SUBJECT TO MAXIM GROUP COMMITMENT COMMITTEE APPROVE
Exhibit 10.36
SUBJECT
TO MAXIM GROUP COMMITMENT COMMITTEE APPROVE
February 11, 2011
RE: Private Placement of Securities
Dear Xxxxx:
This letter confirms our agreement that CryoPort, Inc, a Nevada corporation (collectively with
its owned or controlled subsidiaries, the “Company”) has engaged Maxim Group LLC (together with its
affiliates and subsidiaries, the “Co-Placement Agent”) to act as the Company’s Co-Placement Agent
in connection with the Company’s current Private Placement (the“Offering”) of units (the “Units”),
at a purchase price of $0.70 per Unit, for aggregate gross proceeds of up to $8,000,000, each unit
consisting of one share of the Company’s common stock and one warrant to purchase one whole share
of the Company’s common stock at an exercise price of $0.77 per
share (the “Securities”). The
Company hereby informs the Co-Placement Agent that the first closing of the Offering occurred on
February 4, 2011. In connection with the Offering, the Co-Placement Agent will attempt to obtain
subscriptions from one or more Investors (as defined below), for aggregate gross proceeds of up to
$4.0 million; provided, however, that in the event that the Company receives subscriptions for the
Offering (including the gross proceeds from the February 4, 2011 first close) in excess of
$8,000,000, the Company and the other existing co-placement agent participating in the Offer shall
have the right to reduce the dollar amount of subscriptions received from Investors identified by
the Co-Placement Agent.
Upon acceptance (indicated by your signature below), this letter agreement (the “Agreement”)
will confirm the terms of the engagement between the Co-Placement Agent and the Company on the
terms and conditions set forth herein.
1. Appointment.
(a) Subject to the terms and conditions of this Agreement, the Company hereby retains
the Co-Placement Agent, and the Co-Placement Agent xxxxxx agrees to act, as one of the Company’s
Co-Placement Agents in connection with the Offering. As a Co-Placement Agent for the Offering, the
Co-Placement Agent will advise and assist the Company in identifying one or more investors that
are “accredited” within the meaning of the U.S. federal securities laws (“Investors”) to
participate in the Offerings. The Company acknowledges and agrees that the Co-Placement Agent is
only required to use its “commercially reasonable efforts” in connection with its activities
hereunder and that this Agreement does not constitute a legal or binding commitment by the
Co-Placement Agent to purchase the Securities or introduce the
Company to Investors, nor does this
Agreement constitute a representation or warranty
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
2
on the part of the Co-Placement Agent that any Offering will be consummated. The
Co-Placement Agent will, in its sole discretion, determine the reasonableness or its efforts, and
is under no obligation to perform at any level other than what it deems reasonable. The Company
retains the right to determine all of the terms and conditions of the Offering and to accept or
reject any proposals submitted to it by the Co-Placement Agent in its sole and absolute discretion
2. Information.
(a) The
Company recognizes that, in completing its engagement hereunder, the
Co-Placement Agent will be using and relying on both publicly available information and on data,
material and other information (including non-public information) furnished to Co-Placement Agent
by the Company or its Representatives. The Company will cooperate with the Co-Placement Agent and
furnish, and cause to be furnished, to the Co-Placement Agent, any and all information and data
concerning the Company, its business, financial condition and plans for the Offering that the
Co-Placement Agent deems appropriate (including, without limitation, the Company’s strategic,
business, growth, acquisition and/or merger plans and plans for raising capital or additional
financing) that is reasonably requested by the Co-Placement Agent (collectively, the “Private
Placement Materials”). Any Private Placement Materials forwarded to prospective Investors will be
in form acceptable to Co-Placement Agent and its counsel. The Company represents and warrants that
all Private Placement Materials, including, but not limited to, the Company’s financial statements,
will be complete and correct in all material respects and will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein
not misleading.
(b) It is further agreed that the Co-Placement Agent will conduct a due diligence
investigation of the Company and the Company will cooperate with such investigation as a condition
of the Co-Placement Agent’s participation in the Offering. The Company recognizes and confirms that
the Co-Placement Agent; (i) will use and rely primarily on the
Private Placement Materials and
information available from generally recognized public sources in performing the services
contemplated by this letter without having independently verified the same, (ii) is authorized as
the Co-Placement Agent to transmit to any prospective investors a copy or copies of the Private
Placement Materials, forms of subscription documents and any other legal documentation supplied to
the Co-Placement Agent for transmission to any prospective investors by or on behalf of the Company
or by any of the Company’s officers, representatives or agents, in connection with the performance
of the Co-Placement Agent’s services hereunder or any transaction contemplated hereby: (iii) does
not assume responsibility for the accuracy or completeness of the Information or the Private
Placement Materials and such other information, if any provided to the Investors; (iv) will not
make an appraisal of any assets of the Company or the Company generally; and (v) retains the right
to continue to perform due diligence of the Company, its business and its officers and directors
during the course of the engagement.
(c) Until the date that is one year from the xxxx hereof, the Co-Placement Agent will keep all
information obtained from the Company confidential except: (i) Information which is otherwise
publicly available, or previously known to or obtained by, the Co-Placement Agent independently of
the Company and without breach of any of the Co-Placement Agent’s agreements with the Company; (ii)
the Co-Placement Agent may disclose such information to its officers, directors, employees, agents
and representatives, and to its other advisors and financial sources on a need to know basis only
and will ensure that all such persons will keep such information
strictly confidential. No such
obligation of confidentiality shall apply to information that (i) is in the public domain as of the
date hereof or hereafter enters the public domain without a breach by the Co-Placement Agent, (ii)
was known or became known by the Co-Placement Agent prior to the Company’s disclosure thereof to
the Co-Placement Agent, (iii) becomes known to the Co-Placement Agent from a source other than the
Company, and other than by the breach of an obligation of confidentiality owed to the Company, (iv)
is disclosed by the Company to a
3
third party without restrictions on its disclosure, (v) is independently developed by the
Co-Placement Agent or (vi) is required to be disclosed by the Co-Placement Agent or its officers,
directors, employees, agents, attorneys and to its other advisors and financial sources, pursuant
to any order of a court of competent jurisdiction or other governmental body or as may otherwise
be required by law. The Co-Placement Agent shall obtain from any potential investor to which the
Co-Placement Agent disseminates any material non-public information obtained from the Company such
investor’s agreement to keep such information confidential upon terms substantially similar to
those set forth above.
(d) The
Company recognizes that in order for the Co-Placement Agent to perform properly its
obligations in a professional manner, the Company will keep the Co-Placement Agent informed of
and, to the extent practicable, permit the Co-Placement Agent to participate in meetings and
discussions between the Company and any third party relating to the
matters covered by the terms of the Co-Placement Agent’
engagement. If at any time during the course of the
Co-Placement Agent’s engagement, the Company becomes aware of any material change in any of the
information previously furnished to the Co-Placement Agent, it will promptly advise the
Co-Placement Agent of the change.
(e) The Offering shall be conditioned upon, among other things, the following:
(i) Satisfactory completion by the Placement Agent of its due diligence investigation and
analysis of: (a) the Company’s arrangements with its officers, directors, employees, affiliates,
customers and suppliers, (b) the audited historical financial statements of the Company, and (c)
the Company’s projected financial results for the fiscal years ending December 31, 2010 through
2014;
3. Compensation. As compensation for services rendered and to be rendered hereunder by
Co-Placement Agent, the Company agrees to provide the Co-Placement Agent with the following:
(a) The Company agrees to pay the Co-Placement Agent a cash fee payable upon each closing of
the Offering (each, a “Closing”) equal to eight percent (8%) of the gross proceeds received by the
Company from Investors at each Closing (the “Placement Fee”).
(b) The Company also agrees to pay Xxxxx a corporate finance fee payable in cash upon the
Closing equal to two (2%) of the gross proceeds received by Investors
at each Closing.
(c) Notwithstanding the foregoing, with respect to any gross proceeds received from an
Investor(s) who previously invested in the Company’s Private Placement of Units which closed in
August 2010, Maxim’s Placement Fee shall reduced from eight (8%) percent to five (5.0%) percent and
there shall be no corporate finance fee paid nor warrants issued with respect to such Investor(s).
(d) The Company shall, at the Closing, grant to the Co-Placement Agent (or its designated
affiliates) securities purchase warrants (the “Warrants”) covering a number of the
securities (“Securities”) equal to seven and one-half percent (7.5%) of the total number of
Securities being sold and/or issued to Investors in the Offering The Warrants will be immediately
exercisable after the date of the Closing and will expire five (5) years after the Closing. The
Warrants will be exercisable at a price per share equal to 110% of the price per Unit paid by the
Investors in connection with the Offering, or $0.77 per share. The Warrants shall not be
redeemable. To the extent that the Investors are granted registration rights with respect their
Securities (or components thereof), the Company will grant identical rights to the Co-Placement
Agent with respect to the Securities underlying the Warrants. The Co- Placement Agent will be
entitled to customary demand and “piggyback” rights
pursuant to FINRA Rule 5110. If so registered,
the Warrants (and the underlying securities) may not be transferred, assigned or hypothecated for a
period of six (6) months following the Effective Date pursuant to FINRA Rule
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
4
5110(g)(l), except that they be assigned, in whole or in part, to any successor, officer or
member of the Co-Placement Agent (or to officers or partners of any such successor of member)
pursuant to FINRA Rule 5110(g)(2). The Warrants may be exercised in whole or in part, shall provide
for “cashless” exercise in the event that the Company does
not have, at the time of such exercise,
an effective registration statement covering the resale of the shares underlying such Warrants, and
shall provide for customary anti-dilution and price protection.
4.
Term of Engagement.
(a) This Agreement will automatically terminate upon the earlier to occur of (a) the Company’s
second closing of the Offering, and (b) the date which is one
(1) months after the date hereof. The
date of termination of this Agreement is referred to herein from time to time as the “Termination
Date.” The period of time during which this Agreement
remains in effect is referred to herein from
time to time as the “Term”. In the event, however in the course of the Co-Placement Agent’s
performance of due diligence it deems it necessary to terminate the engagement, the Co-Placement
Agent may do so prior to the termination date and upon immediate written notice. If, within six (6)
months after the date of this engagement letter, the Company completes any private financing of
equity, equity-linked or debt or other capital raising activity of the Company (other than the
exercise by any person or entity of any options, warrants or other convertible securities other
than the warrants issued pursuant to this Agreement) with any of the Investors who were first
introduced to the Company in connection with the financing contemplated hereby by the Placement
Agent, the Company will pay to the Placement Agent upon the closing of such financing the
compensation set forth in Sections 3(a), 3(b), 3(c) and 3(d).
(b) Notwithstanding anything herein to the contrary, subject to the six month limitation
described in Section 4(a) above and the obligation to pay the compensation described in Section 3,
Section 6 and Sections 8-15, and all of Exhibit A attached, hereto (the terms of which are
incorporated by reference hereto), will survive any termination or
expiration of this Agreement. The
termination of this Agreement shall not affect the Company’s obligation to pay fees to the extent
provided for in Section 3 herein. All such fees due shall be paid to the Co-Placement Agent on or
before the Termination Date (in the event such fees and reimbursements are earned or owed as of the
Termination Date) or upon the closing of the Offering or any applicable portion thereof (in the
event such fees are due pursuant to the terms of Section 3 hereof).
5. Certain Co-Placement Procedures. The Company and the Co-Placement Agent each represents
to the other that it has not taken, and the Company and the Co-Placement Agent each agrees with the
other that it will not take any action, directly or indirectly, so as to cause the Offering to fail
to be entitled to rely upon the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “Act”). In effecting the Offering, the Company and the
Co-Placement Agent each agrees to comply in all material respects with applicable provisions of the
Act and any regulations thereunder and any applicable laws, rules,
regulations and requirements. The
Company agrees that any representations and warranties made by it to any Investor in the Offering
shall be deemed also to be made to the Co- Placement Agent for its benefit. The Company agrees that
it shall cause any opinion of its counsel delivered to any Investors in the Offering also to be
addressed and delivered to the Co-Placement Agent, or to cause such counsel to deliver to the
Co-Placement Agent a letter authorizing it to rely upon such opinion.
6. Indemnification. The Company agrees to indemnify Co-Placement Agent in accordance with
the indemnification and other provisions attached to the Agreement as
Exhibit A (the “Indemnification Provisions”), which provisions are incorporated herein by reference and shall
survive the termination or expiration of the Agreement.
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
5
7. Other Activities. The Company acknowledges that the Co-Placement Agent has been, and may
in the future be, engaged to provide services as an underwriter, Co-Placement agent, finder,
advisor and investment banker to other companies in the industry in which the Company is involved.
Subject to the
confidentiality provisions of the Co-Placement Agent contained in Section 2 hereof, the Company
acknowledges and agrees that nothing contained in this Agreement shall limit or restrict the right
of the Co-Placement Agent or of any member, manager, officer, employee, agent or representative of
the Co-Placement Agent, to be a member, manager, partner, officer, director, employee, agent or
representative of, investor in, or to engage in, any other business, whether or not of a similar
nature to the Company’s business, nor to limit or restrict the right of the Co-Placement Agent to
render services of any kind to any other corporation, firm,
individual or association; provided
that the Co-Placement Agent and any of its member, manager, officer, employee, agent or
representative shall not use the Information to the detriment of the
Company. The Co-Placement
Agent may, but shall not be required to, present opportunities to the Company.
8. Governing Law: Jurisdiction; Waiver of Jury Trial. This Agreement will be governed as to
validity, interpretation, construction, effect and in all other respects by the internal law of the
State of New York. The Company and the Co-Placement Agent each (i) agree that any legal suit,
action or proceeding arising out of or relating to this Agreement shall be institued exclusively 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, (ii) waives any objection to the venue of any such suit, action
or proceeding, and the right to assert that such forum is an inconvenient forum, and (iii)
irrevocably consents 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 Company and the Co-Placement Agent further agrees to accept and
acknowledge service of any and all process that 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 in any such suit, action or proceeding. The parties hereby expressly waive all rights to
trial by jury in any suit, action or proceeding arising under this Agreement.
9. Securities and Other Law Compliance. The Company, at its own expense, will use its best
efforts to obtain any registration, qualification or approval required to sell any Securities under
the laws (including U. S. state “blue sky” laws) of any applicable jurisdictions.
10. Representations and Warranties. The Company and the Co-Placement Agent each
respectively represent and warrant that: (a) it has full right, power and authority to enter into
this Agreement and to perform all of its obligations hereunder; (b) this Agreement has been duly
authorized and executed and constitutes a legal, valid and binding agreement of such party
enforceable in accordance with its terms; and (c) the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby does not conflict with or result in a
breach of (i) such party’s certificate of incorporation or
by-laws or (ii) any agreement to which
such party is a party or by which any of its property or assets is
bound.
11. Parties; Assignment; Independent Contractor; No Tax Advice. This Agreement has been and
is made solely for the benefit of the Co-Placement Agent and the Company and each of the persons,
agents, employees, officers, directors and controlling persons referred to in Exhibit A and their
respective heirs, executors, personal representatives, successors and assigns, and nothing
contained in this Agreement will confer any rights upon, nor will this Agreement be construed to
create any rights in, any person who is not party to such Agreement, other than as set forth in
this section. The rights and obligations of either party under this Agreement may not be assigned
without the prior written consent of
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
6
the other party hereto and any other purported assignment will be null and void. The Co-Placement
Agent has been retained under this Agreement as an independent contractor, and it is understood and
agreed that this Agreement does not create a fiduciary relationship between the Co-Placement Agent
and the Company or their respective Boards of Directors. The Co-Placement Agent shall not be
considered to be the agent of the Company for any purpose whatsoever and the Co-Placement Agent is
not granted any right or authority to assume or create any obligation or liability, express or
implied, on the Company’s behalf, or to bind the Company in any
manner whatsoever. The Company
acknowledges that the Co-Placement Agent does not provide accounting,
tax or legal advice. The
Company is authorized, however, subject to applicable law, to disclose any and all aspects of the
Offering that are necessary to support any U.S. federal income tax benefits expected to be claimed
with respect to such transaction, and all materials of any kind (including tax opinions
and other lax analyses) related to those benefits.
12. Validity. In case any term of this Agreement will be held invalid, illegal or
unenforceable, in whole or in part, the validity of any of the other terms of this Agreement will
not in any way be affected thereby.
13. Counterparts. This Agreement may be executed in counterparts and each of such
counterparts will for all purposes be deemed to be an original, and such counterparts will together
constitute one and the same instrument.
14. Notices. All notices will be in writing and will be effective when delivered in person
or sent via facsimile and confirmed by letter, to the party to whom it is addressed at the
following addresses or such other address as such party may advise the other in writing:
To the Company:
|
CryoPort, Inc. | |
| 000 Xxxx Xxxxxxxx | ||
| Suite 400 | ||
| San Diego, CA 92101 | ||
| Attention: Xxxxx Xxxxxxxxx and Xxxxx Xxxx | ||
| Telephone: (000) 000-0000 | ||
To the Co-Placement Agent
|
Maxim Group LLC | |
| 000 Xxxxxxxxx Xxxxxx | ||
| New York, NY 10174 | ||
| Attention: Xxxxxxxx X. Xxxxxx and Xxxxx Xxxxxx, Esq. | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 and (000) 000-0000 |
15. Press Announcements. The Company agrees that the Co-Placement Agent shall, from and
after any Closing, have the right to reference the Offering and the Co-Placement Agent’s role in
connection therewith in the Co-Placement Agent’s marketing materials and on its website and to
place advertisements in financial and other newspapers and journals, in each case at its own
expense.
(Signature Page Follows)
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
7
We are delighted at the prospect of working with you and look forward to proceeding with the
Offering. If you are in agreement with the foregoing, please execute and return two copies of this
engagement letter to the undersigned. This Agreement may be executed in counterparts, electronic
mail and by facsimile transmission.
| Very truly yours. Maxim Group LLC |
||||
| /s/ Xxx Xxxxxx | ||||
| Name: | Xxx Xxxxxx | |||
| Title: | Managing Director, Investment Banking | |||
| /s/ Xxxxxxxx X. Xxxxxx | ||||
| Name: | Xxxxxxxx X. Xxxxxx | |||
| Title: Executive Managing Director of Investment Banking | ||||
Agreed to and accepted this 10 day of February, 2011
/s/ Xxxxx X. Xxxxxxxxx
|
||
Title: Chairman & CEO |
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
8
Exhibit A
INDEMNIFICATION PROVISIONS
INDEMNIFICATION PROVISIONS
Capitalized terms used in this Exhibit shall have the meanings ascribed to such terms in
the Agreement to which this Exhibit is attached.
In addition to and without limiting any other right or remedy available to the
Co-Placement Agent and the Indemnified Parties (as hereinafter
defined), the Company agrees to
indemnify and hold harmless Co-Placement Agent and each of the other Indemnified Parties from and
against any and all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings and
investigations in respect thereof and any and all legal and other costs, expenses and disbursements
in giving testimony or furnishing documents in response to a subpoena or otherwise (including,
without limitation, the costs, expenses and disbursements, as and when incurred, of investigating,
preparing, pursing or defending any such action, suit, proceeding or investigation (whether or not
in connection with litigation in which any Indemnified Party is a party)) (collectively, “Losses”),
directly or indirectly, caused by, relating to, based upon, arising out of, or in connection with,
Co-Placement Agent’s acting for the Company, including, without limitation, any act or omission by
Co-Placement Agent in connection with its acceptance of or the performance or non-performance of
its obligations under the Agreement between the Company and Co-Placement Agent to which these
indemnification provisions are attached and form a part, any breach by the Company of any
representation, warranty, covenant or agreement contained in the Agreement (or in any instrument,
document or agreement relating thereto, including any agency agreement), or the enforcement by
Co-Placement Agent of its rights under the Agreement or these indemnification provisions, except to
the extent that any such Losses are found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from the gross negligence
or willful misconduct of the Indemnified Party seeking indemnification hereunder.
The Company also agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement
of Co-Placement Agent by the Company or for any other reason, except to the extent that any such
liability is found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily and directly from such Indemnified Party’s gross
negligence or willful misconduct.
These Indemnification Provisions shall extend to the following persons (collectively, the
“Indemnified Parties”): Co-Placement Agent, its present and former affiliated entities, managers,
members, officers, employees, legal counsel, agents and controlling persons (within the meaning of
the federal securities laws), and the officers, directors, partners, stockholders, members,
managers, employees, legal counsel, agents and controlling persons of
any of them. These
indemnification provisions shall be in addition to any liability, which the Company may otherwise
have to any Indemnified Party.
If any action, suit, proceeding or investigation is commenced, as to which an Indemnified
Party proposes to demand indemnification, it shall notify the Company
with reasonable promptness;
provided, however, that any failure by an Indemnified Party to notify the Company shall
not relieve the Company from its obligations hereunder. An Indemnified Party shall have the right
to retain counsel of its own choice to represent it, and the fees, expenses and disbursements of
such counsel shall be borne by the Company. Any such counsel shall, to the extent consistent with
its professional responsibilities, cooperate with the Company and any counsel designated by the
Company. The Company shall be liable for any settlement of any claim against any Indemnified Party
made with the Company’s written consent. The Company shall not, without the prior written consent
of Co-Placement Agent, settle or compromise
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
9
any claim, or permit a default or consent to the entry of any judgment in respect thereof,
unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the
giving by the claimant to all of the Indemnified Parties of an unconditional release from all
liability in respect of such claim, and (ii) does not contain any factual or legal admission by or
with respect to an Indemnified Party or an adverse statement with respect to the character,
professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any
Indemnified Party.
In order to provide for just and equitable contribution, if a claim for indemnification
pursuant to these indemnification provisions is made but it is found in a final judgment by a court
of competent jurisdiction (not subject to further appeal) that such indemnification may not be
enforced in such case, even though the express provisions hereof provide for indemnification in
such case, then the Company shall contribute to the Losses to which any Indemnified Party may be
subject (i) in accordance with the relative benefits received by the Company and its stockholders,
subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and
(ii) if (and only if) the allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as to reflect not only the relative benefits, but also the
relative fault of the Company, on the one hand, and the Indemnified
Party, on the other hand, in
connection with the statements, acts or omissions which resulted in such Losses as well as any
relevant equitable considerations. No person found liable for a fraudulent misrepresentation shall
be entitled to contribution from any person who is not also found
liable for fraudulent misrepresentation. The relative benefits received (or anticipated to be received) by the
Company and it stockholders, subsidiaries and affiliates shall be deemed to be equal to the
aggregate consideration payable or receivable by such parties in connection with the transaction or
transactions to which the Agreement relates relative to the amount of fees actually received by
Co-Placement Agent in connection with such transaction or
transactions. Notwithstanding the
foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount of
fees previously received by Co-Placement Agent pursuant to the Agreement.
| Neither termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force and effect. The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives. |
Members
NASD & SIPC
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
000 Xxxxxxxxx Xxx • New York, NY 10174 • Tel (000) 000-0000 • (000) 000-0000 • Fax (000) 000-0000 • xxx.xxxxxxxx.xxx
New York, NY — Woodbury, NY • Red Bank, NJ
