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EXHIBIT 10.8
PROJECT DEVELOPMENT ADVISORY AGREEMENT
This Project Development Advisory Agreement ("Agreement") is entered into
effective as of December 1, 1998 by and between Project Development Associates,
LLC, a Minnesota limited liability company having a principal place of business
of 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxx 00000 ("PDA") and Probex Corp., a
Colorado corporation having a principal place of business at 0000 XxXxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxx 00000, and its affiliates (the "Company").
WHEREAS, the Company is currently developing a used oil re-refining
facility (the "Initial Probex Facility");
WHEREAS, the Company plans on developing used oil re-refining facilities
other than the Initial Probex Facility (the "Other Probex Facilities")
(hereinafter, the Initial Probex Facility and the Other Probex Facilities are
referred to as the "Projects"); and
WHEREAS, the Company desires to engage general project development
advisory services with respect to the Projects (the "Services");
WHEREAS, PDA has agreed to assist the Company by performing the Services
in accordance with the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, and intending to be legally bound, the Company and PDA hereby agree as
follows:
1. ENGAGEMENT OF PDA. Subject to the terms and conditions hereof, the Company
hereby engages and appoints PDA as project development advisor for the Projects
and with respect to the Services and PDA hereby accepts its appointment and
engagement by the Company.
2. TERM. The term of this Agreement (the "Term") shall commence as of December
1, 1998 and shall continue until the Services are completed, unless sooner
terminated pursuant to a notice of termination given by either of the parties to
the other pursuant to Section 11 below; provided, however, if any party
introduced by PDA to the Company enters into an agreement to invest, purchase or
otherwise participate in any offerings of the Company on or before December 31,
1999, even if PDA is terminated by the Company, then PDA shall be entitled to
compensation pursuant to terms mutually acceptable to PDA and the Company.
3. DIRECTION, CONTROL AND COORDINATION. PDA shall perform the Services under the
direction and with the approval of the Company's Board of Directors and Chief
Executive Officer. PDA shall perform the Services in coordination and in
conjunction with the Company's management team and other project participants,
including but not limited to HSB Engineering Finance Corp. ("HSB").
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4. SCOPE OF SERVICES. The Services shall include but not be limited to:
(a) Preparing a detailed milestone schedule work plan of the tasks
necessary to complete the financing of the Projects;
(b) Updating the Company's business plan to reflect the project financing
of the Projects;
(c) Preparing an estimated budget for the development period ("Development
Period Budget");
(d) Developing, arranging, drafting, and negotiating letters-of-intent and
the credit support engineering, procurement and construction contract(s),
feedstock supply agreements, off-take contracts, operation and maintenance
agreement(s), and other agreements appropriate and necessary to obtain the
project financing of the Projects;
(e) Selecting and negotiating with selected participants in the Project
commitments of cash and in-kind investment necessary to satisfy the Development
Period Budget (the "Development Period Funding" or "DPF") as well as the basic
structure of the company established as the legal entity for each Project (the
"Project Companies");
(f) Preparing and submitting to the Board periodic reports of the current
status of the financing for the Projects; and
(g) Other services as may be agreed between the Company and PDA.
5. STANDARD OF PERFORMANCE. PDA shall use its best reasonable efforts to perform
the Services as an advisor to Probex in a professional, efficient and effective
manner. PDA shall perform the Services in conjunction and cooperation with
the Company, and with the Company's concurrence as appropriate and necessary.
PDA makes no other warranty or guarantee, express or implied, with respect to
its performance of the Services.
6. DISCLAIMER AND LIMIT OF LIABILITY. PDA is not licensed, nor does it have the
capacity, to underwrite or guarantee the closing of the DPF or the financing of
the Projects. Other than as set forth in the last sentence of this Section 6,
PDA's sole liability for any of the Services which do not meet the standard set
forth in Section 5, above, shall be to perform or correct such Services at its
sole expense. Other than as set forth in the last sentence of this Section 6, in
no event shall a party to this Agreement or its employees, shareholders,
officers, directors, agents or lenders be liable for indirect or consequential
damages suffered by the other party to this Agreement or its officers,
directors, employees, shareholders, agents or lenders. The foregoing limitation
and exclusion of liability shall not be effective in the event of a party's
gross negligence, willful misconduct or bad faith, or to the extent prohibited
by applicable law.
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7. DEDICATION OF RESOURCES. PDA shall devote such time, attention and energy as
is necessary to perform and discharge the duties and responsibilities under this
Agreement in an efficient, trustworthy, and businesslike manner. The Company
acknowledges that PDA has other duties outside of its duties under this
Agreement; however, PDA, with Managing Principal Xxxxxxx X. Xxx taking the lead,
shall dedicate no less than the equivalent of two weeks of each calendar month
on a full time basis to the performance of the Services.
8. FEES. In consideration for the performance of the Services by PDA hereunder,
during the term of the Agreement the Company shall:
(a) Reimburse PDA monthly for all reasonable and necessary direct
out-of-pocket expenses incurred by PDA in the performance of the
Services and supported by reasonable documentation, subject to a monthly
maximum of $5,000 unless otherwise approved by Probex;
(b) Pay PDA $5,000 per month, payable on the last day of each month, the
payment of which may be deferred in the event that the working capital
of Probex (defined as current assets less current liabilities) is less
than $100,000 until such time as the working capital balance exceeds
$100,000, whereupon any prior deferred fees shall be paid in full;
(c) Pay PDA a success fee of $100,000 upon the closing of the financing for
the Initial Probex Facility if such financing closes within 12 months of
the date of execution of this Agreement and a success fee of $25,000
upon the closing of the financing of each of the subsequent four Other
Probex Facilities;
(d) Grant to PDA a seven-year warrant to purchase 100,000 shares of the
Company's common stock at $.50 per share upon the closing of the
financing for the Initial Probex Facility if such financing closes
within 12 months of the date of execution of this Agreement. Such
warrant shall be essentially identical in form and substance to the
document contained in Attachment A hereto. The Company shall grant to
PDA similar warrants to purchase 25,000 shares of the Company's common
stock upon the closing of the financing of each of the subsequent four
Other Probex Facilities; and
(e) If a party introduced to Probex by PDA provides funding to, or for the
benefit of, Probex, then Probex shall compensate PDA for such
introduction upon terms mutually agreeable to Probex and PDA.
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9. STATUS. PDA is, and shall be deemed for all purposes to be, an independent
contractor, advisor and consultant, rather than a co-venturer, employee, agent
or other representative of the Company. PDA shall not have authority, and will
not represent itself as having authority, to enter into any agreement or incur
any obligation on behalf of the Company, except as expressly authorized by the
Company or HSB.
10. CONFIDENTIAL AND PROPRIETARY INFORMATION. PDA recognizes and acknowledges
that by reason of its performance of the Service to the Company (both during the
Term and before or after it) it has had and will continue to have access to
confidential information of the Company and its affiliates, including, without
limitation, information and knowledge pertaining to products and services
offered, inventions, innovations, designs, ideas, plans, trade secrets,
proprietary information, advertising, distribution and sales methods and
systems, and relationships between the Company and its affiliates and customers,
clients, suppliers and others who have business dealings with the Company and
its affiliates ("Confidential Information"). PDA acknowledges that such
Confidential Information is a valuable and unique asset and covenants that it
will not, either during or for five years after the term of this Agreement,
disclose any such Confidential Information to any person for any reason
whatsoever or use such Confidential Information (except as his duties hereunder
may require) without the prior written authorization of the Company, unless such
information is in the public domain through no fault of PDA or except as may be
required by law. Upon the Company's request, PDA will return all tangible
materials containing Confidential Information to the Company.
11. TERMINATION. Unless otherwise mutually agreed by Probex and PDA or as
stipulated in this Section 11, the term of this Agreement shall end upon the
closing of the financing for the Projects, at which point neither party shall
have further obligations to the other. Notwithstanding the foregoing, either
Probex or PDA may terminate this Agreement at any time upon thirty days written
notice to the other if, in the good faith judgment of such party, either the
Scope of Services or the Standard of Performance as described herein either has
not been fulfilled, or is deemed unlikely to be fulfilled, in the estimation of
the party providing such notice. In addition, after the Initial Probex Facility
has been financed, then either party may terminate this Agreement for its
convenience upon thirty days' written notice to the other. If following the
financing of the Initial Probex Facility Probex then elects to terminate for its
convenience, then those fees described under Section 8 (b) shall be terminated;
however, those fees for Other Project Facilities which are described under
Sections 8 (c) and (d) shall continue to be earned by PDA as long as PDA
provides ongoing general consulting and advisory services within PDA's areas of
competence and expertise on terms mutually agreeable to Probex and PDA, and in a
manner acceptable to Probex in its sole discretion.
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12. INDEMNIFICATION
(a) The Company shall defend, indemnify, and hold harmless PDA, its
principals, officers, directors, employees and controlling persons (each of
which shall be an "indemnified party") from and against any and all losses,
claims, damages, liabilities or actions (collectively, "liabilities"), joint or
several, to which an indemnified party may become subject and to reimburse such
indemnified parties for any reasonable legal or other expenses (including the
cost of any investigation and preparation) incurred by them in connection with
any litigation or threatened litigation, whether or not resulting in any
liability, arising out of, or based upon, this Agreement.
(b) Notwithstanding the foregoing, the Company shall not be liable under
subsection 12 (a) immediately above for indemnification in respect of any
liabilities to the extent the same is determined, in a final judgment by a court
of competent jurisdiction, to have resulted from the willful misconduct, gross
negligence, or bad faith of any indemnified party.
(c) If any action is brought against an indemnified party in respect of
which indemnity may be sought against the Company, such indemnified party shall
promptly notify the Company in writing of the commencement of such action, but
the omission so to notify the Company shall not release the Company from any
liability it may have to such indemnified party except to the extent of actual
prejudice resulting therefrom. The Company shall not be liable for any
settlement of any action or proceeding effected without its prior written
consent.
13. CHOICE OF LAW. This Agreement shall be construed and enforced in accordance
with the law of the State of Texas without giving effect to any conflict of laws
provisions.
14. MODIFICATIONS: WAIVER. No modification or waiver of any provision of this
Agreement shall be valid unless it is in writing and signed by the party against
whom it is sought to be enforced. No waiver at any time of any provision of this
Agreement shall be deemed a waiver of any other provision of this Agreement at
that time or a waiver of that or any other provision at any other time.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties with regard to the Services to be provided by PDA to the Company and
supersedes all prior agreements or understandings between the Company and PDA or
their agents with regard to the Services.
16. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.
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17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties set forth herein shall survive the execution and delivery of this
Agreement and the consummation of any offering or transaction contemplated
hereby.
18. NOTICES. All notices, requests, consents and other communications hereunder
shall be in writing, shall be addressed to the receiving party's address set
forth below or to such other address as a party may designate by notice
hereunder, and shall be either (i) delivered by hand, (ii) made by telex,
telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv)
sent by registered mail, return-receipt requested, postage prepaid.
If to PDA: Xx. Xxxxxxx X. Xxx
Managing Principal
Project Development Associates, LLC
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Company: Mr. Xxxxxx Xxxxxx, CEO
Probex Corporation
0000 XxXxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
mail, on the fifth business day following the day such mailing is made.
19. HEADINGS AND CAPTIONS. The headings and captions of the various subdivisions
of this Agreement are for convenience of reference only and shall in no way
modify or affect the meaning or construction of any of the terms or provisions
hereof.
20. NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a party
hereto in exercising any right, power or remedy under this Agreement, and no
course of dealing among the parties hereto, shall operate as a waiver of any
such right, power or remedy of the party. No single or partial exercise of any
right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or
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further exercise thereof or the exercise of any other right, power or remedy
hereunder. The election of any remedy by a party hereto shall not constitute a
waiver of the right of such party to pursue other available remedies. No notice
or demand on a party not expressly required under this Agreement shall entitle
the party receiving such notice or demand to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the party giving such notice or demand to any other or further action in any
circumstances without such notice or demand.
IN WITNESS WHEREOF, PDA and the Company have signed this Agreement as of the
date of execution noted below.
Project Development Associates, LLC
By: /s/ Xxxxxxx X. Xxx 28 July 1999
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Name: Xxxxxxx X. Xxx Date of Execution
Title: Managing Principal
Probex Corporation
By: /s/ Xxxxxx X. Xxxxxx 30 July 1999
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Name: Xxxxxx Xxxxxx Date of Execution
Title: Chief Executive Officer
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