Exhibit 10.1
Xxxxxxx Securities, LLC
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
(000) 000-0000 fax
July 6, 2005
Mr. Xxxxx Xxxxxxx, President
Chiste Corporation.
000X Xxxxxxxxx Xxxxxxxxx, Xxxxx 00
Xxxx Xxxxx, Xxxxxxx, 00000
Re: Financial Advisory Agreement
Dear Xx. Xxxxxxx:
This letter will confirm our agreement ("Agreement") that Xxxxxxx Securities,
LLC ("Xxxxxxx") is authorized to represent Chiste Corporation and its
affiliates, subsidiaries and related entities (collectively, the "Company") and
to assist the Company as its financial advisor on the terms and conditions set
forth herein. This Agreement shall become effective upon the execution hereof by
both Xxxxxxx and the Company.
1. Performance of Services. In its capacity as financial advisor, Xxxxxxx
will assist the Company by undertaking the following activities, to the
extent that such activities are required or requested by the Company. The
services being provided by Xxxxxxx hereunder are being rendered solely to
the Board of Directors of the Company (the "Board"). These services are
not being rendered by Xxxxxxx as an agent or as a fiduciary of the
shareholders of the Company, and Xxxxxxx shall not have any obligation or
liability with respect to its services hereunder to such shareholders or
any other person, firm or corporation absent fraud or willful misconduct
by Xxxxxxx.
Xxxxxxx shall act as the Company's exclusive advisor concerning matters
pertaining to the Company's efforts to acquire HydroGen, LLC ("HydroGen")
in a "going public" or reverse merger transaction ("Reverse Merger").
Xxxxxxx will assist the Company in: (i) the corporate, business and
financial due diligence evaluation of HydroGen; (ii) the capital and
transaction structuring; (iii) development of capital markets strategy;
(iv) valuation analysis; (v) company, market and industry research; (vi)
analysis of various exchange listing requirements; and (vii) transaction
negotiation and execution. The services set forth in this paragraph shall
be referred to herein in as "Reverse Merger Services".
The parties hereto acknowledge and agree that Xxxxxxx is not rendering
legal advice or performing accounting or auditing services as part of the
services provided under this Agreement. Xxxxxxx shall be free to provide
services for other persons, which services shall not be deemed to be in
conflict with the services to be performed by Xxxxxxx under this
Agreement.
2. Term. The term of this Agreement shall commence on the date of this
Agreement and continue until the closing of the Reverse Merger (the
"Term"). The Term hereof may be extended by the mutual written agreement
of the parties hereto. Notwithstanding anything contained herein to the
contrary, the provisions of Section 2 (Term), Section 3 (Compensation),
Section 9 (Indemnification), Section 10 (Disclosure) and Section 11
(Miscellaneous) shall survive the termination and expiration of this
Agreement.
3. Compensation. As compensation for the Reverse Merger Services rendered by
Xxxxxxx under this Agreement, upon closing of the Reverse Merger between
the Company and HydroGen, the Company shall pay Xxxxxxx a fee of $325,000
at the closing of the Reverse Merger.
4. Affiliated Companies. The Company acknowledges and agrees, and enters into
this Agreement with the full knowledge that, Xxxxxxx and its officers,
directors and affiliates: (i) own, directly or indirectly, a majority
interest in the Company as of the date of this Agreement; (ii) own,
directly or indirectly, an interest in certain investment funds that have
provided or may provide equity or debt financing to the Company for which
Xxxxxxx or one of its affiliates would be entitled to compensation
hereunder with respect to financing raised from such funds during the Term
hereof; and (iii) manage certain investment funds that have provided or
may provide equity or debt financing to the Company for which Xxxxxxx or
one of its affiliates would be entitled to compensation hereunder with
respect to financing raised from such funds during the Term hereof.
5. Availability and Accuracy of Information. The Company shall furnish
Xxxxxxx with all reasonable information and material requested or required
by Xxxxxxx involving the Company and HydroGen including, without
limitation, information concerning historical and projected financial
results, public and regulatory filings, material contracts and
commitments, proposed financings, acquisitions or other transactions, and
possible and known litigation, environmental and other contingent
liabilities of the Company and HydroGen ("Information"). The Company also
agrees to make available to Xxxxxxx such representatives of the Company
and HydroGen, including, among others, directors, officers, employees,
outside counsel and independent certified public accountants, as Xxxxxxx
may reasonably request. The Company will promptly advise Xxxxxxx of any
material changes in the Company's or HydroGen's business or finances. The
Company represents and warrants that the Information provided or made
available to Xxxxxxx by the Company and HydroGen, at all times during the
Term hereof, is and shall be complete and true in all material respects
and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements thereof
not misleading in light of the circumstances under which such statements
are made. The Company further represents and warrants that any projections
provided to Xxxxxxx will have been prepared in good faith and will be
based upon assumptions that, in light of the circumstances under which
they are made, are reasonable. The Company acknowledges and agrees that in
rendering its services hereunder Xxxxxxx will be using and relying on the
Information, without independent investigation, appraisal or verification,
and Xxxxxxx assumes no responsibility for the accuracy or completeness of
the Information.
2
6. Indemnification. The Company agrees to indemnify and hold harmless
Xxxxxxx, its affiliates and their respective officers, directors, members,
partners, employees, agents and affiliates and control persons of any of
the above (each an "Indemnified Person") from and against all claims,
liabilities, losses or damages (or actions in respect thereof) or other
expenses that are related to or arise out of (i) actions taken or omitted
to be taken (including any untrue statements made or any statements
omitted to be made) by the Company, (ii) any breach of any warranty,
representation or agreement of Company contained in this Agreement, or
(iii) actions taken or omitted to be taken by an Indemnified Person with
the consent of or in conformity with the actions or omissions of the
Company. The Company shall not be responsible, however, for any losses,
claims, damages, liabilities or expenses pursuant to the preceding
sentence that are finally judicially determined to have resulted from
Xxxxxxx'x or such other Indemnified Person's reckless or wrongful conduct,
and Xxxxxxx agrees to indemnify and hold Company harmless from any claims,
losses, liabilities or damages incurred by the Company arising out of
Xxxxxxx'x reckless or wrongful conduct as determined in a final judicial
determination. The Company agrees to reimburse each Indemnified Person for
all reasonable out-of-pocket expenses (including reasonable fees and
expenses of counsel for such Indemnified Person) of such Indemnified
Person in connection with investigating, preparing, conducting or
defending any such action or claim, whether or not in connection with
litigation in which any Indemnified Person is a named party, or in
connection with enforcing the rights of an Indemnified Person under this
Agreement. The indemnity agreements under this Section shall survive the
completion of services rendered for Company by Xxxxxxx and the termination
or expiration of this Agreement.
7. Disclosure and Confidentiality. Any financial or other advice, descriptive
memoranda or other documentation rendered by Xxxxxxx pursuant to this
Agreement may not be disclosed publicly or to any third party without the
prior written approval of Xxxxxxx. All non-public information provided by
the Company to Xxxxxxx will be considered confidential information and
shall be maintained as such by Xxxxxxx, except as required by law or as
required to enable Xxxxxxx to perform its services pursuant to this
Agreement, until the same becomes known to third parties or the public
without release thereof by Xxxxxxx. This provision is intended to insure,
among other things, that the parties at all times comply with the
provisions of SEC Regulation FD.
8. Miscellaneous.
A. Before the Company releases any information referring to Xxxxxxx'x
role as the Company's financial advisor under this Agreement or uses
Xxxxxxx'x name in a manner which may result in public dissemination
thereof, the Company shall furnish drafts of all documents or
prepared oral statements to Xxxxxxx for comments, and shall not
release any information relating thereto without the prior written
consent of Xxxxxxx. Nothing herein shall prevent the Company from
releasing any information to the extent that such release is
required by law.
B. The Company agrees that, following the consummation of any
transaction covered by this Agreement, Xxxxxxx shall have the right
to place advertisements in financial and other newspapers and
journals at Xxxxxxx'x expense, describing its services to the
Company hereunder, provided that Xxxxxxx will submit a copy of any
such advertisements to the Company for its prior approval, which
approval shall not be unreasonably withheld.
3
C. The Company represents and warrants that this Agreement has been
duly authorized and represents the legal, valid, binding and
enforceable obligation of the Company and that neither this
Agreement nor the consummation of any transactions contemplated
hereby requires the approval or consent of any governmental or
regulatory agency or violates or conflicts with any law, regulation,
contract or order binding the Company.
D. The terms, provision and conditions of this Agreement are solely for
the benefit of the Company and Xxxxxxx and the other Indemnified
Persons and their respective heirs, successors and permitted assigns
and no other person or entity shall acquire or have a right by
virtue of this Agreement. This Agreement may not be assigned by
either party without prior written consent of the other party.
E. This Agreement (including all exhibits and any addenda or schedules
attached hereto) contains the entire understanding and agreement
between the parties hereto with respect to Xxxxxxx'x engagement
hereunder, and all prior writings and discussions are hereby merged
into this Agreement, except for the Selling Agreement which shall
continue in full force and effect. No provision of this Agreement
may be waived or amended except in a writing signed by both parties.
A waiver or amendment of any term or provision of this Agreement
shall not be construed as a waiver or amendment of any other term or
provision.
F. Each party represents and warrants that it will comply with all
applicable securities and other laws, rules and regulations relating
hereto and that it shall not circumvent or frustrate the intent of
this Agreement.
G. This Agreement may be executed by facsimile signatures and in
multiple counterparts, each of which shall be deemed an original. It
shall not be necessary that each party executes each counterpart, or
that any one counterpart be executed by more than one party so long
as each party executes at least one counterpart.
H. If any provision of this Agreement is declared by any court of
competent jurisdiction to be invalid for any reason, such invalidity
shall not affect the remaining provisions of this Agreement.
I. This Agreement shall be governed by and constructed under the laws
of the State of Colorado without regard to such state's conflicts of
law principles, and may be amended, modified or supplemented only by
written instrument executed by parties hereto.
J. All disputes, controversies or claims ("Disputes") arising out of or
relating to this Agreement shall in the first instance be the
subject of a meeting between a representative of each party who has
decision-making authority with respect to the matter in question.
Should the meeting either not take place or not result in a
resolution of the Dispute within twenty (20) business days following
notice of the Dispute to the other party, then the Dispute shall be
resolved in a binding arbitration proceeding to be held in Denver,
Colorado in accordance with the international rules of the American
Arbitration Association. The arbitrators may award attorneys' fees
and other related arbitration expenses, as well as pre- and
post-judgment interest on any award of damages, to the prevailing
party, in their sole discretion. The parties agree that a panel of
three arbitrators shall be required, all of whom shall be fluent in
the English language, and that the arbitration proceeding shall be
conducted entirely in the English language. Any award of the
arbitrators shall be deemed confidential information for a minimum
period of five years, except to the extent public disclosure of such
information is required by applicable securities laws or
regulations.
4
K. All notices required by the terms of this Agreement shall be in
writing and delivered to the other party at the addresses set forth
below, either by personal delivery, by a recognized international
overnight courier service, or by facsimile or e-mail transmission.
Notices will be deemed given as of the date of receipt, which date
shall be evidenced by the signature of an authorized representative
of the receiving party or by written evidence of a successful
transmission of either a facsimile or e-mail message.
If to Xxxxxxx:
Xxxxxxx Securities, LLC
Attn: Xxxxxxx X. Xxxxxxx, President
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000 telephone
(000) 000-0000 fax
If to the Company:
Chiste Corporation
Attn: Xxxxx Xxxxxxx, President
000X Xxxxxxxxx Xxxxxxxxx, Xxxxx 00
Xxxx Xxxxx, Xxxxxxx, X.X.X 00000
(000) 000-0000
(000) 000-0000 fax
or such other address as indicated by the Company as its
primary business address in its SEC filings.
[Signature page follows.]
5
If the forgoing correctly sets forth the entire understanding and
agreement between the Company and Xxxxxxx, please so indicate by executing this
Agreement as indicated below and returning an executed copy to Xxxxxxx together,
whereupon this Agreement shall constitute a binding agreement as of the date
first above written.
Very truly yours,
XXXXXXX SECURITIES, LLC
By: /S/ Xxxxxxx Xxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxx, President
ACCEPTED AND AGREED TO:
Chiste Corporation
By: /S/ Xxxxx X. Xxxxxxx
------------------------
Xxxxx X. Xxxxxxx, President
Date: July 6, 2005
6
