Exhibit 10.36
May 14, 2002
Xx. Xxxx Xxxxxx
Chairman, President and CEO
On Track Innovations Ltd.
Z.H.R Industrial Zone
Rosh Xxxx, Xxxxxx 12000
Dear Sirs:
This will confirm the understanding and agreement (the "Agreement")
between Rockwood, Inc. ("Rockwood") and On Track Innovations, LTD ("OTI" or "the
Company") as follows:
1. The Company hereby engages Rockwood as the Company's financial advisor
with respect to the Company's continuing review of strategic and
financial planning matters.
2. Xxxxxxxx hereby accepts the engagement and in that connection agrees to:
(a) undertake, in consultation with the Company, a study and
analysis of the business, operations, financial condition and
prospects of the Company;
(b) review with the Company its financial plan and analyze its
strategic plans and business alternatives;
(c) advise, structure and assist the Company with regard to the
listing of its shares on a United States exchange
(d) be available to meet with the Company's Board of Directors to
discuss strategic alternatives and their financial
implications
3. In connection with Xxxxxxxx'x engagement, the Company will furnish
Rockwood with any reasonable information concerning the Company which
Rockwood reasonably deems appropriate and will provide Rockwood with
reasonable access to the Company's officers, directors, accountants,
counsel and other advisors. The Company represents and warrants to
Rockwood that all such information concerning the Company will be true
and accurate 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 made. In addition,
Xxxxxxxx shall be kept fully informed of any events which might have a
material effect on the financial condition of the Company. The Company
acknowledges and agrees that Rockwood will be using and relying upon
such information supplied by the Company and its officers, agents and
others and any other publicly available information concerning the
Company without any independent investigation or verification thereof
or independent appraisal by Rockwood of the Company or its business
assets. If, in Rockwood's opinion after completion of its due diligence
process, the condition of the Company, financial or otherwise, and its
prospects are not substantially as represented or do not fulfill
Rockwood's expectations, Rockwood shall have the sole discretion to
review and determine its continued interest in the Agreement. The
Company further acknowledges and agrees that neither this Agreement nor
any actions taken by Rockwood pursuant to it shall obligate Rockwood to
provide or obtain financing for the Company. Any such agreement shall
only be contained in a separate written agreement executed by the
Company and Rockwood.
June 21, 2002
Page 2
4. As compensation and in consideration for the services to be rendered by
Rockwood hereunder and such other services to be provided by Xxxxxxxx
at the request of the Company, the Company shall pay to Rockwood as
follows:
(a) a six month retainer fee of (i) $37,500 in cash, payable as
follows: $12,500 upon the execution of this agreement, $12,500
upon commencement of trading on a U.S. exchange; $12,500 a
month after commencement of trading on a U.S. exchange and
(ii) 6,000 registered and freely traded shares of the
company's stock to be issued one day following the
commencement of trading on a U.S. exchange
(b) 50,000 five-year warrants to purchase common shares of OTI at
exercise prices listed as follows: 16,000 at an exercise price
equal to the volume weighted average closing bid price of the
OTI shares for the first five trading days on a U.S. exchange
(Volume Weighted Average Price "WVAP"), 17,000 at exercise
price of 120% WVAP and 17,000 at an exercise price of 150% of
WVAP (with customary registration, cashless exercise and price
protection and anti-dilution rights), all 50,000 to be granted
within 10 business days following the fifth trading day of the
OTI shares on a U.S. exchange. OTI may demand exercise of the
warrants by Rockwood upon 30 days prior written notice, if
requested by the lead underwriter of a bona fide follow-on
offering of OTI's common stock and the warrants are in the
money,
(c) this Agreement shall be renewable at the option of both the
Company and Rockwood on a monthly basis for a fee of $10,000
per month, payable up front no later than the first day of
each monthly period for which this Agreement is extended.
5. The Company agrees to reimburse Rockwood from time to time upon request
and upon receipt of appropriate invoices therefor, for all reasonable
out of pocket expenses incurred by Rockwood in connection with this
engagement up to the amount of $20,000, provided, however, that
Xxxxxxxx shall obtain prior written approval for any expenses in excess
of $2,000.
6. Since Xxxxxxxx will be acting on behalf of the Company in connection
with this engagement, the Company agrees to indemnify Xxxxxxxx as set
forth in a separate letter agreement, dated the date hereof, between
Rockwood and the Company.
June 21, 2002
Page 3
7. The Company agrees that Xxxxxxxx has the right to place advertisements
in financial and other newspapers and journals at its own expense
describing their services to the Company hereunder.
8. Subject to the provisions of paragraphs 3 through 7 and 9 through 10
which shall survive any termination of this Agreement, either party may
terminate Xxxxxxxx'x engagement hereunder at any time, with or without
cause, by giving the other party at least 30 days prior written notice.
However, should Rockwood terminate the engagement prior to the
expiration of the initial three-month period then the retainer fee owed
as per paragraph 4(a) would be pro-rated to the actual period of
engagement and no warrants as per paragraph 4(b) would be owed to
Rockwood.
9. The benefits of this Agreement shall, together with the separate
indemnity letter, inure to the benefit of respective successors and
assigns of the parties hereto and of the indemnified parties hereunder
and their successors and assigns and representatives, and the
obligations and liabilities assumed in this Agreement by the parties
hereto shall be binding upon their respective successors and assigns.
10. This Agreement may not be amended or modified except in writing and
shall be governed by and construed in accordance with the laws of the
State of New York, without regard to principles of conflicts of laws.
We are delighted to accept this engagement and look forward to working
with you on this assignment. Please confirm that the foregoing correctly sets
forth our agreement by signing the enclosed duplicate of this letter in the
space provided and returning it, whereupon this letter shall constitute a
binding agreement as of the date first above written.
ROCKWOOD, INC.
By:__________________________________
Xxxxx Xxxxx
Managing Director, Investment Banking
AGREED:
On Track Innovations Ltd
By:__________________________________
Xxxx Xxxxxx
Chairman, President and CEO
ROCKWOOD, INC.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
July ___, 2002
On Track Innovations Ltd.
Z.H.R. Industrial Zone
P.O. Box 32
Rosh Xxxx, 12000 Israel
Ladies and Gentlemen:
This letter will serve as Amendment No. 1 to that certain letter
agreement dated May 14, 2002 (the "Letter Agreement") between Rockwood, Inc.
("Rockwood") and On Track Innovations Ltd. (the "Company"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to them
in the Letter Agreement.
The parties agree that the Letter Agreement is hereby amended as
follows:
Section 4(a) of the Letter Agreement is amended and restated in its
entirety as follows:
"(a) a six month retainer fee of (i) $37,500 in cash, payable
as follows: $12,500 upon the execution of this agreement;
$12,500 upon commencement of trading on a U.S. exchange;
$12,500 on a month after commencement of trading on a U.S.
exchange and (ii) options to acquire 6,000 shares of the
Company's ordinary shares at an exercise price equal to $0.1
per share, such options to expire on July 10, 2007 and such
shares to be included in the Company's F-1 Registration
Statement filed with the United States Securities and Exchange
Commission;"
Except as otherwise set forth herein, the Letter Agreement shall remain
in full force and effect in accordance with its terms.
Please confirm the foregoing by signing below.
Very truly yours,
ROCKWOOD, INC.
By:_______________________
Name:
Title:
AGREED:
ON TRACK INNOVATIONS LTD.
By:__________________________
Name: Xxxx Xxxxxx
Title: Chairman, President & CEO
