PLACEMENT AGENT AND
ADVISORY
SERVICES AGREEMENT
This Placement Agent and Advisory
Services Agreement (this " Agreement ") is made as of July
15, 2008 (the “ Effective Date ”), by and
between Abviva, Inc., a Nevada corporation (together with its
subsidiaries, the " Company "), and Doherty & Company,
LLC, a Delaware limited liability company (" D&C ").
D&C and the Company agree as follows:
1.
Engagement of
D&C : The
Company hereby engages D&C, and D&C hereby accepts such
engagement, to act as the Company's placement agent with respect to
finding investors (the “Investors”) for offerings of
the Company’s capital stock or convertible debt or other
equity-linked securities in a transaction or transactions in
compliance with the applicable laws and regulations of any
jurisdiction in which securities are sold under this Agreement
(each subscriber to such offering, a “ Placement
”). The foregoing engagement shall be on an exclusive
basis except if an investment is provided through Doug Wilson and
affiliates, Chuck Lawrence and affiliates and the current
shareholders (the “Carve-out”).
The Company acknowledges and agrees that
D&C's obligations hereunder are on a reasonable best efforts
basis only and that the execution of this Agreement does not
constitute a commitment by D&C to purchase the securities and
does not ensure the successful placement of the securities or any
portion thereof or the success of D&C with respect to securing
any other financing on behalf of the Company. D&C will
act solely as a broker with respect to identifying and negotiating
with potential investors in securities that may be issued in a
Placement. D&C will not act as an underwriter in any
Placement.
2 .
D&C's
Compensation : The
Company hereby agrees to pay D&C fees in such amount and upon
such terms and conditions contained herein as follows:
(a) Financial and Operational Advisory Fee
. The Company will be required to
issue to D&C (a retainer fee for services provided by D&C
hereunder, provided that D&C is able to raise a minimum of $2
million within 180 days) warrants for 8% of the Company’s
Fully-Diluted Common Stock, par value $0.0001 per share (the
“ Advisory Warrant Shares ”). The Advisory
Warrant Shares shall have an exercise price of $0.05 per share and
shall have a five (5) year term. The Advisory Warrant Shares will
be issued to D&C upon a minimum of $2 million raised at a
mutually agreeable share price and shall vest 25% upon the 181
st day after execution of this agreement and 5% each
month over the subsequent months. The Advisory Warrant
Shares, which will carry such legends under SEC Rule 144 as are
deemed appropriate and necessary by the Company’s counsel,
will be included in the first registration statement filed by the
Company covering the securities issued in any Placement hereunder
(or securities issuable upon conversion or exercise thereof).
Subject to compliance with federal and state laws and
regulations and an opinion of the Company’s counsel (at the
Company’s expense), which shall not be unreasonably withheld
and the rules of any self-regulatory organization, the Advisory
Warrant Shares will be transferable within D&C’s
organization, at D&C’s discretion, or as obligated to
participating FINRA member firms.
(b) Success Fees .
The Company will pay D&C a Success Fee, as described
below, when the Company closes on a Placement during the Term of
this Agreement except no Success will be paid to D&C if an
investment is received from the parties listed in the
Carve-out.
Computation and Payment of Success
Fees .
Placements.
For each Placement, the Success Fee will
be (x) a cash fee equal to 8% of gross proceeds raised in the
Placement (excluding exercise of any warrants issued in Placement,
which D&C shall be entitled to 5% of the gross proceeds) and
(y) warrants (the “ D&C Warrants ”) to
purchase 8% of the total number of shares of common stock issued
and issuable by the Company to Investors under and in connection
with the Placement, including (without limitation) shares issuable
upon conversion or exercise of the securities sold in the
Placement, at an exercise price equal to the purchase price of the
common stock sold in the Placement or, in the event that securities
convertible into common stock are sold in the Placement, the
conversion price of such securities.
The cash portion of the Success Fee will
be due and payable upon the closing of each Placement or exercise
of any warrants issued in Placement and will be payable directly to
D&C.
D&C Warrants will have a two (2) year
term (or such longer term as is provided in any warrants issued in
the Placement) and will provide for cashless exercise (even if the
Investors do not have such a right). D&C Warrants will
have the benefit of full ratchet anti-dilution protection against
issuances of securities at prices (or with conversion or exercise
prices, in the case of convertible securities, warrants, options or
rights) below the exercise price of D&C Warrants (except for
securities issued upon the exercise or conversion of currently
outstanding warrants or convertible securities). The shares
underlying D&C Warrants will be included in the first
registration statement filed by the Company covering the securities
issued in the Placement (or securities issuable upon conversion or
exercise thereof). Subject to compliance with federal
and state laws and regulations, and the rules of any
self-regulatory organization, D&C Warrants will be transferable
within D&C’s organization, at D&C’s discretion,
or as obligated to participating FINRA member firms. D&C
Warrants will contain such other terms and conditions no less
favorable to D&C than the term and conditions of any warrants
issued to the Investors in the Placement.
(c) M&A Transaction Fees . During the term of this Agreement, the
Company agrees to appoint D&C as a non-exclusive investment
banker with respect to possible merger, acquisition, joint venture,
sale of all or substantially all of the assets of the Company (any
of the foregoing, a “ M&A Transaction ”),
subject in all cases to D&C’s agreement so to act.
In connection with an M&A Transaction that the Company
agrees to retain D&C’s services in a separate writing,
the Company agrees to pay D&C a fee which will be a percent of
the value of the aggregate consideration paid in the M&A
Transaction in accordance with the attached fee schedule (
Exhibit B ).
3.
Certain Matters Relating to
D&C’s Duties :
(a)
D&C shall (i) assist the Company in
the preparation of information documents to be shared with
potential Investors (ii) identify and screen potential Investors,
and (iii) perform other related duties.
(b)
D&C shall perform its duties under
this Agreement in a manner consistent with the instructions of the
Company. Such performance shall include the delivery of information
to potential interested parties, conducting due diligence, and
leading discussions with potential Investors.
(c)
D&C shall not engage in any form of
general solicitation or advertising in performing its duties under
this Agreement and shall otherwise comply in all respects with
Securities And Exchange Commission Regulation D, Rules 501, 502,
503, 506, 507 and 508. This prohibition includes, but is not
limited to, any mass mailing, any advertisement, article or notice
published in any magazine, newspaper or newsletter and any seminar
or meeting where the attendees have been invited by any mass
mailing, general solicitation or advertising.
(d)
D&C is and will hereafter act as an
independent contractor and not as an employee of the Company and
nothing in this Agreement shall be interpreted or construed to
create any employment, partnership, joint venture, or other
relationship between D&C and the Company. D&C will not hold
itself out as having, and will not state to any person that D&C
has, any relationship with the Company other than as an independent
contractor. D&C shall have no right or power to find or create
any liability or obligation for or in the name of the Company or to
sign any documents on behalf of the Company. The employment
status, allowances and responsibilities of Michael Doherty and
Brandon Rockow as individuals are to be defined subsequent to this
Agreement.
(e)
D&C agrees, represents and warrants
that: (i) it has full right, power and authority to enter into this
Agreement and to perform all of its obligations hereunder; (ii)
this Agreement has been duly authorized and executed by and
constitutes a valid and binding agreement of D&C enforceable in
accordance with its terms; (iii) D&C has all applicable
securities licenses that may be required to engage in the
activities contemplated by this Agreement; (iv) the general terms
of this Agreement, in particular D&C’s compensation
hereunder, are a material item of disclosure that must be made to
any prospective investor prior to the acceptance of any investment
funds either through an Offering Memorandum or subscription
agreement; and (v) the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby do not
conflict with or result in a breach of D&C’s certificate
of organization or operating agreement. Further, this Agreement and
the transactions contemplated herein shall not conflict with or
result in the breach of any agreement to which D&C is a party
at the time the transactions contemplated herein are
consummated.
3.
Certain Matters Relating to
Company’s Duties :
(a)
The Company shall promptly provide
D&C with all relevant information about the Company (to the
extent available to the Company in the case of parties other than
the Company) that shall be reasonably requested or required by
D&C, which information shall be complete and accurate in all
material respects, to the best knowledge of Company, at the
time furnished.
(b)
The Company recognizes that in order for
D&C to perform properly its obligations in a professional
manner, it is necessary that D&C be informed of and, to the
extent practicable, participate in meetings and discussions between
the Company and any third party, including, without limitation, any
prospective purchaser of the Company’s securities, relating
to the matters covered by the terms of D&C's
engagement.
(c)
The Company agrees that any report or
opinion, oral or written, delivered to it by
D&C is prepared solely for its
confidential use and shall not be reproduced, summarized, or
referred to in any public document or given or otherwise divulged
to any other person without D&C's prior written consent, except
as may be required by applicable law or regulation.
(d)
The Company represents and warrants that:
(i) it has full right, power and authority to enter into this
Agreement and to perform all of its obligations hereunder; (ii)
this Agreement has been duly authorized and executed by and
constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms; and (iii) the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in
a breach of the Company's certificate of incorporation or by-laws.
Further, this Agreement and the transactions contemplated herein
shall not conflict with or result in the breach of any agreement to
which the Company is a party at the time the transactions
contemplated herein are consummated.
4.
Term; Termination of
Agreement . The term of
this Agreement shall commence on the Effective Date and shall
expire on January 15, 2009; provided that the term automatically
shall be extended for an additional six months if D&C raises an
aggregate of $2,000,000 for the Company by completing a Placement
or a series of Placements on or before January 4, 2009 (the
“Term”). Either party may terminate this
Agreement prior to its expiration (i) for any reason within the
contiguous 180 (One Hundred Eighty) days following the Effective
Date by notifying the other party in writing notice of termination
or (ii) by notifying the o
