Steven Urbach Chardan Capital Markets, LLC
Exhibit 10.2
Xxxxxx Xxxxxx
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Chardan Capital Markets, LLC
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Chief Executive Officer
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00 Xxxxx Xxxxxx
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Xxxxx 0000
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Xxx Xxxx, XX 00000
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Tel: 000 000 0000
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Fax: 000 000 0000
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August 5, 2016
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STRICTLY CONFIDENTIAL
Abba Xxxxx Xxx.
X.X. Xxx 0000
Xxxxxx, 00000, Xxxxxx
Attention: Xxxxxxx Xxxxxx
Dear Xxxx:
This letter (the “Agreement”) constitutes the agreement between Check-Cap Ltd. (the “Company”) and Chardan Capital Markets, LLC (“Chardan”) that Chardan shall serve as the exclusive placement agent (the “Services”) for the Company, on a reasonable best efforts basis, in connection with the proposed offer and placement (the “Offering”) by the Company of securities of the Company with a market value of up to Six Million Dollars ($6,000,000) (the “Securities”). The terms of the Offering and the Securities shall be mutually agreed upon by the Company and the investors and nothing herein implies that Chardan would have the power or authority to bind the Company or that there is any obligation for the Company to issue any Securities or complete the Offering. The Company expressly acknowledges and agrees that the execution of this Agreement does not constitute a commitment by Chardan to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of Chardan with respect to securing any other financing on behalf of the Company.
1. In connection with the Company’s engagement of Chardan as placement agent in the Offering, the Company hereby agrees to indemnify and hold harmless Chardan and its affiliates, and the respective controlling persons, directors, officers, members, shareholders, agents and employees of any of the foregoing (collectively the “Indemnified Persons”), from and against any and all claims, actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, (collectively a “Claim”), that are (A) related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s engagement of Chardan, or (B) otherwise relate to or arise out of Chardan’s activities on the Company’s behalf under Chardan’s engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified Person is a party; provided, however, that the Company will not be responsible for any Claim that is determined to have resulted from the gross negligence, willful misconduct or failure to act when there was a duty or responsibility to act by Chardan or any of the Indemnified Persons. The Company further agrees that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of Chardan except for any Claim incurred by the Company as a result of such Indemnified Person’s gross negligence, willful misconduct or failure to act when there was a duty or responsibility to act by any such Indemnified Person.
2. The Company further agrees that it will not, without the prior written consent of Chardan, settle, compromise or consent to the entry of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.
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3. Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only in the event such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company so elects, the Company will assume the defense of such Claim, including the employment of counsel and the payment of the fees and expenses of such counsel. In the event, however, that outside legal counsel to such Indemnified Person reasonably determines that having common counsel would present such common counsel with a conflict of interest, then such Indemnified Person may employ its own separate counsel to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. If the Company fails timely or diligently to defend, contest, or otherwise protect against any Claim for any reason other than an Indemnified Person failed to give timely notice of the Claim to the Company or the Claim is not covered by the indemnification obligations of the Company as described herein, then in such event the relevant Indemnified Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof; provided, however, that no Indemnified Person nor his/her/its counsel shall have any right to consent to, compromise or settle any Claim unless such consent, compromise or settlement includes an unconditional, irrevocable release of the Company and all of its affiliates from any and all liability arising out of such Claim. In addition, with respect to any Claim in which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her or its own counsel therefor at his, her or its own expense.
4. The Company agrees that if any indemnity sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason, then the Company shall not have any indemnification obligation hereunder.
5. The Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be effective whether or not the Company is at fault in any way and (b) shall not be effective in the event the Company is excused from its indemnification obligations as provided in this Section F.
I. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein. Any disputes that arise under this Agreement, even after the termination of this Agreement, will be heard only in the state or federal courts located in the City of New York, State of New York. The parties hereto expressly agree to submit themselves to the jurisdiction of the foregoing courts in the City of New York, State of New York. The parties hereto expressly waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City and State of New York. In the event of the bringing of any action, or suit by a party hereto against the other party hereto, arising out of or relating to this Agreement, the party in whose favor the judgment or award shall be entered shall be entitled to have and recover from the other party the costs and expenses incurred in connection therewith, including its reasonable attorneys’ fees. Any rights to trial by jury with respect to any such action, proceeding or suit are hereby waived by Chardan and the Company.
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In acknowledgment that the foregoing correctly sets forth the understanding reached by Chardan and the Company, please sign in the space provided below, whereupon this letter shall constitute a binding Agreement as of the date indicated above.
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Very truly yours,
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CHARDAN CAPITAL MARKETS, LLC
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By
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/s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
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Title: President
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Accepted and Agreed:
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By
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/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Chief Executive Officer
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