Re: Financing Engagement Agreement
EXHIBIT
10.8
August
22, 2007
000
X.
Xxxxxxxxxx Xxx.
000
Xxxxxx Xxxx
Xx
Xxxx,
XX 00000-0000
| Attention: |
Xx.
Xxxxx Xxxxxxx, President & Chief Executive Officer
|
Dear
Sir,
Orion
Securities Inc. (“Orion”
or
“we”),
understands that Refinery Science Corp. (the “Company”
or
“you”)
is
pursuing financing options for the funding of the further development of the
pilot plant currently in operation; the purchase of heavy oil assets; and the
building, engineering, and fabrication of a 1,000 bbl/d refinery. Orion is
pleased to confirm its interest in acting on behalf of the Company as agent
and
financial advisor.
Terms
of Engagement
|
1.
|
Orion
will act as exclusive agent on the Company’s behalf in raising, on a best
efforts basis, up to U.S.$30.0 million through the private placement
(the
“Offering”)
to include, but be not limited to, common shares, flow-through shares,
convertible interest bearing securities or preferred shares (collectively,
the “Securities”)
of the Company. The proceeds of the Offering shall be paid to the
Company
at closing on completion of the Offering, which may close in multiple
stages.
|
|
2.
|
The
Company agrees to:
|
|
a)
|
provide
Orion with reasonable unimpeded access, for the purpose of its conducting
a due diligence investigation, to senior management, as well as to
all
books and records of the Company;
|
|
b)
|
assist
Orion in contacting persons and sourcing information deemed useful
and
necessary to Orion’s due diligence
investigation;
|
|
c)
|
develop
marketing materials and a marketing presentation;
and
|
|
d)
|
have
its senior management available and, within reason, commit the time
necessary to make requisite presentations to potential
investors.
|
|
3.
|
Any
material or information prepared or distributed in connection with
this
Offering may be distributed only in accordance with the applicable
laws
relating to the distribution of securities in the jurisdictions in
which
purchasers under the Offering are
resident.
|
| Re: Refinery Science Corp. - Engagement Agreement | |
| August 22, 2007 |
Page
2
|
|
4.
|
Orion
shall be paid upon the closing(s) of the Offering, a fee equal to
6.0% of
the gross proceeds of the Offering of
Securities.
|
|
5.
|
Subject
to the successful completion of the Offering, Orion shall receive
compensation options (the “Compensation
Options”)
entitling it to acquire Securities in aggregate amount equal to 6.0%
of
the number Securities issued pursuant to the Offering at a price
equal to
the Offering price. In the case of multiple closing dates, the
Compensation Options will be issued to Orion on each closing of the
Offering. The Compensation Options shall have an expiry date of two
years
from the relevant closing date of the
Offering.
|
|
6.
|
The
Company shall be responsible for all reasonable costs and expenses
relating to the Offering including, but not limited to, the preparation
of
marketing materials (including any slides, videos, printed material
and
other similar items), the filing of all documents with the requisite
regulatory bodies, accountant's fees and legal expenses of the Company.
The Company shall also be responsible for all fees and expenses of
Orion,
including without limitation, marketing and travel and legal expenses.
|
|
7.
|
The
Company agrees to grant to Orion the right to act as the lead agent
or
lead underwriter with a minimum 40.0% participation interest in any
financing conducted by the Company for a period of 12 months following
the
Closing Date
|
|
8.
|
The
Company agrees that if the Offering is completed, Orion may, at its
option
and expense, place an announcement in such newspapers and periodicals
as
it may choose stating that Orion has acted as financial advisor and
agent
to the Company in connection therewith. Orion shall review the
announcement with the Company and obtain its written approval on
the
contents of the announcement prior to publication (although such
approval
may be withheld at the sole discretion of the
Company).
|
|
9.
|
Orion
agrees that the Company may make press releases and announcements
in
connection with the Offering subject to Orion reviewing the press
release
or announcement with the Company and Orion giving its written approval
on
the contents of the press release or announcement prior to release
or
publication.
|
|
10.
|
If
the Offering is a private placement, the Company agrees to provide
annual
audited financial statements and quarterly unaudited financial statements
to purchasers of Securities as if it were a publicly reporting issuer
regardless of whether the Company remains a private
entity.
|
|
11.
|
This
agreement will be governed by and construed in accordance with the
laws of
the Province of Alberta.
|
|
12.
|
The
Company agrees to indemnify and save harmless the directors, officers,
employees and agents of Orion as more fully described in Appendix
A.
|
|
13.
|
Orion’s
engagement hereunder will expire on December 31, 2007 it being understood
that the provisions relating to the indemnification set forth in
Appendix
A to this agreement will survive any such termination. The termination
of
this agreement may be made by Orion by giving no less than 7 days
written
notice to that effect to the
Company.
|
|
14.
|
If
an Offering is pursued as described in this letter then a formal
agency
agreement shall be signed prior to closing which shall set out the
specific terms and conditions of our agreement. The agency agreement
shall
be negotiated in good faith between the Company and Orion and will
contain
representations, warranties, covenants, conditions and indemnities
and
termination rights standard in an agreement of this
type.
|
| Re: Refinery Science Corp. - Engagement Agreement | |
| August 22, 2007 |
Page
3
|
It
is
understood that this letter is not a firm underwriting commitment of Orion
to
acquire the Securities, but is evidence of the understanding between us relating
to the proposed Offering. The price and Orion’s ability to successfully market
the Offering will be contingent upon several factors including market conditions
at the time of the Offering and the completion of satisfactory due diligence
by
Orion or its representatives.
If
this
letter is acceptable to you, please execute this letter where indicated below
and return a copy of same (personally, or by facsimile and courier) to Orion
Securities Inc., Attention: Xxxxx X. Xxxxxx, facsimile number (000) 000-0000
whereupon this letter shall become a binding agreement between us.
Yours
very truly,
ORION
SECURITIES INC.
Xxxxx
X.
Xxxxxx
Vice-President,
Investment Banking
The
foregoing accurately reflects the terms of the transaction and such terms are
hereby agreed to.
ACCEPTED
this __ day of August 2007.
Xxxxx
Xxxxxxx
President
& Chief Executive Officer
A-1
SCHEDULE
A
Indemnity
In
connection with the engagement (the “Engagement”)
of
Orion Securities Inc. (“Orion”)
pursuant to the engagement letter attached hereto (the “Agreement”),
the
Company agrees to indemnify and hold harmless Orion, each of its affiliates
providing services in connection with the Engagement and each of their
respective directors, officers, employees, partners and shareholders
(collectively, the “Indemnified
Parties”)
and
individually, (an “Indemnified
Party”),
from
and against any and all losses (other than losses of profit), expenses, claims
(including shareholder actions, derivative or otherwise), actions, damages
and
liabilities, joint or several, including the aggregate amount paid in reasonable
settlement of any actions, suits, proceedings, investigations or claims and
the
reasonable fees and expenses of their counsel that may be incurred in advising
with respect to and/or defending any action, suit, proceeding, investigation
or
claim that may be made or threatened against any Indemnified Party or enforcing
this indemnity (collectively the "Claims") to which any Indemnified Party may
become subject or otherwise involved in any capacity insofar as the Claims
relate to, are caused by, result from, arise out of or are based upon, directly
or indirectly, the Engagement. The Company also agrees that no Indemnified
Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company or any person asserting claims on behalf of or in
right of the Company for or in connection with the Engagement except to the
extent any losses, expenses, claims, actions, damages or liabilities incurred
by
the Company are determined by a court of competent jurisdiction in a final
judgement that has become non-appealable to have resulted primarily from the
negligence or wilful misconduct of such Indemnified Party. Subject to the
provisions of the fourth paragraph of this indemnity, the Company shall cause
to
be defended and contested, with experienced and competent counsel of the
Company's choosing, each Claim which is made against an Indemnified Party in
respect of which the Company is obliged to provide indemnity or contribution
hereunder. The Company shall be permitted to compromise and settle at its
expense any such Claim on behalf of the Indemnified Party against whom the
same
has been made, provided that the Company will not, without Orion's prior written
consent, settle, compromise, consent to the entry of any judgement in or
otherwise seek to terminate any action, suit, proceeding, investigation or
claim
in respect of which indemnification may be sought hereunder (whether or not
any
Indemnified Party is a party thereto) unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Party from any liabilities arising out of such action, suit, proceeding,
investigation or claim. An Indemnified Party against whom a Claim is made and
seeking indemnity hereunder in respect of such claim shall co-operate with
the
Company and its counsel to the extent necessary in order that the grounds for
such Claim can be properly investigated and such Claim can be properly defended
and contested.
Promptly
after receiving notice of an action, suit, proceeding or claim against Orion
or
any other Indemnified Party or receipt of notice of the commencement of any
investigation which is based, directly or indirectly, upon any matter in respect
of which indemnification may be sought from the Company, Orion or any such
other
Indemnified Party will notify the Company in writing of the particulars thereof,
provided that the omission so to notify the Company shall not relieve the
Company of any liability which the Company may have to Orion or any other
Indemnified Party except and only to the extent that any such delay in or
failure to give notice as herein required materially prejudices the defence
of
such action, suit, proceeding, claim or investigation or results in any material
increase in the liability which the Company has under this indemnity. Orion
shall, and shall use its reasonable efforts to cause other relevant Indemnified
Parties to, co-operate with the Company and respond to any such investigation
or
defend any such proceeding.
A-2
The
Company will reimburse monthly each Indemnified Party for all expenses
reasonably incurred by or on behalf of such Indemnified Party in connection
with
investigating, preparing or defending any Claim, including payment to Orion
at
the applicable standard per diem rate for the time expended by any director,
officer, employee, partner or agent of Orion or any affiliate attending at
or
participating in such investigation, preparation or defence, provided that
the
Indemnified Party shall make prompt repayment to the Company of all amounts
so
paid to it for which a court of competent jurisdiction in a final judgement
determines that such Indemnified Party is not entitled to indemnification
pursuant to the provisions hereof.
An
Indemnified Party may retain counsel to separately represent it in the defence
of a Claim, which shall be at the Company's expense if (i) the Company does
not
promptly assume the defence of the Claim, (ii) the Company agrees to such
separate representation or (iii) the Indemnified Party is advised by counsel
in
writing that there is an actual or potential conflict in the Company's and
the
Indemnified Party's respective interests or additional defences are available
to
the Indemnified Party, which makes a representation by the same counsel
inappropriate.
If
for
any reason (other than a determination based on negligence or wilful misconduct
as contemplated herein) the indemnification provided hereby is unavailable
to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless,
the
Company shall contribute to the amount paid or payable by the Indemnified Party
as a result of a claim in such proportion as is appropriate to reflect not
only
the relative benefits received by the Company on the one hand and all
Indemnified Parties on the other hand, but also the relative degrees of fault
of
the Company and of all Indemnified Parties and any other equitable
considerations, provided that the Company shall in any event contribute to
the
amount paid or payable by any Indemnified Party as a result of such claim any
excess of such amount over the amount of the fees actually received by Orion
and
all affiliates pursuant to the Agreement.
This
indemnity shall apply to the Agreement, to any additional engagement resulting
from the Agreement and to any modification of the terms of any of them and
shall
remain in full force and effect following the completion or termination of
any
or all of them. This indemnity shall be binding on and inure to the benefit
of
the Company and each Indemnified Party and the respective successors, assigns,
heirs and personal representatives of each of them, and to the extent necessary
or appropriate may be enforced by Orion as trustee for any other Indemnified
Party. This indemnity shall be in addition to any rights that any Indemnified
Party may have at common law or otherwise.
The
foregoing indemnity shall not apply to the extent that a court of competent
jurisdiction in a final judgement that has become non-appealable shall determine
that such losses, expenses, claims, actions, damages, or liabilities to which
the Indemnified Party may be subject were primarily caused by the negligence
or
wilful misconduct of the Indemnified Party.
