EXHIBIT 10.135
XXXXXXX XXXX PARTNERS
A DIVISION OF PALI CAPITAL, INC.
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000 XXXXXXXXX XXXXXX TEL 000-000-0000
XXX XXXX, XXX XXXX 00000 FAX 000-000-0000
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September 26, 2005
Xx. Xxxxxx Xxxxxxx
Chairman and Chief Executive Officer
HiEnergy Technologies, Inc.
0000-X Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Gentlemen:
This letter Agreement (the "Agreement") confirms the engagement of Xxxxxxx Hill
Partners ("BHP), a division of Pali Capital, Inc., by HiEnergy Technologies,
Inc. (the "Company") to act as its exclusive placement agent in connection with
capital raising through a transaction or transactions exempt from registration
under the Securities Act of 1933, as amended, and in compliance with the
applicable securities laws and regulations.
As compensation related to the proposed financing activity, BHP shall receive a
cash placement fee equal to ten (10%) percent of the gross proceeds up to $3
million and seven (7%) percent of the gross proceeds in excess of $3 million.
The Company, in its sole discretion, may accept or reject any financing terms
proposed pursuant to this Agreement.
During the term of the Agreement, BHP shall act as the Company's exclusive
financial advisor in connection with one or more potential strategic
transactions, which may include an acquisition, partnership, strategic alliance,
merger or a sale or disposition of assets (a "Strategic Transaction"). At the
Company's request, BHP will:
(a) assist the Company in analyzing and evaluating the business,
operations and financial position of each suitable prospect for a
Strategic Transaction;
(b) assist the Company with its due diligence efforts related to each
potential Strategic Transaction;
(c) assist the Company in structuring and negotiating each Strategic
Transaction and
(d) be available at the Company's request to meet with your Board of
Directors to discuss any proposed Strategic Transaction and its
financial implications.
In connection with advisory services related to Strategic Transaction the
Company shall pay BHP a cash fee (or stock fee upon mutual agreement) equal to
three (3%) percent of the aggregate value/consideration received or paid in
connection with such Strategic Transaction.
BHP, or its registered assigns, shall be issued Placement Agent Warrants in an
amount equal to eight (8%) percent of the securities issued in connection with
the financing activity under this agreement. The Placement Agent Warrants shall
be exercisable at the purchase price or exercise price of the common stock or
underlying common stock in the case of convertible securities issued and such
placement agent warrants shall expire five years from the issuance date. The
shares underlying the Placement Agent Warrants shall have standard piggyback
registration rights, and shall be exercisable pursuant to a cashless exercise
provision, subject to the Company's right to call the Placement Agent Warrants
if the common stock closes above $2.00 for ten consecutive trading days. The
common shares underlying the Placement Agent Warrants shall be included in any
registration statement covering the shares issued pursuant to financing activity
under this Agreement.
The Company shall pay to BHP an initial retainer of $10,000, which shall be
deducted from any fees due under the Agreement. The Company shall provide to BHP
periodic reimbursement of all out-of-pocket expenses, which amount shall not
exceed $10,000 without the prior written approval of the Company.
Notice given pursuant to any of the provisions of this Agreement shall be given
in writing and shall be sent by overnight courier or personally delivered (a) if
to the Company, to the Company's Chief Executive Officer at the address listed
above; and (b) if to BHP, to its offices at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000. Attention: Xxxxx Xxxxxxx, Managing Director.
No advice or opinion rendered by BHP, whether formal or informal, may be
disclosed, in whole or in part, or summarized, excerpted from or otherwise
referred to without our prior written consent. In addition, BHP may not be
otherwise referred to without its prior written consent. Since BHP will be
acting on behalf of the Company in connection with its engagement hereunder, the
Company has entered into a separate letter Agreement, dated the date hereof,
providing for the indemnification by the Company of BHP and certain related
persons and entities.
BHP's engagement hereunder shall expire twelve (12) months from the date of this
Agreement (the "Authorization Period"). In the event that there has not been an
initial closing with gross proceeds of at least $2,000,000 within thirty (30)
days of the execution of this Agreement, the Company may terminate this
Agreement upon five business days notice. Provided however, that upon the
expiration or termination, BHP will continue to be entitled to its full fees
provided for herein in the event that at any time prior to the expiration of
twelve (12) months after such expiration or termination, a Financing involving
the Company occurs that involves a party contacted by BHP on behalf of the
Company.
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Subject to the completion of the initial financing with gross proceeds of at
least $2,000,000, for a period of eighteen (18) months following such closing,
BHP shall have a right of first refusal to act as an underwriter in connection
with a public offering of the Company's securities with BHP receiving no less
than thirty (30%) percent of the deal economics. BHP, at the Company's request,
shall assist the Company in identifying and facilitating a larger bracket
investment bank in pursuing an underwritten public offering of the Company's
securities during the term of this Agreement.
BHP is a division of Pali Capital Inc. The letter agreement shall remain in full
force and effect as to BHP and the Company in the event that BHP becomes an
independent entity. Each of BHP and the Company agrees that the other party has
no fiduciary duty to it or its stockholders, officers and directors as a result
of the engagement described in this Agreement. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to conflicts of law principles thereof. This Agreement may not be amended
or modified except in writing signed by each of the parties hereto.
The invalidity or unenforceability of any provision of this letter Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement or the Indemnification Agreement, which shall remain in full force and
effect.
We are delighted to accept this engagement and look forward to working with you
on this assignment. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
Agreement.
Very truly yours,
Xxxxxxx Xxxx Partners
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Managing Director
Accepted and Agreed to as of the date first written above:
By: X.X. Xxxxxxx
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Name: X.X. Xxxxxxx
Title: CEO
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