Document:

ex10-1.htm

TERMINATION AND SETTLEMENT AGREEMENT

 

This TERMINATION AND SETTLEMENT AGREEMENT (“Agreement”) is dated and effective as of September 30, 2011, and entered into by and among SECUREALERT, INC., a Utah corporation (“SecureAlert”), SECUREALERT MONITORING, INC., a Utah corporation (“SMI”) and MIDWEST MONITORING AND SURVEILLANCE, INC., a Minnesota corporation (“Midwest” and together with SecureAlert and SMI, collectively the “Borrowers” and each singularly a “Borrower”), each with a mailing address of 150 West Civic Center Drive, Suite 100, Sandy, Utah 84070, and SAPINDA UK LIMITED, a limited liability company organized
under the laws of the United Kingdom, as “Sapinda” with a mailing address of 25 Park Lane, W1K 1RA, London, United Kingdom.

WHEREAS Borrowers and Sapinda entered into that certain Loan and Security Agreement dated August 19, 2011 (the “Credit Agreement”); and

WHEREAS, Borrower and Sapinda entered into that certain Advisory Agreement dated August 19, 2011 and effective April 1, 2011 (the “Advisory Agreement”); and

WHEREAS, Borrowers and Sapinda entered into that certain Post Closing Letter dated August 19, 2011 (the “Letter” and together with the Advisory Agreement and Credit Agreement the “Loan Agreements”); and

WHEREAS, Borrowers and Sapinda desire to modify the terms of the Advisory Agreement and to terminate the Credit Agreement and Letter.

NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:

1.           Defined Terms:  Unless otherwise defined herein capitalized terms used herein shall have the same meanings as defined in the Credit Agreement.

2.           Termination of Credit Agreement and Releases:  Effective upon execution of this Agreement the Credit Agreement shall be null and void and each of the parties to the Loan Agreements shall be released from any and all obligations, responsibilities, representations and warranties contained therein and each party to the Loan Agreements hereby irrevocably and fully and forever releases and discharges each of the other parties to the Loan Agreements, together with their respective past, present and future successors, assigns, parent entities, principals,
affiliates, managers, directors, officers, employees, agents, attorneys and other representatives, from and with respect to any and all actions and causes of action, suits, disputes, claims, demands, liabilities, damages, counterclaims, compensation, expenses, costs and losses, and all rights and remedies in respect of any and all of the foregoing, whether known or unknown, fixed or contingent, direct or indirect, and whether arising in contract or in tort, at law or in equity, or otherwise, in each case which such releasing party now has or may hereafter have against any one or more of such released parties for or by reason of any act or omission (including, without limitation, any non-performance) under or in connection with the Loan Agreements.

  

  

  

3.           Release of All Liens etc.:  Sapinda will release all liens, Uniform Commercial Code filings, Deposit Account Control Agreements of Borrowers accounts, and any other claim or right to Borrowers assets under the Loan Agreements and the documents executed by the parties pursuant thereto promptly but no later than 5 business days after the date of this Agreement. Sapinda shall provide to SecureAlert documentation in form and substance reasonably acceptable to the parties effecting such
releases.  Each of the parties hereto shall be responsible for its own legal and other expenses associated with effecting such releases.  For the avoidance of doubt, Company and Sapinda clarify that failure to meet timeline cannot negate the Termination of Credit Agreement and Release.

4.           Fees, Retainers and Payments:  Sapinda shall be allowed to retain all fees and retainers previously paid to it by the Borrowers in connection with the Credit Agreement and Advisory Agreement as outlined in the attached Exhibit “A”.

5.           Legal and Other Expenses:  Each of the parties hereto shall be responsible for its own legal and other expenses associated with the Credit Agreement, Advisory Agreement and the Post Closing Letter.  Notwithstanding the foregoing, SecureAlert shall pay an amount of one-half (50%) of Sapinda’s legal fees associated with the Loan Agreements, but such 50% portion shall not exceed $75,000.00.  Sapinda shall provide SecureAlert detailed and complete invoices for all of its legal fees no later than October 8, 2011.

6.           Repayment of $500,000 Advance under the Credit Agreement.  Borrowers shall repay to Sapinda the sum of $500,000.00 which was loaned to Borrowers by Sapinda on or about August 30, 2011.  Borrowers’ obligations under this paragraph 6 shall only become effective upon receipt of a minimum of $1,000,000 in equity invested in SecureAlert by an investor introduced to SecureAlert by Sapinda after the effective date of this Agreement.  Borrowers shall owe Sapinda no interest or other fees associated with the $500,000.00 Advance under the
Credit Agreement.

7.           Sub-advisors:  From the effective date of this Agreement, Sapinda shall be responsible for all fees, expenses and compensation owed or payable to Gus Spanos and avant ag accruing on or after the effective date of this Agreement.  From the effective date of this Agreement, Borrowers shall have no obligation to pay, reimburse or compensate these advisors.  Borrowers shall not have an obligation to consult with or use these advisors any longer, except at their own discretion.  All fees, expenses and compensation paid by Sapinda
to Gus Spanos or avant ag between April 1st, 2011, and the date of this Agreement shall nevertheless be reimbursed to Sapinda by SecureAlert.

8.           Advisory Agreement:  The Advisory Agreement is amended and restated as shown in Exhibit “A” attached hereto and incorporated herein.

9.           Funds Raised or Committed to Company:  Any funds raised or committed to the Company through independent efforts of the Company shall not be credited to Sapinda in this Agreement or the Amended and Restated Advisory Agreement attached hereto.

  

  

  

10.           Headings:  The headings of the paragraphs contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

11.           Applicable Law:  This Agreement shall be governed by and construed in accordance with the internal substantive laws, and not the choice of law rules, of the State of New York.  The parties hereto consent to the exclusive and personal jurisdiction of the state and federal courts in the State of New York.

12.           Counterparts:  This Agreement may be executed in one or more counterparts, none of which need contain the signature of more than one party hereto, and each of which shall be deemed to be an original, and all of which together shall constitute a single agreement.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, and has been duly authorized to do so as of the day and year indicated herein.

	
SECUREALERT, INC.

	  	
SECUREALERT MONITORING, INC.

	
a Utah corporation

	  	
a Utah corporation

	  	  	  
	  	  	  
	
By: /s/  John L. Hastings, III                   

	  	
By: /s/  John L. Hastings, III            

	
              John L. Hastings III

	  	
              John L. Hastings III

	
              President & CEO

	  	
              President and CEO

	  	  	  
	
MIDWEST MONITORING AND

	  	  
	
SURVEILLANCE, INC.

	  	  
	
a Minnesota corporation

	  	  
	  	  	  
	  	  	  
	
By: /s/  John L. Hastings, III                    

	  	  
	
              John L. Hastings III

	  	  
	
              President & CEO

	  	  
	  	  	  
	  	  	  
	
SAPINDA UK LIMITED

	  	  
	
A limited liability company organized

	  	  
	
under the laws of the United Kingdom

	  	  
	  	  	  
	  	  	  
	
By: /s/  Lars Windhorst                          

	  	  
	
Name:   Lars Windhorst

	  	  
	
Title:  Managing Director

	  	  

  

  

  

EXHIBIT “A”

AMENDED AND RESTATED ADVISORY AGREEMENT

This Amended and Restated Advisory Agreement (“Advisory Agreement”) is entered into effective September 30, 2011, by and between Sapinda UK Ltd. (“Sapinda”) and SecureAlert, Inc., a Utah corporation (the “Company”).

WHEREAS, the parties previously entered into that certain agreement dated effective April 1, 2011, whereby Sapinda was retained by the Company to provide certain advisory services (the “April Agreement”); and

WHEREAS, the Company and Sapinda desire to amend and restate the April Agreement; and

WHEREAS, the Company desires to retain Sapinda to provide general financial advisory services to the Company in regards to the issuance by the Company of common equity or preferred (whether convertible or non-convertible) equity in the gross amount of up to $13,000,000 (the “Financing Transaction”); and

WHEREAS, the Company and Sapinda mutually acknowledge that a significant amount of the Company’s and Sapinda’s obligations and responsibilities under this Agreement have already been performed prior to the date of this Agreement, and such prior performance by Sapinda shall be deemed performance under this Agreement.

 

Now therefore, in consideration of the covenants and promises contained herein, the parties agree as follows:

1.           Effect of Agreement.  This Advisory Agreement replaces and supersedes all previous agreements both written and verbal between the Company and Sapinda (other than the Termination and Settlement Agreement dated as of September 30, 2011 between the parties).  It is agreed that neither the Company nor Sapinda will be entitled to any future claims based on any such previous agreements, including, without limitation the April Agreement.

 

2.           Retention.  The Company retains Sapinda as a financial advisor to provide general financial advisory services, and Sapinda accepts such retention on the terms and conditions set forth in this Advisory Agreement.  In such capacity, Sapinda shall as requested by the Company; (i) familiarize itself, to the extent appropriate and feasible, with the business, operations, properties, financial condition, management and prospects of the Company, (ii) advise the Company on matters relating to its
capitalization; (iii) evaluate alternative financing structures and arrangements; (iv) review the Company’s presentation and marketing materials and other materials used to present the Company to the investment community; (v) coordinate with the Company in marketing non-deal road shows with existing and potential investors, and (vi) provide such other financial advisory services upon which the parties may mutually agree (hereafter collectively referred to as the “Advisory Services”).  It is expressly understood and agreed that Sapinda shall be required to perform only those Advisory Services (i) as may be deemed necessary or desirable by the Company in connection with its engagement hereunder and therefore may not perform all of the tasks enumerated above during the term of the Advisory
Agreement and (ii) which do not require any banking, broker-dealer, financial adviser, or financial services license in the United States, Germany, United Kingdom or elsewhere.  Moreover, it is understood that Sapinda’s tasks may not be limited to those enumerated in this paragraph, and that any additional services requested by the Company will be contemplated under a separate agreement. In no event shall Sapinda be obligated to offer, place or distribute any securities in the United States or to United States’ persons. Nothing in this Advisory Agreement is intended to be or shall constitute a commitment or obligation by Sapinda or any of its affiliates to provide any financing or debt or equity capital to the Company.

  

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3.           Information.

 

(a)           In connection with Sapinda’s rendering the Advisory Services hereunder, the Company will cooperate with Sapinda and furnish Sapinda upon request with all information regarding the business, operations, properties, financial condition, management and prospects of the Company (all such information so furnished being the “Information”) which Sapinda deems appropriate and will provide Sapinda with access to the Company’s officers, directors, employees, independent accountants and legal counsel.

(b)           The Company represents and warrants to Sapinda that all Information made available to Sapinda hereunder will be complete and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements are or will be made.  The Company further represents and warrants that any projections and other forward-looking information provided by it to Sapinda will have been prepared in good faith and will be based upon assumptions which, in light of the
circumstances under which they are made, are reasonable.  The Company recognizes and confirms that Sapinda; (i) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Advisory Agreement without having independently verified (ii) does not assume responsibility for the accuracy or completeness of the Information and such other information; and (iii) will not make an appraisal of any assets of the Company.

(c)           Any advice rendered by Sapinda pursuant to this Advisory Agreement may not be disclosed publicly without Sapinda’s prior written consent.  Sapinda hereby acknowledges that certain of the Information received by Sapinda may be confidential and/or proprietary, including Information with respect to the Company’s technologies, products, business plans, marketing, and other Information which must be maintained by Sapinda as confidential.  Sapinda agrees that it will not disclose such confidential and/or proprietary Information to any other companies in the industry in which the Company is involved
and which have been identified by the Company to Sapinda in writing.  Sapinda will not make any representations regarding the Company that are not contained in the Information provided by the Company.  Sapinda will not disclose to any third party any information it receives from the Company that is deemed by the Company to contain material non-public information.

 

(d)           Within 30 days after the date of this Agreement, the Company may request that Sapinda (i) return to Company all documents or copies (regardless of the form thereof) of documents that Company provided to Sapinda and, subject to Section (e), below, all work papers, reports or other documents Sapinda prepared during the Term of this Agreement, or (ii) destroy such materials (including all copies thereof, regardless of the form thereof, whether paper, electronic or otherwise).  If Company does not timely request one of these options for disposition of materials, Sapinda may elect either
option.  Notwithstanding the forgoing, Sapinda will have the right to retain a copy of Sapinda’s reports and work papers for internal use.

  

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(e)           Upon full payment of all amounts due to Sapinda in connection with this Advisory Agreement, all right, title and interest in any deliverables Sapinda provides to Company will become Company’s sole and exclusive property, except as set forth below.  Sapinda will retain sole and exclusive ownership of all right, title and interest in its work papers, proprietary information, processes, methodologies and know how, including such information as existed prior to the delivery of the Advisory Services and, to the extent such information is of general
application, anything which Sapinda may discover, create or develop during the provision of the Advisory Services.

 

4.           Indemnification.

(a)           Company agrees that Sapinda and the Indemnified Persons (as such term is defined below) will not have any liability to Company or any other person in connection with, related to or arising out of, this Agreement, including the Services to be provided hereunder, except (i) in connection with any willful breach by Sapinda or any Indemnified Person of its obligations under Sections 3(a) through 3(d), or 8 hereof or (ii) in connection with any loss, claim, damage or liability to Company, and any action in respect thereof, that results from or arises as a result of
any gross negligence, fraud, bad faith or willful misfeasance of Sapinda or any Indemnified Person or any affiliate thereof.  To the fullest extent permitted by applicable law, Company shall indemnify and hold harmless Sapinda and its advisors, managing principals, principals, directors, employees, affiliates, and each of their respective members, managers, directors, officers, employees, counsel, agents, representatives, contractors and affiliates (each such individual or entity to be referred to hereinafter as an “Indemnified Person”), from and against any loss, claim, damage or liability, joint or several, and any action in respect thereof, whether or not involving a third party, to which
an Indemnified Person may be subject, insofar as such loss, claim, damage, liability or action relates to, arises out of or results from any Covered Event (as such term is defined below) or alleged Covered Event, and will reimburse such Indemnified Person upon request for all expenses (including, without limitation, reasonable attorneys' fees and disbursements) incurred by such Indemnified Person in connection with investigating, defending or preparing to defend against any such loss, claim, damage, liability or action, as such expenses are incurred or paid; provided, however, that Company shall not be obligated to indemnify or hold harmless Sapinda or any Indemnified Person for any loss, claim, damage, liability or action that results from or arises as a result of any gross negligence, fraud, bad faith or willful misfeasance of Sapinda or any Indemnified Person or any affiliate
thereof.  The term “Covered Event” shall mean (a) any action taken, or services performed, by an Indemnified Person, related to or consistent with the Services or the terms of this Agreement, or (b) any action taken, or omitted to be taken, by Company or any of its managers, directors, officers, employees or agents, in connection with any matter in which an Indemnified Person has been involved pursuant to this Agreement.

(b)           Limitation of Liability. In no event shall Sapinda be liable to Company for any indirect, special, incidental, consequential, punitive or exemplary damages, even if Sapinda has been advised of the possibility of such damages.

  

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5.            Compensation.

 

As compensation for the Advisory Services, Company agrees to pay to Sapinda the following fees:

 

(a)            Retainer.  Sapinda acknowledges the receipt of a cash non-refundable retainer (“Retainer”) of Four Hundred Twenty-five Thousand dollars ($425,000), together with approximately $1,000 of costs, previously paid by the Company.  The Company acknowledges that there are no additional invoices or claims relating to prior understandings or agreements that are not covered by the Retainer described in this Section 5(a).

 

(b)            Financial Advisory Fee.  With respect to completion of the Financing Transaction with any investor(s) introduced to the Company by Sapinda (“Completed Financing”), Company agrees to pay Sapinda a financial advisory fee (“Financial Advisory Fee”)
equal to Six Hundred Fifty Three Thousand Seven Hundred and Fifty dollars ($653,750).  The Company confirms the receipt of $2,000,000 equity in April 2011, $1,467,000 equity in June 2011, $3,500,000 equity in July 2011, and $1,000,000 on September 23, 2011 under this Advisory Agreement. Sapinda confirms that it has received the Financial Advisory Fees due for these respective amounts.  Sapinda will receive the entire Financial Advisory Fee only upon completion of the Completed Financing.

 

(c)            Penalty Fee.  In the event that Completed Financing cannot be achieved by December 31, 2011, Sapinda shall immediately return to Company an amount of shares of Series D Preferred Stock of SecureAlert equal to 2,550 divided by $13,000,000 and multiplied by the difference between $13,000,000 and the amount of equity invested into the Company between March 1, 2011 and December 31, 2011 by any Investor(s) introduced to the Company by Sapinda (the
“Funded Amount”):2,550 / $13,000,000 * ($13,000,000 – Funded Amount)

 

(d)            Equity Fee.  Sapinda acknowledges receipt prior to the execution of this Advisory Agreement of an Equity Fee previously paid by the Company to Sapinda through the issuance of 655 shares of the Company’s Series D Convertible Preferred Stock in April 2011 and of 2,550 shares of the Company’s Series D Convertible Preferred Stock in August 2011.

 

(e)            For the avoidance of doubt and with the exception of aforementioned Penalty Fee, the Company and Sapinda confirm that any Retainer, Financial Advisory Fee, Equity Fee or similar fee previously paid by Company to Sapinda shall not be reimbursable to Company under any circumstances and shall not be credited against the Financial Advisory Fee.

 

           6.           Expenses.  The Company shall reimburse Sapinda all reasonable out-of-pocket expenses (including without limitation, fees and disbursements and all travel and out of pocket expenses) incurred by Sapinda in connection with the Advisory Services, provided that Sapinda will obtain Company’s prior written approval for any expense or combination
of expenses in excess of $1,000.00.  Pre-approval of expense may be authorized by the Chief Executive Officer or the Chief Financial Officer; provided, however, that Sapinda shall submit to the Board of the Company a schedule of estimated expenses with a description of the expense.  Each party is responsible for the payment of its own legal counsel in connection with the negotiation and preparation of this Advisory Agreement. Sapinda is responsible for the payment of its employees, consultants and other professionals or affiliates providing Advisory Services under this Agreement. Nothing in this Agreement shall be construed to create any contractual relationship between Company and any subcontractor or consultant of Sapinda, nor any obligation on the part of Company to pay or to see to the
payment of any money due any subcontractor or consultant as may otherwise be required by law.

  

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7.           Future Rights. To the extent the Financial Transaction shall be fully consummated the Company and Sapinda may mutually agree to continue their relationship.

8.           Other Activities.  Company acknowledges and agrees that Sapinda may provide independent advisory services to other entities, including those in the same industry as Company.  Sapinda shall identify those entities in writing to the Company to the extent that those entities pursue business in the same industry as Company. Sapinda acknowledges and agrees that the Company may engage other financial advisors. Sapinda acknowledges and agrees that
Company may independently raise capital for which Sapinda will not receive credit under this Agreement if the investor(s) making such investment have not been introduced to Company by Sapinda.

 

9.           Non-Solicitation.  During the term of this Advisory Agreement and for a period of twenty-four (24) months after the Termination Date, each party will not, without prior written consent of the other party, hire or attempt to hire any current or former employee of the other party or its subsidiaries or affiliates, who is or was involved in the
performance of the Advisory Services hereunder.

 

10.         Publicity.  Each party agrees not to use the name of the other party or any of its affiliated companies in any sales or marketing publication or advertisement or make any public disclosure except as may be legally required, relating to this Advisory Agreement or the other party or any of its affiliated companies, without obtaining the prior written consent of the other party.  Specifically, Company shall not release or publish any news release, advertising or other public announcement
relating to this Advisory Agreement or to the transactions contemplated herein without Sapinda’s prior review and written approval.  In addition, Company shall not use Sapinda’s corporate name, logos, trademarks or service marks without Sapinda’s prior written authorization.  Company agrees that it shall not, and shall cause its subsidiaries to not, engage in any conduct that could reasonably be expected to bring Sapinda into public disrepute, contempt, scandal or ridicule, or which might tend to reflect unfavorably on Sapinda or Sapinda’s personnel.  Sapinda agrees that it shall not, and shall cause its affiliates to not, engage in any conduct that could reasonably be expected to bring the Company into public disrepute, contempt, scandal or ridicule, or which might tend to reflect unfavorably on the Company, its affiliates and
personnel, or its business.

 

11.         Termination; Survival of Provisions.  The term of this Advisory Agreement shall be through December 31, 2011.  In the event that Sapinda has not completed the Financial Transaction by raising a total of $13,000,000 it shall not receive any further compensation from the Company under this Agreement.  Notwithstanding the foregoing, either Sapinda or the Company may terminate this Advisory Agreement in the event of a breach by the other
party by observing a notice period of fifteen (15) days to the end of a calendar month (the “Termination Date”).  In the event of such termination prior to the completion of the term, the Company shall pay and deliver to Sapinda all authorized out-of-pocket expenses of Sapinda in connection with the Advisory Services hereunder, as provided in Section 6 incurred prior to and through the Termination Date.  Sapinda shall be paid its Financial Advisory Fees payable pursuant to Section
5 to the extent the same have been earned prior to and through the Termination Date. Moreover, irrespective of when this Advisory Agreement is terminated, the compensation pursuant to Section 5 shall also be payable to Sapinda in the event that Sapinda would have earned the right to receive any compensation pursuant to Section 5 within a period of twelve (12) months following the termination date had such termination not occurred and only to the extent that Sapinda can prove that it has communicated with the Investor(s) making an investment after the termination date about the Company. Notwithstanding an actual or purported termination of this Advisory Agreement, the terms and provisions of Section 4, 5, 6, 7, 8,
9, 10, 11, 12, 13, 14 and 16 shall survive the termination of this Advisory Agreement.

  

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12.           Notices.  All notices provided hereunder shall be given in writing and either delivered personally or by overnight courier service or sent by certified mail, return receipt requested, or by facsimile transmission, if to Sapinda, to:

                      Sapinda UK Limited

                      Attn.: Mr. Lars Windhorst

                      25 Park Lane

                      London W1K 1RA

                      United Kingdom

And if to the Company, to:

                      SecureAlert, Inc.

                      Attn.: John L. Hastings, III, CEO and President

                      140 West Civic Center Drive, Suite 400

                      Sandy, Utah 84070

                      USA

Any notice delivered personally or by fax shall be deemed given upon receipt (with confirmation of receipt required in the case of fax transmissions); any notice given by overnight courier shall be deemed given on the next business day after delivery to the overnight courier, and any notice given by certified mail shall be deemed given upon the second business day after certification thereof.

           13.           Governing Law; Jurisdiction; Waiver of Jury Trial.  This Advisory Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein, without regard to conflicts of law principles.  Company and Sapinda irrevocably submit to the exclusive jurisdiction of any court of the State of Utah or the federal courts located in New York for the purpose of any
suit, action or other proceeding arising out of this Advisory Agreement, or any of the agreements or transactions contemplated hereby, which is brought by or against the Company, and agrees that service of process in connection with any such suit, action or proceeding may be made upon the Company in accordance with Section 12 hereof.  THE PARTIES HEREBY EXPRESSLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING UNDER THE ADVISORY AGREEMENT.

           14.           Amendments.  This Advisory Agreement may not be modified or amended except in writing duly executed by the parties hereto.

           15.           Headings.  The section headings in the Advisory Agreement have been inserted as a matter of reference and are not part of the Advisory Agreement.

           16.           Successors and Assigns.  The benefits of this Advisory Agreement shall inure to the parties hereto, their respective successors and assigns and to the indemnified parties hereunder and their respective successors and assigns, and the obligations and liabilities assumed in this Advisory Agreement shall be binding upon the parties hereto and their respective successors and assigns.  Notwithstanding anything contained herein to the contrary,
neither Sapinda nor the Company shall assign any of its obligations hereunder without the prior written consent of the other party, provided however that Sapinda shall be entitled to transfer its right and duties under this Advisory Agreement to any other legal entity.

 

  

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           17.           No Third Party Beneficiaries.  This Advisory Agreement does not create, and shall not be construed as creating, any right enforceable by any person or entity not a party hereto, except those entitled to the benefits of the Indemnification Provisions.  Without limiting the foregoing, the Company acknowledges and agrees that Sapinda is not being engaged as, and shall not be deemed to be an agent or fiduciary of the Company’s stockholders
or creditors or any other person by virtue of this Advisory Agreement or the retention of Sapinda hereunder, all of which are hereby expressly waived.

           18.           Waiver. Any waiver or any breach of any of the terms or conditions of this Advisory Agreement shall not operate as a waiver of any other breach of such terms or conditions or of any other term or condition, nor shall any failure to insist upon strict performance or to enforce any provision hereof on any one occasion operate as a waiver of such provision or of any other provision hereof or a waiver of the right to insist upon strict performance or to enforce
such provision or any other provision on any subsequent occasion.  Any waiver must be in writing.

           19.           Counterparts.  This Advisory Agreement may be executed in any number of counterparts and by facsimile transmission, each of which shall be deemed to be an original instrument, but all of which taken together shall constitute one and the same agreement.  Facsimile signatures shall be deemed to be original signatures for all purposes.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]

  

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THE parties acknowledge their acceptance and agreement of this Advisory Agreement by their execution this 4th day of October 2011.

Sapinda UK Limited

By:   /s/  Lars Windhorst

Name and Title: Lars Windhorst, Managing Director

 

SecureAlert, Inc.

By: /s/  John L. Hastings, III

Name and Title:  Mr. John Hastings, Chief Executive Officer and President

 

8Exhibit 10.10

 

 

	
 
    	
June 1, 2011
    

 

STRICTLY CONFIDENTIAL

 

OncoSec Medical Incorporated

200 South Virginia St. 8th Floor

Reno, NV  89501

 

Dear Mr. Dhillon:

 

This letter (the “Agreement”) constitutes the agreement between OncoSec Medical Incorporated (the “Company”) and Rodman & Renshaw, LLC (“Rodman”) that Rodman shall serve as the exclusive lead placement agent (the “Services”) for the Company, on a reasonable best efforts basis, in connection with the proposed offer and placement (the “Offering”) by the Company of securities of the Company (the “Securities”). The terms of the Offering and the Securities shall be mutually agreed upon by the Company and the investors and nothing herein implies that Rodman would have the power or authority to bind the Company or an obligation for the Company to issue any Securities or complete the Offering.  The Company expressly acknowledges and agrees that the execution of this Agreement does not constitute a commitment by Rodman to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of Rodman with respect to securing any other financing on behalf of the Company.  The parties further acknowledge and agree that Roth Capital Partners, LLC (“Roth”) may serve as the co-placement agent for the Company for the Offering.

 

A.            Fees and Expenses.  In connection with the Services described above, the Company shall pay to Rodman the following compensation:

 

1.     Placement Agent’s Fee.  The Company shall pay a cash placement fee (the “Placement Agent’s Fee”) equal to 6% of the aggregate purchase price paid by each purchaser of Securities that are placed in the Offering.  The Placement Agent’s Fee shall be paid at the closing of the Offering (the “Closing”) from the gross proceeds of the Securities sold, payable as follows:

 

(A)                  3% payable to Rodman and 3% payable to Roth of the aggregate purchase price paid by each purchaser of Securities that are placed in the Offering up to $10 million; and

 

(B)                   6% payable to Rodman of the aggregate purchase price paid by each purchaser of Securities that are placed in the Offering that is in excess of $10 million.

 

2.     Warrants.  As additional compensation for the Services, the Company shall issue:

 

(A)                  to Rodman or its designees at the Closing warrants (the “Rodman Warrants”) to purchase that number of shares of common stock of the Company (“Shares”) equal to (i) 3% of the aggregate number of Shares placed in the Offering (but excluding any warrants issued to purchasers in the Offering) for the aggregate number of Shares that equal up to $10 million in aggregate purchase price and (ii) 6% of the aggregate number of Shares placed in the Offering (but excluding any warrants issued to purchasers in the Offering) for the aggregate number of Shares that equal in excess of $10 million in the aggregate; and

 

Rodman & Renshaw, LLC · 1251 Avenue of the Americas, 20th Floor, New York, NY 10020

Tel: 212 356 0500 · Fax: 212 581 5690 · www.rodm.com · Member: FINRA, SIPC

 

 

(B)                   to Roth or its designees at the Closing warrants (the “Roth Warrants,” and together with the Rodman Warrants, the “Placement Agent Warrants”) to purchase that number of Shares equal to 3% of the aggregate number of Shares placed in the Offering (but excluding any warrants issued to purchasers in the Offering) for the aggregate number of Shares that equal up to $10 million in the aggregate.

 

The Placement Agent Warrants shall have the same terms, including exercise price and registration rights, as the warrants issued to investors (“Investors”) in the Offering.  If no warrants are issued to Investors, the Placement Agent Warrants shall have an exercise price equal to 110% of the price at which Shares are issued to Investors or, if no Shares are issued, 110% of the current market price of the Shares at Closing, an exercise period of five years and registration rights for the Shares underlying the Placement Agent Warrants equivalent to those granted with respect to the Securities.

 

3.     Expenses.  In addition to any fees payable to Rodman hereunder, but only if an Offering is consummated, the Company hereby agrees to reimburse Rodman for all reasonable travel and other out-of-pocket expenses incurred in connection with Rodman’s engagement, including the reasonable fees and expenses of Rodman’s counsel.   Such reimbursement shall be limited to $30,000 without prior written approval by the Company and shall be paid at the Closing from the gross proceeds of the Securities sold (provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).

 

B.            Term and Termination of Engagement.  The term (the “Term”) of Rodman’s engagement will begin on the date hereof and end on the earlier of the consummation of the Offering or 10 days after the receipt by either party hereto of written notice of termination; provided that no such notice may be given by the Company for a period of 25 days after the date hereof. Notwithstanding anything to the contrary contained herein, the provisions concerning indemnification, contribution and the Company’s obligations to pay fees and reimburse expenses contained herein will survive any expiration or termination of this Agreement.

 

C.            Fee Tail.  Rodman shall be entitled to a Placement Agent’s Fee and Rodman Warrants, calculated in the manner provided in Paragraph A, with respect to any public or private offering or other financing or capital-raising transaction of any kind (“Tail Financing”) within 9 months after the expiration or termination of this Agreement, to the extent that such financing or capital is provided to the Company by any of the [NUMBER] investors introduced to the Company by Rodman and set forth on Schedule 1(A)(C) delivered by Rodman to the Company at the earlier of the closing of the Offering or the termination of this Agreement.

 

D.            Use of Information.  The Company will furnish Rodman such written information as Rodman reasonably requests in connection with the performance of its services hereunder.  The Company understands, acknowledges and agrees that, in performing its services hereunder, Rodman will use and rely entirely upon such information as well as publicly available information regarding the Company and other potential parties to an Offering and that Rodman does not assume responsibility for independent verification of the accuracy or completeness of any information, whether publicly available or otherwise furnished to it, concerning the Company or otherwise relevant to an Offering, including, without limitation, any financial information, forecasts or projections considered by Rodman in connection with the provision of its services.

 

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E.             Publicity.  In the event of the consummation or public announcement of any Offering, Rodman shall have the right to disclose its participation in such Offering, including, without limitation, the placement at its cost of “tombstone” advertisements in financial and other newspapers and journals.

 

F.             Securities Matters.  The Company shall be responsible for any and all compliance with the securities laws applicable to it, including Regulation D and the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, and unless otherwise agreed in writing, all state securities (“blue sky”) laws. Rodman agrees to cooperate with counsel to the Company in that regard.

 

G.            Indemnity.

 

1.     In connection with the Company’s engagement of Rodman as placement agent, the Company hereby agrees to indemnify and hold harmless Rodman and its affiliates, and the respective controlling persons, directors, officers, members, shareholders, agents and employees of any of the foregoing (collectively the “Indemnified Persons”), from and against any and all claims, actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, (collectively a “Claim”), that are (A) related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s engagement of Rodman, or (B) otherwise relate to or arise out of Rodman’s activities on the Company’s behalf under Rodman’s engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified Person is a party.  The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted from the gross negligence or willful misconduct of any person seeking indemnification for such Claim.  The Company further agrees that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of Rodman except for any Claim incurred by the Company as a result of such Indemnified Person’s gross negligence or willful misconduct.

 

2.     The Company further agrees that it will not, without the prior written consent of Rodman, settle, compromise or consent to the entry of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.

 

3.     Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses.  If the Company so elects or is requested by such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel reasonably satisfactory to such Indemnified Person and the payment of the fees and expenses of such counsel. In the event, however, that legal counsel to such Indemnified Person reasonably determines that having common counsel would present such counsel with a conflict of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses available to it or other Indemnified Persons

 

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different from or in addition to those available to the Company, then such Indemnified Person may employ its own separate counsel to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel.  Notwithstanding anything herein to the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any Claim, the relevant Indemnified Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof.  In addition, with respect to any Claim in which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her or its own counsel therefor at his, her or its own expense.

 

4.     The Company agrees that if any indemnity sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason then (whether or not Rodman is the Indemnified Person), the Company and Rodman shall contribute to the Claim for which such indemnity is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and Rodman on the other, in connection with Rodman’s engagement referred to above, subject to the limitation that in no event shall the amount of Rodman’s contribution to such Claim exceed the amount of fees actually received by Rodman from the Company pursuant to Rodman’s engagement.  The Company hereby agrees that the relative benefits to the Company, on the one hand, and Rodman on the other, with respect to Rodman’s engagement shall be deemed to be in the same proportion as (a) the total value paid or proposed to be paid or received by the Company or its stockholders as the case may be, pursuant to the Offering (whether or not consummated) for which Rodman is engaged to render services bears to (b) the fee paid or proposed to be paid to Rodman in connection with such engagement.

 

5.     The Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise adversely affect any rights that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not the Company is at fault in any way.

 

H.            Limitation of Engagement to the Company.  The Company acknowledges that Rodman has been retained only by the Company, that Rodman is providing services hereunder as an independent contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement of Rodman is not deemed to be on behalf of, and is not intended to confer rights upon, any shareholder, owner or partner of the Company or any other person not a party hereto as against Rodman or any of its affiliates, or any of its or their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), employees or agents.  Unless otherwise expressly agreed in writing by Rodman, no one other than the Company is authorized to rely upon this Agreement or any other statements or conduct of Rodman, and no one other than the Company is intended to be a beneficiary of this Agreement.  The Company acknowledges that any recommendation or advice, written or oral, given by Rodman to the Company in connection with Rodman’s engagement is intended solely for the benefit and use of the Company’s management and directors in considering a possible Offering, and any such recommendation or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used or relied upon for any other purpose.  Rodman shall not have the authority to make any commitment binding on the Company.  The Company, in its sole discretion, shall have the right to reject any investor introduced to it by Rodman.  The Company agrees that it will perform and comply with the covenants and other obligations set forth in the purchase agreement and related transaction documents between the Company and the investors in the Offering, and that Rodman will be entitled to rely on the representations, warranties, agreements and covenants of the Company contained in such purchase agreement and related

 

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transaction documents as if such representations, warranties, agreements and covenants were made directly to Rodman by the Company.

 

I.              Limitation of Rodman’s Liability to the Company.  Rodman and the Company further agree that neither Rodman nor any of its affiliates or any of its or their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents shall have any liability to the Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating to this Agreement or the Services rendered hereunder, except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by Rodman and that are finally judicially determined to have resulted solely from the gross negligence or willful misconduct of Rodman.

 

J.             Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein.  Any disputes that arise under this Agreement, even after the termination of this Agreement, will be heard only in the state or federal courts located in the City of New York, State of New York.  The parties hereto expressly agree to submit themselves to the jurisdiction of the foregoing courts in the City of New York, State of New York. The parties hereto expressly waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City and State of New York.  In the event of the bringing of any action, or suit by a party hereto against the other party hereto, arising out of or relating to this Agreement, the party in whose favor the final judgment or award shall be entered shall be entitled to have and recover from the other party the costs and expenses incurred in connection therewith, including its reasonable attorneys’ fees.  Any rights to trial by jury with respect to any such action, proceeding or suit are hereby waived by Rodman and the Company.

 

K.            Notices.  All notices hereunder will be in writing and sent by certified mail, hand delivery, overnight delivery or fax, if sent to Rodman, to the address set forth on the first page hereof, fax number (646) 841-1640, Attention: General Counsel, and if sent to the Company, to the address on the first page hereof, fax number                     , Attention:                                             .  Notices sent by certified mail shall be deemed received five days thereafter, notices sent by hand delivery or overnight delivery shall be deemed received on the date of the relevant written record of receipt, and notices delivered by fax shall be deemed received as of the date and time printed thereon by the fax machine.

 

L.             Miscellaneous.  The Company represents that it is free to enter into this Agreement and the transactions contemplated hereby, that it will act in good faith, and that it will not hinder Rodman’s efforts hereunder.  This Agreement shall not be modified or amended except in writing signed by Rodman and the Company.  This Agreement shall be binding upon and inure to the benefit of Rodman and the Company and their respective assigns, successors, and legal representatives.  This Agreement constitutes the entire agreement of Rodman and the Company, and supersedes any prior agreements, with respect to the subject matter hereof.  If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect, and the remainder of the Agreement shall remain in full force and effect.  This Agreement may be executed in counterparts (including facsimile or .pdf counterparts), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

5

 

In acknowledgment that the foregoing correctly sets forth the understanding reached by Rodman and the Company, please sign in the space provided below, whereupon this letter shall constitute a binding Agreement as of the date indicated above.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
RODMAN & RENSHAW,   LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ John Borer
    
	
 
    	
 
    	
Name: John Borer
    
	
 
    	
 
    	
Title: Senior Managing Director
    
	
 
    	
 
    
	
Accepted and Agreed:
    	
 
    
	
 
    	
 
    
	
ONCOSEC MEDICAL INCORPORATED
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By
    	
/s/ Punit Dhillon
    	
 
    	
 
    
	
 
    	
Name: Punit Dhillon
    	
 
    	
 
    
	
 
    	
Title: Chief Executive Officer
    	
 
    	
 
    

 

6

 

 

Schedule 1

 

Antecip Capital

Aspire Capital Partners

Ayer Capital Management

Broadfin Capital

CLS Capital

DAFNA Capital Management

Deerfield Management

Downsview Capital, Inc. (Cranshire Capital)

Empery Asset Management

Great Point Partners

Heights Capital Management

Highbridge Capital Management

Highland Capital Management

Hudson Bay Capital Management

Iroquois Capital Management

Jennison Associates

Kingsbrook Partners

LH Financial Services

Manatuck Hill Partners

Medical Strategy GmbH

Merlin BioMed Group

Opus Point Partners

Palo Alto Investors

Perceptive Advisors

Quogue Capital

QVT Financial

RA Capital Management

Rosalind Capital Partners

Silver Back Asset Management

Tang Capital Management

Thomas McNerny & Partners

 

1251 Avenue of the Americas, 20th Floor, New York, NY 10020 · Tel: 212 356 0500 Fax: 212 356 0536
 www.rodm.com · Member: FINRA, SIPC

 

 

 

	
 
    	
June 21, 2011
    

 

STRICTLY CONFIDENTIAL

 

OncoSec Medical Incorporated

200 South Virginia St. 8th Floor

Reno, NV  89501

 

Dear Mr. Dhillon:

 

Reference is made to that certain letter agreement (“Letter Agreement”), dated June 1, 2011, by and between OncoSec Medical Incorporated (the “Company”) and Rodman & Renshaw, LLC (“Rodman”) pursuant to which Rodman shall serve as the exclusive lead placement agent (the “Services”) for the Company, on a reasonable best efforts basis, in connection with the proposed offer and placement (the “Offering”) by the Company of securities of the Company (the “Securities”).  The Company and Rodman hereby agree to amend and restate Section A.1. and Section A.2. of the Letter Agreement as follows:

 

“A.          Fees and Expenses.  In connection with the Services described above, the Company shall pay to Rodman the following compensation:

 

1.             Placement Agent’s Fee.  The Company shall pay a cash placement fee (the “Placement Agent’s Fee”) equal to 6% of the aggregate purchase price paid by each purchaser of Securities that are placed in the Offering.  The Placement Agent’s Fee shall be paid at the closing of the Offering (the “Closing”) from the gross proceeds of the Securities sold, payable as follows:

 

(A)                  3.6% payable to Rodman and 2.4% payable to Roth of the aggregate purchase price paid by each purchaser of Securities that are placed in the Offering up to $10 million; and

 

(B)                  6% payable to Rodman of the aggregate purchase price paid by each purchaser of Securities that are placed in the Offering that is in excess of $10 million.

 

2.             Warrants.  As additional compensation for the Services, the Company shall issue:

 

(A)         to Rodman or its designees at the Closing warrants (the “Rodman Warrants”) to purchase that number of shares of common stock of the Company (“Shares”) equal to (i) 3.6% of the aggregate number of Shares placed in the Offering (but excluding any warrants issued to purchasers in the Offering) for the aggregate number of Shares that equal up to $10 million in aggregate purchase price and (ii) 6% of the aggregate number of Shares placed in the Offering (but excluding any warrants issued to purchasers in the Offering) for the aggregate number of Shares that equal in excess of $10 million in the aggregate; and

 

Rodman & Renshaw, LLC · 1251 Avenue of the Americas, 20th Floor, New York, NY 10020

Tel: 212 356 0500 · Fax: 212 581 5690 · www.rodm.com · Member: FINRA, SIPC

 

 

(B)                  to Roth or its designees at the Closing warrants (the “Roth Warrants,” and together with the Rodman Warrants, the “Placement Agent Warrants”) to purchase that number of Shares equal to 2.4% of the aggregate number of Shares placed in the Offering (but excluding any warrants issued to purchasers in the Offering) for the aggregate number of Shares that equal up to $10 million in the aggregate.  The Placement Agent Warrants shall have the same terms, including exercise price and registration rights, as the warrants issued to investors (“Investors”) in the Offering.  If no warrants are issued to Investors, the Placement Agent Warrants shall have an exercise price equal to 110% of the price at which Shares are issued to Investors or, if no Shares are issued, 110% of the current market price of the Shares at Closing, an exercise period of five years and registration rights for the Shares underlying the Placement Agent Warrants equivalent to those granted with respect to the Securities.”

 

The Company represents that it is free to enter into this Agreement and the transactions contemplated hereby.  This Agreement shall not be modified or amended except in writing signed by Rodman and the Company.  This Agreement shall be binding upon and inure to the benefit of Rodman and the Company and their respective assigns, successors, and legal representatives.  This Agreement constitutes the entire agreement of Rodman and the Company, and supersedes any prior agreements, with respect to the subject matter hereof.  If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect, and the remainder of the Agreement shall remain in full force and effect.  This Agreement may be executed in counterparts (including facsimile or .pdf counterparts), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

Notwithstanding any of the foregoing, all other provisions of the Letter Agreement and all rights and obligations thereunder between Rodman and the Company, shall remain the same as of the date of execution of the Letter Agreement.

 

In acknowledgment that the foregoing correctly sets forth the understanding reached by Rodman and the Company, please sign in the space provided below, whereupon this letter shall constitute a binding agreement as of the date indicated above.

 

	
 
    	
 
    	
Very   truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
RODMAN & RENSHAW, LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ John Borer
    
	
 
    	
 
    	
 
    	
Name:   John Borer
    
	
 
    	
 
    	
 
    	
Title:   Senior Managing Director
    
	
 
    	
 
    	
 
    
	
Accepted   and Agreed:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ONCOSEC   MEDICAL INCORPORATED
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/ Punit Dhillon
    	
 
    	
 
    
	
 
    	
Name:   Punit Dhillon
    	
 
    	
 
    
	
 
    	
Title:   Chief Executive Officer
    	
 
    	
 
    

 

2

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