Exhibit 10.2
PLACEMENT AGENT AND ADVISORY
SERVICES AGREEMENT
This Placement Agent and Advisory Services Agreement (this "Agreement") is made
as of May 8, 2007 (the "Effective Date"), by and between American Soil
Technologies, Inc., a Nevada corporation (together with its subsidiaries, the
"Company"), and Monarch Bay Associates, LLC, a California limited liability
company ("MBA"). MBA and the Company agree as follows:
1. ENGAGEMENT OF MBA: The Company hereby engages MBA, and MBA hereby accepts
such engagement, to act as:
(a) the Company's placement agent on a non-exclusive basis with respect to
finding investors (the "Investors") for an offering of the Company's
capital stock in a transaction or transactions exempt from
registration under the Securities Act of 1933, as amended, and in
compliance with the applicable laws and regulations of any
jurisdiction in which securities are sold under this Agreement (a
"Private Placement"); and
(b) the Company's advisor, on a non-exclusive basis, in identifying and
introducing prospective parties to an acquisition, merger, joint
venture or any other similar transaction or relationship, directly or
indirectly, involving the Company (a "Transaction").
The Company acknowledges and agrees that MBA's obligations hereunder are on
a reasonable best efforts basis only and that the execution of this
Agreement does not constitute a commitment by MBA to purchase the
securities and does not ensure the successful placement of the securities
or any portion thereof or the success of MBA with respect to securing any
other financing or a Transaction on behalf of the Company. MBA will act
solely as a broker with respect to identifying and negotiating with
potential investors in securities that may be issued in the Private
Placement and potential parties to a Transaction. MBA will not act as an
underwriter in any Private Placement or Transaction.
2. MBA'S COMPENSATION: The Company hereby agrees to pay MBA fees in such
amount and upon such terms and conditions contained herein upon the
successful completion of a Private Placement as follows:
(a) Success Fees. The Company will pay MBA a Success Fee, as described
below, when the Company closes on a Private Placement or a Transaction
during the Term (as hereinafter defined) of this Agreement or during a
one-year period thereafter, so long as any purchasers of the Company's
capital stock or parties to a Transaction were identified by or
introduced to the Company by MBA (or are affiliates of any person so
identified or introduced).
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Computation and Payment of Success Fees.
(i) PRIVATE PLACEMENTS. For each Private Placement, the Success Fee will be (x)
a cash fee equal to 9% of gross proceeds raised in the Private Placement
(including, without limitation, upon exercise of any warrants issued in Private
Placement) and (y) warrants (the "MBA Warrants") to purchase 9% of the total
number of shares of common stock issued and issuable by the Company to Investors
under and in connection with the Private Placement, including (without
limitation) shares issuable upon conversion or exercise of the securities sold
in the Private Placement, at an exercise price equal to the purchase price of
the common stock sold in the Private Placement or, in the event that securities
convertible into common stock are sold in the Private Placement, the conversion
price of such securities.
The cash portion of the Success Fee will be due and payable upon the closing of
each Private Placement and will be payable directly to MBA from the escrow
established for such closing or in such other manner as may be acceptable to
MBA.
MBA Warrants will have a five year term (or such longer term as is provided in
any warrants issued in the Private Placement) and will provide for cashless
exercise (even if the Investors do not have such a right). MBA Warrants will
have the benefit of full ratchet anti-dilution protection against issuances of
securities at prices (or with conversion or exercise prices, in the case of
convertible securities, warrants, options or rights) below the exercise price of
MBA Warrants. MBA Warrants will not be callable or redeemable. The shares
underlying MBA Warrants will be included in the first registration statement
filed by the Company covering the securities issued in the Private Placement (or
securities issuable upon conversion or exercise thereof). MBA Warrants will be
transferable within MBA's organization, at MBA's discretion. MBA Warrants will
contain such other terms and conditions no less favorable to MBA than the term
and conditions of any warrants issued to the Investors in the Private Placement.
(ii) TRANSACTIONS. For each Transaction, the Success Fee will be a cash fee
equal to 3% of the Total Consideration (as defined below) with respect to such
Transaction. As used herein. "Total Consideration" means, with respect to any
Transaction, the total value of all cash, securities, or other property paid or
received, directly or indirectly, by the Company or its owners (at closing or in
the future) in connection with such Transaction, including (without limitation)
in respect of (i) the assumption (by contract, operation of law or otherwise) of
any indebtedness or (ii) consulting, non-compete or similar agreements.
The Success Fee will be due and payable upon the closing of each Transaction and
will be payable directly to MBA from the escrow established for such closing or
in such other manner as may be acceptable to MBA; provided that in the case of
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any installment or contingent payment made in respect of the Transaction, the
Success Fee in respect of such installment or contingent payment shall be due
and payable on the date such payment is made.
3. CERTAIN MATTERS RELATING TO MBA'S DUTIES:
(a) MBA shall (i) assist the Company in the preparation of information
documents to be shared with potential Investors and parties to
Transactions (ii) identify and screen potential Investors and parties
to Transactions, and (iii) perform other related duties.
(b) MBA shall perform its duties under this Agreement in a manner
consistent with the instructions of the Company. Such performance
shall include the delivery of information to potential interested
parties, conducting due diligence, and leading discussions with
potential Investors and parties to Transactions.
(c) MBA shall not engage in any form of general solicitation or
advertising in performing its duties under this Agreement. This
prohibition includes, but is not limited to, any mass mailing, any
advertisement, article or notice published in any magazine, newspaper
or newsletter and any seminar or meeting where the attendees have been
invited by any mass mailing, general solicitation or advertising.
(d) MBA is and will hereafter act as an independent contractor and not as
an employee of the Company and nothing in this Agreement shall be
interpreted or construed to create any employment, partnership, joint
venture, or other relationship between MBA and the Company. MBA will
not hold itself out as having, and will not state to any person that
MBA has, any relationship with the Company other than as an
independent contractor. MBA shall have no right or power to find or
create any liability or obligation for or in the name of the Company
or to sign any documents on behalf of the Company.
4. CERTAIN MATTERS RELATING TO COMPANY'S DUTIES:
(a) The Company shall promptly provide MBA 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 MBA, which information shall be complete and accurate
in all material respects at the time furnished.
(b) The Company recognizes that in order for MBA to perform properly its
obligations in a professional manner, it is necessary that MBA be
informed of and, to the extent practicable, participate in meetings
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and discussions between the Company and any third party, including,
without limitation, any prospective purchaser of the Company's
securities, relating to the matters covered by the terms of MBA's
engagement.
(c) The Company agrees that any report or opinion, oral or written,
delivered to it by MBA 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
MBA's prior written consent, except as may be required by applicable
law or regulation.
(d) The Company represents and warrants that: (i) it has full right, power
and authority to enter into this Agreement and to perform all of its
obligations hereunder; (ii) this Agreement has been duly authorized
and executed by and constitutes a valid and binding agreement of the
Company enforceable in accordance with its terms; and (iii) the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in a
breach of the Company's certificate of incorporation or by-laws.
Further, this Agreement and the transactions contemplated herein shall
not conflict with or result in the breach of any agreement to which
the Company is a party at the time the transactions contemplated
herein are consummated.
5. TERM; TERMINATION OF AGREEMENT. The term of this Agreement shall commence
on the Effective Date and shall expire 180 days thereafter unless
terminated earlier pursuant to the terms of this paragraph (the "Term").
Either party may terminate this Agreement prior to its expiration by
notifying the other party in writing. Notwithstanding the foregoing, all
provisions of this Agreement (including Exhibit A hereto) other than
Sections 1, 3 and 4 (a) and (b) shall survive the termination or expiration
of this Agreement. MBA shall be entitled to compensation under Section 2
(and payment for non-accountable expenses under Section 12) based on the
completion of a Private Placement or a Transaction prior to the termination
or expiration of this Agreement or during the period one year following
termination so long as any Investors or party to a Transaction, as the case
may be, (or any affiliate of any such person or entity) were identified by
or introduced to the Company by MBA. MBA will provide to the Company within
ten business days after the expiration or termination of this Agreement a
list of all persons or entities identified by or introduced to the Company
by MBA pursuant to this Agreement (the "Introduction List"). Within five
business day following the delivery of the Introduction List to the
Company, the Company will provide MBA with written notice of any objections
to the inclusion of any person or entity in the Introduction List and state
the basis for each objection in reasonable detail. The inclusion of a
person or entity in the Introduction List shall be deemed conclusive in
making a later determination as to whether a Success Fee is payable
hereunder, unless the Company shall have made a timely and proper
objection. The parties will cooperate to resolve the status of any person
or entity as to which the Company shall have made a timely and proper
objection.
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Except as otherwise specifically provided for herein, the Company shall
have no liability to MBA should the Company terminate this Agreement prior
to the completion of a Private Placement or a Transaction.
6. INDEMNIFICATION. The indemnification provisions set forth in Exhibit A
hereto are incorporated by reference and are a part of this Agreement.
7. NOTICES. Any notice, consent, authorization or other communication to be
given hereunder shall be in writing and shall be deemed duly given and
received when delivered personally, when transmitted by fax during the
normal business hours of the party receiving such notice so long a copy of
that notice is also send by certified mail, return receipt requested at the
time it is transmitted by fax, five business days after being mailed by
certified mail, return receipt requested or one business day after being
sent by a nationally recognized overnight delivery service, charges and
postage prepaid, properly addressed to the party to receive such notice, at
the following address or fax number for such party (or at such other
address or fax number as shall hereafter be specified by such party by like
notice):
(a) If to the Company, to:
Xxxx Xxxxx
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Fax Number:
E-mail: xxxxxxxxx@xxx.xxx
(b) If to MBA, to:
Xxxxx Xxxxxxx, Managing Director
Monarch Bay Associates, LLC
00000 Xxxxxx Xxxxx Xx #000
Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000
Telephone Number:(000) 000-0000
Fax Number: (000) 000-0000
E-mail:
8. COMPANY TO CONTROL TRANSACTIONS. The terms and conditions under which the
Company would enter into a Private Placement or a Transaction shall be at
the sole discretion of the Company. Nothing in this Agreement shall
obligate the Company to actually consummate a Private Placement or a
Transaction. The Company may terminate any negotiations or discussions at
any time and reserves the right not to proceed with a Private Placement or
a Transaction.
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9. CONFIDENTIALITY OF COMPANY INFORMATION. MBA, and its officers, directors,
employees and agents shall maintain in strict confidence and not copy,
disclose or transfer to any other party (1) all confidential business and
financial information regarding the Company and its affiliates, including
without limitation, projections, business plans, marketing plans, product
development plans, pricing, costs, customer, vendor and supplier lists and
identification, channels of distribution, and terms of identification of
proposed or actual contracts and (2) all confidential technology of the
Company. In furtherance of the foregoing, MBA agrees that it shall not
transfer, transmit, distribute, download or communicate, in any electronic,
digitized or other form or media, any of the confidential technology of the
Company. The foregoing is not intended to preclude MBA from utilizing,
subject to the terms and conditions of this Agreement, the Private
Placement or Offering Memorandum and/or other documents prepared or
approved by the Company. Further, the Company must approve the Private
Placement or Offering Memorandum, being prepared by MBA, before it is
mailed to prospective Investors or parties to a Transaction.
All communications regarding any possible transactions, requests for due
diligence or other information, requests for facility tours, product
demonstrations or management meetings, will be submitted or directed to the
Company, and MBA shall not contact any employees, customers, suppliers or
contractors of the Company or its affiliates without express permission.
Nothing in this Agreement shall constitute a grant of authority to MBA or
any representatives thereof to remove, examine or copy any particular
document or types of information regarding the Company, and the Company
shall retain control over the particular documents or items to be provided,
examined or copied. If a Private Placement or a Transaction is not
consummated, or if at any time the Company so requests, MBA and its
representatives will return to the Company all copies of information
regarding the Company in their possession.
The provisions of this Section shall survive any termination of this
Agreement.
10. PRESS RELEASES, ETC. The Company shall control all press releases or
announcements to the public, the media or the industry regarding any
Private Placement, Transaction or business relationship involving the
Company or its affiliates. Except for communication to Investors in
furtherance of this Agreement, MBA will not disclose the fact that
discussions or negotiations are taking place concerning a possible Private
Placement or a Transaction involving the Company, or the status or terms
and conditions thereof.
11. DUE DILIGENCE: Neither the Company, nor any of its directors, officers or
stockholders, should, in any way rely on MBA to perform any due diligence
with respect to the Company. It is expressly understood and agreed that the
Investors and parties to any Transaction will conduct their own due
diligence on the Company and the opportunity.
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12. EXPENSES, ETC. The Company will pay to MBA a non-accountable expense fee
equal to 2% of gross proceeds raised in each Private Placement (the
"Non-Accountable Fee"), which will be used to pay MBA's travel and other
expenses. The Non-Accountable Fee will be paid in the same time and manner
as the Success Fee. The Company will pay all other costs and expenses
incident to the issuance, offer, sale and delivery of each Private
Placement and Transaction, including but are not limited to ""legal fees,
printing costs, travel costs, mailing, couriers, and personal background
checks.
13. COMPLIANCE WITH LAWS. MBA represents and warrants that it shall conduct
itself in compliance with applicable federal and state laws. MBA represents
that it is not a party to any other Agreement, which would conflict with or
interfere with the terms and conditions of this Agreement.
14. ASSIGNMENT PERMISSABLE. MBA reserves the right to assign a portion of this
Agreement to one or more sub-agents with respect to any Private Placement
or Transaction, subject to the prior written consent of the Company. Any
approved sub-agent shall be paid a portion of Success Fees as may be
determined by MBA. The Company does acknowledge that MBA may pay other
consultants or agents in connection with the Private Placement(s) and
Transaction(s).
15. AMENDMENTS. Neither party may amend this Agreement or rescind any of its
existing provisions without the prior written consent of the other party.
16. GOVERNING LAW; JURISDICTION. This Agreement shall be deemed to have been
made in the State of California and shall be construed, and the rights and
liabilities determined, in accordance with the law of the State of
California, without regard to the conflicts of laws rules of such
jurisdiction. The parties submit to the jurisdiction of the Courts of the
County of Orange, State of California or a Federal Court empaneled in the
State of California for the resolution of all legal disputes arising under
the terms of this Agreement. Any controversy or claim relating to or
arising from this Agreement (an "Arbitrable Dispute") shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA") as such rules may be modified
herein or as otherwise agreed by the parties in controversy. The forum for
arbitration shall be Orange County, California. Following thirty (30) days
notice by any party of intention to invoke arbitration, any Arbitrable
Dispute arising under this Agreement and not mutually resolved within such
thirty (30) day period shall be determined by a single arbitrator upon
which the parties agree.
17. WAIVER. Neither MBA's nor the Company's failure to insist at any time upon
strict compliance with this Agreement or any of its terms nor any continued
course of such conduct on their part shall constitute or be considered a
waiver by MBA or the Company of any of their respective rights or
privileges under this Agreement.
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18. SEVERABILITY. If any provision herein is or should become inconsistent with
any present or future law, rule or regulation of any sovereign government
or regulatory body having jurisdiction over the subject matter of this
Agreement, such provision shall be deemed to be rescinded or modified in
accordance with such law, rule or regulation. In all other respects, this
Agreement shall continue to remain in full force and effect.
19. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and will become effective and
binding upon the parties at such time as all of the signatories hereto have
signed a counterpart of this Agreement. All counterparts so executed shall
constitute one Agreement binding on all of the parties hereto,
notwithstanding that all of the parties are not signatory to the same
counterpart. Each of the parties hereto shall sign a sufficient number of
counterparts so that each party will receive a fully executed original of
this Agreement.
20. ENTIRE AGREEMENT. This Agreement (together with Exhibit A hereto)
constitutes the entire agreement between the Company and MBA. No other
agreements, covenants, representations or warranties, express or implied,
oral or written, have been made by any party hereto to any other party
concerning the subject matter hereof. All prior and contemporaneous
conversations, negotiations, possible and alleged agreements,
representations, covenants and warranties concerning the subject matter
hereof are merged herein and shall be of no further force or effect.
MONARCH BAY ASSOCIATES, LLC ("MBA")
By: /s/ Xxxxx Xxxxxxx
---------------------------------------------
Xxxxx Xxxxxxx
Title: Managing Director
AMERICAN SOIL TECHNOLOGIES, INC. (the "Company")
By: /s/ Xxxx Xxxxx
---------------------------------------------
Xxxx Xxxxx
Title: Chief Executive Officer
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EXHIBIT A
AS TO MBA
INDEMNIFICATION
The Company agrees that it shall indemnify and hold harmless, MBA, its
stockholders, members 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, liabilities, or expenses, 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
investigation, preparation, defense or settlement of any claim, action or
proceeding, whether or not resulting in any liability), incurred by an
Indemnified Party with respect to, caused by, or otherwise arising out of any
transaction contemplated by this Agreement or MBA's performing the services
contemplated hereunder; provided, however, the Company will not be liable to the
extent, and only to the extent, that any loss, claim, damage, liability or
expense is finally judicially determined to have resulted primarily from MBA's
gross negligence or bad faith in performing such services.
If the indemnification provided for herein is conclusively determined (by
an entry of final judgment by a court of competent jurisdiction and the
expiration of the time or denial of the right to appeal) to be unavailable or
insufficient to hold any Indemnified Party harmless in respect to any losses,
claims, damages, liabilities or expenses referred to herein, then the Company
shall contribute to the 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 the Company on the one hand and
MBA on the other, from the transaction or proposed transaction under the
Agreement or, if allocation on that basis is not permitted under applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
received by the Company on the one hand and MBA on the other, but also the
relative fault of the Company and MBA; provided, however, in no event shall the
aggregate contribution of MBA and/or any Indemnified Party be in excess of the
net compensation actually received by MBA and/or such Indemnified Party pursuant
to this Agreement.
The Company shall not settle or compromise or consent to the entry of any
judgment in or otherwise seek to terminate any pending or threatened action,
claim, suit or proceeding in which any Indemnified Party is or could be a party
and as to which indemnification or contribution could have been sought by such
Indemnified Party hereunder (whether or not such Indemnified Party is a party
thereto), unless such consent or termination includes an express unconditional
release of such Indemnified Party, reasonably satisfactory in form and substance
to such Indemnified Party, from all losses, claims, damages, liabilities or
expenses arising out of such action, claim, suit or proceeding.
In the event any Indemnified Party shall incur any expenses covered by this
Exhibit A, the Company shall reimburse the Indemnified Party for such covered
expenses within ten (10) business days of the Indemnified Party's delivery to
the Company of an invoice therefor, with receipts attached. Such obligation of
the Company to so advance funds may be conditioned upon the Company's receipt of
a written undertaking from the Indemnified Party to repay such amounts within
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ten business days after a final, non-appealable judicial determination that such
Indemnified Party was not entitled to indemnification hereunder.
The foregoing indemnification and contribution provisions are not in lieu
of, but in addition to, any rights which any Indemnified Party may have at
common law hereunder or otherwise, and shall remain in full force and effect
following the expiration or termination of MBA's engagement and shall be binding
on any successors or assigns of the Company and successors or assigns to all or
substantially all of the Company's business or assets.
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