PACIFIC SUMMIT SECURITIES
000 XXXXXXXX, XXXXX 000
XXXXXX, XXXXXXXXXX 00000
(000) 000-0000
(000) 000-0000 FAX
xxx.xxxxxxxxxxxxx.xxx
July 27, 2004
Xx. Xxxxxx Xxxxxxx
HiEnergy Technologies, Inc.
Chairman & Chief Scientist
0000X Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxxx:
Xxxx and I thoroughly enjoyed our meeting with you and Xxxx yesterday and we are
very impressed with the technology you have developed. Accordingly, I am pleased
to present this engagement letter ("Agreement") whereby Pacific Summit
Securities ("PSS" or the "Firm") will serve as the exclusive representative for
HiEnergy Technologies, Inc. ("HIET" or the "Company"), in the raising of
institutional capital (the "Financing") on a best efforts basis.
Accordingly, and subject to your approval via your countersignature below, our
Agreement shall be as follows:
1. TERM. The term of this Agreement shall be until the Financing is completed,
or until terminated by either party by giving ten days' written notice.
Full compensation with regards to Success Fees outlined in this Agreement
shall be paid if, within 18 months after termination, a Financing
transaction is entered into with any party introduced by PSS during the
term of this Agreement. The Company to approve and confirm parties
introduced during this agreement.
2. BUSINESS INFORMATION. The Company shall furnish complete and accurate
current and historical information and shall promptly notify PSS of any
material changes in the business that may affect the transaction
contemplated herein.
3. CASH SUCCESS FEES. PSS shall be paid a Cash Success Fee equal to 8% of the
funds raised or committed at closing, or invested by such investor
(including other parties introduced directly or indirectly by such
investor) at any subsequent closing occurring within a 24 month period
following the initial closing. Such fees shall be paid in cash out of the
proceeds of the Financing(s) at the closing(s). This Fee shall also apply
to Company stock purchased from third party affiliates pursuant to PSS
introductions.
4. EQUITY FEE. PSS shall receive warrants to purchase Common Stock (the
"Warrants") equal to 10% of the shares underlying the transaction. Such
Warrants shall have an exercise price equal to the price paid by the
Investors at closing, shall contain standard anti-dilution, net exercise
and registration rights provisions, and shall have an exercise period of 4
years.
5. RETAINERS. No retainer fees shall be charged.
6. EXPENSES. We do not anticipate incurring any expenses other than legal fees
for Blue Sky review and pre-approved travel expenses. Accordingly, the
Company agrees to reimburse PSS $5,000 at closing for non-accountable legal
fees. Travel expenses will be approved and paid or reimbursed as incurred.
7. FINDER'S FEES. We are of the understanding that the Company is under no
obligation to pay any finder's fees to third parties for this transaction.
Please advise us in writing if that is not the case.
8. INDEMNITY. The Company agrees to indemnify PSS, its officers, directors,
employees, agents and independent contractors, from any claim, controversy
or damages, including reasonable attorney's fees, resulting from assertions
from third parties and arising out of this Agreement, except to the extent
attributable to the gross negligence or willful malfeasance of PSS.
9. GOVERNING LAW. This Agreement shall be interpreted under, and governed by,
the laws of the State of California.
10. ARBITRATION. Any disputes arising pursuant to this Agreement shall be
settled by binding arbitration according to the rules of the American
Arbitration Association.
11. ENTIRE AGREEMENT. This is the entire Agreement between the parties
pertaining to the subject matter and supersedes all prior agreements,
representations and understandings of the parties. No modification of this
Agreement shall be binding unless agreed to in writing by both parties.
12. RIGHT OF REFUSAL. The Company shall retain the sole and absolute right to
accept or reject any offers received pursuant to this Agreement.
Xx. Xxxxxxx, if the above states with sufficient detail and accuracy the
essential terms of our Agreement, please countersign below and we will begin the
process immediately. The Pacific Summit team and I very much look forward to
working with you, your management team, and your professional advisors on this
transaction.
Sincerely,
/s/
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Xxxxx X. Xxxxx
President & CEO
Accepted and Agreed to this 27th day of July, 2004:
HiEnergy Technologies, Inc. by
/s/
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Xxxxxx Xxxxxxx, Chairman & CEO
