March 22, 2005 Maurice Shanley Dear Mo,
EXHIBIT
10.4
March
22,
2005
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Dear
Mo,
This
letter
serves to confirm our Agreement regarding the introduction by Pali Capital,
Inc.
(the “Representative”) to ▇▇▇▇▇▇▇ Technologies Corporation (the “Company”)
of one or more investors (the “Investor”) to purchase the Company’s securities
described below (the “Securities”) on the following terms and
conditions.
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1.
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Appointment
as Representative.
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(A) The
Company appoints the Representative as its exclusive representative for the
term
of this Agreement in order to attempt to raise money for the Company by
introducing it to investors to purchase the Company’s Securities in a method not
requiring registration with the Securities and Exchange Commission or the
securities commission of any state. The exact sum and the particulars of
the
Securities will be upon terms to be negotiated between the Company and the
Investor(s). Such terms shall be acceptable to the Company in its sole
discretion. The Company understands that the Representative has not made
any
representations that an investment in the Securities will be obtained by
the
Representative on terms agreeable to the Company.
(B) The
Representative accepts such appointment and agrees to attempt to raise the
funds
contemplated by this Agreement for the Company, subject to the provisions
and
conditions of this Agreement; provided, however, that nothing in this Agreement
or otherwise shall be deemed a guaranty or warranty that the Representative
will
be able to raise any money for the Company.
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2.
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Company’s
Duties.
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The
Company, with the assistance of the Representative, shall prepare a Term
Sheet
or the like, a Private Placement Memorandum, (the “PPM”) and such other
documents as may be necessary for the non-public offering and sale by the
Company of its restricted securities as contemplated by paragraph 1 of this
Agreement, (hereinafter collectively the “Information”) and the Company shall
comply with all federal and state securities laws applicable to the Company’s
offer and sale of such restricted securities. The Company herein represents
that
any Information provided to the Representative by the Company will be complete
and correct in all material respects and will not include any untrue statement
of a material fact or omit to state a material fact necessary in order to
make
the statements therein, in the light of the circumstances under which they
were
made, not misleading, (ii) all historical financial data contained in the
Information will be prepared in accordance with generally accepted accounting
principles then in effect in the United States and will fairly present in
all
material respects the financial condition and operations of the Company as
of
the respective date or dates. The Company will notify Introducer promptly
of any
material adverse change in the business, properties, operations, financial
condition or prospects of the Company, or concerning any statement contained
in
any of the Information provided by the Company to the Representative which
is
not accurate or which is incomplete or misleading in any material respect.
The
Company acknowledges that the Representative may rely, without independent
verification, upon the accuracy and completeness of the Information, and
that
the Representative does not assume any responsibility therefore.
The
Company further herein indemnifies, defends and holds harmless the
Representative and its affiliates and their respective officers, directors,
attorneys, employees, agents and controlling persons (each an “Indemnified
Person”) from and against any and all losses, claims, damages, liabilities and
expenses, joint or several, to which any such Indemnified Person may become
subject arising out of any untrue statement or alleged untrue statement of
a
material fact contained in the Information or a violation of this Agreement
by
the Company or any claim, litigation, investigation or proceedings relating
to
the foregoing regardless of whether any of such Indemnified Person or Persons
is
a party thereto, and to reimburse such Indemnified Person or Persons for
any
legal or other expenses as they are incurred in connection with investigating
or
defending any of the foregoing, provided that the foregoing indemnification
will
not, as to any Indemnified Person, apply to losses, claims, damages, liabilities
or expenses to the extent that they are finally judicially determined to
have
resulted from the gross negligence, willful misconduct, bad faith or criminal
misconduct of such Indemnified Person. The company further acknowledges that
any
indemnification pursuant to this paragraph 2 shall in no way limit, alter
or
nullify any provisions specified in this paragraph 8 hereof.
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3.
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Purchase,
Sale and Delivery of the Shares.
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On
the
basis of the representations and warranties herein contained and subject
to the
terms and conditions herein set forth:
(A) The
Company hereby appoints Representative as its exclusive agent, to solicit
purchase of the Securities, and Representative agrees to use its best efforts
to
obtain such purchase to the extent consistent with the requirements of Sections
4(2) and 4(6) of the Act, Regulation D, and applicable requirements of the
securities laws of any state in which the sale of the Shares is being made.
It
is understood that no sale shall be regarded as effective unless and until
accepted by the Company, and that the Company reserves the right to refuse
to
sell the Shares to any person; provided, however, acceptance of a subscription
by the Company shall not be unreasonably withheld. It shall be the obligation
of
the Company to determine, prior to acceptance of a subscription, that the
prospective investor is an accredited investor. The Company shall be entitled
to
rely on the representations as to the status of a prospective investor contained
in the subscription documents. Representative will solicit the exercise of
1,145
of Company’s warrants as contemplated by this agreement exercisable at $2.00 per
share. Said shares are also to be determined as “kicker warrants.”
(B) Representative
shall observe the following procedures with respect to the
offering:
(i) Prior
to
delivery of the PPM to any prospective investor, Representative shall deliver
a
copy of a Non-Disclosure Agreement provided by the Company and shall receive
an
executed copy of the Non-Disclosure Agreement from the prospective investor.
Representative shall deliver the original copy of the executed Non-Disclosure
Agreement to the Company.
(ii) If
a
prospective investor to whom a copy of the PPM has been provided decides
not to
participate in the Offering, Representative shall use its best-efforts to
recover the copy of the PPM delivered to such prospective investor.
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4. Compensation
to the Representative.
(A) Fees.
If
during
the term of this Agreement, or within twelve (12) months after its termination,
the Company sells any of its Securities to one or more Investors introduced
by
the Representative, the Company shall pay to the Representative, at the closing
of each sale of Securities, a fee equal to:
(i) Nine
percent (9%) of the gross proceeds of the Securities sold at each closing;
and
(ii) Warrants
to purchase common shares equal to nine percent (9.00%) of the total face
amount
of the equity financing raised at each closing with an exercise price equal
to
the price at which the investor acquires such shares and with such other
terms
including registration rights and duration as any warrants issued to the
investors. In the event that no warrants are issued to an investor, the warrants
will carry the same registration rights as the shares and the term of the
warrants issued hereunder shall be 5 years.
The number of shares which can be purchased pursuant to the warrants shall
be
determined by multiplying the face amount of the financing by ten percent
(10%)
and dividing the result by the price at which the investor acquires the
stock.
(iii) In
the
event of a sale of the majority of Securities of the Company to one or more
investors, Company shall pay to the Representative, in addition to other
fees
and compensation as contemplated herein, at the closing of the sale of Company
two percent (2%) of the gross proceeds of the Securities sold resulting in
a
change in ownership of Company.
5. Expenses.
In
addition to the fees described in paragraph 4 above, the Company agrees to
reimburse the Representative for all out-of-pocket expenses incurred in
connection with or arising out of the Representative’s activities pursuant to or
contemplated by this Agreement, including a reimbursement of $20,000 of
non-accountable expenses.
6. Representative’s
Duties.
The
Representative shall:
(A) Endeavor
to aid the Company to sell its Securities, as contemplated by this Agreement;
provided, however, that nothing in this Agreement or otherwise shall be deemed
a
guaranty or warranty by the Representative that it will be successful in
raising
any money for the Company;
(B) Devote
such time as the Representative determines may be reasonably necessary for
the
purpose of aiding the Company to sell its Securities; and
(C) Provide
a
monthly report to the Company listing investors with whom they have had
communications.
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7.
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Term
of Agreement.
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This
Agreement shall continue for a term of 90 days to be extended upon written
agreement of both parties. If extended beyond the 90-day period, this Agreement
shall continue for a term of five years. Throughout the duration of this
Agreement, Company agrees to enable Representative to name one director to
the
Company’s board of directors in exchange for Representative’s activities
contemplated by this engagement.
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8.
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No
Employment Contract.
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Nothing
contained in the Agreement shall be construed to constitute the Representative
as a partner, employee, or agent of the Company, nor shall either party have
any
authority to bind the other in any respect, it being intended that each shall
remain an independent contractor responsible for its own actions. The Company
further understands and herein acknowledges that the Representative may engage
in similar activities with other individuals or entities in its sole and
absolute discretion.
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9.
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Future
Financings; Investment Banking
Services.
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If
the
Representative raises the funds contemplated by this Agreement for the Company,
the Company:
(A) Agrees
that the Representative shall have a right of first refusal for the next
three
(3) years with respect to all future
financings,
public or private, involving the sale of stock by the Company or the sale
of
securities convertible into stock of the Company (“Future Company Financings”).
If the Company contemplates any such Future Company Financings, it shall
provide
the Representative with a written term sheet, which shall describe in reasonable
detail all of the salient terms of such Future Company Financing(s) (the
“Term
Sheet”). The Representative shall have thirty (30) days from the date it
receives the Term Sheet to advise the Company whether or not it wishes to
attempt to effect such Future Company Financing for the Company. If the
Representative advises the Company that it wishes to do so, the parties will
negotiate in good faith regarding the preparation and execution of a mutually
satisfactory agreement.
(B) Agrees
to
retain the services of the Representative to provide it with investment banking
services and advice for a period of (5) years
after the raising of such funds for the Company at a monthly fee mutually
agreed
to between the Company and the Representative.
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10.
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Indemnification
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The
Parties agree to indemnify one another and hold each other harmless from
and
against any losses, claims, damages, judgments, assessments, costs and other
liabilities and shall reimburse each other for all fees and expenses (including
reasonable attorneys fees) as they are incurred by an indemnified party in
defending any claim, action or proceeding arising out of or in connection
with
any untrue
statement
of material fact or omission to state a material fact. No Party from whom
indemnification shall be sought shall be liable for the negligence, gross
negligence, bad faith or willful misconduct of the other Party.
The
Party
seeking indemnification shall, within fifteen (15) days of receipt of actual
notice of the claim, action or proceeding, notify the other party in writing
of
the claim, action or proceeding. Failure to notify the party who is obligated
to
provide the indemnity described herein of the claim, action or proceeding
shall
result in an absolute waiver of the Party’s right to seek
indemnification.
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11.
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Entire
Contract.
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This
Agreement contains the entire understanding of the Parties and supersedes
all
previous verbal and written agreements. The Parties herein acknowledge that
there are no other agreements, representations, or warranties other then
those
set forth herein.
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12.
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Dispute
Resolution, Attorney Fees.
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The
Company hereby irrevocably submits to the jurisdiction of any New York State
or
Federal court sitting in New York County over any action or proceeding arising
out of or relating to this Agreement and the Company hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The Company hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding.
The
Company agrees that a final judgment in any such action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law. Nothing in this paragraph 10 shall affect
the right of the Representative to bring any action or proceeding against
the
Company in the courts of any other jurisdiction.
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13.
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Governing
Law.
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This
Agreement shall be construed in accordance with, and governed by, the procedural
and substantive laws of the State of New York, without giving effect to conflict
of law principles.
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14.
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Binding
Effect.
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The
provisions of this Agreement shall be binding upon and inure to the benefit
of
each of the Parties and their respective successors and assigns. This document
shall be binding when signed in counterpart and/or delivered by
facsimile.
If
the
foregoing meets with your understanding and approval, please sign and return
one
copy to me for our records.
Very
truly yours,
PALI
CAPITAL, INC.
By: /s/
Signature not
legible
Dated: 3/22/2005
Accepted
and Agreed to:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
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[▇▇▇▇▇▇▇
TECHNOLOGIES CORP. LETTERHEAD]
November
14, 2005
▇▇▇▇▇▇▇
▇▇▇▇
Pali
Capital
▇▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇▇
▇▇▇▇▇
New
York,
NY 10019
Dear
▇▇▇▇:
This
letter is to amend section 4. Compensation to the Representative (A(iii)),
of
the Engagement Agreement dated March 22, 2005. This section should be amended
to
include the sale of any subsidiaries of ▇▇▇▇▇▇▇ Technologies as
well.
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
-6-
[▇▇▇▇▇▇▇
TECHNOLOGIES CORP. LETTERHEAD]
July
13,
2005
▇▇.
▇▇▇▇
▇▇▇▇
Pali
Capital
▇▇▇
▇▇▇▇▇
▇▇▇
New
York,
NY
Dear
▇▇▇▇:
This
is
to confirm the discussions and agreement reached concerning warrants previously
issued to Pali Capital and their investors by ▇▇▇▇▇▇▇ Technologies Corp.
As
additional consideration in settlement of the current outstanding balance
for
past fees of $187,000, I confirm that ▇▇▇▇▇▇▇ will re-price the warrants
issued
in the second round as “kickers”, plus the Pall warrants for that round, to be
exercisable into common stock at an exercise price of the market closing
price
today, and will increase the number of those warrants by 20%.
Additionally,
I agree to the modification discussed earlier, increasing the additional
warrant
for unregistered common shares to Pali from 40,000 to 70,000.
Sincerely,
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
CEO
▇▇▇▇▇▇▇
Technologies Corp
-7-
▇▇▇▇▇▇▇
TECHNOLOGIES CORP. LETTERHEAD]
July
13,
2005
▇▇.
▇▇▇▇
▇▇▇▇
Pali
Capital
▇▇▇
▇▇▇▇▇
▇▇▇
New
York,
NY
Dear
▇▇▇▇:
This
is
to confirm the discussions and agreement reached concerning fees due Pali
by
▇▇▇▇▇▇▇ Technologies Corp. As to the current outstanding balance for past
fees
of $187,000, I confirm the following:
1
▇▇▇▇▇▇▇
will issue 40,000 warrants exercisable into common stock at 05 to Pali Capital.
▇▇▇▇▇▇▇ agrees to registered the underlying shares within 90 days.
2.
▇▇▇▇▇▇▇ will sign a promissory note for $187,000 with an 11% interest
rate and payable within 90 days, will repay this from “first dollars” received
from any equity or debt proceeds (other than normal revolving debt associated
with working capital financing of inventory and receivables) and apprise
Pali
immediately of receipt of either. The ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ transaction is set aside
from this agreement.
3.
▇▇▇▇▇▇▇ will adjust “kicker warrants” issued to investors to either 2.00 per
share or 110% of the price of any equity issuances completed prior to payment
of
the note, whichever is lower.
Sincerely,
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
CEO
▇▇▇▇▇▇▇
Technologies Corp.
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