Idleaire Technologies Corporation January 18, 2002 Tom Badgett Chief Operating Officer IdleAire Technologies Corporation 900 South Gay Street, Suite 300 Knoxville, TN 37902 Gentlemen:
Exhibit 4.1.5
Idleaire Technologies Corporation
January 18, 2002
Xxx Xxxxxxx
Chief Operating Officer
IdleAire Technologies Corporation
000 Xxxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Chief Operating Officer
IdleAire Technologies Corporation
000 Xxxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Gentlemen:
This Agreement confirms our understanding of the engagement of CIBC World Markets Corp. (“CIBC
WM”) by Idleaire Technologies Corporation, a Delaware corporation (the “Company”) to act as
exclusive financial advisor to the Company in connection with a possible Transaction (as
hereinafter defined). In the context of this Agreement, “Transaction” is defined as and understood
to include a private placement of up to $40 million of one or more classes or series of securities
of the Company. Such securities may take the form of subordinated debt, preferred stock, and/or
other equity-like securities convertible into or exchangeable for or accompanied by warrants or
other rights exercisable for or giving the holder thereof the right to purchase common or preferred
stock, in each case as agreed to by the Company (collectively, the “Securities”). During the Term
of this Agreement, CIBC WM shall, in all instances, retain the right to act as sole manager or sole
placement agent for the Transaction, subject to the approval of CIBC WM’s Commitment and Due
Diligence Committees.
Services. During the term of this Agreement, CIBC WM will provide you with financial
advice and assistance in connection with a Transaction which will include (i) assisting in
preparing a private placement memorandum (the “Offering Document”); (ii) assisting in structuring
the Transaction and the terms of the Securities; (iii) reviewing with the Company a list of
potential investors; (iv) preparing other communications to be used in placing the Securities,
whether in the form of letter, circular, notice or otherwise; (v) assisting the Company in
obtaining necessary approvals and consents from existing investors and creditors; (vi) assisting
the Company in marketing the Securities; (vii) assisting and advise the Company with respect to the
negotiation of the sale of the Securities to the investors; (viii) arranging a “Road Show”, and
choose investors acceptable to the Company. In order to coordinate the efforts in connection with
a Transaction, the Company and CIBC WM promptly will inform and consult with each other with
respect to inquiries received from third parties in connection with a Transaction.
Due Diligence. It is understood that CIBC WM’s involvement in the Financing is subject to
the satisfactory completion of its due diligence process, the approval of CIBC WM’s internal
Commitment and Due Diligence Committees and is strictly on a best efforts basis which shall not be
unreasonably delayed by CIBC WM.
It is understood that CIBC WM’s ability to proceed with the private placement is conditioned upon
the absence of: (i) any material adverse change in the business condition of the Company, (ii) any
material adverse change in the financial or capital markets, (iii) any legal, regulatory, financial
or other restrictions or legal proceedings which may impact the Company’s ability to consummate the
private placement and (iv) the satisfactory completion of due diligence by CIBC WM as explained
more fully herein. CIBC WM shall have the right, in its sole discretion, not to proceed with the
private placement if any of the above-listed conditions are not met.
Compensation. In connection with this Agreement, the Company agrees to pay CIBC WM
(i) an expense deposit of $50,000, payable in cash upon execution of this Agreement, which will be
credited against any Expenses (as defined below) paid by the Company to CIBC WM; any unused portion
of this Expense Deposit will be refundable upon termination of this Agreement,
and (ii) a transaction fee (the “Transaction Fee”) equal to the greater of (a) 7.0% of the gross
proceeds raised from the sale of such Securities by the Company, or (b) $1,500,000 payable upon
closing of the Transaction. If the Company closes on a bridge facility to an investor group within
21 days of the date of this Agreement, that bridge facility shall be subject to the terms of this
Agreement but the fee payable to CIBC pursuant to this agreement shall equal 3.5% of the gross
proceeds raised from said bridge facility which fee shall also be payable only upon Closing of the
Transaction. If at any time CIBC is entitled to receive any Transaction Fee under this paragraph,
the Company agrees to issue to CIBC WM warrants (exercisable at will, with a maximum exercise
Idleaire Technologies Corporation
period of 7 years) to purchase 2.5% of the fully diluted common equity of the Company at an
exercise price per share equal to the fair market value of one share of common stock on the
issuance date of the warrants determined by dividing the valuation of the Company immediately
following the close of the Transaction by a denominator equal to the number of fully diluted common
shares outstanding on such date.
Furthermore, the Company will pay CIBC WM the applicable Transaction Fee in respect of a private
placement if, within twelve (12) months from the termination of this Agreement (other than a
termination of this Agreement occurring upon consummation of a Transaction resulting in the payment
of a Transaction Fee to CIBC WM) the Company consummates a sale of the Securities to one or more
parties to whom CIBC WM sent an Offering Document..
CIBC WM also shall have the right of first offer with respect to any other transaction
involving the Company, which arises during the period ending on the day that is twenty four (24)
calendar months from the date of this Agreement, to act as (i) underwriter, initial purchaser or
placement agent (the “Placement Agent”), as applicable, on the terms and conditions set forth
herein, in connection with any debt financing, whether in the form of a loan or securities (“Debt
Financing”), (ii) underwriter for any public offering of equity securities (“Equity Financing” and
together with the Debt Financing, the “Financings”) and (iii) advisor with respect to any other
transaction requiring the services of an investment banker or financial advisor, including any
disposition of assets or change of control of the Company (together with the Financings, “Alternate
Transaction”). In the case of an Alternate Transaction, both parties shall enter into an
additional agreement which will set forth the nature and scope of the services, appropriate
compensation and other customary matters.
Furthermore, in the event that CIBC WM furnishes the Company with one or more term sheets for at
least $20,000,000 in aggregate funding from Solicited Investors to participate in a Transaction
upon terms, conditions and valuation reasonably acceptable to CIBC WM, acting in good faith, and
the Company determines (for whatever reason) not to consummate such Transaction, the Company will
pay to CIBC WM a break fee (the “Break Fee”) in an amount equal to $500,000; provided, that should
the term sheets be revoked by the Solicited Investors prior to either due diligence or substantive
negotiations with the Company, then the Break Fee shall not be owed by the Company to CIBC WM.
The Company also agrees to periodically reimburse CIBC WM promptly when invoiced for all of its
reasonable out-of-pocket expenses (including reasonable fees and expenses of its legal counsel,
collectively “Expenses”) in connection with the performance of its services hereunder, regardless
of whether a Transaction occurs. Upon termination or expiration of this Agreement or completion of
a Transaction, the Company agrees to pay promptly in cash any unreimbursed expenses that have
accrued as of such date. To the extent officers of CIBC WM assist in, or provide testimony in
trial or deposition for any action, suit or proceeding relating to a Transaction, or this Agreement
or our engagement hereunder, the Company will pay CIBC WM a per diem charge for the services of
such officers in an amount to be mutually agreed upon by the Company and CIBC WM prior to such
assistance.
Term. The term of this Agreement will automatically terminate (i) upon the date which is
twenty four (24) months from the date of this letter or (ii) upon the consummation of a Transaction
unless extended in writing by the Company. Notwithstanding anything herein to the contrary, CIBC
WM may terminate this Agreement and its engagement hereunder by giving the other party at least
thirty (30) days prior written notice to that effect and the Company may terminate this Agreement
by giving CIBC WM at least thirty (30) days prior written notice to that effect at any time after
the date which is twelve (12) months from the date of this Agreement. Notwithstanding the
term of this Agreement, the parties shall use their best efforts to expedite the sale of the
Securities. The Company agrees that the provisions relating to the payment of fees, reimbursement
of expenses, right of first offer, indemnification and contribution, confidentiality and waiver of
the right to trial by jury will survive any such termination.
Exclusivity. Pending the completion of the Transaction contemplated herein, the Company
agrees that it will not negotiate with any other underwriter or other financial adviser relating to
a possible Transaction. The Company represents and warrants that, except as disclosed to CIBC WM,
its subsidiaries are wholly owned by it and that it has not granted any other person any right to
underwrite or register shares thereof or agreed to pay any finders or financial services fees in
connection with the transactions contemplated herein.
Idleaire Technologies Corporation
Indemnification. As CIBC WM will be acting on your behalf, the Company agrees to indemnify
CIBC WM and certain related parties in the manner set forth in Annex A which is attached and
incorporated by reference in its entirety to this Agreement.
Use of Information. The Company will furnish (or will use reasonable efforts to cause
other potential parties to the Transaction to furnish) to CIBC WM such information as CIBC WM
believes appropriate to its assignment (the “Information”). The Company hereby agrees and
represents that all Information relating to the Company furnished to CIBC WM will be accurate and
complete in all material respects at the time provided, and that, if the Company is aware of any
Information becoming materially inaccurate, incomplete or misleading during the term of this
Agreement or CIBC WM’s engagement hereunder, the Company will promptly advise CIBC WM. The Company
recognizes and confirms that CIBC WM assumes no responsibility for the accuracy and completeness of
the Information and will be using and relying upon the Information (and information available from
generally recognized public sources) without assuming responsibility for independent verification
or independent evaluation of any of the assets or liabilities of the Company. Inasmuch as it will
be necessary to prepare and disseminate an Offering Document, the Company will prepare the Offering
Document with the assistance of its counsel and CIBC WM, and will provide CIBC WM a copy of such
Offering Document. The Company will represent to CIBC WM in writing that the Offering Document is
accurate in all material respects and does not contain an untrue statement of 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 are made, not misleading. The Company acknowledges
that in performing its services, CIBC WM is acting as an independent contractor with duties owing
solely to the Company. The Company further acknowledges that any service, information or advice
provided by CIBC WM to the Company in connection with this Agreement is for the confidential use of
the Board and senior management of the Company and may not be disclosed or referred to publicly or
to any third party, without our prior written consent, which consent will not be unreasonably
withheld. Notwithstanding anything to the contrary contained herein, CIBC WM acknowledges and
agrees that the Offering Document shall be the exclusive property of the Company and that CIBC WM
shall have no rights thereto. In connection with this Agreement, it is contemplated that the
Company may supply to CIBC WM certain non-public or proprietary information concerning the Company
(“Confidential Information”). CIBC WM shall disclose Confidential Information solely for the
purposes of rendering services pursuant to and in accordance with this Agreement; provided,
however, that the foregoing shall not apply to any information which becomes publicly available
other than as a result of the breach of CIBC WM’s undertakings hereunder, or that which CIBC WM is
required to disclose by judicial or administrative process in connection with any action, suit,
proceeding or claim.
Miscellaneous. This Agreement will be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of law. The Company
irrevocably submits to the jurisdiction of any court of the State of New York for the purpose of
any suit, action or other proceeding arising out of this Agreement or our engagement hereunder.
Each of the Company and CIBC WM hereby waives any right it may have to a trial by jury in respect
of any claim brought by or on behalf of either party based upon, arising out of or in connection
with this Agreement, our engagement hereunder or the transactions contemplated hereby. The Company
represents and warrants to CIBC WM that there are no brokers, representatives or other persons
which have an interest in compensation due to CIBC WM from any Transaction or our services
contemplated herein. CIBC WM may, at its own expense and with the Company’s consent (which shall
not be unreasonably withheld), place announcements or advertisements in financial newspapers and
journals describing our services hereunder.
This Agreement may not be amended or modified except in writing signed by the Company and CIBC WM
and may be executed in two or more counterparts, each of will be deemed to be an original, but all
of which will constitute one and the same Agreement. All rights, liabilities and obligations
hereunder will be binding upon and inure to the benefit of the Company, CIBC WM, each Indemnified
Party (as defined in Annex A) and their respective successors and assigns.
Idleaire Technologies Corporation
Please sign and return the original and one copy of this letter to indicate your acceptance of the
terms set forth herein whereupon this letter and your acceptance shall constitute a binding
agreement between the Company and CIBC.
| Very truly yours, | ||||
| CIBC WORLD MARKETS CORP. | ||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Xxxxx Xxxxxxx | ||||
| Managing Director | ||||
Agreed to and accepted as
of 18 January 2002.
of 18 January 2002.
| IDLEAIRE TECHNOLOGIES CORPORATION | ||||
By:
|
/s/ Xxx Xxxxxxx | |||
| Xxx Xxxxxxx | ||||
| COO | ||||
