors.
Company Representations and Warranties
7. In order to induce PacificWave to enter into this Agreement, the Company hereby represents and warrants to and agrees with PacificWave as follows:
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(a)All information provided by the Company to PacificWave or to any Named Investor regarding the Company is true and does not omit any material fact necessary to make such information, in light of the circumstances under which it was delivered, not misleading. If during the Term, any event occurs, or any event known to the Company relating to or affecting the Company shall occur, as a result of which the
information provided to PacificWave or to any Named Investor becomes incorrect or misleading, the Company shall inform PacificWave and any Named Investor of such occurrence within a reasonable period of time. PacificWave and its officers, directors, employees, agents and representatives shall have no responsibility for any information supplied by or on behalf of the Company to any Named Investor, and the Company shall not represent to any person or entity that PacificWave and/or its officers, directors,
employees, agents and representatives have assumed such responsibility. |
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(b)The execution and delivery of this Agreement, and the consummation of the transactions herein contemplated, and compliance with the terms of this Agreement will not conflict with or result in a material breach of any of the terms, conditions or provisions of, or constitute a default under, the Articles of Incorporation or By-Laws of the Company (in any respect that is material to the Company), any material note,
indenture, mortgage, deed of trust, or other agreement or instrument to which the Company is a party or by which the Company or any property of the Company is bound, or to the best of the Company's knowledge, any existing law, order, rule, regulation, writ, injunction or decree of any government, governmental instrumentality, agency or body, arbitration tribunal or court, domestic or foreign, having jurisdiction over the Company or any property of the Company, which breach would have a material adverse effect
on the business or financial condition of the Company. |
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(c)The Company is duly formed, validly existing and in good standing as a corporation under the laws of its jurisdiction of incorporation. The execution and delivery by the Company of this Agreement have been duly authorized by all necessary action, and this Agreement is the valid, binding and legally enforceable obligation of the Company, except as enforcement may be limited by general principles of equity
and by bankruptcy and other laws affecting creditors' rights generally |
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(d)All offerings of securities by the Company shall be conducted in compliance with all applicable laws, including but not limited to federal, state and other applicable securities laws. |
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Mutual Indemnification
8. The Company agrees to indemnify and hold harmless PacificWave and each of its officers, directors, employees, agents and representatives against any losses, claims, damages or liabilities, joint or several, for which PacificWave or
its officers, directors, employees, agents and representatives may directly or indirectly become liable in connection with or arising out of the advisory services that are governed by this Agreement or the offering or sale of securities of the Company. Furthermore, the Company shall reimburse any legal or other expenses reasonably incurred by PacificWave and its officers, directors, employees, agents and representatives in connection with investigating or defending against any loss, claim, damage or
liability or any action in respect thereof. Notwithstanding anything to the contrary contained herein, the Company shall not be liable hereunder for any loss, claim, damage or liability resulting from intentional wrongdoing, recklessness, bad faith or gross negligence of PacificWave and its officers, directors, employees, agents and representatives. The indemnity agreement in this paragraph 8 shall, upon same terms and conditions, extend to and inure to the benefit of each person, if any,
who may be deemed to control PacificWave and to its officers, directors, employees, agents and representatives and shall survive the termination of this Agreement.
9. ▇▇▇▇▇▇▇▇▇▇▇ agrees to indemnify and hold harmless the Company and its officers, directors, employees, agents and representatives against any losses, claims, damages or liabilities, joint or several, for which the Company or its officers,
directors, employees, agents and representatives may directly or indirectly become liable in connection with or arising out of the advisory services that are governed by this Agreement. Furthermore, PacificWave shall reimburse any legal or other expenses reasonably incurred by the Company and its officers, directors, employees, agents and representatives in connection with investigating or defending against any loss, claim, damage or liability or any action in respect thereof. Notwithstanding
anything to the contrary contained herein, PacificWave shall not be liable hereunder for any loss, claim, damage or liability resulting from intentional wrongdoing, recklessness, bad faith or gross negligence of the Company and its officers, directors, employees, agents and representatives. The indemnity agreement in this paragraph 9 shall, upon same terms and conditions, extend to and inure to the benefit of each person, if any, who may be deemed to control the Company and to its officers, directors,
employees, agents and representatives and shall survive the termination of this Agreement.
Covenants and Obligations of Company
10. The Company shall make available to PacificWave all information concerning the business, assets, operations and financial condition of the Company which PacificWave reasonably requests in connection with the performance of its services
under this Agreement. PacificWave may rely upon the accuracy and completeness of such information without independent verification.
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11. In connection with the services to be provided by PacificWave under this Agreement, PacificWave may receive from the Company information relating to the Company which is of a confidential and proprietary nature (the "Proprietary
Information"), which may include (without limitation) trade secrets, know-how, designs, formulas, processes, data and information regarding the Company's personnel, plans, operations, customers, prices, costs or financial condition. Except for appropriate actions related to its activities under this Agreement by PacificWave and its employees, PacificWave shall not permit any other person to use the Proprietary Information or disclose to any other person any of the Proprietary Information, except
with the prior written consent of the Company. PacificWave shall ensure that the confidentiality of the Proprietary Information is maintained by its employees, contractors, affiliates and agents. Upon termination of this Agreement, any Proprietary Information possessed by PacificWave, including duplicates, shall be destroyed or delivered to the Company and shall not be retained, furnished or communicated to any third party in any form. The foregoing obligations shall not apply
to disclosures of Proprietary Information required by court order or applicable laws or to information which, through no wrongful act or inaction or any breach on the part of PacificWave, has become generally known or available to the public, has been furnished to PacificWave by a third party as a matter of right and without restriction on such disclosure, or has been developed independently by PacificWave.
Arbitration
12. The Company and PacificWave agree that any dispute arising out of or in connection with this Agreement shall be resolved solely by confidential binding arbitration in San Francisco, California according to the then current commercial
arbitration rules of JAMS. Each party shall bear its own attorneys’ fees, expert witness fees, and costs in connection with such arbitration. This Agreement has been negotiated and drafted by each party, with counsel from each party reviewing the document. The language in this Agreement shall be construed as to its fair meaning and not strictly for or against any party. This Agreement, and any dispute arising hereunder, shall be governed by California law, without giving effect to
any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than California.
Governing Law
13. This Agreement shall be governed by the laws of the State of California; without regard to its conflicts of law provisions.
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Attorney’s Fees
14. If any party to this Agreement brings an action directly or indirectly based on this Agreement, the prevailing party shall be entitled to reasonable expenses therefor, including but not limited to, attorney’s fees and court costs.
Assignment
15. This Agreement and the rights and obligations of the parties hereto shall bind and inure to the benefit of any successor or successors of the Company by reorganization, merger, consolidation or otherwise and any assignee of all or
substantially all of its business and properties. Subject to the Company’s prior approval in writing, PacificWave shall have the right to assign its rights under this Agreement to any person or entity as specified in writing with notice of assignment sent to the Company by mail and/or facsimile.
Notices
16. Any notice required or permitted to be given to any of the parties to this Agreement will be in writing and may be given by prepaid registered post, electronic facsimile transmission or other means of electronic communication capable
of producing a printed copy to the address of such party first above stated or such other address as any party may specify by notice in writing to the other parties and any such notice will be deemed to have been given and received by the party to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time of mailing or between the time of mailing and the third
business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.
Authorization
17. Each of the undersigned parties, respectively, hereby represents and warrants that he/she is duly authorized to execute this Agreement and that this Agreement, when executed, shall become a valid, binding and legally enforceable obligation,
enforceable in accordance with the terms and conditions set forth herein, except as may be limited by general principles of equity and by bankruptcy and other laws affecting creditors’ rights generally.
Entire Agreement, Modifications and Waivers
18. This Agreement sets forth the complete terms and conditions between the parties with respect to the subject matter hereof, and may not be amended except in another written document executed by all of the parties. All prior
and contemporaneous conversations, negotiations, possible and alleged agreements, representations, warranties and covenants concerning the subject matter hereof are merged herein. Waiver of or failure to exercise any rights provided by this Agreement in any respect shall not be deemed a waiver of any further or future rights.
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Execution
19. This Agreement may be executed in any number of counterparts each of which shall be enforceable against the parties executing such counterparts, and all of which together shall constitute a single document. Except as otherwise
stated herein, in lieu of the original documents, a facsimile transmission or copy of the original documents shall be as effective and enforceable as the original.
Construction
20. This Agreement shall be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party. Any ambiguity shall not be interpreted against the drafting party.
Further Assurances
21. The parties will execute and deliver all such further documents, do or cause to be done all such further acts and things, and give all such further assurances as may be necessary to give full effect to the provisions and intent of
this Agreement.
Currency
22. Unless otherwise provided, all dollar amounts referred to in this Agreement are in lawful money of the United States of America.
Number and Gender
23. All references to any party, whether a party to this Agreement or not, will be read with such changes in number and gender as the context or reference requires. When the context hereof makes it possible, the word “person”
appearing in this Agreement includes in its meaning any firm and any body corporate or politic.
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Set-Off
24. The obligation of the Company to make all payments hereunder will be absolute and unconditional and will not be affected by any circumstance, including, without limitation, any set-off, compensation, counterclaim, recoupment, defence,
or other right which the Company may have against PacificWave, or anyone else for any reason whatsoever.
Please confirm that the foregoing is in accordance with your understanding by initialing each page in the lower right hand corner, and signing and dating this letter in the spaces provided below, and faxing a copy to our Los Angeles telefax no. (▇▇▇) ▇▇▇.▇▇▇▇.
Sincerely,
PACIFICWAVE PARTNERS LIMITED
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ |
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▇▇▇▇▇▇ ▇▇▇▇ |
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Managing Director |
The foregoing has been read, understood and approved:
GENOVA BIOTHERAPEUTICS, INC.
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
Dated: | September 8, 2009 | |||
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President and CEO |
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