Divine Capital Markets LLC Investment Banking Agreement

Exhibit 10.3

 

 

Divine Capital Markets LLC Investment Banking Agreement

Sent via email to ▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

CytoBioscience Incorporated

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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, PhD

Dear ▇▇. ▇▇▇▇▇▇:

The purpose of this letter agreement (this "Engagement Letter" or the "Agreement") is to set forth the terms and conditions pursuant to which Divine Capital Markets LLC ("Divine" or the "Placement Agent"), shall serve as the Placement Agent; in that capacity the Placement Agent shall introduce CYTOCENTRICS BIOSCIENCE INCORPORATED  (the "Company") to one or more investors (each an "Introduced Investor") in connection with the proposed offering up to $ 5MM (the "Placement" or "Offering") of securities ("Securities") of the Company on a "best efforts" basis, subject to the terms and conditions of this Agreement.

   

The terms of an Offering and the Securities issued in such Offering shall be mutually agreed upon by the Company and the purchasers in such Offering (each, a "Purchaser" and collectively, the "Purchasers") and nothing herein enables the Placement Agent to bind the Company or any Purchaser. This Agreement and the documents executed and delivered by the Company and the Purchasers in connection with the Placement shall be collectively referred to herein as the "Transaction Documents."  The materials utilized to offer the Securities shall be referred to as the "Offering Materials."  The date of each of the closings of an Offering shall be referred to herein as the "Closing Date."  The Company expressly acknowledges and agrees that the Placement Agent's obligations hereunder are on a reasonable "best efforts" basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase or to sell the Securities and does not ensure the successful placement of the Securities or any portion thereof.  The identities of the Introduced Investors shall be proprietary information of the Placement Agent and shall not be divulged to third parties by the Company, nor used by the Company outside the scope of the Placement Agent's engagement as described herein, other than as required by applicable law; provided, however, that nothing in the preceding sentence shall prohibit the Company from dealing with any Purchaser with respect to their investment in the Company.

The subscription proceeds for any Securities sold in the Offering will be deposited in a non-interest bearing escrow account established by the Company and the Placement Agent at U.S. Bank, or another mutually acceptable federally chartered bank, in accordance with the requirements of Rule 15c2-4 and the interpretations relating thereto issued by the Financial Industry Regulatory Authority.  Upon Closing of the Offering, the proceeds will be released upon the joint authorization and direction of the Company and the Placement Agent; notwithstanding the foregoing, the Placement Agent will authorize, at the direction of the Company, the release of any and all proceeds attributable to investors who are not Introduced Investors; upon termination of the Offering without any Closings, the escrow agreement  governing the account shall provide that the escrow agent shall promptly return such proceeds, without the payment of interest and without deduction, to the subscribers.

 

 

Without limiting the generality of the foregoing, Divine will:

(A)

Study and review the business, operations, and financial performance of COMPANY (based in part upon management's forecast of financial performance) so as to enable Divine to provide advice to COMPANY;

(B)

Assist COMPANY in formulating the best strategy to meet COMPANY's working capital and capital resource needs;

(C)

Introduce COMPANY to potential investors (whether such investment is in the form of debt and/or equity financing or some combination thereof).

(D)

Assist in the formulation of the terms and structure of any reasonably proposed business combination transaction involving COMPANY, including without limitation, any merger or consolidation, sale of assets, or sale or exchange of stock (a "Business Combination");

(E)

Assist in the presentation to the Board of Directors of COMPANY of any proposed transaction;

 

 

 

 

 

 

(F)

Advise COMPANY in the preparation of press releases and other communications for the financial and investment communities;

(G)

Divine agrees to furnish advice to COMPANY in connection with the identification of individual and institutional sources of financing; arrangement of appropriate introductions to same parties; and marketing of financing proposals. Divine will also assist in preparation of the Transaction Documents and Offering  Materials.  Divine shall also render such other financial consulting and/or investment banking services as may from time to time be agreed upon by Divine and COMPANY.

(H)

Milestones

(I)

Divine will update COMPANY on at least a weekly basis on the progress of milestones.

The Company represents and warrants to, and agrees with, the Placement Agent that:

 

 

 

 

 

The Placement Agent shall be entitled to rely upon any and all representations and warranties of the Company included in the purchase agreements entered into by the Company and the Purchasers in connection with the Placement, subject to the qualifications and limitations therein, including, but not limited to, any disclosure set forth on an applicable schedule.

 The Placement Agent's engagement under this Agreement shall be non-exclusive for a period of six months from the date hereof, and shall be extended upon mutual agreement of the Company and the Placement Agent for an additional six months from the date of any Closing of an Offering hereunder pursuant to which the aggregate proceeds equal or exceed one million dollars (the "Term").  Notwithstanding the foregoing, this Agreement may be terminated by either the Company or the Placement Agent at any time after the initial six month period, upon 30 days' written notice; provided however that in the event of the termination or expiration of this Agreement, the Placement Agent's compensation due under Section 1 (A) and (B) of this Agreement for the sale of Securities to Introduced Investors will be payable in full at Escrow Closings occurring during the twelve (12) month period commencing with such termination or expiration (the "Tail Period").  The Company shall pay Divine the applicable Tail Period Compensation, provided, however, that (i) no Tail Period Compensation shall become due and payable unless and until the Closing has occurred and the Company actually receives the cash proceeds from a Financing Transaction, (ii) in no event shall any Tail Period Compensation be payable if this Agreement is terminated due to the material breach of this Agreement by Placement Agent. For the avoidance of doubt, in the event of more than one Closing, a pro rata portion of the aggregate Tail Period Compensation shall be due based on the actual cash proceeds received by the Company at each such Closing prior to the expiration of the Tail Period. Notwithstanding anything to the contrary contained herein, the Company's representations and warranties; the provisions concerning confidentiality, indemnification, contribution, choice of law and venue; and the Company's obligations to pay fees earned and payable pursuant to Section 1 hereof, will survive any expiration or termination of this Agreement.  The Placement Agent agrees not to use any confidential information concerning the Company provided to them by the Company for any purposes other than those contemplated under this Agreement.

The Company agrees that any written or oral advice rendered by the Placement Agent in connection with this engagement is for the confidential use of the Company only in its evaluation of the Placement and preparation of the Offering Materials and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice in any manner without prior written consent of the Placement Agent.

This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity that is not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof.  The Company acknowledges and agrees that the Placement Agent is not and shall not be construed as a fiduciary of the Company and that the Placement Agent shall not have any duties or liabilities to the equity holders or the creditors of the Company or to any other person by virtue of this Agreement or the retention of the Placement Agent hereunder, all of which are hereby expressly waived.

The obligations of the Placement Agent and the Purchasers, and the Closing(s) of the sale of the Securities hereunder, are subject to the accuracy, when made and on the respective Closing Date, of the representations and warranties of the Company contained or incorporated herein, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of their obligations hereunder, and to each of the following additional terms and conditions:

 

 

 

 

 

 

 

 

 

All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Placement Agent.

The parties agree to the terms of the Placement Agent's standard indemnification agreement, which is attached hereto as Appendix A and incorporated herein by reference. The provisions of this Section 9 shall survive any termination of this Agreement.

The Company grants to the Placement Agent the right to place customary announcement(s) of the Placement in certain newspapers and to mail announcement(s) to persons and firms selected by Placement Agent subject to the Company's prior written approval, which shall not be unreasonably withheld, and all costs of such announcement(s) will be borne by such Placement Agent.

This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State.  This Agreement may not be assigned by either party without the prior written consent of the other party.  This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.  Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived.  Any dispute arising under this Agreement may be brought into the courts of the State of New York located in New York County or into the Federal Court located in Manhattan, New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

 

 

 

This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.  If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect.  This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by each of the Placement Agent and the Company.  The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement and delivery and/or exercise of the Securities, as applicable.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.

Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified on the signature pages attached hereto prior to 6:30 p.m. (New York time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York time) on any business day, (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages hereto.

Please confirm that the foregoing correctly sets forth our agreement by signing and returning an executed copy of this Agreement to the Placement Agent.

Very truly yours,

DIVINE CAPITAL MARKETS, LLC

 

By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

 Name:  ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

 Title:  Chief Executive Officer

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Address for notice:

Divine Capital Markets LLC

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Accepted and Agreed to as of

the date first written above:

ISSUER NAME

By:  /s/ ▇▇▇▇▇ ▇▇▇▇▇▇                                                               

      Name: ▇▇▇▇▇ ▇▇▇▇▇▇

      Title: CEO(

Address for notice:

 

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APPENDIX A - - INDEMNIFICATION PROVISIONS

(A)  The Company agrees to indemnify and hold harmless the Placement Agent and its affiliates and their respective officers, directors, employees, agents, counsel, advisers and consultants, and any persons controlling the Placement Agent or any of its affiliates within the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934 (the Placement Agent and each such other person or entity being referred to herein as an "Indemnified Person"), from and against all claims, liabilities, losses or damages (or actions in respect thereof) or other expenses which (A) are related to or arise out of (i) actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company or its respective affiliates or (ii) actions taken or omitted to be taken by an Indemnified Person with the consent or in conformity with the actions or omissions of the Company or their respective affiliates or (iii) any investigation, litigation, or inquiry by a regulatory or self-regulatory agency or authority involving the Company or any transaction arising under any agreements between the Company and the Placement Agent or (B) are otherwise related to or arise out of the Placement Agents' activities on behalf of the Company or its respective affiliates pursuant to this Agreement or (C) in any way involving or alleged to involve the Company, the Offering or the Securities.  The Company will not be responsible, however, for any losses, claims, damages, liabilities or expenses pursuant to clause (B) of the preceding sentence which are finally judicially determined to have resulted solely from such Indemnified Person's gross negligence or willful misconduct.  In addition, the Company agrees to advance (and in the absence of advancement required hereunder) to promptly reimburse each Indemnified Person for all out-of-pocket expenses (including fees and expenses of counsel) as they are incurred by such Indemnified Person in connection with investigating, preparing, conducting or defending any such action or claim, whether or not in connection with litigation in which any Indemnified Person is a named party, or in connection with enforcing the rights of such Indemnified Person under this Agreement.