Exhibit 10.33
April 15, 2002
Xx. Xxxxxx X. Xxxxxx
President
Ocean Power corporation
5000 Xxxxxx X. Xxxxxxx Xxxx.
Xx Xxxxxx Xxxxx, XX 00000
Re: Engagement Letter
-----------------
Dear Xx. Xxxxxx:
This letter agreement (this "Agreement") confirms Ocean Power
Corporation's (the "Company") engagement of Hyperion Partners Corp. ("Hyperion")
as non-exclusive investment banker and consultant of the Company and sets forth
the terms and conditions pursuant to which Hyperion shall perform in said
capacity.
1. RETENTION. Subject to the terms and conditions of this Agreement, the
Company hereby engages Hyperion to act on behalf of the Company as a
non-exclusive investment banker, commencing on the date hereof and continuing
for a period of 6 months hereafter (the "Engagement"). Either party may cancel
this Agreement upon 30-calendar days written notice.
2. SERVICES. During the Engagement and subject to the terms and
conditions herein, Hyperion agrees to provide financial services to the Company
consisting of: (i) evaluating the Company's requirements for funding growth and
expansion of the Company's operations; (ii) advising the Company as to
alternative modes and sources of financing; and (iii) bringing to the attention
of the Company possible business opportunities and evaluating business
opportunities generally, whether or not Hyperion or others originate such
opportunities. Hyperion agrees to devote such time, attention, and energy as may
be necessary to perform the services hereunder. The Company expressly
acknowledges and agrees that nothing herein shall be construed, however, to
require Hyperion to (i) provide a minimum number of hours of service to the
Company or to limit the right of Hyperion to perform similar services for the
benefit of persons or entities other than the Company, (ii) commit to purchase
securities of the Company or secure financing on behalf of the Company by third
parties, (iii) ensure that any potential investor(s) introduced to the Company
by Hyperion will execute final agreements with the Company, or (iv) guaranty the
obligations of any investor(s) introduced to the Company by Hyperion under any
final agreements with such investor(s).
3. REMUNERATION. For undertaking the Engagement and for other good and
valuable consideration, including but not limited to, the substantial benefit
the Company will derive from the ability to announce its relationship with
Hyperion, the Company agrees as follows:
a. PLACEMENT FEES. The Company shall pay to Hyperion a cash
placement fee equal to 8% of the total amount of financing raised ("Aggregate
Consideration") in any Bridge Loan, Debenture, or placement of the Company's
securities in connection with Hyperion's efforts hereunder. Notwithstanding the
foregoing, in connection with the exercise of any investor warrants issued in
connection with a placement of the securities in connection with Hyperion's
efforts hereunder, Hyperion's placement fee shall be reduced to 4% of the cash
proceeds and shall be paid on receipt of such funds into the escrow account
established for this purpose by the Company.
b. WARRANTS. On each closing date on which Aggregate Consideration
is paid or becomes payable, the Company shall issue to Hyperion Partners
warrants (the "Warrants") to purchase, in the aggregate, 3% of the amount of the
Aggregate Consideration paid to the company (for example, if a $5 million
Confidential Page 1 4/16/02
private placement, 150,000 warrants will be issued). The exercise price of the
Warrants shall equal the lower price (to any investor(s)) at which any common
equity of the Company is or may be sold in such placement or upon the
conversion, exercise or exchange of such securities. The Warrants shall be
exercisable immediately after the date of issuance, and shall expire 5 years
after the date of issuance, unless otherwise extended by the Company. The
Warrants shall include customary anti-dilution protection, a cashless exercise
provision and will be non-redeemable and provide for automatic exercise upon
expiration. The Warrants shall be transferable, subject only to the securities
laws by the holders thereof.
c. TAIL PERIOD. The Company shall and shall have cause its
affiliates to pay Hyperion all compensation described in this Section 3 with
respect to all financing at any time prior to the expiration of 1 year after the
Termination Date (the "Tail Period") if such candidates were identified to the
Company by Hyperion during the Authorization Period and Hyperion provided
written notification to the Company of the introduction.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company
hereby represents, warrants and covenants as follows:
a. (i) The Company has the full right, power and authority to enter
into this Agreement and to perform all of its obligations hereunder, (ii) the
Agreement has been duly authorized and executed by and constitutes a valid and
binding agreement of the Company enforceable in accordance with its terms, (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
(A) the Company's certificate of Incorporation or by-laws, or (B) any agreement
to which the Company is a party or by which any of its property or assets is
bound.
b. Upon the filing of the first registration statement by the
Company pursuant to the Securities Act of 1933, as amended, following the
Private Placement in connection with the proposed offer and sale of any of its
securities by it or any of its security holders, the Company shall also register
for resale by the holder(s) thereof in such registration statement(s) the
unregistered Warrant Shares then issued but not yet registered for resale.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF HYPERION. Hyperion
hereby 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 Hyperion enforceable in accordance with its
terms, (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 (A) Hyperion's certificate of incorporation or by-laws, or (B) any
agreement to which Hyperion is a party or by which any of its property or assets
is bound, (iv) it is and will be at the time of any sale of the Company's common
stock to the Accredited Investors found by Hyperion and introduced to the
Company, fully licensed as a broker dealer with the NASD and in those states in
which the Accredited Investors reside and (v) will not provide such Accredited
Investor with any information (oral or written) other than that provided in the
materials prepared by the Company in connection with the Private Placement.
6. INDEPENDENT CONTRACTOR. Hyperion and the Company hereby acknowledge
that Hyperion is an independent contractor. Hyperion shall not hold itself out
as, not shall it take any action from which others might infer that it is a
partner or agent of, or joint venture with, the Company. In addition, Hyperion
shall take no action, which binds, or purports to bind, the Company.
7. CONFIDENTIALITY. The Company acknowledges that all opinions and
advice, whether oral or written, given by Hyperion to the Company in connection
with this Agreement are intended solely for the benefit and use of the Company
in considering the transactions to which they relate, and the Company agrees
that no person or entity other than the Company shall be entitled to make use of
or rely upon the advice of Hyperion to be given hereunder, and no such opinion
or advice shall be used by the Company or any other purpose or reproduced,
disseminated, quoted or referred to by the Company in communications with third
Confidential Page 2 4/16/02
parties at any time, in any manner or for any purpose, nor may the Company make
any public references to Hyperion or use Hyperion's name in any annual report or
any other report or release of the Company without Hyperion's prior written
consent, except that the Company may, without Hyperion's further consent,
disclose this Agreement (but not information provided to the Company by
Hyperion) in the company's filings with the Securities and Exchange Commission,
if such disclosure is required by law.
8. REIMBURSEMENT. The Company agrees to reimburse promptly Hyperion
Partners, upon request from time to time, for all reasonable, out-of-pocket
expenses incurred by Hyperion Partners (including fees and disbursements of
counsel and of other consultants and advisors retained by Hyperion Partners) in
connection with the matters contemplated this Agreement, but in no event more
than $2.500. Ocean Power Corporation will pre-approve any expenses above $250.00
in writing.
9. NOTICES. Except as otherwise specifically agreed, all notices and
other communications made under this Agreement shall be in writing and, when
delivered in person or by facsimile transmission, or by overnight courier shall
be deemed given on the same day if delivered on a business day during normal
business hours, or on the first day of business day following delivery in person
or by facsimile, or overnight courier outside normal business hours, or on the
date indicated on the return receipt if sent registered or certified mail,
return receipt requested. All notices sent hereunder shall be sent to the
representatives of the party to be noticed at the addresses indicated
respectively below, or at such other addresses as the parties to be noticed may
from time to time by like notice hereafter specify.
If to the Company: Xx. Xxxxxx X. Xxxxxx
President
Ocean Power Corporation
5000 Xxxxxx X. Xxxxxxx Xxxx
Xx Xxxxxx Xxxxx, XX 00000
If to Hyperion: Hyperion Partners Corp.
0000 Xxxxxxxxx Xxxxx
Xxxxx X-000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Xx.
(000) 000-0000 (Fax)
10. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties. It may not be changed except by agreement in writing signed
by the party against whom enforcement of any waiver, change, discharge, or
modification is sought. Waiver of or failure to exercise any rights provided by
this Agreement in any respect shall not be deemed a waiver of any further or
future rights.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, acknowledgments and agreements of Hyperion and the Company shall
survive the termination of this agreement. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or valid, this Agreement shall continue in full force and
effect without said provision; provided, however, that, such severability shall
be ineffective if it materially changes the economic benefit of this Agreement
to any party.
12. GOVERNING LAW. This Agreement shall be construed according to the
laws of the State of Georgia and subject to the jurisdiction of the courts of
said state, without application of the principles of conflicts of laws. Each of
the parties' consents exclusively to personal jurisdiction in Xxxxxx County,
Georgia, waives any objection as to jurisdiction or venue, and agrees not to
assert any defense based on lack of jurisdiction or venue. In any litigation,
arbitration, or other dispute resolution arising out of or relating to this
Agreement, the prevailing party shall be reimbursed by the other party (as
determined by a court of competent jurisdiction) for reasonable attorneys' fees
and/or arbitration costs.
Confidential Page 3 4/16/02
13. SUCCESSORS. This Agreement shall be binding upon the parties, their
successors and assigns.
14. EXECUTION. This Agreement may be executed in any number of
counterparts each of which shall be enforceable against the parties executing
such counterparts, and all of which together shall constitute a single document.
Except as otherwise stated herein, in lieu of the original documents, a
facsimile transmission or copy of the original documents shall be as effective
and enforceable as the original.
If the foregoing correctly sets forth our understanding and agreement, please so
indicate by signing where indicated below. We look forward to working with you.
HYPERION PARTNERS CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-----------------------------------
Xxxx X. Xxxxxxx, Xx., President
Agreed to and accepted this 16 day of April 2002:
Ocean Power Corporation
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
Confidential Page 4 4/16/02
