Exhibit 10.22
August 25, 2003
Dr. Xxxx Xxxxxxx MD Chairman INYX, INC.
000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
RE: INVESTMENT BANKING AGREEMENT
Dear Xx. Xxxxxxx:
This letter confirms the terms upon which INYX, INC. (the "Company") engages
Xxxxxx Capital LLC ("Xxxxxx") to provide investment banking services to the
Company. This Agreement will be deemed to be effective as of August 25, 2003.
1. Scope of Engagement.
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The Company hereby engages (the "Engagement") Xxxxxx to: (i) secure a
series of financings, including an initial financing of $2.5 million to $3
million through convertible preferred stock as outlined in a proposed term
sheet dated August 25, 2003 (collectively, "Financing") or other equity
financing acceptable to the Company; (ii) provide other investment banking
advisory and services; cultivate increased investor interest and buying
activity in the Company's common stock; and related investor relations
counsel (collectively, "services").
Commencing with the start of this Agreement, Xxxxxx will cultivate steadily
increasing trading volume in the Company's common stock; Xxxxxx will
endeavor to increase trading from less than the 8,500 shares average daily
volume presently to 20,000 shares or higher average daily volume within the
first 30 days, to 30,000 shares or higher average daily volume within 60
days, to 40,000 shares or higher average daily volume within 90 days.
During this period, it is contemplated that between 1 million and 2 million
of the Company's common shares will be purchased in the open market; this
will include shares purchased by Xxxxxx and/or affiliates of Xxxxxx; all
such stock buying will be conducted in full compliance with and governed by
U.S. securities regulations.
2. Scope of Work.
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In connection with the Engagement:
x. Xxxxxx will familiarize itself to the extent it deems appropriate with
the business, operations, financial condition, and prospects of the
Company;
b. For any Financing, the Company, with Xxxxxx'x assistance, will prepare
a Confidential Business Plan and/or Executive Summary Plan ("Confidential
Plan"), which will contain various matters including: (i) a description of
the Company, its business, assets, growth prospects and management; and
(ii) certain detailed past and projected financial information. If
required, the Company will update the Confidential Plan as necessary;
x. Xxxxxx will identify and introduce possible capital sources
("Xxxxxx-Identified Capital Sources") that might have an interest in
receiving the Confidential Plan and evaluating providing Financing to the
Company; the Identified Capital Sources will be presented by Xxxxxx to the
Company for its approval; such approved capital sources shall be considered
Xxxxxx'x sources for purposes of this contract.
x. Xxxxxx is authorized, on the Company's behalf, to release copies of
the Confidential Plan and to relay other information on the Company to such
Identified and Approved Capital Sources pursuant to a Confidentiality
Agreement to be entered between Xxxxxx and such possible sources;
x. Xxxxxx will assist the Company and its Board of Directors in
evaluating any Financing and other investment banking transactions; and
f. If requested, Xxxxxx will participate in meetings of the Board of
Directors of the Company (either in person or by telephone, as
appropriate).
3. Company Responsibilities, Representations and Warranties.
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3.1 In connection with the Engagement:
a. The Company agrees to cooperate with Xxxxxx and will furnish to Xxxxxx
all information and data concerning the Company (the "Information"), which
Xxxxxx reasonably deems appropriate for purposes of rendering its services
hereunder, and will provide Xxxxxx access to the Company's officers,
directors, employees and advisors;
b. The Company represents and warrants to Xxxxxx that all information
included or incorporated by reference in any Confidential Plan or otherwise
made available to Xxxxxx by the Company to be communicated to possible
lenders in connection with a Financing or to investors in other
Company-related transactions in which Xxxxxx is involved: (i) will be
complete and correct and does not 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 made, in light of the circumstances under which they
were made, not misleading; and (ii) any projected financial information or
other forward-looking information that the Company provides to Xxxxxx will
be made by the Company in good faith, based on management's best estimates
at the time and based on facts and assumptions that the Company believes
are reasonable;
c. The Company agrees to promptly notify Xxxxxx if the Company believes
that any information that was previously provided to Xxxxxx has become
materially misleading or inaccurate in any way;
d. The Company acknowledges and agrees that, in rendering its services
hereunder, Xxxxxx will be using and relying on the information (and
information available from public sources and other sources deemed reliable
by Xxxxxx) without independent investigation or verification thereof or
independent appraisal or evaluation of the Company or its business or
assets, or of any other party to a Financing or any other Company-related
transaction in which Xxxxxx is involved. Xxxxxx has no responsibility for
the accuracy or completeness of the Confidential Business Plan or any other
information regarding the Company; and
e. The Company agrees it is solely responsible for the decision to accept
any Financing and acknowledges that Xxxxxx is not responsible for the due
diligence, legal or regulatory compliance, and success or failure of any
Financing.
3.2 The references in this Section 3 to the Company will, when
appropriate, be deemed also to include its parent(s), subsidiaries or other
affiliates. 3.3 Any advice rendered by Xxxxxx during the Engagement or in
meetings with the Company and/ or its Board of Directors, as well as any
written materials provided by Xxxxxx, are intended solely for the benefit
and confidential use of the Company and will not be reproduced, summarized,
described or referred to or given to any other person for any purpose
without Xxxxxx'x prior wriconsent (except for the Company's accountants,
attorneys and similarly employed and/or engaged persons).
3.4 The Company represents to Xxxxxx that the Company has not engaged in
any public or private offering of securities or taken or failed to take any
action that would cause any Financing not to qualify for an applicable
exemption from registration under the Securities Act of 1933, as amended
(the "Act"). Further the Company agrees not to solicit any offerees or take
any action which might jeopardize the availability of exemption under the
Act.
4. Xxxxxx'x Fees.
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As compensation for its services, the Company agrees to pay Xxxxxx fees as
follows:
4.1 Retainer Fee. As compensation for services rendered in connection with
this Agreement, the Company agrees to compensate Xxxxxx as follows: (i) to
pay Xxxxxx a monthly cash retainer fee of $7,500 due in advance on the
first of each month; (ii) at the commencement of this Agreement, to issue
to Xxxxxx 300,000 stock purchase warrants with an exercise price of $1.25
per share; and (iii) if the Company's market capitalization reaches $50
million to qualify to have its common stock listed for trading on the
American Stock Exchange without having to effect a reverse stock split, it
will issue to Xxxxxx an additional 300,000 warrants with an exercise price
of $1.25 per share when Amex listing is commenced. All shares of common
stock underlying warrants issued to Xxxxxx will be registered by the
Company for trading within 30 days of issuance and the term of the warrants
will be five years and will be fully assignable by Xxxxxx.
4.2 Financing Fee. As compensation for services rendered in connection
with any Financing completed by the Company with Xxxxxx-Identified
Investors, Xxxxxx will be compensated as follows: Upon closing of any
Financing, Xxxxxx will be paid a cash fee equal to 8% on any capital
raised. To the extent Xxxxxx has used any other agents, Xxxxxx will pay
them directly or at Xxxxxx'x option, and subject to compliance with all
applicable laws, rules and regulations, the Company will pay such agent and
reduce Xxxxxx'x Financing Fee by such amount. Any expenses previously
approved in writing by the Company will be reimbursed to Xxxxxx as well at
each closing of a Financing unless the Company, at Xxxxxx'x request, has
paid such expenses in advance.
4.3 Warrants. For any Financing completed by the Company with
Xxxxxx-Identified Investors, Xxxxxx will also receive warrants equal to 10%
coverage on any equity, debt or convertible security issued as part of the
Financing; with the warrant coverage assuming full conversion at the then
market price, and with the warrant exercise price equal to 120% of the
Company's common stock price at the date that a Financing closes, and with
piggyback registration rights on the common stock underlying the warrants.
The term of the warrants will be five years and will be fully assignable by
Xxxxxx.
4.4 Follow-On Financing. For a period of 18 months following the
termination of this Agreement and if any Financing is completed with any
Xxxxxx-Identified Investors, Xxxxxx shall be entitled to receive fees as
set forth in this Section 4 with respect to any such transaction.
5. Expenses.
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The Company will reimburse Xxxxxx for all normal business expenses
(including fees and expenses of its counsel and any other independent
experts retained by Xxxxxx) reasonably incurred by it in connection with
its Engagement hereunder, whether or not any Financing is consummated. Such
reimbursement will be payable promptly upon submission by Xxxxxx of
statements to the Company, which usually will be issued monthly. If any
expense shall exceed $500, Xxxxxx shall obtain the prior written consent of
the Company before incurrence of such expense.
6. Scope of Responsibility, Etc.
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Neither Xxxxxx nor any of its affiliates (nor any of their respective
control persons, directors, officers, employees or agents) shall be liable
to the Company or to any other person claiming through the Company for any
claim, loss, damage, liability, cost or expense suffered by the Company or
any such person arising out of or related to Xxxxxx'x Engagement hereunder
(a "Company Claim") except for a claim, loss or expense that arises
primarily out of or is based primarily upon any action or failure to act by
Xxxxxx, other than an action or failure to act undertaken at the request or
with the written consent of the Company, that is found in a final judicial
determination (or settlement tantamount thereto) to constitute bad faith,
willful misconduct or gross negligence on the part of Xxxxxx.
7. Indemnification.
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The Company agrees to indemnify and hold harmless Xxxxxx and its affiliates
(and their respective control persons, directors, officers, employees and
agents) to the full extent lawful against any and all claims, losses,
damages, liabilities, costs and expenses as incurred (including all
reasonable fees and disbursements of counsel and all reasonable travel and
other out-of-pocket expenses incurred in connection with investigation of,
preparation for and defense of any pending or threatened claim and any
litigation or other proceeding arising therefrom arising out of or related
to any actual or proposed Financing or Xxxxxx'x Engagement hereunder in any
way (a "Xxxxxx Claim"), except that the Company shall not be obligated to
indemnify, hold harmless and/or pay any fees or expenses to any person for
a Xxxxxx Claim if such Xxxxxx Claim arises out of or is based upon any
action or failure to act by Xxxxxx, that is found in a final judicial
determination (or settlement tantamount thereto) to constitute bad faith,
willful misconduct or gross negligence on the part of Xxxxxx.
The Company will not, without the prior written consent of Xxxxxx, settle
any litigation relating to Xxxxxx'x Engagement hereunder unless such
settlement includes an express, complete and unconditional release of
Xxxxxx and its affiliates (and their respective control persons, directors,
officers, employees and agents) with respect to all claims asserted in such
litigation or relating to Xxxxxx'x Engagement hereunder, such release to be
set forth in an instrument signed by all parties to such settlement.
Without in any way diminishing the Company's indemnification obligations
herein, the Company shall at all times maintain insurance that is adequate
and sufficient to cover any indemnification requirements hereunder.
8. Term and Termination.
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Initially, Xxxxxx'x Engagement hereunder may be terminated, with or without
cause, by either the Company or Xxxxxx upon 30 days' prior written notice
to the other party. Commencing on the closing date of the initial financing
that is completed by Xxxxxx for the Company, Xxxxxx will become the
Company's exclusive investment banker for a 12-month term, whereby then
Xxxxxx'x Engagement hereunder may be terminated, with or without cause, by
either the Company or Xxxxxx upon 90 days' prior written notice to the
other party. However, no termination will affect Xxxxxx'x right to (a)
expense reimbursement under Section 5 herein, (b) receipt of payment of the
fees pursuant to Section 4 herein, (c) the indemnification contemplated by
Section 7 herein, and (d) right to any accrued but unpaid compensation
expressly due under this Agreement.
9. Governing Law; Jurisdiction; Waiver of Jury Trial; Optional Arbitration.
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This Agreement will be deemed made in New York and will be exclusively
governed by the laws of the State of New York with regards to the conflict
of law principles contained therein.
Any dispute arising hereunder, if not settled by mutual agreement, shall be
settled by arbitration. The arbitration shall be conducted in accordance
with the rules then obtaining of the American Arbitration Association by a
single arbitrator appointed in accordance with such rules. Arbitration
shall take place in New York, New York.
This Letter Agreement will be deemed made in New York and will be governed
by the laws of the State of New York with regards to the conflict of law
principles contained therein. The Company irrevocably submits to the
jurisdiction of any court of the State of New York, for the purpose of any
suit, action or other proceeding arising out of this Letter Agreement, or
any of the agreements or transactions contemplated hereby, which is brought
by or against the Company. Each of the Company (and, to the extent
permitted by law, on behalf of the Company's equity holders and creditors)
and Xxxxxx hereby knowingly, voluntarily and irrevocably waive any right it
may have to a trial by jury in respect of any claim based upon, arising out
of or in connection with this Letter Agreement and the transactions
contemplated hereby (including, without limitation, any Financing or
Acquisition).
10. No Rights in Equityholders, Creditors.
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This Letter Agreement does not create, and will not be construed as
creating, rights enforceable by any person or entity not a party hereto,
except those entitled thereto by virtue of Section 7 herein. The Company
acknowledges and agrees that (a) Xxxxxx will act as an independent
contractor and is being retained solely to assist the Company in corporate
finance matters, and that Xxxxxx is not being retained to advise the
Company on, or to express any opinion as to, the wisdom, desirability or
prudence of consummating any Financing; and (b) Xxxxxx is not and will not
be construed as a fiduciary of the Company or any affiliate thereof and
will have no duties or liabilities to the equity holders or creditors of
the Company, and affiliates of the Company or any other person by virtue of
this Letter Agreement and the retention of Xxxxxx hereunder, all of which
duties and liabilities are hereby expressly waived. Neither equity holders
nor creditors of the Company are intended beneficiaries hereunder. The
Company confirms that it will rely on its own counsel, accountants and
other similar expert advisors for legal, accounting, tax and other similar
advice.
11. Xxxxxx; Other Activities.
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It is understood and agreed that Xxxxxx affiliates may, from time to time,
make a market in, have a long position, buy and sell or otherwise affect
transactions for customer accounts and for their own accounts in the
securities of, or perform investment banking or other services for, the
Company and other entities which are or may be the subject of the
Engagement contemplated by this Letter Agreement. This is to confirm that
possible investors identified or contacted by Xxxxxx could include entities
in respect of which Xxxxxx may have rendered or may in the future render
services. Nothing herein shall be interpreted as permitting Xxxxxx to
violate any xxxxxxx xxxxxxx laws or any provisions of the Xxxxxxxx-Xxxxx
law. Notwithstanding anything to the contrary provided herein or elsewhere,
Xxxxxx shall not directly and/or indirectly for itself, and shall not
recommend any person directly and/or indirectly, short or perform a similar
transaction relating to the Company's stock.
12. Miscellaneous.
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This Letter Agreement may not be modified or amended except in writing
executed in counterparts, each of which will be deemed an original and all
of which will constitute one and the same instrument.
If the foregoing correctly sets forth our Agreement, please so indicate by
signing below and returning an executed copy to Xxxxxx Capital LLC. This
Agreement may be executed by the exchange by facsimile/telecopy or
e-mail/electronic signature between the Parties of signed counterparts of this
Agreement. We look forward to working with you and the rest of the management
team in a long-term relationship that assists the Company in achieving its
business goals.
Sincerely, ACCEPTED AND APPROVED:
XXXXXX CAPITAL LLC INYX, INC.
/s/Xxx X. Xxxxx /s/ Dr. Xxxx Xxxxxxx MD
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Name: Xxx X. Xxxxx Name: Dr. Xxxx Xxxxxxx MD
Title: Managing Director Title: Chairman
Date: As of August 26, 2003 Date: As of August 26, 2003
