January 22, 2014 STRICTLY CONFIDENTIAL UQM Technologies, Inc.
January 22, 2014
UQM Technologies, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Dear Xxxxx:
This letter agreement (this “Agreement”) constitutes the agreement between UQM Technologies, Inc. (the “Company”) and X.X. Xxxxxxxxxx & Co., LLC (“Xxxxxxxxxx”) that Xxxxxxxxxx shall serve as the exclusive agent, advisor or underwriter in an offering (the “Offering”) of securities of the Company (“Securities”) during the Term (as defined below) of this Agreement. The terms of the Offering and the Securities issued in connection therewith shall be mutually agreed upon by the Company and Xxxxxxxxxx and nothing herein implies that Xxxxxxxxxx would have the power or authority to bind the Company and nothing herein implies that the Company shall have an obligation to issue any Securities. It is understood that Xxxxxxxxxx’x assistance in the Offering will be subject to the satisfactory completion of such investigation and inquiry into the affairs of the Company as Xxxxxxxxxx deems appropriate under the circumstances and to the receipt of all internal approvals of Xxxxxxxxxx in connection with the transaction. The Company expressly acknowledges and agrees that Xxxxxxxxxx’x involvement in the Offering is strictly on a reasonable best efforts basis and that the consummation of the Offering will be subject to, among other things, market conditions. The execution of this Agreement does not constitute a commitment by Xxxxxxxxxx to purchase the Securities and does not ensure a successful Offering of the Securities or the success of Xxxxxxxxxx with respect to securing any other financing on behalf of the Company. Xxxxxxxxxx may retain other brokers, dealers, agents or underwriters on its behalf in connection with the Offering.
A. Compensation; Reimbursement. At the closing of the Offering (each, a “Closing”), the Company shall compensate Xxxxxxxxxx as follows: |
1. Cash Fee. The Company shall pay to Xxxxxxxxxx a cash fee, or as to an underwritten Offering an underwriter discount, equal to 5.0% of the aggregate gross proceeds raised in the Offering (including the proceeds of any “over-allotment”, “greenshoe” or “additional investment” option components or the exercise of the warrants issued to investors in such Offering). |
2. Warrant Coverage. The Company shall issue to Xxxxxxxxxx or its designees at each Closing, warrants (the “Xxxxxxxxxx Warrants”) to purchase that number of shares of common stock of the Company (the “Common Stock” equal to 3.0% of the aggregate number of shares of Common Stock placed in the Offering (if the Securities are convertible or include a “greenshoe” or “additional investment” option component, such shares of Common Stock underlying such Securities or options). The Xxxxxxxxxx Warrants shall have the same terms as the warrants issued to investors in the Offering. . |
3. Expense Allowance. Out of the proceeds of each Closing, the Company also agrees to pay Xxxxxxxxxx a non-accountable expense allowance of $25,000 (provided, however, that such reimbursement amount in no way limits or impairs the indemnification and contribution provisions of this Agreement). |
000 Xxxx Xxxxxx x Xxx Xxxx, Xxx Xxxx 00000 | 212.356.0500 | xxx.xxxxx.xxx
Member: FINRA/SIPC
4. Tail Fee. Xxxxxxxxxx shall be entitled to compensation under clauses (1) and (2) hereunder, calculated in the manner set forth therein, with respect to any public or private offering or other financing or capital-raising transaction of any kind (“Tail Financing”) to the extent that such financing or capital is provided to the Company by investors whom Xxxxxxxxxx had introduced, directly or indirectly, to the Company during Term, if such Tail Financing is consummated at any time within the 12-month period following the expiration or termination of this Agreement. |
C. Information; Reliance. The Company shall furnish, or cause to be furnished, to Xxxxxxxxxx all information requested by Xxxxxxxxxx for the purpose of rendering services hereunder (all such information being the “Information”). In addition, the Company agrees to make available to Xxxxxxxxxx upon request from time to time the officers, directors, accountants, counsel and other advisors of the Company. The Company recognizes and confirms that Xxxxxxxxxx (a) will use and rely on the Information, including any documents provided to investors in the Offering (the “Offering Documents” which shall include any Purchase Agreements (as defined below)), and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (b) does not assume responsibility for the accuracy or completeness of the Offering Documents or the Information and such other information; and (c) will not make an appraisal of any of the assets or liabilities of the Company. Upon reasonable request, the Company will meet with Xxxxxxxxxx or its representatives to discuss all information relevant for disclosure in the Offering Documents and will cooperate in any investigation undertaken by Xxxxxxxxxx thereof, including any document included or incorporated by reference therein. At the closing of the Offering, at the request of Xxxxxxxxxx, the Company shall deliver such legal letters, comfort letters and officer’s certificates, all in form and substance satisfactory to Xxxxxxxxxx and its counsel as is customary for such Offering. Xxxxxxxxxx shall be a third party beneficiary of any representations, warranties, covenants and closing conditions made by the Company in any Offering Documents, including representations, warranties, covenants and closing conditions made to any investor in the Offering. |
D. Related Agreements. At the Offering, the Company shall enter into the following additional agreements: |
1. Underwritten Offering. If the Offering is an underwritten Offering, the Company and Xxxxxxxxxx shall enter into a customary underwriting agreement in form and substance satisfactory to Xxxxxxxxxx and its counsel. |
2. Best Efforts Offering. If the Offering is on a best efforts basis, the sale of Securities to the investors in the Offering will be evidenced by a purchase agreement (“Purchase Agreement”) between the Company and such investors in a form reasonably satisfactory to the Company and Xxxxxxxxxx. Prior to the signing of any Purchase Agreement, officers of the Company with responsibility for financial affairs will be available to answer inquiries from prospective investors. |
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3. Escrow. In respect of the Offering, the Company and Xxxxxxxxxx shall enter into an escrow agreement with a third party escrow agent pursuant to which Xxxxxxxxxx’x compensation shall be paid from the gross proceeds of the Securities sold. The Company shall bear the cost of the escrow agent. |
4. FINRA Amendments. Notwithstanding anything herein to the contrary, in the event that Xxxxxxxxxx determines that any of the terms provided for hereunder shall not comply with a FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall agree to amend this Agreement (or include such revisions in the final underwriting) in writing upon the request of Xxxxxxxxxx to comply with any such rules; provided that any such amendments shall not provide for terms that are less favorable to the Company. |
F. Indemnity. |
1.In connection with the Company’s engagement of Xxxxxxxxxx as Offering agent, the Company hereby agrees to indemnify and hold harmless Xxxxxxxxxx and its affiliates, and the respective controlling persons, directors, officers, members, shareholders, agents and employees of any of the foregoing (collectively the “Indemnified Persons”), from and against any and all claims, actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, (collectively a “Claim”), that are (A) related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s engagement of Xxxxxxxxxx, or (B) otherwise relate to or arise out of Xxxxxxxxxx’x activities on the Company’s behalf under Xxxxxxxxxx’x engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified Person is a party. The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted from the gross negligence or willful misconduct of any person seeking indemnification for such Claim. The Company further agrees that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of Xxxxxxxxxx except for any Claim incurred by the Company as a result of such Indemnified Person’s gross negligence or willful misconduct.
2.The Company further agrees that it will not, without the prior written consent of Wainwright, settle, compromise or consent to the entry of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.
3.Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company
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of substantial rights and defenses. If the Company so elects or is requested by such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel reasonably satisfactory to such Indemnified Person and the payment of the fees and expenses of such counsel. In the event, however, that legal counsel to such Indemnified Person reasonably determines that having common counsel would present such counsel with a conflict of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses available to it or other Indemnified Persons different from or in addition to those available to the Company, then such Indemnified Person may employ its own separate counsel to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. Notwithstanding anything herein to the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any Claim, the relevant Indemnified Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof. In addition, with respect to any Claim in which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her or its own counsel therefor at his, her or its own expense.
4.The Company agrees that if any indemnity sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason then (whether or not Xxxxxxxxxx is the Indemnified Person), the Company and Xxxxxxxxxx shall contribute to the Claim for which such indemnity is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and Xxxxxxxxxx on the other, in connection with Xxxxxxxxxx’x engagement referred to above, subject to the limitation that in no event shall the amount of Xxxxxxxxxx’x contribution to such Claim exceed the amount of fees actually received by Xxxxxxxxxx from the Company pursuant to Xxxxxxxxxx’x engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and Xxxxxxxxxx on the other, with respect to Xxxxxxxxxx’x engagement shall be deemed to be in the same proportion as (a) the total value paid or proposed to be paid or received by the Company pursuant to the applicable Offering (whether or not consummated) for which Xxxxxxxxxx is engaged to render services bears to (b) the fee paid or proposed to be paid to Xxxxxxxxxx in connection with such engagement.
5.The Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise adversely affect any rights that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not the Company is at fault in any way.
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remedies upon, any other person or be used or relied upon for any other purpose. Xxxxxxxxxx shall not have the authority to make any commitment binding on the Company. The Company, in its sole discretion, shall have the right to reject any investor introduced to it by Xxxxxxxxxx.
I. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein. Any disputes that arise under this Agreement, even after the termination of this Agreement, will be heard only in the state or federal courts located in the City of New York, State of New York. The parties hereto expressly agree to submit themselves to the jurisdiction of the foregoing courts in the City of New York, State of New York. The parties hereto expressly waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City and State of New York. In the event of the bringing of any action, or suit by a party hereto against the other party hereto, arising out of or relating to this Agreement, the party in whose favor the final judgment or award shall be entered shall be entitled to have and recover from the other party the costs and expenses incurred in connection therewith, including its reasonable attorneys’ fees. Any rights to trial by jury with respect to any such action, proceeding or suit are hereby waived by Xxxxxxxxxx and the Company. |
K. Conflicts. The Company acknowledges that Xxxxxxxxxx and its affiliates may have and may continue to have investment banking and other relationships with parties other than the Company pursuant to which Xxxxxxxxxx may acquire information of interest to the Company. Xxxxxxxxxx shall have no obligation to disclose such information to the Company or to use such information in connection with any contemplated transaction. |
L. Anti-Money Laundering. To help the United States government fight the funding of terrorism and money laundering, the federal laws of the United States requires all financial institutions to obtain, verify and record information that identifies each person with whom they do business. This means we must ask you for certain identifying information, including a government-issued identification number (e.g., a U.S. taxpayer identification number) and such other information or documents that we consider appropriate to verify your identity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument. |
M. Miscellaneous. The Company represents and warrants that it has all requisite power and authority to enter into and carry out the terms and provisions of this Agreement and the execution, delivery and |
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performance of this Agreement does not breach or conflict with any agreement, document or instrument to which it is a party or bound. This Agreement shall not be modified or amended except in writing signed by Xxxxxxxxxx and the Company. This Agreement shall be binding upon and inure to the benefit of both Xxxxxxxxxx and the Company and their respective assigns, successors, and legal representatives. This Agreement constitutes the entire agreement of Xxxxxxxxxx and the Company with respect to the Offering and supersedes any prior agreements with respect to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect, and the remainder of the Agreement shall remain in full force and effect. This Agreement may be executed in counterparts (including facsimile counterparts), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
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In acknowledgment that the foregoing correctly sets forth the understanding reached by Xxxxxxxxxx and the Company, please sign in the space provided below, whereupon this letter shall constitute a binding Agreement as of the date indicated above.
Title: Chief Executive Officer
Title: Chief Financial Officer
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Amendment to UQM Engagement Letter dated 1/22/2014
February 3, 2014
STRICTLY CONFIDENTIAL
UQM Technologies, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Dear Xxxxx:
Reference is made to the engagement letter (the “Engagement Letter”), dated January 22, 2014, by and between UQM Technologies, Inc. (the “Company”) and X.X. Xxxxxxxxxx & Co., LLC (“Xxxxxxxxxx”), pursuant to which XX Xxxxxxxxxx shall serve as the exclusive placement agent for the Company on a reasonable best efforts basis, in connection with the Offering during the Term.
The Company and Xxxxxxxxxx hereby agree to amend the Engagement Letter in order to modify Section A.2 of the Engagement Letter in order to reduce the number of Xxxxxxxxxx Warrants that Xxxxxxxxxx shall receive in connection with the Offering to 2% of the aggregate number of shares of Common Stock placed in the Offering. As such, Section A.2 is amended and restated in its entirety as follows:
“Warrant Coverage. The Company shall issue to Xxxxxxxxxx or its designees at each Closing, warrants (the “Xxxxxxxxxx Warrants”) to purchase that number of shares of common stock of the Company (the “Common Stock” equal to 2.0% of the aggregate number of shares of Common Stock placed in the Offering (if the Securities are convertible or include a “greenshoe” or “additional investment” option component, such shares of Common Stock underlying such Securities or options). The Xxxxxxxxxx Warrants shall have the same terms as the warrants issued to investors in the Offering.”
Except as expressly set forth above, all of the terms and conditions of the Engagement Letter shall continue in full force and effect after the execution of this agreement and shall not be in any way changed, modified or superseded by the terms set forth herein. Defined terms used herein but not defined herein shall have the meanings given to such terms in the Engagement Letter.
This agreement may be executed in two or more counterparts and by facsimile or “.pdf” signature or otherwise, and each of such counterparts shall be deemed an original and all of such counterparts together shall constitute one and the same agreement.
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000 Xxxx Xxxxxx x Xxx Xxxx, Xxx Xxxx 00000 | 212.356.0500 | xxx.xxxxx.xxx
Member: FINRA/SIPC
IN WITNESS WHEREOF, this agreement is executed as of the date first set forth above.
Very truly yours,
X.X. XXXXXXXXXX & CO., LLC
By /s/ XXXX X. VIKLUND___
Name: Xxxx X. Viklund
Title: Chief Executive Officer
Accepted and Agreed:
UQM TECHNOLOGIES, INC.
By /s/XXXXX X. XXXXXXXXX
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
[Signature Page to UQM Engagement Letter Amendment]