THIS TRANSACTION FEE AGREEMENT (this “Agreement”) is made as of the ____ day of February, 2006.
EXHIBIT 10.4
THIS TRANSACTION FEE AGREEMENT (this “Agreement”) is made as of the ____ day of February, 2006.
BETWEEN: |
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| CytRx Corporation | ||||
| 00000 Xxx Xxxxxxx Xxxx., Xxxxx 000 | ||||
| Xxx Xxxxxxx, XX 00000 | ||||
| (the “Company”) | ||||
| OF THE FIRST PART | ||||
AND: |
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| X.X. XXXXXXX & COMPANY, LLC | ||||
| 000 Xxxx Xxxxxx | ||||
| Xxxxxxxxxx, Xxx Xxxxxx 00000 | ||||
| (the “Broker”) | ||||
| OF THE SECOND PART |
W H E R E A S:
A. The Company wishes to engage Broker to act on a non-exclusive basis in connection with the
potential sale of between $8,000,000 and $15,000,000 aggregate principal amount of equity
securities (“Securities”) of the Company (the “Transaction”);;
B. The Broker is a licensed broker-dealer with the National Association of Securities Dealers;
C. The Company wishes to reward the Broker for its services in the event that a Transaction
closes in the manner hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants, promises, conditions, warranties and
representations hereinafter set forth, the parties hereto agree as follows:
1. Broker will introduce the Company to one or more of those certain accredited, institutional
investors listed on Exhibit A attached hereto (“Investor” or “Investors”), with whom Broker has a
pre-existing substantive relationship. For the avoidance of doubt, no party shall be deemed an
Investor for purposes of this Agreement, and no fees shall be payable to Broker with respect to the
investment by such party in the securities of the Company, unless such party is listed on Exhibit
A. Broker and the Company may periodically amend Exhibit A by mutual written agreement. The actual
terms and structure of the Transaction will depend on market conditions and will be subject to
negotiation between the Company and prospective Investors. Broker agrees to not contact any person
who is not designated as an Investor in connection with the Transaction.
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2. Nothing contained in this Agreement shall limit or restrict the right of the Company to
negotiate or enter into any transaction of a type similar to the Transaction with a party other
than a Investor, or to engage any other company to provide services of the type provided by Broker
hereunder.
3. In consideration for the services rendered by Broker hereunder, at the Closing of any
Transaction with Investors, the Company agrees to compensate the Broker as follows: (i) seven
percent (7%) of the cash proceeds actually received by Company from the sale of Securities to
Investors and (ii) a warrant exercisable for seven percent (7%) of the Securities (other than
warrants or shares underlying warrants) issued to Investors in the Transaction. The warrants shall
be exercisable into Securities similar to those issued in the Transaction, and will have an
exercise price and term consistent with the warrants issued to the Investors. Fees and warrants
shall be paid to Broker in the manner and in the name designated by Broker. For purposes of
determining Broker’s compensation under this Section 3, the cash proceeds received in the
Transaction shall not include any amounts paid to the Company by Investors upon the exercise of
warrants issued in the Transaction.
4. If any party who is not set forth on Exhibit A hereto, as it may be amended from time to
time (a “Non-Introduced Party”), invests in the Transaction arranged by Broker hereunder, then the
Company shall pay Broker the fees set forth in Section 3 with respect to such investment; provided,
however, that in the event that the Company owes any fee (whether cash or warrants or otherwise) to
any third party other than Broker in connection with the investment by the Non-Introduced Party,
then the amount of the cash fee owed to, and the number of warrants issuable to, Broker pursuant to
Section 3 in respect of the investment by the Non-Introduced Party shall be reduced by the amount
of the fee paid to and the number of warrants issued to that third party. Notwithstanding the
foregoing, Broker shall not contact any such Non-Introduced Party without the prior written consent
of the Company. The parties hereby agree that Bristol Investment Fund, Ltd. is a Non-Introduced
Party who may be contacted by Broker.
5. The shares of common stock underlying the warrants issued to the Broker pursuant to this
Agreement shall carry “piggy-back” registration rights.
6. By execution hereof, the Company acknowledges that the Broker does not provide investment
advice or financial planning services. In that regard, the Broker is not registered as an
investment adviser under the Investment Advisers Act of 1940, as amended, and cannot therefore
provide any advice regarding the desirability or value of purchasing, selling, transacting in,
investing in, or holding any security. Rather, the Broker’s services will be limited to those
properly provided by a licensed broker-dealer (X.X. Xxxxxxx & Company, LLC is registered with the
NASD as an “Introducing Broker/Dealer” or “K” broker/ dealer in accordance with Section 15 of the
Securities and Exchange Act of 1934, as amended.) Broker represents and warrants that it is a duly
registered broker/dealer and in good standing with the SEC, NASD and the State of California and
has and shall maintain such registrations as well as all other necessary licenses and permits to
conduct its activities under this Agreement, which it shall conduct in compliance with applicable
federal and state laws relating to a private placement under Regulation D of the 1933 Act. Broker
represents that it is not a party to any other agreement which would conflict with or interfere
with the terms and conditions of this Agreement.
7. This Agreement will terminate upon a closing of the Transaction. The Company may terminate
this Agreement following thirty (30) days after the date hereof upon written notice.
Notwithstanding the foregoing, all provisions of this Agreement other than section 1, 3 and 4 shall
survive the termination of this Agreement. Broker shall be entitled to compensation under Section
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based on investments made by Investors listed on Exhibit A, as it may be amended from time to
time, at any time within one year of the date hereof.
8. Broker, and its officers, directors, employees and agents shall maintain in strict
confidence and not copy, disclose or transfer to any other party (1) all confidential business and
financial information regarding the Company and its affiliates, including without limitation,
projections, business plans, marketing plans, product development plans, pricing, costs, customer,
vendor and supplier lists and identification, channels of distribution, and terms of identification
of proposed or actual contracts and (2) all confidential technology of the Company. In furtherance
of the foregoing, Broker agrees that it shall not transfer, transmit, distribute, download or
communicate, in any electronic, digitized or other form or media, any of the confidential
technology of the Company. If the Transaction is not consummated, or if at any time the Company so
requests, Broker and its representatives will return to the Company all copies of information
regarding the Company in their possession.
9. Except for communication to Investors in furtherance of this Agreement, Broker will not
disclose the fact that discussions or negotiations are taking place concerning a possible
transaction involving the Company, or the status or terms and conditions thereof.
10. The Company hereby agrees to indemnify and hold harmless the Broker, its managers,
members, agents and employees (collectively referred to as the Broker for purposes of this Section
6) from and against any and all claims, actions, suits, proceedings (including those of
shareholders), damages, liabilities and expenses as incurred by any of them (including the fees and
expenses of counsel) which are related to or arise out of any actions taken or omitted to be taken
(including any untrue statements made or omitted to be made) by the Company or any actions taken or
omitted to be taken by the Broker (except in the case of gross negligence or willful misconduct on
the part of such Broker) in connection with any Transactionor otherwise related to or arising out
of the Broker’s activities on behalf of the Company. The Company shall reimburse Broker for all
reasonable expenses (including the reasonable fees and expenses of counsel) incurred by such Broker
in connection with investigating, preparing or defending any such claim, action, suit or
proceeding, including in connection with pending or threatened litigation to which Broker is a
party.
11. The Company and the Broker acknowledge that Xxxxx Xxxxxx Xxxxxxx is a director of Bristol
Investment Fund, Ltd., one of the Investors, and also acts as a registered representative of the
Broker and a manager at Bristol Capital Advisors, LLC. Bristol Capital Advisors, LLC is the
investment manager to Bristol Investment Fund, Ltd.
12. Upon the closing of any Transaction with Investors, the Company shall pay all legal fees
associated with the preparation of definitive documents for the Transaction, not to exceed $25,000.
13. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, administrators, successors and assigns.
14. This Agreement represents the entire agreement by and between the Company and Broker and
supersedes any and all other agreements, either oral or written, with respect to the Agreement.
Each party to this Agreement acknowledges that no representation, inducements, promises or
agreement, orally or otherwise, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. No assignment of this Agreement shall be
made without the prior written consent of the other party.
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15. This Agreement shall be enforced, governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed entirely within such State.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof. The parties hereto hereby submit to the
exclusive jurisdiction of the state courts or the United States Federal Courts located in New York
with respect to any dispute arising under this Agreement or the transactions contemplated hereby.
The party which does not prevail in any dispute arising under this Agreement shall be responsible
for all fees and expenses, including attorneys’ fees, incurred by the prevailing party in
connection with such dispute.
8. This Agreement consists of a total of 5 pages, and an Exhibit A. This Agreement may be
signed in any number of counterparts and the combination of the same shall constitute a binding
agreement. A signed copy of this Agreement received via facsimile shall be deemed an original
signature of a party for purposes of making this Agreement a binding agreement.
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IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreement as of and from the
day first above written.
| CYTRX CORPORATION |
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| By: | /s/ XXXXXX X. XXXXXXXXX | |||
| Name: | Xxxxxx X. Xxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| X.X. XXXXXXX & COMPANY, LLC |
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| By: | /s/ G. XXXXX XXXXXXX | |||
| Name: | G. Xxxxx Xxxxxxx | |||
| Title: | Chairman | |||
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