Exhibit 10.13
Placement Agent Agreement
This Placement Agent Agreement ("Agreement") dated as of September 15, 2003, is
entered into by and among CytRx Corporation ("CytRx" or the "Company"), having
its business office located at 00000 Xxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx
Xxxxxxx, XX 00000, and Gilford Securities Incorporated ("GILFORD"), having its
principal office located at 000 Xxxxx Xxx., 00xx Xxxxx, Xxx Xxxx, XX 00000.
The Company has entered into an engagement letter with Xxxxxxxx Capital Corp.
("Xxxxxxxx") under which Xxxxxxxx is to serve as the Company's exclusive
placement agent for any financing transaction, including the proposed private
placement in a "PIPE" transaction involving the sale of securities to
institutional investors (the "Offering"). Xxxxxxxx has agreed to our
participation in the Offering on the terms set forth herein.
For good consideration, the receipt and sufficiency of which are acknowledged,
GILFORD and CytRx hereby agree as follows:
I. Scope of Services to be Provided by XXXXXXX
XXXXXXX will provide the following services during the term of this Agreement.
Capital Raising
The Company currently anticipates raising up to USD$8.5 million in the Offering.
The actual terms of the Offering will depend on market conditions, and will be
subject to negotiation among the Company, Xxxxxxxx, XXXXXXX and prospective
investors; provided, however, that all terms must be acceptable to the Company
in its sole and absolute discretion.
Although we cannot guarantee CytRx that we will be able to raise new capital, we
will conduct the offering on a best efforts basis. We will offer the Company's
securities in the Offering only to those investors listed in Exhibit A hereto
and any other investors that Xxxxxxxx and the Company in their sole discretion
jointly agree to in writing (collectively, the "GILFORD Investors"). The Company
will have no obligation to accept any subscription from any proposed investor in
the Offering or any minimum aggregate amount of subscriptions from GILFORD
Investors.
II. Compensation and Other Provisions Relating to Fees
A. Compensation to XXXXXXX
XXXXXXX shall be entitled to the following compensation in connection herewith:
1. Cash Fee
Upon receipt and acceptance of any funds from a GILFORD
Investor, CytRx agrees to pay GILFORD a cash fee of 3.75% of
the aggregate purchase price of the securities placed at the
closing of the Offering ("Initial Closing Date").
2. Warrant
In addition, GILFORD shall receive a Warrant ("GILFORD
Warrant") to purchase a number of shares of common stock equal
to 3% of the number of shares of common stock purchased by the
GILFORD Investor in the offering.
The GILFORD Warrant shall be delivered at the Initial Closing
Date, registered on the GILFORD Investor's Registration
Statement, and shall be exercisable any time until the seventh
(7th) anniversary of the Initial Closing Date hereof at one
hundred percent (100%) of the purchase price of the Common
Stock issued to the GILFORD Investors in the Offering, and
shall provide for cashless exercise provisions.
III. Representations and Warranties
a) The Company hereby authorizes GILFORD to transmit to the
prospective purchasers of the securities copies of the
Company's most recent filings with the Securities and Exchange
Commission, together with summary materials, if any, approved
in writing by the Company.
b) The Company agrees that CytRx will enter into subscription,
registration rights and other customary agreements, and that
CytRx's counsel will supply an opinion letter on the
transaction in form and substance reasonably acceptable to,
and addressed to, GILFORD and the investors.
c) The Company further agrees that GILFORD may rely upon, and are
a third party beneficiary of, the representations and
warranties, and applicable covenants, set forth in any
agreements with investors in the Offering.
d) GGILFORD represents that the only investors to which it has
offered the Company's securities are listed in Exhibit A
hereto.
IV. Status/Liability of GILFORD
When performing any of the services described herein, or in connection with any
special business assignment, GILFORD shall be deemed to be an independent
contractor. Except as expressly provided for in writing by CytRx, GILFORD shall
have no authority to act unilaterally on behalf of CytRx.
GILFORD will use its best efforts in performing its duties hereunder. GILFORD
shall not be liable to CytRx, for errors in judgment or for any other action
undertaken or omitted hereunder unless such error or action involves willful
malfeasance, gross negligence or fraud. Except as hereunder provided, GILFORD
shall not be accountable for any loss suffered by any of them.
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GILFORD's ability to complete its assignments described herein in a satisfactory
and timely way is dependent upon the provision by CytRx of corporate or
financial records and available diligence materials, and such other information
that XXXXXXX xxxxx material to effective completion of its work. It is further
understood and agreed that GILFORD and/or its designees may rely on the accuracy
of such information provided by CytRx and CytRx shall be solely responsible for
the accuracy and completeness of such records and information.
It is also specifically understood that CytRx will employ independent legal
counsel to advise it as to contract, tax, international laws and regulations and
securities considerations in connection herewith and with all of the financing
transactions resulting here from, and that all financing documents should be
reviewed and approved by such counsel prior to the consummation of any finance
transaction.
CytRx, its corporate affiliates or its designees and successors hereby agree to
indemnify GILFORD and each of its officers, directors, trustees, governors,
employees, partners, shareholders, beneficiaries or agents of any of the
entities comprising GILFORD, against all cost and expenses, including but not
limited to, reasonable attorney's fees, for any claim by third parties made
against any of them arising out of or relating to this Agreement and all related
agreements, provided that such indemnity shall not apply if GILFORD shall have
been found guilty of willful malfeasance, gross negligence or fraud by a
competent court of final jurisdiction.
V. Other Activities
GILFORD, its affiliates, designees and assigns, now render and will continue to
render investment banking services, financial advisory, management services and
the like, to other companies which may conduct business similar to that of
CytRx. GILFORD shall be free to render such advice and services according to its
sole discretion and CytRx hereby consents thereto. Similarly, GILFORD shall not
be required to devote full time and attention to the performance of the duties
specified under this Agreement but shall only devote so much of its time and
attention as it deems reasonable and/or necessary for such purposes.
VI. Confidentiality and Non-Disclosure
GILFORD acknowledges that it is being provided with, and will in the future be
provided with, confidential and proprietary information concerning the business
and operations of CytRx and that such information constitutes confidential and
proprietary information owned solely by CytRx. Without the express written
consent of CytRx, GILFORD may not disclose to any person, legal entity or
government agency any such information except (i) to the extent that such
information otherwise is generally known to the public; (ii) pursuant to the
written advice of counsel that disclosure by GILFORD is required under
applicable law, after providing CytRx with reasonable advance notice of such
proposed disclosure; or (iii) pursuant to Court order. Under no circumstances
may GILFORD use any such information for the benefit of GILFORD or third parties
without the express written consent of CytRx. In cases where disclosure is made
with express written consent of CytRx, GILFORD may nevertheless disclose such
information only upon receipt of a confidentiality agreement from the person to
whom such disclosure is to be made, substantially in the form of this paragraph,
and stated to be for the benefit of CytRx.
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VII. Miscellaneous
A. Term
This Agreement shall continue in effect for an initial period of three (3)
months from the date of execution. If the Agreement is renewed subsequent to the
expiration of the initial period then the Agreement shall continue in effect
until terminated by either GILFORD or CytRx by 30 days prior written notice to
the other parties hereto. In the event that this Agreement is terminated, all
earned but unpaid fees or expense of any kind due GILFORD or its successors or
designees shall be paid in full prior to the effective date of the termination.
B. Non-Circumvention
Any potential GILFORD Investor who GILFORD introduces (via conference call,
visit or other means) to CytRx shall be considered for purposes of this Letter a
protected investor of GILFORD, whether or not such GILFORD Investor participates
in the offering(s) contemplated by this Letter. Note that the aforementioned
protected potential GILFORD Investors shall be listed on Exhibit A. In the event
that CytRx accepts an investment from a GILFORD Investor for a period of 24
months from the date of introduction of said GILFORD Investor, CytRx agrees to
pay to GILFORD a fee as stated in Section II. Compensation and Other Provisions
Relating to Fees at the time of closing.
C. No Obligation
CytRx may, in their sole and absolute discretion, choose not to accept any
investment with any GILFORD Investor. CytRx shall have no obligation to pay
GILFORD any fees or issue any Stock or warrants to GILFORD to the extent that
CytRx rejects any proposed investor and any future investment from said GILFORD
Investor is not covered under Section VI. B. Non-Circumvention.
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D. Venue
This Agreement shall be construed and interpreted according to the Laws of the
State of California applicable to agreements to be performed entirely within
such State.
E. Entire Agreement
This Agreement constitutes the entire Agreement between the parties and
supersedes and cancels any and all prior or contemporaneous arrangements,
understandings and agreements, written or oral, between them relating to the
subject matter hereof.
F. Effectiveness
This Agreement shall be deemed in force at the time the Agreement is executed by
both parties.
The undersigned have executed this Agreement as of this 15th day of September
2003.
Gilford Securities Incorporated
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Xx. VP - Capital Markets
Date: 9/15/03
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CYTRX CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
Chief Executive Officer
Date: 9/19/03
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CytRx Corporation ("CytRx")
Exhibit A
Pursuant to the executed Placement Agent Agreement ("Agreement"), CytRx hereby
confirms that GILFORD has permission to introduce CytRx to:
o RSGM Partners
o Xxxxxxx & Associate
The above named investor(s) shall be covered under the terms as agreed upon in
the executed Letter. This signed Exhibit A will act as written confirmation for
GILFORD to make this/these introduction(s).
By: /s/ Xxxxxx Xxxxxxxxx
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Print Name:
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Title:
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Date:
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