May 21, 2007
EXHIBIT
10.1
May
21,
2007
CrossPoint
Energy Company
0000
Xxxxxxx Xxxx. Suite 810
Frisco,
TX 75034
| RE: | Engagement of Venn Capital Advisors, L.P. | ||
| Attn: | Xxx Xxxxxxx | ||
| President and CEO | |||
This
letter agreement (“Letter Agreement”) confirms the terms and conditions of the
engagement (the “Engagement”) of Venn Capital Advisors, L.P. (the “Advisor”) by
CrossPoint Energy Company and its subsidiaries and affiliates (collectively,
the
“Company”) as the Company’s business and restructuring Advisor during the term
of this Letter Agreement.
Such
engagement as the Company’s Advisor is subject to the terms and conditions
outlined below.
| 1. |
The
Advisor’s Role and Responsibilities:
The Advisor agrees to assist the Company in its efforts to restructure
its
business and shall provide such business advisory services as you
may
request and as we deem to be
appropriate.
|
| 2. |
Information;
Confidentiality:
|
| A. |
The
Company shall make available to the Advisor, on a timely basis, all
financial and other information concerning the Company’s business and
operations that the Advisor reasonably requests. The Advisor shall
be
entitled to rely, without investigation, upon all information supplied
by
the Company. Furthermore, the Advisor shall bear no responsibility
to the
Company, any potential lender, any creditors, stockholders, employees,
or
any other parties for the accuracy, completeness, or legal sufficiency
of
any financial statements, memoranda, other documentation or information
prepared or provided by, or on behalf of, the Company or for verifying
any
of the information contained therein. Appropriate officers of the
Company
shall be responsible for reviewing any memorandum or other documentation
prior to its use to determine that it does not contain any material
omissions or inaccuracies. The Company will also provide access to
the
Company’s officers, directors, employees, independent accountants and
legal counsel. To the extent consistent with legal requirements,
all
information given to the Advisor by the Company, unless publicly
available
or otherwise available to the Advisor without restriction or breach
of any
confidentiality agreement or except as required by law to be disclosed,
will be held by the Advisor in confidence and will not be disclosed
to
anyone without the Company’s prior approval except as necessary in
connection with completing this Engagement. In the event that the
parties
hereto have executed a separate confidentiality agreement said separate
confidentiality agreement will govern in the case of a conflict.
|
| B. |
The
Company hereby represents that all information provided to Advisor
will be
true, complete and accurate in all material respects and will not
contain
any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements
therein,
in light of the circumstances under which they were made, not misleading.
The
Advisor shall be entitled to rely without investigation upon all
information that is furnished by the Company to the Advisor and will
not
be responsible for the accuracy or completeness of, or have any obligation
to verify the same or to conduct any appraisal of assets or liabilities
of
the Company.
|
Page
1 of 6
EXHIBIT
10.1
| C. |
Any
advice, written or oral, provided by Advisor pursuant to this Letter
Agreement will be treated by the Company as confidential, will be
solely
for the information and assistance of the Company in connection with
its
business and may not be quoted or summarized, or furnished to any
other
party, nor will any such advice or the name of Advisor be referred
to, in
any report, document, release or other communication, whether written
or
oral, prepared, issued or transmitted by the Company or any affiliate,
director, officer, employee, agent or representative of any thereof,
without, in each instance, Advisor's prior written consent, in Advisors
sole discretion.
|
| 3. |
Compensation:
For services rendered in connection with the Engagement, the Company
shall
pay the Advisor the following
compensation:
|
| A. |
A
non-refundable retainer of $10,000 payable in cash upon execution
of this
Letter Agreement.
|
| B. |
An
advisory retainer of $10,000 payable in cash on the first business
day of
each month subsequent to the initial execution of this
letter.
|
| 4. |
Expense
Reimbursement:
The Company shall reimburse, on a monthly basis, all accountable
out-of-pocket expenses (including any legal fees and expenses, as
well as
direct or allocated charges for third-party services, if any) incurred
by
the Advisor in connection with the Engagement. Advisor will obtain
approval from the Company in advance for any anticipated expense
in excess
of one thousand dollars ($1,000).
|
| 5. |
Term: The
term of the Engagement shall commence from the date of the Company’s
acceptance of this Letter Agreement (the “Effective Date”), and shall
expire on the earlier of (i) 180 days from the Effective Date, unless
extended by agreement of the Company and the Advisor, in writing,
(ii) the
date which is thirty (30) days after the date that either the Advisor
or
the Company gives
written notice of termination to the other party, (iii) the effective
date
of the sale of all or substantially all the assets of the Company,
or (iv)
the closing date of any merger, consolidation, recapitalization,
or other
restructure transaction involving the
Company.
|
Termination
or expiration of the Engagement shall not relieve the Company of its obligation
to pay compensation earned by the Advisor hereunder, or to reimburse expenses
incurred by the Advisor, prior to the termination or expiration.
The
terms
and provisions of this Letter Agreement contained in paragraphs 2-7, 9, 11,
13-17 and 19 shall survive the termination or expiration of the Engagement.
| 6. |
Disclosure:
The
Company agrees that all advice given by the Advisor in connection
with the
Engagement hereunder is for the benefit and use of the Company and
the
Company agrees that no such advice shall be used for any other purpose
or
be disclosed, reproduced, disseminated, quoted or referred to at
any time,
in any manner or for any purpose, nor shall any public references
to the
Advisor be made by or in behalf of the Company, in each case without
the
Advisor’s prior written consent, in Advisor’s sole discretion.
|
Page
2 of 6
EXHIBIT
10.1
| 7. |
Limitations
of Engagement:
|
|
A.
|
The
Company agrees that the Advisor has been retained to act solely as
Advisor
to the Company, and not as an Advisor to or agent of any other person,
and
that the Company’s engagement of the Advisor is not intended to confer
rights upon any person not a party hereto (including, but not limited
to,
stockholders, employees or creditors of the Company) as against the
Advisor or its affiliates, or their directors, officers, employees
or
agents. It is specifically understood that the Company will not base
its
decisions solely on the Advisor’s advice, but will also consider the
advice of the Company’s legal, tax and other business advisors, and such
other factors which they consider appropriate. The Advisor, as an
independent contractor under this Letter Agreement, shall not assume
the
responsibilities of a fiduciary to the Company or its stockholders,
employees or creditors in connection with the performance of the
Advisor’s
service hereunder, and any duties arising out of its engagement shall
be
owed solely to the Company. The rights and obligations the Company
may
have to the Advisor or the Advisor’s affiliates under any credit or other
agreement are separate from the Company’s rights and obligations under
this Letter Agreement and will not be affected by the Advisor’s services
hereunder.
|
| 8. |
Independent
Contractor.
The Company acknowledges and agrees that the Advisor has been retained
solely to provide the advice and services set forth in this Letter
Agreement. The Advisor shall act as an independent contractor, and
any
duties of the Advisor arising out of its engagement hereunder shall
be
owed solely to the Company.
|
| 9. |
Advertising:
After
the closing of a Financing, the Advisor shall have the right, at
the
Advisor’s option and expense, to advertise its services to the Company in
connection with the Engagement.
|
| 10. |
Blank
|
| 11. |
Indemnification:
In
connection with engagements such as this, it is our firm’s policy to
receive indemnification. THE COMPANY AGREES TO BE BOUND BY THE TERMS
OF
THE INDEMNIFICATION AGREEMENT THAT IS ATTACHED HERETO AS EXHIBIT “A”,
WHICH IS INCORPORATED BY REFERENCE.
|
| 12. |
Amendment
or Modification:
This Letter Agreement, Exhibit “A”, any annexes or attachments hereto and
any rights, duties or obligations hereunder may not be waived, amended,
modified or assigned in any way, in whole or in part, including by
operation of law, without the prior written consent of each of the
parties
hereto.
|
| 13. |
Binding
Effect:
This Letter Agreement is binding on and inures to the benefit of
the
parties hereto and their respective heirs, legal representatives,
successors, and assigns.
|
| 14. |
Enforceability:
In
case any provision of this Letter Agreement shall be deemed invalid,
illegal or unenforceable, the validity, legality and enforceability
of the
remaining provisions of this Letter Agreement shall not in any
way be
affected or impaired thereby.
|
| 15. |
Governing
Law; Venue:
This Letter Agreement shall be governed by and construed in
accordance
with the laws of the State of Texas. The Company and the Advisor
irrevocably and unconditionally submit to the exclusive jurisdiction
of
any State or Federal court sitting in Dallas, Texas over any
suit, action,
or proceeding arising out of or relating to this Letter Agreement
(including Exhibit “A”) and any amendments thereto, but only to the extent
that is needed as a result of first complying with the
Mediation/Arbitration and Jury Waiver paragraphs set forth
herein below.
|
Page
3 of 6
EXHIBIT
10.1
| 16. |
Attorney’s
Fees:
If
any action, at law or at equity, or through any Alternate Dispute
Resolution process is brought to enforce or interpret the provisions
of
this Letter Agreement, the prevailing party is entitled to
reasonable
attorney’s fees in addition to any other relief to which it may be
entitled.
|
| 17. |
JURY
WAIVER: ANY RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM,
ACTION OR
PROCEEDING, DIRECTLY OR INDIRECTLY, ARISING OUT OF, OR RELATING
TO, THE
ENGAGEMENT ARE WAIVED BY THE ADVISOR AND THE
COMPANY.
|
| 18. |
Notices:
All notices, demands, requests and other communications required
or
permitted hereunder shall be in writing, and shall be deemed
to be
delivered when actually received, or, if earlier and regardless
of whether
actually received (except where receipt is specified) in
this Letter
Agreement, upon deposit in a regularly maintained receptacle
for the
United States mail, registered or Certified, postage fully
prepaid,
addressed to the addressee at its address set forth below
in this
paragraph:
|
| If to Advisor: | Venn Capital Advisors, L.P. | ||
| 0000 XXX Xxxxxxx, Xxxxx 0000 | |||
| Dallas, TX 75234-2757 |
| If to Company: | CrossPoint Energy Company | ||
| 0000 Xxxxxxx Xxxx. Suite 810 | |||
| Frisco, TX 75034 | |||
| Attn: Xxx Xxxxxxx |
| 19. |
Mediation/Arbitration:
Any controversy or claim arising out of or relating to this engagement
or
the breach thereof, exclusive of paragraph 3, shall first be conducted
by
Mediation administered under Commercial Mediation Rules. If a settlement
acceptable to the parties cannot be reached pursuant to said Mediation,
any remaining controversy or claim arising out of or relating to
this
engagement, or the breach thereof, shall be settled by Arbitration
under
Commercial Arbitration Rules, and any judgment on the award rendered
by
the Arbitrator shall be final and binding on the parties hereto
and may be
entered into any court having jurisdiction as set forth
herein. ANY
RIGHTS TO TRIAL BY JURY, EXCLUSIVE OF PARAGRAPH 3, WITH RESPECT
TO ANY
CLAIM, ACTION, PROCEEDING OR INTERPRETATION, OF THIS DOCUMENT DIRECTLY
OR
INDIRECTLY, ARE WAIVED BY THE ADVISOR AND THE
COMPANY.
|
| 20. |
Entire
Agreement:
This Letter Agreement comprises the full and complete agreement
of the
parties hereto with respect to the dealings between the parties
and it
supercedes and cancels all prior communications, understandings
and
agreements between the parties hereto, whether written or oral,
express or
implied with respect thereto.
|
Please
confirm that the foregoing is in accordance with your understanding by signing
and returning to us the enclosed duplicate of this letter, which shall thereupon
constitute a binding agreement.
IN
WITNESS WHEREOF the duly authorized representatives of the parties have signed
this Letter Agreement to be effective as of the date first
written above.
Page
4 of 6
EXHIBIT
10.1
Very
truly yours,
Venn
Capital Advisors, L.P.
by
Venn
Capital L.L.C., its General Partner
By: /s/
Xxxx
Xxxxxxxxxxx
Name: Xxxx
Xxxxxxxxxxx
Title: Member
CrossPoint
Energy Company
By: /s/
Xxx
Xxxxxxx
Name: Xxx
Xxxxxxx
Title: President
and CEO
Page
5 of 6
EXHIBIT
10.1
EXHIBIT
“A”
INDEMNIFICATION
AGREEMENT
The
Company hereby indemnifies and holds harmless the Advisor, its controlling
persons, directors, officers, employees, agents, affiliates and representatives
(each herein after referred to as an “Indemnified Party”) from any and all
losses, claims, damages, judgments, assessments, expenses, costs and other
liabilities, joint or several (collectively, “Liabilities”) to which the
Indemnified Parties may become liable as a result of anything having to do
with
the Letter Agreement to which this Exhibit “A” is attached or the transaction
contemplated in the dealings between the Parties (herein after “Transaction”),
unless a final determination has been made either through the court system
or
pursuant to Alternative Dispute Resolution that the Liabilities resulted solely
from the gross negligence or willful misconduct of any Indemnified Party. The
Company further agrees to reimburse each Indemnified Party immediately upon
request for all expenses, including reasonable Attorney’s fees as they are
incurred in connection with the Transaction itself or anything to do with the
defense of an Indemnified Party. This reimbursement shall include situations
where an action is pending or threatened and whether or not any Indemnified
Party is a party to such proceedings. Additionally the Company agrees that
no
Indemnified Party shall have any liability, whether direct or indirect, in
contract, tort, or otherwise, to the Company or any person asserting claims
on
behalf of or through the Company, directly or indirectly, arising out of or
relating to the Transaction between the Parties. Additionally, in no event,
shall any Indemnified Party be liable to the Company or any persons asserting
claims on behalf of or through the Company for any consequential, indirect,
incidental or special damages of any nature. The Company will also reimburse
expenses for any Indemnified Party as a result of the Indemnified Party
appearing as a witness or otherwise assisting in any action brought against
the
Company, its affiliates, or any corporation or other person or entity having
to
do with the Transaction.
The
Indemnified Person shall promptly notify the Company in writing; provided a
failure to notify the Company shall not relieve the Company from any liability
which the Company may have on account of this Indemnity or otherwise, except
to
the extent the Company shall have been materially prejudiced by such failure.
In
the event the Company elects to assume the defense in any such action it shall
notify Advisor in writing and the employment of counsel shall be reasonably
satisfactory to the Indemnified Person. Any Indemnified Person shall have the
right to employ separate counsel with the fees and expenses to be paid by said
Indemnified Person unless (i) the Company has failed to promptly assume the
defense of said action or (ii) the Indemnified Person has been advised by
counsel that there is one or more legal defenses which are available to it
which
are different or in conflict with those available to the Company. In such case
the counsel used by the Indemnified Person shall be at the Company’s expense and
approval, which shall not be unreasonably withheld.
The
Company agrees that without the Advisor’s prior written consent, which shall not
be unreasonably withheld, it will not settle, compromise, or consent to the
entry of any judgment or settlement of any case or other proceeding that
involves the Advisor or any other Indemnified Party unless such consent (i)
includes an unconditional release of each Indemnified Party from any liabilities
arising out of such claim, action, suit, proceeding or investigation and does
not include any admission by any Indemnified Party of any civil or criminal
liability, and (ii) the Parties agree that the terms of such settlement shall
remain confidential.
All
other terms of the Letter Agreement to which this Exhibit “A” is attached are
incorporated herein for all purposes. The rights of the Indemnified Parties
referred to above shall be in addition to any other rights that any Indemnified
Party may otherwise have at law or equity.
Page
6 of 6
