BENTLEY SECURITIES CORPORATION
000
Xxxx
Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
xxx.xxxxxxxxx.xxx
___________________
Tel:
(000) 000-0000
Fax:
(000) 000-0000
November
11, 2005
Opticon
Systems,Inc.
00000
Xxxxx Xxxxxx Xxxxxxx
Attn: Xx.
Xxxx
X. Xxxxxx
President
This
letter agreement (the “Agreement”) confirms the engagement of Bentley Securities
Corporation, and its affiliates ("Bentley") by Opticon Systems, Inc. and its
subsidiaries and any affiliates created for the purposes of effecting a
Financing (the “Company”) to act as exclusive financial advisor and placement
agent (the “Engagement”) to use its best efforts to arrange equity capital or
such other form of financing or commitments for financing as the Company deems
appropriate (the “Financing” or the “Financing Commitment”) for the purpose of
providing expansion capital for the Company to complete development of its
fiber
optic management suite of solutions. The Financing or Financing Commitment
could
be effected in various legal structures, including but not limited to a
development fund, a partnership, an investment in a current or to-be-formed
subsidiary or affiliate of the Company, or other structures. Bentley will seek
such financing or financing commitments from institutional investors. For the
purpose of this Agreement, the term Financing or Financing Commitment refers
to
any Financing whether effected in one transaction or in a series of
transactions. In
the
event the Company is combined with another entity (whether by merger,
consolidation, reorganization or otherwise), the new entity shall assume the
obligations of the Company under this Agreement.
Bentley’s
role as financial advisor shall include (but is not limited to): (i) performing
additional work to gain a more complete understanding of the Company with
particular attention to the assumptions underlying its financial projections
in
order to represent the Company effectively in discussions with prospective
investors; (ii) assisting the Company in the preparation of its Information
Memorandum to be used in presenting the Company’s investment opportunity to
prospective investors; (iii) identifying, contacting and where it deems
appropriate, introducing the Company to potential investors for the Company;
(iv) participating with and on behalf of the Company in meetings and subsequent
negotiations with interested investors; (v)
providing assistance and advice with respect to negotiating with all parties
involved in a Financing including
reviewing the preliminary and final documentation relating to such Transaction
and
(vi)
assisting in the closing of a Financing.
The
Company will furnish Bentley with such information as Bentley believes
appropriate to its assignment under this Agreement (all such information so
furnished being the "Information"). The Company recognizes and confirms that
Bentley: (i) will be using and relying primarily on the Information furnished
to
it by the Company in connection with Bentley's activities hereunder and on
information from generally recognized public sources without having
independently verified same and (ii) does not assume responsibility for the
accuracy or completeness of the Information and such other
information.
The
term
of Bentley’s engagement hereunder (the “Engagement Period”) shall extend for six
months commencing with the signing of this Agreement and will be extended
automatically unless terminated in writing. In the event that the Company
(subject to earlier termination as provided below), closes a Financing or
Financing Commitment within eighteen (18) months after terminating this
Engagement ( the “tail period”) with any Investor in connection with the
Financing then, the Company agrees to pay Bentley the fees described below.
The
term “Investor(s)” is defined to mean (i) any Investor for whom Bentley has
performed services relating to the Financing or Financing Commitment; (ii)
any
Investor introduced by Bentley to the Company for whom Bentley has performed
services relating to the Financing or Financing Commitment; and (iii) any party
formed or affiliated with such Investor(s). A schedule will be furnished to
the
Company by Bentley upon the termination of this agreement containing the names
of all Investors for whom the tail period applies.
Bentley’s
services hereunder may be terminated by the Company or Bentley any time after
three months from the date hereof without liability or continuing obligation
to
the Company or Bentley (except for any compensation earned, obligations under
the “tail period” provisions and expenses incurred by us to the date of
termination) provided that the indemnity provisions will remain operative
regardless of any such termination and provided that the party terminating
shall
give fifteen days written notice of its intention to terminate.
As
compensation for Bentley's services as financial advisor, the Company agrees
to
pay Bentley: (i) upon signing of this Agreement, a non-refundable retainer
of
10,000 warrants (the “Warrants” ) at $1.10/warrant for the first month of the
Engagement and
thereafter
10,000
warrants per month at $1.10/warrant for months two and three, and 6,000 warrants
per month at $1.10/warrant for months four through six;
(ii)
at
a
closing of a Financing
or Financing Commitment,
a
success fee in cash equal
to
six and
one half percent (6.5%)of
the
total gross Financing Commitment.
In
the
event of an alternative transaction, e.g. a sale of control, a merger,
consolidation or sale of a majority of the assets of the Company (an “Alternate
Transaction”) with any third party (the “Third Party”), introduced to the
Company by Bentley, in lieu of the Financing or Financing Commitment
contemplated by this Agreement, pursuant to an agreement executed by the Company
and the Third Party during the Engagement Period (or during the tail period
with
any third party introduced by Bentley to the Company during the Engagement
Period), then Bentley shall receive a contingent fee (an “Alternate Transaction
Fee”) no later than the closing of the Alternate Transaction. The
Alternate Transaction Fee will be a sum of cash equal to three percent (3%)
of
the enterprise value of the Company, as determined by, and just prior to, the
Alternate Transaction.
In
addition, the Company agrees to promptly reimburse Bentley for its out-of-pocket
expenses incurred in connection with Bentley's activities under the Agreement.
Bentley shall not incur expenses under the Agreement without the prior approval
of the Company.
Bentley
will act under the Agreement as an independent contractor with duties solely
to
the Company. Because Bentley will be acting in this capacity, it requires that
the Company enter into an Indemnification Agreement, which is attached hereto
as
Schedule I.
This
Agreement supersedes all prior agreements and understandings, oral or written,
between the parties, and will extend to and bind their respective successors
and
assigns. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. If the foregoing accurately reflects the
understanding between us, please evidence your agreement by executing and
returning to the undersigned the enclosed copy of this Agreement.
Sincerely,
BENTLEY
SECURITIES CORPORATION
By:
Xxxxxx
X.
Xxxxxxx
Managing
Director
Accepted
and Agreed:
OPTICON
SYSTEMS, INC.
By:
Xx.
Xxxx
X. Xxxxxx
President
Schedule
I
Indemnification
Agreement
November
11 , 2005
Bentley
Securities Corporation
000
Xxxx
Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Gentlemen:
In
connection with the engagement of Bentley
Securities Corporation ("Bentley") to advise and assist us with the matters
set
forth in the Agreement dated November 11, 2005 between us and Bentley, we hereby
agree to indemnify and hold harmless Bentley, its affiliated companies including
Bentley Associates LP, and each of Bentley's and such affiliated companies'
respective officers, directors, agents, employees and controlling persons
(within the meaning of each of Section 20 of the Securities Exchange Act of
1934
and Section 15 of the Securities Act of 1933) (each of the foregoing, including
Bentley, being hereinafter referred to as an "Indemnified Person") to the
fullest extent permitted by law from and against any and all losses, claims,
damages, expenses (including reasonable fees, disbursements and other charges
of
counsel), actions (including actions brought by us or our equity holders or
derivative actions brought by any person claiming through us or in our name),
proceedings or investigations (whether formal or informal), or threats thereof
(all of the foregoing being hereinafter referred to as "Liabilities"), based
upon, relating to or arising out of such engagement or any Indemnified Person's
role therein; provided,
however,
that we
shall not be liable under this paragraph: (a) for any amount paid in settlement
of claims without our consent, which consent shall not be unreasonably withheld,
or (b) to the extent that it is finally judicially determined that such
Liabilities resulted primarily from the willful misconduct, bad faith or gross
negligence of the Indemnified Person seeking Indemnification. In connection
with
our obligation to indemnify for expenses as set forth above, we further agree
to
reimburse each Indemnified Person for all such expenses (including reasonable
fees, disbursements and other charges of counsel) as they are incurred by such
Indemnified Person; provided,
however,
that if
an Indemnified Person is reimbursed hereunder for any expenses, such
reimbursement of expenses shall be refunded to the extent it is finally
judicially determined that the Liabilities in question resulted primarily from
the willful misconduct, bad faith or gross negligence of such Indemnified
Person. We hereby also agree that neither Bentley nor any other Indemnified
Person shall have any Liability to us (or anyone claiming through us or in
our
name) in connection with Bentley's engagement by us except to the extent that
such Indemnified Person has engaged in willful misconduct, acted in bad faith
or
been grossly negligent.
Promptly
after Bentley receives notice of the commencement of any action or other
proceeding in respect of which indemnification or reimbursement may be sought
hereunder, Bentley will notify us thereof; but the omission so to notify us
shall not relieve us from any obligation hereunder unless, and only to the
extent that, such omission results in our forfeiture of substantive rights
or
defenses. If any such action or other proceeding shall be brought against any
Indemnified Person, we shall, upon written notice given reasonably promptly
following your notice to us of such
action
or
proceeding, be entitled to assume the defense thereof at our expense with
counsel chosen by us and reasonably satisfactory to the Indemnified Person;
provided,
however,
that
any Indemnified Person may at its own expense retain separate counsel to
participate in such defense. Notwithstanding the foregoing, such Indemnified
Person shall have the right to employ separate counsel at our expense and to
control its own defense of such action or proceeding if, in the reasonable
opinion of counsel to such Indemnified Person, (i) there are or may be legal
defenses available to such Indemnified Person or to other Indemnified Persons
that are different from or additional to those available to us, or (ii) a
conflict or potential conflict exists between us and such Indemnified Person
that would make such separate representation advisable; provided,
however,
that in
no event shall we be required to pay fees and expenses under this indemnity
for
more than one firm of attorneys in any jurisdiction in any one legal action
or
group of related legal actions. We agree that we will not, without the prior
written consent of Bentley, settle or compromise or consent to the entry of
any
judgment in any pending or threatened claim, action or proceeding relating
to
the matters contemplated by Bentley's engagement (whether or not any Indemnified
Person is a party thereto) unless such settlement, compromise or consent
includes an unconditional release of Bentley and each other Indemnified Person
from all liability arising or that may arise out of such claim, action or
proceeding.
If
the
indemnification or reimbursement provided for hereunder is finally judicially
determined by a court of competent jurisdiction to be unavailable to an
Indemnified Person in respect of any Liabilities (other than as a consequence
of
a final judicial determination of willful misconduct, bad faith or gross
negligence of such Indemnified Person), then we agree in lieu of indemnifying
such Indemnified Person, to contribute to the amount paid or payable by such
Indemnified Person as a result of such Liabilities in such proportion as is
appropriate to reflect the relative benefits received, or sought to be received,
by us on the one hand and by such Indemnified Person on the other from the
transactions in connection with which Bentley has been engaged. If the
allocation provided in the preceding sentence is not permitted by applicable
law
or as a result of a final judicial determination of willful misconduct, bad
faith or gross negligence, then we agree to contribute to the amount paid or
payable by such Indemnified Person as a result of such Liabilities in such
proportion as is appropriate to reflect not only the relative benefits referred
to in such preceding sentence but also the relative fault of us and of such
Indemnified Person. Notwithstanding the foregoing, in no event shall the
aggregate amount contributed by the Indemnified Person taking into account
our
contributions as described above exceed the amount of fees actually received
by
Bentley pursuant to such engagement. The relative benefits received or sought
to
be received by us on the one hand and by Bentley on the other shall be deemed
to
be in the same proportion as (a) the total value of the transactions with
respect to which Bentley has been engaged bears to (b) the fees paid or payable
to Bentley with respect to such engagement
The
rights accorded to Indemnified Persons hereunder shall be in addition to any
rights that any Indemnified Person may have at common law, by separate agreement
or otherwise.
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 performed entirely
in
such state. We hereby consent, solely for the purpose of allowing an indemnified
person to enforce its rights hereunder, to personal jurisdiction and service
and
venue in any court in which any claim for which indemnification may be sought
hereunder is brought against Bentley or any other indemnified person.
Bentley
and we also hereby irrevocably waive any right Bentley and we may have to a
trial by jury in respect of any claim based upon or arising out of this
agreement or the transactions contemplated hereby. This agreement may not be
amended or otherwise modified except by an instrument signed by both Bentley
and
us. If any provision hereof shall be determined to be invalid or unenforceable
in any respect, such determination shall not affect such provision in any other
respect or any other provision of this agreement, which shall remain in full
force and effect. If there is more than one indemnitor hereunder, each
indemnifying person agrees that its liabilities hereunder shall be joint and
several.
The
foregoing Indemnification agreement shall remain in effect indefinitely,
notwithstanding any termination of Bentley's engagement.
Sincerely,
OPTICON
SYSTEMS, INC.
By:
Xx.
Xxxx
X. Xxxxxx
President
Acknowledged
and Agreed to:
BENTLEY
SECURITIES CORPORATION
By:
Xxxxxx
X.
Xxxxxxx
Managing
Director
