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EXHIBIT 10.1
December 11, 1997
LXR Biotechnology Inc.
0000 Xxxxxx Xxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: L. Xxxxx Xxxxx, Ph.D.
Chairman and Chief Executive Officer
Gentlemen:
The purpose of this letter is to outline our agreement pursuant to which
Sunrise Securities Corp. ("Sunrise") will act as placement agent in connection
with a "best efforts" private placement (the "Offering") of securities of LXR
Biotechnology Inc. (the "Company").
The terms of our agreement are as follows:
1. The Offering shall consist of the sale of a minimum of
$5,000,000 and a maximum of $10,000,000 of the Company's Common
Stock ("Shares") at a price ("Sales Price") of not less than
$1.75 per share. Sunrise will act as placement agent, subject
to, among other things, completion of its due diligence
examination.
2. The commission to Sunrise shall be 6.5% of the gross sales price
of shares sold in this Offering. Sunrise shall also be
reimbursed for all documented out-of-pocket expenses incurred in
connection with the Offering subject to a maximum of 2% of the
gross proceeds. Such commission and expenses may be paid, at
Sunrise's option, in shares of the Company's Common Stock valued
at the Sales Price ("Commission Shares"). The Commission Shares
shall have substantially the same registration rights as granted
to the Subscribers for the shares sold in the offering,
provided, however, that
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Sunrise should not be entitled to receive additional
compensation in the event the Company should fail to file a
timely Registration Statement.
3. As soon as practicable, the necessary state securities law
filings will be made with respect to the Offering. The Company
and Sunrise will cooperate in obtaining the necessary approvals
and qualifications in such states as Sunrise deems desirable.
4. Subscribers for the shares sold in the Offering will receive
certain registration rights for the resale of such shares. The
Company shall, at its expense, (i) not later than the earlier of
(x) January 30, 1998 or (y) 30 business days after the final
closing of the offering of which the Shares are a part (in
either case, the "Filing Deadline") file a registration
statement (the "Registration Statement") with the Securities and
Exchange Commission ("Commission") to register under the Act the
resale by the subscribers of the Shares, (ii) use its reasonable
best efforts to cause the Registration Statement to become
effective under the Act as promptly as practicable, (iii) after
the Registration Statement is declared effective under the Act,
furnish subscribers with such number of copies of the prospectus
(the "Prospectus") included in the Registration Statement as the
subscribers may reasonably request to facilitate the resale of
the Shares; and (iv) use its reasonable best efforts to cause
such Registration Statement to remain effective until such time
as the subscribers become eligible to resell the Shares pursuant
to Rule 144. In the event that the Company shall fail to file a
timely Registration Statement in accordance with the above, the
Company shall issue to the subscribers, as compensation
therefor, shares of Common Stock equal to (I) 1% of the Shares
for each 30 days or part thereof the filing is delayed until 60
days after the Filing Deadline and (ii) 2% of the Shares for
each 30 days or part thereof the filing is delayed from 60 days
after the filing Deadline; provided, however, that the Company
shall not be required to issue such shares if such failure has
been caused by the failure of the subscribers to provide
information in connection with the Registration Statement.
5. Concurrent with the closing of the Offering, the Company shall
sell to Sunrise (or its designees) purchase warrants (the
"Agent's Warrants") covering a number of shares of Common Stock
sold in the Offering, inclusive of the Commission Shares, if
any, issued to Sunrise. The price of the Agent's Warrants shall
be one mil ($0.001) per option. Such warrants will expire five
years after the Offering closes. The Agent's Warrants will be
exercisable at a price of $2.00 per share. The Agent's Warrants
shall not be redeemable. The Company will register the
underlying shares under the
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Act concurrently with the registration of the shares sold in the
Offering and the Commission Shares, if any, issued to Sunrise.
The Agent's Warrants may be exercised as to all or a lesser
number of the shares represented thereby and will contain
provisions substantially similar to those contained in the
warrants issued to Sunrise in connection with the private
placement pursuant to the Confidential Private Memorandum dated
October 30, 1996.
6. The Company shall provide, at its cost, such opinions of counsel
and letters from auditors as shall be reasonably requested by
Sunrise. Any such opinions or letters addressed to any
subscribers in the Offering shall also be addressed to Sunrise,
and Sunrise shall be entitled to rely thereon.
7. Sunrise shall be entitled to rely upon any officer's certificate
delivered in connection with any closing of the Offering and
upon the representations and warranties made by the Company in
the Subscription Agreement for the Offering. The Company agrees
to indemnify and hold harmless Sunrise, its officers, directors,
stockholders, employees, agents, advisors, consultants and
counsel against any and all loss, liability, claim, damage and
expense whatsoever including attorneys' fees as and when
incurred due to or arising out of any breach of any
representation or warranty made by the Company set forth
therein.
Please indicate your agreement to the terms set forth in this letter by
signing where indicated below.
Very truly yours,
/s/ XXXXXXX XXXX
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Xxxxxxx Xxxx
Managing Director
ACCEPTED AND AGREED TO
LXR BIOTECHNOLOGY INC.
By: /s/ L. XXXXX XXXXX
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L. Xxxxx Xxxxx, Ph.D.
Chairman & Chief Executive Officer
