BEAR STEARNS Bear Stearns & Co.,Inc. 383 Madison Ave. New York, New York 10179 Tel. 212-272-2000 www.bearstearns.com
Exhibit
10
Bear,
Xxxxxxx & Co., Inc. Agreement
Dated
December 12, 2006
|
BEAR
XXXXXXX
|
Bear Xxxxxxx & Co.,Inc.
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Tel. 000-000-0000
xxx.xxxxxxxxxxx.xxx
|
December
12, 2006
Fuel
Frontiers, Inc.
0000
00xx
Xx.
XX
Xxxxx
000
Xxxxxxxxxx,
XX 00000
|
Attention:
|
Xxxx
Xxxxx
|
Dear
Xx.
Xxxxx:
We
are
pleased to set forth the terms of the retention of Bear, Xxxxxxx & Co. Inc.
("Bear Xxxxxxx") by Fuel Frontiers, Inc. (collectively with its affiliates,
the
"Company") as the senior underwriter for the Company’s anticipated tax-exempt
debt financing to fund a facility to produce ethanol from waste tires (“the
Project”) to be located in Toms River, New Jersey.
| 1. |
Our
services under this Agreement are expected to include the following
tasks
(collectively, the “Assignment”):
|
| (a) |
Bear
Xxxxxxx will familiarize itself with the Project and its proposed
implementation, financing, construction and
operation.
|
| (b) |
Bear
Xxxxxxx will assist the Company in obtaining tax-exempt financing
approvals.
|
| (c) |
Bear
Xxxxxxx will review existing documentation, assist in the development
of
the new documentation and make recommendations on the terms and conditions
necessary to enhance the Project's ability to be
financed.
|
| (d) |
Bear
Xxxxxxx will assist the Company, Bond counsel, Company counsel and
Company
financial advisor in preparing a disclosure document (the "Offering
Memorandum") and related documentation for use in selling the Project's
bonds to institutional investors.
|
| (e) |
Bear
Xxxxxxx will identify likely buyers and work with the Company and
its team
to structure and market a tax-exempt bond issue for the Project,
subject
to certain conditions described in paragraph 8
below.
|
| (f) |
At
the request of the Company, should the Company wish to consider financing
the Project on a taxable debt basis, Bear Xxxxxxx will advise the
Company
as to the feasibility of seeking funds in the 144A debt market, including
a briefing on disclosure and market terms and
conditions.
|
| (g) |
Should
the Company elect to proceed with financing the Project on a taxable
debt
basis, Bear Xxxxxxx will, subject to the conditions described in
paragraph
8 below, assist the Company, Bond counsel, Company counsel and Company
advisors to prepare an Offering Memorandum and related documentation
for
use in selling the Project's bonds to institutional investors in
the 144A
debt market.
|
| 2. |
In
connection with Bear Xxxxxxx’ activities on the Company’s behalf, the
Company agrees to reasonably cooperate with Bear Xxxxxxx and will
furnish
to, or cause to be furnished to, Bear Xxxxxxx all information and
data
(the “Information”) concerning the Company and, to the extent available to
the Company, all information and data concerning the Project, parties
under contract to the Company with respect to the Project and any
entities
participating in the Project (collectively the “Project Participants”)
which Bear Xxxxxxx deems reasonably appropriate and will provide
Bear
Xxxxxxx with reasonable access to the Company’s officers, directors,
employees, appraisers, independent accountants, legal counsel and
other
consultants and advisors. The Company represents and warrants, to
the best
knowledge of the Company after diligent investigation, that all
Information concerning the Company made available to Bear Xxxxxxx
by the
Company will, at all times during the period of the engagement of
Bear
Xxxxxxx hereunder, be complete and correct in all material respects
and
will not contain any untrue statement of a material fact or omit
to state
a material fact necessary in order to make the statements therein
not
misleading in the light of the circumstances under which such statements
are made. The Company represents and warrants that it will cooperate
with
Bear Xxxxxxx in obtaining financial, technical and other information
with
respect to the Project Participants and that all information provided
to
Bear Xxxxxxx by the Company with respect to the Project Participants
will
be derived from sources it believes are reliable, and the Company
will
reasonably cooperate to obtain any and all information which Bear
Xxxxxxx
requests in Bear Xxxxxxx’ due diligence review of the Project
Participants. The Company further represents and warrants that any
projections or other Information prepared or provided by the Company
concerning the Project will have been prepared or provided in good
faith,
will be derived from sources which the Company believes to be reliable
and
will be based upon assumptions which, in light of the circumstances
under
which they are made, are reasonable. The Company acknowledges and
agrees
that, in rendering its services hereunder, Bear Xxxxxxx will be using
and
relying on the Information (and information available from public
sources
and other sources deemed reliable by Bear Xxxxxxx) without independent
verification thereof by Bear Xxxxxxx or independent appraisal by
Bear
Xxxxxxx of any of the Company’s assets or those of any Project
Participant. Bear Xxxxxxx does not assume responsibility for the
accuracy
or completeness of the Information or any other information regarding
the
Company, the Project Participants or any other
party.
|
| 3. |
In
consideration of our services pursuant to this Agreement, Bear Xxxxxxx
shall be entitled to receive, and the Company agrees to pay Bear
Xxxxxxx,
the following compensation:
|
| (a) |
On
or about January 1, 2007 or at any time prior thereto,, the Company
shall
pay to Bear Xxxxxxx a cash fee of $100,000 to initiate its engagement
hereunder.
|
| (b) |
Upon
the closing of any debt offering for the Project, based on the difficulty
of the transaction and the final credit quality of the Project, an
amount
equal to not more than two percent (2%) and not less than one and
one-quarter percent (1.25%) of the initial principal amount of such
debt
offering.
|
2
| 4. |
In
addition to the fees described in paragraph 3 above, the Company
agrees to
promptly reimburse Bear Xxxxxxx, upon request from time to time,
for all
reasonable out-of pocket expenses incurred by Bear Xxxxxxx (including
fees
and disbursements of counsel, and of other consultants and advisors
retained by Bear Xxxxxxx with the prior consent of the Company which
consent shall not be unreasonably withheld and which consent is
not required
in connection with the attached indemnification provisions) in connection
with the matters contemplated by this Agreement; provided, however,
that
the Company will not be obligated to reimburse more than $5,000 (other
than with respect to the attached indemnity provisions) unless Bear
Xxxxxxx has obtained the consent of the
Company.
|
| 5. |
The
Company agrees to indemnify Bear Xxxxxxx in accordance with the
indemnification provisions (the "Indemnification Provisions") attached
to
this Agreement, which Indemnification Provisions are incorporated
herein
and made a part hereof and which shall survive the termination, expiration
or supersession of this Agreement.
|
| 6. |
Either
party hereto may terminate this Agreement at any time upon 10 days
written
notice, without liability or continuing obligation, except as set
forth in
the following sentence. Neither termination of this Agreement nor
completion of the Assignment shall affect: (i) any compensation earned
by
Bear Xxxxxxx up to the date of termination or completion, as the
case may
be, (ii) the reimbursement of expenses incurred by Bear Xxxxxxx up
to the
date of termination or completion, as the case may be, or relating
to any
testimony by Bear Xxxxxxx in any legal or regulatory proceeding,
(iii) the
provisions of paragraphs 3-15 (other than paragraph 3(b) if the Company
has terminated this Agreement prior to the closing of the Transaction)
inclusive, of this Agreement and (iv) the attached Indemnification
Provisions that are incorporated herein, all of which shall remain
operative and in full force and effect. Bear Xxxxxxx anticipates
that the
financing will be closed on or beforeJune30, 2007 , and will exert
reasonable efforts toward such a closing. Should a closing not have
occurred and Bear Xxxxxxx has not materially failed to comply with
or
perform any of its obligations under this Agreement, then Bear Xxxxxxx
and
the Company will negotiate an additional retainer or mutually acceptable
termination.
|
3
| 7. |
The
validity and interpretation of this Agreement shall be governed by
and
enforced, and construed in accordance with, the laws of the State
of New
York. The Company irrevocably (a) submits to the jurisdiction of
any court
of the State of New York or the United States District Court for
the
Southern District of the State of New York for the purpose of any
suit,
action, or other proceeding arising out of this Agreement, or any
of the
agreements or transactions contemplated hereby (each, a “Proceeding”), (b)
agrees that all claims in respect of any Proceeding may be heard
and
determined in any such court, (c) waives, to the fullest extent permitted
by law, any immunity from jurisdiction of any such court or from
any legal
process therein, (d) agrees not to commence any Proceeding other
than in
such courts, and (e) waives, to the fullest extent permitted by law,
any
claim that such Proceeding is brought in an inconvenient
forum.
|
| 8. |
This
Agreement does not constitute an expressed or implied commitment
or
undertaking on the part of Bear Xxxxxxx to provide any part of the
Financing and does not ensure the successful arrangement or completion
of
the Financing or any portion thereof. Notwithstanding any oral
representations or assurances previously or subsequently made by
the
parties, Bear Xxxxxxx’ willingness to underwrite or arrange any offering
or placement of securities or otherwise participate in the Financing
is
subject to (a) satisfactory completion of due diligence as to the
Company,
the Project, the Project Participants and the Financing, (b) execution
and
delivery of satisfactory definitive documentation (including, but
not
limited to, the Offering Memorandum and a final, definitive underwriting
agreement, purchase agreement or placement agency agreement, as the
case
may be, in Bear Xxxxxxx’ standard form, containing customary
representations, warranties, covenants, indemnification provisions
and
closing conditions), (c) the satisfaction of all conditions set forth
in
such documentation, as well as the absence of any events set forth
therein
which would constitute a default of potential default thereunder
or permit
the termination thereof, and (d) the receipt of (i) any required
Bear
Xxxxxxx’ internal approvals and (ii) such legal opinions of Company
counsel as may be deemed appropriate by Bear
Xxxxxxx.
|
| 9. |
The
benefits of this Agreement shall inure to the parties hereto, their
respective successors and assigns and to the indemnified parties
hereunder
and their respective successors and assigns and representatives,
and the
obligations and liabilities assumed in this Agreement by the parties
hereto shall be binding upon their respective successors and
assigns.
|
| 10. |
EACH
OF THE COMPANY AND BEAR XXXXXXX (AND, TO THE EXTENT PERMITTED BY
LAW, ON
BEHALF OF THEIR RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY
JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT AND THE TRANSACTION. .
Each of the Company and Bear Xxxxxxx hereby certifies that no
representative or agent of the other party has represented expressly
or
otherwise that such party would not seek to enforce the provisions
of this
waiver. Further, each of the Company and Bear Xxxxxxx acknowledges
that
each party has been induced to enter this Agreement by, inter,
alia,
the provisions of this paragraph.
|
| 11. |
This
Agreement embodies the entire agreement and understanding of the
parties
hereto and supersedes any and all prior agreements, arrangements
and
understanding relating to the matters provided for herein. No alteration,
waiver, amendment, change or supplement hereto shall be binding or
effective unless the same is set forth in writing signed by a duly
authorized representative of each
party.
|
| 12. |
If
it is found in a final judgment by a court of competent jurisdiction
(not
subject to further appeal) that any term or provision hereof is invalid
or
unenforceable, (i) the remaining terms and provisions hereof shall
be
unimpaired and shall remain in full force and effect and (ii) the
invalid
or unenforceable provision or term shall be replaced by a term or
provision that is valid and enforceable and that comes closest to
expressing the intention of such invalid or unenforceable term or
provision.
|
| 13. |
Each
party hereto has all requisite power and authority to enter into
this
Agreement and the transactions contemplated hereby. This Agreement
has
been duly and validly authorized by all necessary action on the part
of
each party hereto and is duly executed and delivered by each party
and
constitutes a legal, valid and binding agreement of each party,
enforceable in accordance with its terms. Each party has received
such
external approvals to enter into this Agreement as may be required
under
applicable law.
|
4
| 14. |
This
Agreement does not create, and shall not be construed as creating,
rights
enforceable by any person or entity not a party hereto, except those
entitled thereto by virtue of paragraphs 5 and 9 and the Indemnification
Provisions hereof. The Company acknowledges and agrees that Bear
Xxxxxxx:
(a) is not and shall not be construed as a fiduciary of the Company
and
shall have no duties or liabilities to any person, including any
Project
Participant (other than the Company) by virtue of this Agreement
or the
retention of Bear Xxxxxxx hereunder, all of which are hereby expressly
waived; (b) is being retained to assist the Company in connection
with the
Assignment; (c) is not being retained to advise the Company as to
the
underlying business decision to consummate any transaction; and (d)
is
acting as an independent contractor. The Company also agrees that
Bear
Xxxxxxx shall not have any liability (including without limitation,
liability for losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, costs, expenses or disbursements resulting from
any
negligent act or omission of Bear Xxxxxxx, whether direct or indirect,
in
contract, tort or otherwise) to the Company or to any person claiming
through the Company for or in connection with the engagement of Bear
Xxxxxxx, this Agreement or the transactions contemplated hereby except
and
only to the extent of its willful misconduct or gross negligence.
The
Company acknowledges that Bear Xxxxxxx was induced to enter into
this
Agreement by inter,
alia,
the provisions of this paragraph.
|
| 15. |
All
opinions and advice (written or oral) given by Bear Xxxxxxx to the
Company
in connection with Bear Xxxxxxx’ engagement hereunder are intended solely
for the benefit and use of the Company and no such opinion or advice
shall
be used for any other purpose, or reproduced, disseminated, quoted
or
referred to at any time in any manner or for any purpose, nor shall
any
public references to Bear Xxxxxxx be made by the Company without
the prior
written consent of Bear Xxxxxxx; provided, however, that nothing
in this
Paragraph 15 shall be construed to prevent the Company from making
necessary disclosures required by
law..
|
| 16. |
Bear
Xxxxxxx is a full service securities firm engaged in securities trading
and brokerage activities, as well as providing investment banking
and
financial advisory services. In the course of its activities, Bear
Xxxxxxx
or its affiliates may hold long or short positions, and may trade
or
otherwise effect transactions for its own account or the accounts
of
customers in debt or equity securities or senior loans of one or
more
Project Participants or affiliated
entities.
|
| 17. |
For
the convenience of the parties hereto, any number of counterparts
of this
Agreement may be executed by the parties hereto. Each such counterpart
shall be, and shall be deemed to be, an original instrument, but
all such
counterparts taken together shall constitute one and the same
agreement.
|
If
the
foregoing correctly sets forth our agreement, please sign the enclosed copy
of
this letter in the space provided and return it to us.
| Very truly yours, | ||
| BEAR, XXXXXXX & CO. INC. | ||
| |
|
|
| Date: | By: | /s/ |
|
Senior
Managing Director
|
||
|
Confirmed and Agreed to:
this _______day of
|
||
| Fuel Frontiers, Inc. | |||
| By: | |||
|
|
|||
|
Name: Title:
|
5
INDEMNIFICATION
PROVISIONS
The
Company agrees to indemnify and hold harmless Bear Xxxxxxx, to the fullest
extent permitted by law, from and against any and all losses, claims, damages,
obligations, assessments, penalties, judgments, awards, and other liabilities
(collectively, “Liabilities”), and will fully reimburse Bear Xxxxxxx for any and
all reasonable fees, costs, expenses and disbursements (collectively,
“Expenses”), as and when incurred, of investigating, preparing or defending any
claim, action, suit, proceeding or investigation, whether or not in connection
with pending or threatened litigation or arbitration, and whether or not Bear
Xxxxxxx is a party (collectively, “Actions”) (including any and all legal and
other Expenses in giving testimony or furnishing documents in response to a
subpoena or otherwise), directly or indirectly, caused by, relating to, based
upon, arising out of or in connection with (a) any act or omission by the
Company in connection with the agreement dated November __, 2006 between Bear
Xxxxxxx and the Company, as it may be amended from time to time (the
"Agreement"), or (b) any untrue statement or alleged untrue statement of a
material fact contained in, or omissions or alleged omissions from any
Information furnished by the Company to Bear Xxxxxxx, any court or governmental
or regulatory agency, commission or instrumentality or any prospective financing
source; provided,
however,
such
indemnity agreement shall not apply to any portion of any such Liability or
Expense to the extent it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted from the gross
negligence or willful misconduct of Bear Xxxxxxx.
These
Indemnification Provisions shall be in addition to any liability which the
Company may otherwise have to Bear Xxxxxxx or the persons indemnified below
in
this sentence and shall extend to the following: The Bear Xxxxxxx Companies
Inc., Bear, Xxxxxxx & Co. Inc., their respective affiliated entities,
directors, officers, employees, legal counsel, agents and controlling persons
(within the meaning of the federal securities laws). All references to Bear
Xxxxxxx in these Indemnification Provisions shall be understood to include
any
and all of the foregoing. Capitalized terms used herein without definition
shall
have the meanings ascribed thereto in the Agreement.
If
any
Action is commenced, as to which Bear Xxxxxxx proposes to demand
indemnification, it shall notify the Company with reasonable promptness;
provided,
however,
that
any failure by Bear Xxxxxxx to notify the Company shall not relieve the Company
from its obligations hereunder unless the Company has been adversely affected
by
Bear Xxxxxxx’ failure to so notify the Company. Bear Xxxxxxx shall have the
right to retain counsel of its own choice to represent it, and the Company
shall
pay the Expenses of such counsel; and such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with the Company
and any counsel designated by the Company. The Company shall be liable for
any
settlement of any claim against Bear Xxxxxxx made with the Company's written
consent, which consent shall not be unreasonably withheld. The Company shall
not, without the prior written consent of Bear Xxxxxxx, which consent shall
not
be unreasonably withheld, settle or compromise any claim, or permit a default
or
consent to the entry of any judgment in any Action in respect of which
indemnification may be sought hereunder.
6
In
order
to provide for just and equitable contribution, if a claim for indemnification
pursuant to these Indemnification Provisions is made but it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification may not be enforced in such case, even though the
express provisions hereof provide for indemnification in such case, then the
Company, on the one hand, and Bear Xxxxxxx, on the other hand, shall contribute
to the Liabilities and Expenses to which the indemnified persons may be subject
in accordance with the relative benefits received by the Company, on the one
hand, and Bear Xxxxxxx, on the other hand, and also the relative fault of the
Company, on the one hand, and Bear Xxxxxxx, on the other hand, in connection
with the statements, acts or omissions which resulted in such Liabilities and
Expenses and the relevant equitable considerations shall also be considered.
No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for such fraudulent
misrepresentation. Notwithstanding the foregoing, Bear Xxxxxxx shall not be
obligated to contribute any amount pursuant to this paragraph that exceeds
the
amount of fees previously received by Bear Xxxxxxx or which at the time such
contribution is required Bear Xxxxxxx is entitled to receive pursuant to the
Agreement.
Neither
termination nor completion of the engagement of Bear Xxxxxxx referred to above
shall affect these Indemnification Provisions which shall remain operative
and
in full force and effect.
7
