EXHIBIT 1.1
[XXXXXX & XXXXXXX LOGO]
Serving Emerging Growth Sectors For over 50 Years
Xxxxxxx Xxxx June 15, 2004
President
Alteon Inc.
0 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Dear Xx. Xxxx:
The purpose of this letter agreement (the "Agreement") is to set forth the
terms and conditions pursuant to which Xxxxxx & Xxxxxxx, LLC ("R&R") shall
introduce Alteon Inc. (the "Company") to one or more investors in connection
with the an offering of securities (the "Securities") of the Company which is
consummated on or before July 15, 2004 (the "Offering"). The terms of such
Offering and the Securities shall be mutually agreed upon by the Company and the
investor(s). Until June 30, 2004, the Company shall not offer any of its
securities to any investors other than those introduced to it by R&R or such
other investors as are identified on a list delivered by the Company to R&R (the
"Additional Investors") within 2 days after the date of this Agreement. The
Company shall have the right, in its sole discretion, to reject or cut back any
order or any offer to purchase shares, or otherwise to postpone, modify or
abandon the Offering. The identities of the investors to which R&R introduces
the Company shall be proprietary information of R&R and shall not be divulged to
third parties by the Company, nor used by the Company outside the scope of R&R's
engagement as described herein.
The parties hereto hereby agree that the Company shall pay to R&R the fees
and compensation set forth below if there is any financing of equity or debt
(including without limitation the Offering) or other capital raising activity of
the Company (a "Financing") which is consummated on or before July 15, 2004 with
a Qualified Investor. As used herein, "Qualified Investor" shall mean any
investor named on a list delivered by R&R to the Company within 2 days after the
date of this Agreement (the "R&R Investors") or any other investor to whom the
Company was introduced by R&R or who was contacted by R&R pursuant to this
Agreement, with whom, in either case, the Company has never had conversations.
Under no circumstances will any of the Additional Investors be deemed to be
Qualified Investors.
In consideration of the services rendered by R&R under this Agreement, the
Company agrees to pay R&R the following fees and other compensation:
(a) A cash fee payable immediately upon the closing of any portion of
any Financing which is consummated on or before July 15, 2004
(including without limitation the Offering) (such Financing being
referred to as a "Qualified Financing") equal to 5% of the aggregate
cash capital received by the Company at such closing from Qualified
Investors and 2.5% of the aggregate cash capital received by the
Company at such closing from the Additional Investors (except as
otherwise provided on the list of Additional Investors).
(b) 5% warrant coverage (with an exercise price of 130% of the price
paid by Qualified Investors and a term of 5 years) of the total
number of shares sold to Qualified Investors, which warrants shall
have piggy-back registration rights and a cashless exercise
provision and will be subject to Rule 2710(g)(1) of the NASD Conduct
Rules. The warrants will be restricted from sale, transfer,
assignment,
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
or hypothecation for a period of six months from the closing date of
the Offering except to officers or partners (not directors) of R&R
pursuant to Rule 2710(c)(7)(A) of the NASD Conduct Rules.
(c) Reimbursement of reasonable and documented out-of-pocket expenses of
up to $15,000.
(d) All amounts payable hereunder shall be paid to R&R out of an
attorney escrow account at the closing or by such other means
acceptable to R&R.
Except as provided above, no fees or other compensation shall be payable
to R&R by the Company with respect to cash received in the Offering or other
Financing from an investor who is not a Qualified Investor.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of law principles.
Any dispute arising out of this Agreement shall be adjudicated in the courts of
the State of New York or in the federal courts sitting in the Southern District
of New York, and each of the parties hereto agrees that service of process upon
it by registered or certified mail at its address set forth herein shall be
deemed adequate and lawful. The Company shall indemnify R&R against any
liabilities arising under the Securities Act of 1933, as amended, attributable
to any material information supplied or omitted to be supplied to any investor
by the Company pursuant to this Agreement.
R&R hereby covenants and agrees with the Company as follows:
(a) Without the written consent of the Company, it will not deliver
to any investor or proposed investor or any other party any sales
literature or other material concerning the Offering, the Company or
the Securities
(b) It will deliver or cause to be delivered to each offeree such
materials as the Company shall reasonably request.
(c) It is a licensed broker-dealer under applicable federal and
state law.
(d) It will not contact any proposed investor that is not an R&R
Investor without the prior written consent of the Company.
This Agreement constitutes the entire understanding and agreement between
the parties hereto with respect to its subject matter and there are no
agreements or understandings with respect to the subject matter hereof which are
not contained in this Agreement. Xxxxxx's execution of this Agreement is subject
to the approval of its Board of Directors and this Agreement shall not be
binding upon Alteon until it is approved by such Board of Directors. This
Agreement may be modified only in writing signed by the party to be charged
hereunder.
If the foregoing correctly sets forth our agreement, please confirm this
by signing and returning to us the duplicate copy of this letter.
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Very truly yours,
XXXXXX & XXXXXXX, LLC
Agreed to and accepted By: /s/ Xxxx Xxxxx
as of the date first written above: -----------------
Name: Xxxx Xxxxx
XXXXXX INC. Title: President
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: President & CEO
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