Jesup & Xxxxxx
SECURITIES CORPORATION
000 XXXXX XXXXXX
XXX XXXX, XX 00000
NASD TELEPHONE: (000) 000-0000
SIPC FAX: (000) 000-0000
Draft # 1a
August 4, 2000
W.Xxxxxxx Xxxxx
CEO
Geotec Thermal Generators, Inc.
0000 X.Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Dear Xx. Xxxxx,
The purpose of this letter agreement (the "Agreement") is to set forth
the terms and conditions pursuant to which Jesup & Xxxxxx Securities Corporation
("Jesup") shall serve as an exclusive placement agent in connection with the
offering (the "Offering") of securities (the "Securities") of Geotec Thermal
Generators, Inc. (the "Company"). The gross proceeds from the Offering is
expected to be in excess of $40,000,000. The terms of such Offering and the
Securities shall be substantially in the form set forth in Exhibit D hereto.
Upon the terms and subject to the conditions of this Agreement, the
parties hereto agree as follows:
1. Appointment. Subject to the terms and conditions of this Agreement
hereinafter set forth, the Company hereby retains Jesup, and Jesup hereby agrees
to act as the Company's exclusive placement agent and financial advisor in
connection with the Offering, effective as of the date hereof. The Company
expressly acknowledges and agrees that Jesup's obligations hereunder are on a
reasonable best efforts basis only and that the execution of this Agreement does
not constitute a commitment by Jesup to purchase the Securities and does not
ensure the successful placement of the Securities or any portion thereof or the
success of Jesup with respect to securing any other financing on behalf of the
Company.
2. Fees and Compensation. In consideration of the services rendered
by Jesup in connection with the Offering, the Company agrees to pay Jesup the
following fees and other compensation:
(a) A total cash fee equal to 10.00% of any funds received by the
Company from any investors or lenders contacted and listed in
Exhibit E by Jesup while this Agreement is in effect. Each
contact of an investor or lender by Jesup while this Agreement is
in effect shall require the written acknowledgement of the
Company.
(b) A fee consisting of 10% warrant coverage for the initial
placement of at least $2,500,000 and additional fee of 500,000
warrants (the Placement Agents Warrants") once the Equity Line
commitment is in place. The Placement Agents Warrants, which
shall be satisfactory in form and substance to Jesup and its
counsel, will expire three years from the date of issuance, will
be non-callable and will be exercisable at 125% of the Closing
Price (120% of the Closing Price for on the Equity Line) as
reported by Bloomberg on the Closing Date. The holders of the
Placement Agent Warrants will have an unlimited number of
"piggyback" registration rights.
(c) 1.00% expense allowance against money raised.
3. Terms of Retention. Unless extended or terminated in writing by
the parties hereto, this Agreement shall remain in effect until August 31, 2000.
Notwithstanding anything herein to the contrary, the obligation to pay
the Fees and Compensation described in Section 2, if any, and paragraph 2, 6,
and 8 of Exhibit A and all of Exhibit B and Exhibit C attached hereto, shall
survive any termination or expiration of the Agreement, should a closing take
place. Not withstanding the foregoing, it is expressly understood and agreed by
the parties hereto that any private financing, whether through senior or
subordinated debt or equity, of the Company within 18 months of the termination
of this Agreement, with any qualified investors or lenders contacted and listed
in Exhibit E by Jesup while this Agreement was in effect, shall result in cash
fees due and payable by the Company to Jesup under the same terms of Section 2
above.
4. Due Diligence. Jesup's role as the placement agent in connection
with the Offering is subject to its satisfactory completion of due diligence of
the Company's business plans, future business and financial conditions. If Jesup
is unsatisfied with the results of its due diligence, Jesup shall give a written
notice of such to the Company, and upon receipt of such notice by the Company
this Agreement will terminate and, notwithstanding the provisions of section 3
hereof the Company's obligation under sections 2 hereof shall be terminated.
5. Information. The Company recognizes and confirms that in completing
its engagement hereunder, Jesup will be using and relying on publicly available
information and on data, material and other information furnished to Jesup by
the Company. It is understood that in performing under this engagement, Jesup
may assume and rely upon the accuracy and completeness of, and is not assuming
any responsibility for independent verification of, such publicly available
information and the other information so furnished.
6. Intentionally Ommitted.
7. Offers and Sales Only to Institutional Accredited Investors. Offers
and sales of the Securities will be made only to institutional investors that
are reasonably believed to be "accredited investors" as defined in Rule 501(a)
promulgated under the Securities Act of 1933, as amended (the "Securities Act")
(each such institutional investor being hereby referred to as an "Institutional
Accredited Investor"). Jesup shall use reasonable care to ensure, including
through the use of investor questionnaires and subscription agreements, that
purchasers acquire the Securities for their own account, for investment purposes
only, and not with a view to resale.
8. No General Solicitation. The Securities will be offered only by
approaching prospective purchasers on an individual basis. No general
solicitation or general advertising in any form will be used in connection with
the offering of the Securities.
9. Miscellaneous. This Agreement constitutes the entire understanding
and agreement between the parties with respect to its subject matter and there
are no agreements or understandings with respect to the subject matter which are
contained in this Agreement. This Agreement may be modified only in writing
signed by the party to be charged hereunder.
If the foregoing correctly sets forth our agreement, please confirm
this by signing and returning to us the duplicate copy of this letter whereupon
it shall become a binding agreement between the Company and Jesup.
We appreciate this opportunity to be of service and are looking forward
to working with you on this matter.
Very truly yours,
JESUP & XXXXXX
SECURITIES CORPORATION
By:
----------------------------
Xxxxxx X. Xxxx - President
Agreed to and Accepted
as of the Effective Date:
Geotec Thermal Generators, Inc.
By:
-------------------------------
W.Xxxxxxx Xxxxx
CEO
EXHIBIT A
STANDARD TERMS AND CONDITIONS
1. The Company shall promptly provide Jesup with all relevant information
about the Company (to the extent available to the Company in the case
of parties other than the Company) that shall be reasonably requested
or required by Jesup, which information shall be accurate in all
material respects at the time furnished.
2. Jesup shall keep all information obtained from the Company strictly
confidential except: (a) information which is otherwise publicly
available, (b) Jesup may disclose such information to its employees and
attorneys, and to its other advisors and financial sources on a need to
know basis only and shall ensure that all such employees, attorneys,
advisors and financial sources will keep such information strictly
confidential; and (c) pursuant to any order of a court of competent
jurisdiction or other governmental body or as may otherwise be required
by law.
3. The Company recognizes that in order for Jesup to perform properly its
obligations in a professional manner, it is necessary that Jesup be
informed of and, to the extent practicable, participate in meetings and
discussions between the Company and any third party relating to the
matters covered by the terms of Jesup's engagement.
4. The Company agrees that any report or opinion, oral or written,
delivered to it by Jesup is prepared solely for its confidential use
and shall not be reproduced, summarized, or referred to in any public
document or given or otherwise divulged to any other person without
Jesup's prior written consent, except as may be required by applicable
law or regulation, which consent shall not be unreasonably withheld or
delayed.
5. No fee payable to Jesup pursuant to any other agreement with the
Company or payable by the Company to any lender shall reduce or
otherwise affect any fee payable by the Company to Jesup under this
Agreement.
6. The Company represents and warrants that: (a) it has full right, power
and authority to enter into this agreement and to perform all of its
obligations hereunder; (b) this Agreement has been duly authorized and
executed and constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms; and (c) the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby does not conflict with or result in a breach of (i)
the Company's certificate of incorporation or by-laws or (ii) any
agreement to which the Company is a party or by which any of its
property or assets is bound.
EXHIBIT A (CONTINUED)
7. Nothing contained in this Agreement shall be construed to place Jesup
and the Company in the relationship of partners or joint venturers.
Neither Jesup nor the Company shall represent itself as the agent or
legal representative of the other for any purpose whatsoever nor shall
either have the power to obligate or bind the other in any manner
whatsoever. Jesup, in performing its services hereunder, shall at all
times be an independent contractor.
8. This Agreement has been and is made solely for the benefit of Jesup and
the Company and each of the persons, agents, employees, officers,
directors and controlling persons referred to in Exhibit B and their
respective heirs, executors, personal representatives, successors and
assigns, and nothing contained in this Agreement shall confer any
rights upon, nor shall this agreement be construed to create any rights
in, any person who is not party to such agreement, other than as set
forth in this paragraph.
9. The rights and obligations of either party under this Agreement may not
be assigned without the prior written consent of the other party hereto
and any other purported assignment shall be null and void.
All communications hereunder, except as may be otherwise specifically
provided herein, shall be in writing and shall be mailed, hand
delivered, or telexed or telegraphed and confirmed by letter, to the
party to whom it is addressed at the following addresses or such other
address as such party may advise the other in writing:
To the Company:
Geotec Thermal Generators, Inc.
0000 X.Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: W. Xxxxxxx Xxxxx
CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Jesup:
Jesup & Xxxxxx Securities Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx,
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices hereunder shall be effective upon receipt by the party to which it
is addressed.
EXHIBIT B
INDEMNIFICATION
The Company agrees that it shall indemnify and hold harmless, Jesup,
its stockholders, directors, officers, employees, agents, affiliates and
controlling persons within the meaning of Section 20 of the Securities Exchange
Act of 1934 and Section 15 of the Securities Act of 1933, each as amended (any
and all of whom are referred to as an "Indemnified Party"), from and against any
and all losses, claims, damages or liabilities, joint and several, and all
actions in respect thereof (including, but not limited to, all legal or other
expenses reasonably incurred by an Indemnified Party in connection with the
preparation for or defense of any claim, action or proceeding, whether or not
resulting in any liability), sustained or incurred by an Indemnified Party: (a)
arising out of, or in connection with, any untrue statement or alleged untrue
statement of a material fact contained in any of the financial or other
information furnished to Jesup by or on behalf of the Company or the omission
(or alleged omission) therefrom of a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; or (b) actions by the Company with respect to, caused by, or
otherwise arising out of any transaction contemplated by the Agreement or
Jesup's performing the services contemplated hereunder; provided, however, the
Company will not be liable under clause (b) hereof to the extent that any loss,
claim, damage or liability is found to have resulted from Jesup's gross
negligence or bad faith in performing such services and except or from any
breach by Jesup of any of its agreements contained in this Agreement; and
provided further however that the Company shall be liable hereunder only up to a
maximum amount equal to the amount raised by Jesup under the Agreement.
If the indemnification provided for herein is determined (by an entry
of final judgment by a court of competent jurisdiction) to be unenforceable by
an Indemnified Party hereunder in respect to any losses, claims, damages or
liabilities referred to therein (except by reason of gross negligence or bad
faith as provided above), then the Company, in lieu of indemnifying such
Indemnified Party, shall contribute any amounts paid or payable by such
Indemnified Party in such proportion as is appropriate and equitable under all
circumstances taking into account the relative benefits received by and the
relative fault of each such party; provided, however, in no event shall Jesup
and/or any Indemnified Party be required to contribute an amount in excess of
net compensation received by Jesup and/or such Indemnified Party pursuant to
this Agreement.
The foregoing indemnification and contribution provisions are not in
lieu of, but in addition to, any rights which any Indemnified Party may have
hereunder or otherwise.
Each of the parties hereto agrees to notify the other promptly of the
assertion against it, or to its knowledge to any other person or any claim or
the commencement of any action or proceeding relating to any activity
contemplated by this Agreement; provided, however, the failure to so notify the
other party shall not alter any parties'
EXHIBIT B (CONTINUED)
rights or obligations under this Agreement unless the indemnifying party
demonstrates prejudice thereby.
EXHIBIT C
JURISDICTION
The Company hereby irrevocably: (a) submits to the jurisdiction of any
court of the State of New York or any federal court sitting in the State of New
York for the purposes of any suit, action or other proceeding arising out of the
agreement between the Company and Jesup which is brought by or against the
Company by Jesup; (b) agrees that all claims in respect of any suit, action or
proceeding may be heard and determined in any such court; and (c) to the extent
that the Company has acquired, or hereafter may acquire, any immunity from
jurisdiction of any such court or from any legal process therein, the Company
hereby waives, to the fullest extent permitted by law, such immunity.
The Company waives, and the Company agrees not to assert in any such
suit, action or proceeding, in each case, to the fullest extent permitted by
applicable law, any claim that: (a) the Company is not personally subject to the
jurisdiction of any such court; (b) the Company is immune from any legal process
(whether through service or notice, attachment prior to judgement, attachment in
the aid of execution, execution or otherwise) with respect to it or its
property; (c) any such suit, action or proceeding is brought in an inconvenient
forum; (d) the venue of any such suit, action or proceeding is improper; or (e)
this agreement may not be enforced in or by any such court.
Any process against the Company in, or in connection with, any suit,
action or proceeding filed in the United States District Court for the Southern
District of New York or any other court of the State of New York, arising out of
or relating to this Agreement or any transaction or agreement contemplated
hereby, may be served on personally, or by air mail (with the same effect as
though served upon the Company personally) addressed to the Company at the
address set forth in the agreement between the Company and Jesup.
Nothing in these provisions shall effect any party's right to serve
process in any manner permitted by law or limit its rights to bring a proceeding
in the competent courts of any jurisdiction or jurisdictions or to enforce in
any lawful manner a judgement obtained in one jurisdiction in any other
jurisdiction.
EXHIBIT D
[The term sheet will be mutually agreed upon by the Company and the investors]
EXHIBIT E
INVESTORS
1. Rhino Advisors
2.
