AMERICAL SECURITIES, INC.
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July 8, 1999
Neurobiological Technologies, Inc.
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Gentlemen:
This letter sets forth our agreement whereby AmeriCal Securities,
Inc. ("AmeriCal") will act as exclusive placement agent for Neurobiological
Technologies, Inc. (the "Company") for the offer and sale of units ("Units") of
common stock and warrants to purchase common stock of the Company for a gross
purchase price not to exceed $2,000,000 as more particularly outlined in the
attached term sheet (the "Term Sheet"). It is understood that the offering shall
be made pursuant to Regulation D under the Securities Act of 1933, as amended
(the "Securities Act").
The sale of such securities is subject to the execution of
definitive documents satisfactory to the Company, the purchasers and AmeriCal.
The definitive agreements will contain representations, warranties and covenants
of the parties, conditions and indemnification provisions customary in
transactions of similar type and size.
All defined terms used and not otherwise defined herein shall have
the meanings set forth for such terms in the Term Sheet.
In consideration of the services rendered by AmeriCal as the result
of any sale of Units of the Company sold to any purchaser not excluded in
Appendix A, the Company shall at the closing of such sale pay to AmeriCal a cash
commission equal to 7.0% of the gross sales price for the Units sold (such gross
sales price shall not be deemed to include the exercise price of the warrants
contained in the Units) and issue to AmeriCal or its designee five year warrants
to purchase for 110% of the gross sales price per Unit sold, a number of shares
of common stock of the Company equal to 10% of the shares of common stock of the
Company sold as part of the Units (the "Placement Agent Warrants"). The Company
shall issue and deliver to AmeriCal a certificate representing the Placement
Agent Warrants within ten business days after the final closing date of the sale
of the Units. The Company also agrees to pay to AmeriCal a cash commission of
7.0% of the purchase price for any shares of Common Stock sold by the Company
upon exercise of any of the warrants included in the Units. Such cash commission
shall be payable within 10 days after the Company receives payment of the
purchase price for such Common Stock.
Regardless of the investors involved , upon closing of an offering
which successfully raises at least $1.5 million dollars, AmeriCal shall receive
a cash commission of least one hundred and fifty thousand dollars ($150,000.00).
The Company also agrees to reimburse AmeriCal for all out-of-pocket
expenses of AmeriCal relating to the offering of securities of the Company,
including travel expenses and legal fees and disbursements of counsel retained
by AmeriCal in connection with the matters contemplated by this Agreement,
promptly after submission to the Company of reasonable documentation of such
expenses, provided that such fees and expenses shall not exceed $15,000 in the
aggregate.
To the extent that the terms of this Agreement conflict with the
terms of the agreement between AmeriCal and the Company dated March 3, 1999 (the
"March 1999 Agreement") the terms of this agreement shall control. Except as
provided in the preceding sentence, the March 1999 Agreement shall remain in
full force and effect.
The engagement of AmeriCal hereunder may be terminated at any time
after August 31, 1999 upon 30 days prior written notice given by the Company at
any time, provided that AmeriCal shall be entitled to receive all of the
compensation set forth in the third paragraph of this letter with respect to any
sale of Units or securities exercisable or convertible into common stock of the
Company (on an as-converted basis based upon the initial exercise or conversion
price) made to any person, firm or entity excluding those listed on Appendix A
hereto within six months after the effective date of termination of AmeriCal's
engagement. AmeriCal may resign at any time effective upon receipt by the
Company of written notice thereof from AmeriCal.
The services to be rendered by AmeriCal are on a best efforts basis
and the Company acknowledges that AmeriCal is not making any representation or
guarantee that any person will purchase any securities of the Company at any
time through the efforts of AmeriCal or otherwise.
The Company agrees that, without the prior written consent of AmeriCal, such
consent not to be unreasonably withheld, the Company will not disclose, and will
not include in any public announcement the name of any purchaser or offeree,
unless and until such disclosure is required by applicable law or applicable
regulation, and then only to the extent of such requirements. The Company agrees
that the withholding of consent by AmeriCal shall be deemed reasonable if the
purchaser or offeree directs AmeriCal not to allow disclosure of its name.
Each party agrees to maintain all non-public and proprietary
information obtained hereunder confidential and not to use such information for
any purpose other than to evaluate the proposed transaction. Notwithstanding the
foregoing, AmeriCal may disclose such information pursuant to applicable law,
regulation, subpoena or administrative investigation. The foregoing restriction
shall not apply to any such information which becomes generally known to the
public for any reason whatsoever other than a breach hereof by AmeriCal.
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The Company agrees to indemnify AmeriCal in accordance with the
indemnification provisions (the "Indemnification Provisions") attached to this
Agreement which Indemnification Provisions are incorporated herein and made a
part hereof and which shall survive any amendment, restatement, termination or
expiration of this Agreement.
This Agreement may not be amended or modified, except by an
instrument in writing signed by each of AmeriCal and the Company.
This Agreement shall be governed by and construed in accordance
with the laws of the State of California, without regard to its conflicts of law
principles. Each party hereby irrevocably submits to the jurisdiction of any
court of the State of California, County of San Francisco or the United States
District Court for the Northern District of California in connection with any
suit, action or proceeding arising out of this Agreement.
This Agreement shall be binding upon AmeriCal and the Company and
shall inure to the benefit of their respective successors and assigns. This
Agreement constitutes the entire understanding and agreement of the parties with
respect to the subject matter hereof and it supersedes all prior and/or
contemporaneous understandings and agreements with respect to such subject
matter, all of which are merged herein.
Please indicate your agreement with the terms of this letter by
signing a copy of this letter in the space set forth below and returning it to
the undersigned.
Sincerely ,
AMERICAL SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
Director of Research
The foregoing accurately sets forth our understanding and agreement
with respect to matters set forth herein.
Accepted this__________ day of July, 1999.
NEUROBIOLOGICAL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
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INDEMNIFICATION PROVISIONS
Neurobiological Technologies, Inc. ("NTI") agrees to indemnify and
hold harmless AmeriCal Securities, Inc. ("AmeriCal") to the fullest extent
permitted by law, from and against, and AmeriCal shall not have any liability to
NTI, or its owners, parents, creditors or security holders for, 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 reasonable legal and other
costs, expenses or 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 or
defending any such action, suit proceeding or investigation (whether or not in
connection with litigation in which AmeriCal is a party), directly or
indirectly, caused by, relating to, based upon, arising out of or in connection
with (a) AmeriCal's acting for NTI, including, without limitation, any act or
omission by AmeriCal in connection with its acceptance of or the performance or
non-performance of its obligations under the agreement dated July , 1999,
between NTI and AmeriCal, as it may be amended from time to time (the
"Agreement"), (b) any transaction, including the sale of the securities of NTI,
as contemplated by this Agreement; (c) any untrue statement or alleged untrue
statement of a material fact contained in, or omissions or alleged omissions
from any disclosure document used in connection with the sale of securities of
NTI or similar statements or omissions in or from any other information
furnished by NTI to AmeriCal or any prospective purchaser or (d) any use of
proceeds from a sale of securities contemplated by this Agreement; provided,
however, such indemnity agreement shall not apply to AmeriCal for any portion of
any such loss, claim, damage, obligation, penalty, judgment, award, liability,
cost, expense or disbursement to the extent it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted
from the negligence or willful misconduct of AmeriCal or to have resulted from
written information furnished to NTI by or on behalf of AmeriCal with respect to
AmeriCal expressly for use in any securities offering document of NTI.
These Indemnification Provisions shall be in addition to any
liability which NTI may otherwise have to AmeriCal and shall extend to all of
AmeriCal's affiliated entities, directors, officers, employees, legal counsel,
agents and controlling persons (within the meaning of the federal securities
laws). All references to AmeriCal in these Indemnification Provisions shall be
understood to include any and all of the foregoing.
If any action, suit, proceeding or investigation is commenced, as
to which AmeriCal proposes to demand indemnification, it shall notify NTI with
reasonable promptness; provided, however, that any failure by AmeriCal to notify
NTI shall not relieve NTI from its obligations hereunder unless such failure
prevents the presentation of material defenses thereto. NTI shall thereupon
assume the defense of any such action, proceeding or investigation at NTI's sole
cost and expense. AmeriCal shall have the right but not the obligation to
participate at its own expense in the defense thereof by counsel of its choice
and at AmeriCal's expense. In the event that NTI fails
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timely to defend, contest or otherwise protect AmeriCal against any such suit,
action, investigation or proceeding or if counsel chosen by NTI to defend
AmeriCal shall have a conflict of interest in its representation of AmeriCal,
AmeriCal shall have the right to appoint counsel of AmeriCal's choice to defend
AmeriCal at NTI's sole cost and expense. NTI shall be liable for any settlement
of any claim against AmeriCal made with NTI's written consent, which consent
shall not be unreasonably withheld. NTI shall not, without the prior written
consent of AmeriCal, settle or compromise any claim, or permit a default or
consent to the entry of any judgment in respect thereof, unless such settlement,
compromise or consent includes, as an unconditional term thereof, the giving by
the claimant to AmeriCal of an unconditional and irrevocable release from all
liability in respect of such claim.
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 NTI and AmeriCal shall contribute to the losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses and
disbursements to which the indemnified persons may be subject in accordance with
the relative benefits received by them, and also their relative fault in
connection with the statements, acts or omissions which resulted in such losses,
claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements and the relevant equitable considerations shall also
be considered. No person found liable for a fraudulent misrepresentation shall
be entitled to contribution from any person who is not also found liable for
such fraudulent misrepresentation. Notwithstanding the foregoing, AmeriCal shall
not be obligated to contribute any amount hereunder that exceeds the amount of
fees previously received by AmeriCal pursuant to the Agreement.
Neither termination nor completion of the engagement of AmeriCal
referred to above shall affect these Indemnification Provisions which shall
remain operative and in full force and effect.
September 1, 1999
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Director of Research
AmeriCal Securities, Inc.
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Dear ▇▇▇▇▇▇▇,
As I informed you yesterday when we spoke, I am hereby giving you
written notice of our intention to terminate the agreement between
Neurobiological Technologies, Inc. ("NTI") and AmeriCal Securities, Inc.
("AmeriCal") dated July 8, 1999 engaging AmeriCal as exclusive placement agent
for the sale of certain securities of NTI (the "Units").
As you agreed when we spoke, AmeriCal is not owed any compensation for
any of the subscriptions that NTI has received to purchase Units to date and
will also agree to waive its rights to any compensation for Units or other
securities sold by NTI within six months of the termination of the engagement. I
am also requesting that you waive AmeriCal's right to 30 days prior written
notice and agree to have this termination be effective as of the date of this
letter, so that I can proceed with raising the much needed funding for NTI.
Thank you for your willingness to promptly resolve this matter.
Sincerely,
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
Accepted and Agreed
AMERICAL SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
Director of Research
October 11, 1999
Via Facsimile
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
Director of Research
AmeriCal Securities, Inc.
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Dear ▇▇▇▇▇▇▇,
Following our conversation of last Friday, I would like to formalize the facts
that we reinstate our agreement of July 8, 1999 until November 1, 1999. NTI(R)
agrees to file a Form S-3 Registration Statement within 30 days of the closing.
We will register the securities for resale through this S-3 mechanism. However,
because of the costs entailed, we will not initiate that process until we have
received at least $2 million from you.
It was a pleasure to be with you and your colleagues and we hope that this run
will be highly successful.
Sincerely,
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
PEF/ab
