ENGAGEMENT AGREEMENT
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This
exclusive agreement (the “Agreement”),
dated
as of November 13, 2007, will confirm the arrangement under which GT Securities,
Inc. (GT Securities) or another FINRA registered Broker Dealer (Broker Dealer)
designated and retained by Genesis Capital Advisors, LLC (“Genesis”)
with
and on behalf of Premier Power Renewable Energy, Inc. (“Premier”), which,
together with its affiliates, subsidiaries, related companies, special purpose
vehicles/entities, joint ventures, strategic alliances, co-investors,
partnerships, funds, officers, directors, shareholders, agents and controlling
entities or persons, shall hereafter be referred to as the “Company”,
to
assist the Company (i) in connection with a possible opportunities involving
the
Company and one or more transactions to be determined and (ii) as set forth
below in connection with the Financing (as defined below)
0.Xxxxxxxx.
(a) GT
Securities or other qualified FINRA registered Broker Dealer (Broker Dealer)
designated by Genesis will assist the Company in obtaining debt or equity
financing in connection with a Merger and other future business needs (any
or
all of the foregoing, the “Financing”).
A
Merger or Financing (or one in conjunction with the other) shall be referred
to
hereafter as the “Transaction”.
Company
is not required to enter into a Transaction, merger or
combination.
(b) Genesis
as consultants will offer opportunities to Company and it is within Companies
sole discretion to choose to enter into opportunities introduced by Genesis.
(c) Genesis
will retain Broker Dealer with and on behalf of Company as authorized
herein.
(d) Broker
Dealer will provide broker dealer services in relation to the sale or exchange
of securities and or any other financial or brokerage or other service requiring
a licensed Broker Dealer related to any and all transactions covered during
the
term of this agreement.
2. Cooperation.
(a) The
Company shall furnish Broker Dealer with all information and data that Broker
Dealer shall reasonably request in connection with Broker Dealer’s activities
hereunder, and shall provide Broker Dealer full access, as requested, to the
Company’s officers, directors, employees and professional advisors. The Company
agrees to promptly advise Broker Dealer of all developments materially affecting
the Company, an acquisition target, any financing or proposed Transaction or
the
accuracy of the information previously furnished to Broker Dealer by the
Company.
(b) Broker
Dealer (i) will be relying on information and data provided by the Company
without having independently verified the accuracy or completeness of the same,
and (ii) does not assume responsibility for the accuracy or completeness of
any
such information and data, and (iii) retains the right to perform due diligence
on the Company and any acquisition target during the course of this
engagement.
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3. Limitation
Upon Engagement.
(a) Broker
Dealer shall not provide any legal, accounting, regulatory or tax advice with
respect to any Transaction and the Company shall consult its own legal,
accounting, regulatory and tax advisors to the extent it deems
appropriate.
(b) Broker
Dealer is not an agent of the Company and shall not have the authority to enter
into any agreement binding upon or otherwise obligating the Company to enter
into a Transaction. Furthermore, this
Agreement does not constitute a partnership or joint venture
(c) The
Company acknowledges that it is sophisticated and experienced in transactions
similar to the contemplated Transaction. The Company further acknowledges that
Broker Dealer will act as an independent contractor hereunder, and that Broker
Dealer’s responsibility to the Company is solely contractual in nature, and that
Broker Dealer does not owe the Company, or any other person or entity, any
fiduciary or similar duty as a result of its engagement hereunder or otherwise.
Broker Dealer will not have any duty to disclose to the Company or utilize
for
the Company’s benefit any non-public information acquired in the course of
providing services to any other person or entity, engaging in any transaction
(on its own account or otherwise) or otherwise carrying on its business.
Genesis
may assign or transfer, or terminate this entire agreement with Broker Dealer
or
the portion or portions of this Agreement as necessary, to an affiliate, partner
or other entity, as necessary to comply with laws and regulations governing
a
Transaction or the services herein in any state or country Company may enter
into a Transaction.
4.
Right
to Retain and Assign.
Genesis
hereby has the right to retain GT Securities or other licensed entity or FINRA
Broker Dealer and replace same on behalf of Company and may assign or terminate
any portion of this Agreement necessary in order to comply with rules and
restrictions of any public or private offering and related financing
transactions.
5.
Compensation:
Initial
Transaction Compensation:
The
Company agrees to pay Broker Dealer as follows for any transactions before
September 15, 2008 (hereafter Initial Transaction):
3%
commission to be paid in cash out of escrow of any closing on the capital raised
in connection with a sale or exchange of securities, merger or reverse merger,
but in no event will the placement fees due the Broker Dealer for that Initial
Transaction be in excess of two hundred ten thousand ($210,000.00) except for
compensation due on the future exercising of warrants which in addition to
the
amounts detailed herein become due and payable at the time the warrants are
exercised.
(a)
This
limit on fees only applies to the initial purchase of equities prior to date
of
September 15, 2008 (Initial Transaction) and does not apply to any warrants
or
options issued in connection with those equities and the initial transaction
detailed in below 5 (b) or future warrants and options.
(b)
Regarding warrants or options issued and/or exercised in connection with the
Initial Transactions securities or in the future, GT Securities or other Broker
Dealer retained by Genesis on behalf of Company will receive 6% of the proceeds
from the exercising of any and all warrants or options issued at the time they
are exercised. With respect to any and all other future transactions, on or
after September 15th
2008,
fees will be as defined in Future Transaction Compensation as
follows
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Future
Transaction Compensation. The Company agrees to pay Broker Dealer based on
the
“Combination Value” as defined below for the following:
(d) (1)
For
acquisitions made by Company of another company, a cash payment as defined
in
fee schedule (n). #1 below will be paid upon each successful close of the merger
with each company that Company chooses to acquire that is introduced by
Genesis.
(e) (2)
If
Broker Dealer introduces an equity investor to the Company that results in
a
sale of less than a 50% interest in the Company, a cash payment as defined
in
Fee Schedule (n). #4 below will be paid.
(f) For
the
sale of over 50% of Premiers equity to an investor that was introduced to
Premier by Broker Dealer or Genesis, or a merger with a company introduced
by
Broker Dealer or Genesis, or a public offering in which Broker Dealer provides
services, Broker Dealer will receive a percentage fee based on the total
combination valuation received by Premier as defined in the Combination Fee
definition below as defined in Fee Schedule (n). #3 below. In the event, and
only in the event of a reverse merger or public offering. Broker Dealer may
at
its sole discretion elect to have its fees paid in unrestricted common stock
of
the same class and rights any financers receive in the surviving
entity.
(i)
A fee
(the “Combination
Fee”)
(as
defined below) will be paid for all combinations introduced by Broker Dealer
or
Genesis. However, if Company enters into a Combination, WITH the assistance of
Broker Dealer, with a Target Company not introduced by Broker Dealer or Genesis,
then the Combination Fee due Broker Dealer shall be reduced to three and a
half
percent (3.5%). Furthermore, if Company enters into a Combination, with a target
company not introduced by Broker Dealer or Genesis, without the assistance
of
Broker Dealer, Broker Dealer will receive nothing. The Combination Fee shall
be
paid immediately when the Company first receives any consideration (directly
or
indirectly) for the Transaction, or when the Company first provides any
consideration (directly or indirectly) for the Transaction, whichever takes
place first.“Combination
Value”
shall
mean the aggregate amount of cash and any securities or other property paid
or
payable directly to or indirectly received by the Company in connection with
a
Combination, including, without limitation, (i) any dividends paid to company
(ii) all Company indebtedness and other liabilities directly or indirectly
assumed, refinanced, retired or extinguished in connection with the Combination,
or which otherwise remains outstanding as of the consummation of the
Combination, (iii) all amounts paid or other value ascribed in respect of
warrants, options or other convertible securities in connection with the
Combination; (iv) the full amount of any consideration placed in escrow or
otherwise held back.
Non-cash
consideration shall be valued as follows: (i) publicly-traded securities in
an
entity that is not a Target in a reverse merger with the Company shall be valued
at the average of their 4:00 p.m. closing prices (as reported in the Wall Street
Journal) for the five trading days prior to the consummation of the Combination
and (ii) any other non-cash consideration shall be valued at the fair market
value thereof as determined in good faith by the Company and Genesis.
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(k)
If,
following or in connection with any proposed Merger, Broker Dealer negotiates
for Company to receive a break-up, termination, “topping”, expense reimbursement
or similar fee or payment (including, without limitation, any judgment for
damages or amount in settlement of any dispute as a result of such termination,
abandonment or failure to occur), Broker Dealer shall be entitled to a cash
fee,
equal to twenty-five percent (25%) due at the same time as it is received by
Company. (This only applies if Company receives a break up fee.).
(l)
A fee
(the “Financing
Fee”)
for
debt financing introduced to Company by Broker Dealer equal to a percent (See
Fee Schedule Below n. #2) of the total gross amount of any Financing provided
to
the Company (the “Financing
Entity”)
in the
form of credit.. Company is under no obligation to accept financing from
companies introduced by Broker Dealer and fees only become due if Company
accepts financing from Financing Entity introduced by Genesis or Broker Dealer.
This excludes financing that company secures on its own.
(m)
Except as expressly set forth herein, no fee payable to Broker Dealer hereunder
shall be credited against any other fee due to Genesis or Broker Dealer. The
Company’s obligation to pay any fee or expense set forth herein shall be
absolute and unconditional and shall not be subject to reduction by way of
setoff, recoupment or counterclaim.
n)
Fee
Schedule for all Broker Dealer services:
1.
Premier Power acquiring other companies
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Fee percentage
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Value of consideration
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6%
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of
the first
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$
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1,000,000.00
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Plus
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5%
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of
the second
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$
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1,000,000.00
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Plus
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4%
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Of
the third
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$
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1,000,000.00
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Plus
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3%
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Of
the forth
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$
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1,000,000.00
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Plus
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2.
New line of credit
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Fee percentage
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Total line of credit
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1%
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line
of credit up to
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$
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2,500,000.00
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2%
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all amounts over $2.5MM
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Example:
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$4MM
line of credit
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$
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80,000.00
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3.
Purchase of Premier Power by other entity
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Fee percentage
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At Purchase Price or Valuation
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3%
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up
to
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$
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10,000,000.00
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4%
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up
to
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$
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15,000,000.00
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5%
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up
to
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$
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25,000,000.00
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6%
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Over $25MM
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Example:
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PPRE
acquired or merged at a valuation of $8MM
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$
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240,000.00
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PPRE
acquired or merged at a valuation of $10MM
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$
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400,000.00
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PPRE
acquired or merged at a valuation of $15MM
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$
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600,000.00
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PPRE
acquired or merged at a valuation of $26MM
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$
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1,300,000.00
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4.
Raising capital for Premier Power
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Fee percentage
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Value of consideration
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6%
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of
the first
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$
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1,000,000.00
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plus
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5%
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of
the second
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$
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1,000,000.00
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plus
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4%
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of
the third
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$
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1,000,000.00
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plus
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4%
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of
the forth
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$
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1,000,000.00
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plus
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4%
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all amounts over $4MM
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Example:
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Raise
$2MM
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$
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110,000.00
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Raise
$8MM
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$
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260,000.00
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6. Payments.
All
payments to be made to Broker Dealer shall be made as follows:
(a)
In
the event an escrow or other third-party is used to facilitate or govern a
Transaction, (including but not limited to a court of law, law firm, accounting
firm, or other entity) (“Escrow”), payment shall be made by Company directly or
through Escrow such that the Company shall provide or cause the provision of
any
anticipated compensation hereunder to Escrow, and Escrow shall directly disburse
said compensation to Broker Dealer without any deduction for tax in
accordance with the timing of payments provided for by this
Agreement.
Company
agrees to use an Escrow for a Transaction whenever possible, and Company agrees
to provide Escrow any written instructions to effectuate the payments
contemplated under this Agreement. Broker Dealer may choose to waive its right
to be paid through Escrow, in which case, Broker Dealer shall be paid in
accordance with subsection (b) below. Any such waiver must be in writing to
be
effective.
(b)
In
the event an Escrow is not used, (i) payments in the form of cash shall be
made
by wire transfer of immediately available U.S. funds no later then 48 hours
after closing and (ii) payments in the form of Company stock shall be made
to
the brokerage account(s) designated by Broker Dealer, without deduction for
any
tax in accordance with the timing of payments provided for by this
Agreement.
7.
Expenses.
In
addition to any fees that may be paid to Broker Dealer hereunder, whether or
not
any Transaction occurs, upon request by Broker Dealer, the Company will
reimburse Broker Dealer, within thirty (30) business days, for all APPROVED
in
writing out-of-pocket expenses incurred by Broker Dealer and Genesis in
connection with its engagement.
8.
Indemnification.
The Company will indemnify and hold Broker Dealer and any of its affiliates,
directors, officers, agents, employees or controlling persons (“Indemnified
Parties”)
harmless against any and all losses, claims, damages or liabilities, including
reasonable attorneys’ fees and expenses (any of the foregoing, a “Claim”),
arising from 1) the Company’s breach of any part of this Agreement, 2) any act
by the Company that actually causes a Claim against Broker Dealer, or 3) any
actions taken or services provided by Broker Dealer under this Agreement, except
for acts of gross negligence or intentional misconduct in performing such
actions or services. The foregoing indemnification shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company and the Indemnified Parties. This
indemnification provision shall survive any termination or expiration of this
Agreement
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9.
Termination. Broker Dealers’ engagement hereunder will commence upon the
execution of the retainer and assignment waiver attached hereto, and will
continue until terminated by either party on thirty (30) business days’ written
notice to the other, provided that, other than in the case of Broker Dealers
’
gross negligence or intentional misconduct (and notice to Broker Dealer and
an
opportunity to cure, if curable), the Company will not terminate this Agreement
prior to that date which is twelve (12) months from the date of the execution
of
this Agreement. Upon any termination of this Agreement, the Company shall
promptly pay Broker Dealer any accrued but unpaid fees hereunder, and shall
reimburse Broker Dealer for any unreimbursed expenses that are reimbursable
hereunder. In the event of any termination or expiration of this Agreement,
Broker Dealer shall be entitled to the applicable fee(s) set forth in Section
5
including and until such time as any warrants or options issued in connection
with a financing under this agreement are exercised or expire, which ever is
the
later.
10. Non-circumvention.
The
Company shall not in any manner solicit or accept any business from any contact
(including, but not limited to, any Target or Financing Entity) provided by
Broker Dealer or Genesis (including, but not limited to, any contact provided
prior to the execution of this Agreement) or engage in any transaction with
any
such contact for thirty-six (36) months following the termination or expiration
of this Agreement, without the prior written consent of Genesis.
11. Confidentiality.
Broker
Dealer, Genesis and the Company agree during the term of this Agreement and
thereafter to take all steps reasonably necessary to hold in trust and
confidence information which they know or have reason to know is considered
confidential by Broker Dealer or the Company except as necessitated by law,
or
used in any manner contrary to the disclosing party's best
interest.
12. Governing
Law.
This
Agreement and the legal relations between the parties hereto shall be governed
by and construed in accordance with the substantive laws of the State of
California, without giving effect to the principles of conflict of laws
thereof.
13. Announcements.
The
Company agrees that Broker Dealer may, following a Transaction, place an
announcement in such newspapers, electronic media and periodicals as it may
choose, stating their role and other material terms of the Transaction. Broker
Dealer shall be entitled to use the Company’s name and logo in connection
therewith. The Company agrees that any press release it may issue announcing
a
Transaction will, at their request, contain a reference to their role in the
Transaction
14. Notices.
All
notices, consents and other communications required by the terms of this
Agreement, including any change of address, shall be in writing and sent to
the
parties at the addresses specified below. Any such notice shall be deemed to
have been given three (3) days after mailing or when received if sent by hand,
facsimile or air courier.
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To
Company:
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To
Genesis:
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Premier
Power Renewable Energy,
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Genesis
Capital Advisors, LLC
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0000
Xxxxxxxx Xx., Xxxxx 000
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15760
Ventura Blvd., Suite 0000
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Xx
Xxxxxx Xxxxx, XX 00000
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Xxxxxx,
XX 00000
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Facsimile
(000) 000-0000
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Facsimile
(000) 000-0000
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Attn:
Xxxx Xxxxx
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Attn:
Xxxxxxx Xxxxxxxx
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For
Broker Dealer Notification see assignment attached
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15. Headings.
Headings used herein are for convenience of reference only and shall not affect
the interpretation or construction of this Agreement.
16. Broker
Dealer Entire Agreement.
This
Agreement constitutes the entire agreement between the Broker Dealer and Company
relating to the subject matter hereof and supersedes all prior or
contemporaneous negotiations, representations, agreements and understandings,
both oral and written, of the parties. This Agreement may not be amended or
modified except by an agreement in writing, executed by the parties
hereto
17. Severability.
If one
or more provisions of this Agreement shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, such provision or the
illegal, invalid or unenforceable portion thereof shall be deemed severed from
this Agreement and all other portions of this Agreement shall be considered
valid and remain in effect.
18. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. Facsimile transmission of the Agreement shall constitute one
acceptable method to provide notice of acceptance between the
parties.
19. Waiver.
The
failure of any party to exercise a right under this Agreement or insist on
the
performance of any of the terms, conditions, and provisions of this Agreement
shall not be construed as a waiver or relinquishment of that right or future
compliance therewith. No waiver of any term or condition of this Agreement
on
the part of either party shall be effective for any purpose whatsoever unless
such waiver is in writing and signed by such waiving party
20. Binding.
This
Agreement shall be binding upon and inure to the benefit of each of the parties
and their respective successors and permitted assigns.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
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Premier
Power Renewable Energy,
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Genesis
Capital Advisors, LLC
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By:
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By:
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Xxxx
Xxxxx
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Xxxxxxx
Xxxxxxxx
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President
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Managing
Member
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Retention
of Broker Dealer and Assignment
For
all
services detailed in the attached agreement requiring a Broker Dealer between
the date of execution and December 31, 2008 Broker Dealer and Company hereby
retains and assigns and transfers the portions of the attached agreement
requiring a FINRA licensed Broker Dealer to GT Securities, Inc.
GT
Securities warrants and represents it is FINRA registered broker
dealer.
GT
Securities hereby accepts retention and assignment and agrees to provide the
brokerage and placement agent services necessary to complete the transaction
or
transactions contemplated under the terms of the attached
agreement.
A
copy of
all notices must be sent to: GT Securities, Inc, 0000 X. Xxxxxxx Xxxx., Xxxxx
000, Xxx Xxxxxxx, XX 00000
Agreed
and accepted
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Xxxxxxx
Xxxxxxxx
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Genesis
Capital Advisors
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GT
Securities
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