EXHIBIT 10.49
SIDE LETTER NO. 1
TO THE
PLACEMENT AGENCY AGREEMENT
December 14, 1996
Paramount Capital, Inc.
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Dear Sirs:
This letter shall constitute Side Letter No. 1 to the Placement Agency
Agreement (the "Placement Agency Agreement") dated September 27, 1996 between
Xytronyx, Inc., a Delaware corporation (the "Company") and Paramount Capital,
Inc. (the "Placement Agent").
The parties hereto agree to the following amendments to the Placement
Agency Agreement:
1. The Company and the Placement Agent hereby agree to extend the
Final Closing Date of the Offering until January 31, 1996, subject to the right
of the Placement Agent to extend the Offering for an additional 30 days.
2. The Company and the Placement Agent hereby agree to increase the
size of the Offering from a Maximum Offering of 40 Units to a Maximum Offering
of 100 Units, for an aggregate dollar amount of $10,000,000. In addition, the
Company hereby grants the Placement Agent an option to offer up to an additional
25 Units, in addition to the Maximum Offering, to cover over-allotments.
3. The Company and the Placement Agent hereby agree to increase the
number of shares of Common Stock underlying the Class A Warrants per Unit from
15,000 to 50,000.
4. The Company and the Placement Agent hereby agree that Section
5(k) of the Placement Agency Agreement shall be replaced with the following
paragraph:
(k) FINANCIAL ADVISORY AGREEMENT. Upon the Final Closing
Date, the Company and the Placement Agent will agree to an eighteen month
extension of the Financial Advisory Agreement currently in effect between
the Placement Agent and the Company, pursuant to which the Placement Agent
is engaged as the Company's non-exclusive financial advisor.
Such engagement will provide that the Placement Agent will
receive (i) a monthly retainer of $2,500, (ii) out-of-pocket expenses and
(iii) standard success fees. In addition, pursuant to the Financial
Advisory Agreement, the Company will sell to the Placement Agent and/or its
designees, for $.001 per option, options (the "Advisory Options") to
acquire a number of newly issued Units equal to 15% of the Units issued in
the Offering, exercisable for a period of ten years commencing six months
after the Closing Date at an exercise price equal to 110% of the initial
offering price of the Units. The Advisory Options will contain a cashless
exercise feature, antidilution provisions and the right to have the Common
Stock issuable upon exercise of the Warrants underlying the Advisory
Options, such Warrants and the Common Stock issuable upon conversion of the
Preferred Stock underlying the Advisory Options included in the Shelf
Registration Statement and will otherwise have features identical to the
Unit Purchase Options. The Company agrees with the Placement Agent and its
successors and assigns that the securities underlying the Advisory Options
will not be subject to redemption by the Company nor will they be callable
or mandatorily convertible by the Company.
4. The Company and the Placement Agent hereby agree to add the
following paragraph as Section 5(n) of the Placement Agency Agreement:
(n) AUTHORIZED SHARES. The Company shall (a) use its best efforts to
increase the authorized Common Stock of the Company to 100,000,000 shares (or
such higher number as may be approved by the Board of Directors) within 90 days
after the Final Closing Date but in any event shall effect such increase no
later than 270 days after the Final Closing Date and (b) at all times after the
date upon which such stock is authorized, use its best efforts to reserve and
keep available out of its authorized but unissued shares of Common Stock solely
for the purpose of effecting the conversion of the shares of Preferred Stock,
such number of shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of the Preferred Stock. If
after 270 days following the Final Closing Date the Company has failed to
authorize sufficient shares, the Company agrees that each Subscriber shall be
entitled at its option to require the Company to repurchase such Subscriber's
shares of Preferred Stock for $200.00 per share and the Company hereby agrees to
repurchase such securities at such prices if requested by the Subscriber.
5. The Company hereby agrees to increase its authorized number of
shares of Preferred Stock to 1,000,000 shares.
Capitalized terms used but not defined in this letter shall have the
meanings provided in the Placement Agency Agreement. Except as expressly
provided herein, the terms of the Placement Agency Agreement shall remain in
full force and effect without modification or amendment. If the foregoing
correctly sets forth the understanding between us, please so indicate in the
space provided below for that purpose, whereupon this shall constitute a binding
agreement between us.
XYTRONYX, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and CEO
Agreed to by:
PARAMOUNT CAPITAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
Title: Chairman
