FINANCING AND CONDITIONAL REGISTRAT ON AGREEMENT
This Financing and Conditional Registration Agreement (the Ag eement ), effective June 3,
2013 (the Closing Date ), isbetween ISA Intemationale, Inc., ( SAT ), aDelaware
corporation located at2564 No Rice St., St.Paul, MN 55113, and Diesel TEK, Inc.
( Company ), with address at3265 East Warm Springs Road Las Vegas, NV 89120 (lSAT and
Company, collectively, the Parties ).
RECITALS
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Company isdedicated toimproving airqjity and other attribute ofthe environment by
providing advanced technology products tdlthe heavy-duty transp rtation industry to improve the
efficiencies ofdiesel engines.; and
ISATisaBusiness Development Company ( BDC ) asdefined b the Securities
Exchange
Commission ( SEC ), Investment Company Act of 1940. ISAT i focused onrecruiting,
mentoring, coaching and enhancing the investment opportunity fo oil, gas and technology based
companies inthe process ofbecoming public entities. ISAT provo esitsexperience, world class
advisors, additional intellectual properties, management expertise, etc.to enhance the value and
profile ofthe companies itrepresents; and
To further itsbusiness plans and raise needed capital, Company isseeking toraise funds through
debt, equity oracombination ofthe above ( Financing Transactio ) inthe amount of
approximately $5,000,000.00 with further Financing Transactions to follow, and
Itisthe intention ofthe parties hereto that ISATshall assist Comp ywith completing such
Financing Transaction,
Itisthe intention ofthe parties that after such initial Financing Tr nsaction iscompleted, parties
will contemplate the following transaction, tobe entered into only ifboth parties agree todo so
inwriting: the registration ofCompany's shares for public trading through an S-l registration
filing with the SEC ( Registration ) through atransaction includi gapurchase ofCompany's
shares by ISAT and consequent distribution ofsuch shares to ISA 's shareholders, and
The boards ofdirectors ofISATand Company deem ittobe inth best interest ofISATand
Company toproceed with these actions.
NOW, THEREFORE, inconsideration ofthe mutual covenants, a reements, representations and
warranties contained inthis Agreement, the parties hereto agree
follows:
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1. DEFINITION OFFINANCING TRA
ISACTION
Company islooking to secure aninitial Financing Transaction of pproximately $5,000,000.00
with further Financing Transactions to follbw. For purposes ofthi engagement, Financing
Transaction means any transaction orseri~s oftransactions, whi hmayor may not involve a
securities transaction, not inthe ordinary cburse ofbusiness, resul ingdirectly orindirectly inthe
injection ofnew capital into the Company, lincluding itsaffiliated' nvestments orcompanies
through amerger orconsolidation, with the assistance, directly orindirectly, byISAT. A
Financing Transaction shall also include acurrently unanticipated course ofaction, such as,
without limitation, divestiture, licensing agreement, strategic alli ce,joint venture or
partnership, credit enhancement, non-recourse grant orany other orm ofcapital injection.
2. TERM
Either Party may terminate the engagement atany time, with orwthout cause, upon fifteen (15)
days written notice tothe other Party. Ifthe Company terminates he engagement forany reason,
the Company shall remain liable forthe Financing Transaction C mpletion Compensation only
pursuant to Section 4(B).
3. SERVICES
ISAT intends and agrees toprovide the following services onabe tefforts basis to facilitate a
Financing Transaction:
A. Approach those potential investors, aspre-approved byt eCompany, to gauge their
interest inentering into aFinancing Transaction with th Company.
B.
Incooperation with the Company, coordinate:
1. meetings forthe Company topresent their operatio sand investment materials to
prospective investors; and
ii. review offinal due diligence.
C.
Provide the Company with comments onthe investment greements and any other
relevant agreements.
D. ISAT may also provide additional Financing Transactio consulting services asmay be
required and coordinated with the Company inorder tof cilitate asuccessful Financing
Transaction( s).
E
Company to Control Transactions. The prices, terms and conditions under which the
Company shall offer orsell any ofitssecurities shall be etermined by the Company in
its sole discretion. The Company shall have the authority to control alldiscussions and
negotiations regarding any proposed oractual offering 0 sale ofany ofitssecurities.
Nothing inthis Agreement shall obligate the Company t actually offer or sellanyJ
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securities orconsummate anytransaction. The Compan may terminate any
negotiations ordiscussions atanytime andreserves the .ghtnot toproceed with any
offering orsale ofsecurities. Other than the Fee Compe ation, asdefined in Section
4(A) below, compensation pursuant tothis Agreement s all only bepaid upon
consummation ofaFinancing Transaction(s), and
F.
Potential Registration. After completion ofinitial transa tion, Parties shall consider
entering into aseparate agreement for the purposes ofR gistration, which shall include
apurchase ofCompany's shares by ISAT and conseque tdistribution ofsuch shares to
ISAT's shareholders.
4. Compensation
Inconsideration ofISAT'sservices descri~ed above, the Compan agrees topay ISATas
follows:
A. Fee Compensation. The company shall remit the follo ng: (i)onthe date hereof, a
$15,000.00 non -refundable amount payable incash toIS Tand (ii) anon -refundable
amount of$35,000.00 payable in cash toISAT within 30 alendar days after the date
hereof.
B.
Financing Transaction Completion Compensation. Ifd . gthe term ofthe engagement
orduring the two (2)years following the termination ofth engagement the Company
consummates aFinancing Transaction with the assistance fISATthe Company will
compensate ISAT (the Financing Transaction Completio Compensation ) inthe
amount of 10.0% ofthe Consideration received, with such Financing Transaction
Completion Compensation being convertible into equity s ares ofthe Company at
ISAT's option.
C.
Consideration. Consideration shall include, but not beli ited to, the total ofany cash
received bythe Company from investors plus: (i)the face alue ofany convertible debt
orsimilar securities issued orassumed inconnection with heFinancing Transaction; (ii)
the higher ofthe book ormarket value, onthe date receive ,ofany shares ofcapital
stock ofanother corporation; and (iii) the fairmarket valu ofany other property orassets
received by Company.
D.
Payment ofCompensation. Unless converted toequity b ISAT atitssole option,
ISAT's compensation setforth in Section 4(B) above are d eand payable incash inU.S.
dollars onthe date ofactual receipt ofconsideration atclosi g,or, inthe event of
multiple closings orsubsequent interim tenders ofconside tion, upon actual receipt of
each installment ofconsideration.
5. EXPENSES
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The Company will reimburse ISAT for all pre-approved expen s incurred in connection with
ISAT's services under the engagement upon ISAT's submission of an invoice to the Company.
Reimbursable expenses shall include, without limitation, ite s such as travel, and other
necessary services performed by ISAT or its employees, agen s, contractors, consultants, on
behalf ofthe Company, with prior written authorization bythe Co pany.
6. DUE DILIGENCE
The Company agrees that ithas the exclusive responsibility tove fy,through itsown due
diligence, any information onwhich the Company bases itsdecisi ntopursue orreject any
Financing Transaction proposal. The Company will rely on its0
legal and financial resources
innegotiating the terms and conditions ofany Financing Transact on. The Company agrees that
neither ISATnor anyofitsemployees, shareholders, directors, ag nts, representatives, or
controlling persons shall have any liability tothe Company, itssh reholders, officers, directors,
employees, orrepresentatives, resulting from any ofthe terms or onditions ofany Financing
Transaction.
7. INFORMATION
A. The Company will furnish ISATwith such information as SATbelieves appropriate to
this engagement and will provide ISAT with access to its fficers, employees, directors,
accountants, legal counsel and other advisors. Inrecogniti nbyISAT ofthe absolute
sensitivity ofthe engagement represented bythis Agreeme t,ISATagrees that no such
access will be granted except with the Company's permiss on. ISAT acknowledges that
insome cases such access may be denied, andthe Comp
agrees that the information
sought by ISAT will be supplied through some means ace table toboth ISAT andthe
Company. Any financial information orforward-looking i ormation which Company
provides to ISATwill beprovided bythe Company ingoo faith, based on
management's best estimates then available, based onfact and assumptions which the
Company believes tobereasonable, inconformit~ with U ited States generally accepted
accounting principles inallmaterial respects and subject t SEC and other regulatory
rules and constraints. ISATagrees totreat allinformation
ceived from the Company as
Confidential Information asmore fully set forth in Section 9below.
B. The Company acknowledges that ISATwill beusing and r lying upon such information
without anyindependent investigation orverification there forindependent appraisal by
ISAT ofthe Company oritsbusiness orassets orany pote tial investor oritsbusiness or
assets and that ISATmakes no representation orwarranty t the Company ofthe
accuracy orcompleteness ofsuch information.
8. ABILITY TO CONTRACT
A. The Company represents and warrants to ISAT that the en agement does not violate or
constitute abreach ordefault under any contract, agreeme ,arrangement or
understanding, whether written ororal, towhich the Comp yorany ofits subsidiaries is
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aparty orbywhich itsortheir assets are bound. Furtherm re,that there arenot brokers,
representatives, fmders orother persons with aninteresti the compensation due and
payable by Company to ISAT inconnection with anytran action contemplated herein.
9. CONFIDENTIALITY
A. Definition. As used herein, Confidential Information me sallinformation about the
Company orapotential investor, other than information w ich:(a)isauthorized in
writing bythe Company; (b)was publicly known atthe ti eofdisclosure; (c)
subsequently becomes publicly known other than asares tofadisclosure by ISAT or
itsagents oradvisors; or (d)has become, orhereafter beco es, available to ISATon a
non-confidential basis from asource other than the Comp y,apotential investor ortheir
respective advisors, provided that such source isnot kno
by ISAT tobebound by a
confidentiality agreement orother obligation ofsecrecy fo the Company's orthe
investor's benefit.
B. Restrictions on ISAT. ISAT agrees to hold inconfidence
dnot todisclose the
Confidential Information toany third party except: (a)as ayberequired by law orby
order ofacourt ofcompetent jurisdiction; provided that in such event, ISATshall
provide the Company with such advance notice ofany dis losure deemed required by
ISAT asisreasonably necessary inorder topermit the Co pany to seek acourt order or
other appropriate remedy toprevent orlimit the scope ofs chdisclosure; (b)that ISAT
may disclose Confidential Information tothose ofitsoffic rs, directors and employees
and representatives ofitsagents and advisors who have a eedtoknow such information
inconnection with ISAT'sengagement and who have agre dnot to disclose such
information otherwise than aspermitted by this letter; and c)to anypotential investor
who has signed aconfidentiality agreement.
C. Restrictions onthe Company. Any written ororal advice p ovided by ISAT inconnection
with aFinancing Transaction will beexclusively forthe befit anduse ofthe Company,
itsBoard ofDirectors, officers, accountants, legaladvisors and expert consultants and,
except asrequired by law orby order ofacourt o~compet ntjurisdiction, may not be
disclosed toany third party orcirculated orreferred topub .cly (other than inaproxy
statement orinthe course oflitigation towhich sUFhadvic isrelevant) without ISAT's
prior written consent, which shall not beunreasonably wit eld. Ifany disclosure of
ISAT's advice istobemade inthe course oflitigation, the Company shall provide ISAT
with such advance notice ofany proposed disclosure asis asonably necessary inorder
topermit ISATto seek acourt order orother appropriate r medy toprevent orlimit the
scope ofsuch disclosure.
10.ARBITRA nON AND CHOICE OF LAW
All disputes, controversies, claims ofdifferences which arise betw enthe parties out oforin
connection tothe engagement, including the scope and applicabili ofthis arbitration clause,
shall be finally settled under the rules ofthe American Arbitration ssociation by an arbitrator
appointed inaccordance with said rules. Theplace ofthe arbitratio shall beNew York City. The
.b?. tJ
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interpretation, construction and legal effect ofthis Agreement sha Ibedetermined byreference
to inthe following order: (i)the language ofthe Agreement; (ii) eintention ofthe parties tothe
Agreement; and (iii) byreference tothe laws ofthe State ofNew ork.
11.INDEMNIFICATION
The Company agrees that neither ISAT, nor any ofitsemployees, directors, agents,
representatives, orcontrolling persons shall have any liability tot eCompany, itsshareholders,
officers, directors, employees, agents, representatives, controlling persons, orthird parties,
resulting from any ofthe terms orprovisions ofthis Agreement.
eCompany further agrees to
defend, indemnify and hold harmless ISAT,itsemployees, direct rs, agents, representatives, or
controlling persons from any losses, claims, liability, damages, co ts and expenses (including
reasonable attorneys' fees andexpenses aswell as settlement cost )arising out oforrelated to
the terms and provisions ofthis Agreement. Company agrees top ace same indemnification as
specified inthis Section 11inany subscription agreement or.simi document that the company
may enter into aspart ofany Financing Transaction.
12.SURVIVING TERMS
Sections 2,4,5,9, 10, 11, 12, 15, 16, 17shall survive the termina ion ofthis Agreement. Any
mutual Non-Disclosure Agreement between the Company and IS Tshall survive the
termination ofthis Agreement.
13.INTEGRATION AND MODIFICATION
This writing contains the entire agreement ofISATand the Comp yand there areno promises,
understandings oragreements, either oral orwritten, ofany kind t atrelate tothe engagement
other than those stated above. This Agreement may not be change except inwriting and signed
bythe Parties tobebound hereby.
14.ASSIGNMENT
The benefits ofthis Agreement shall inure tothe respective succes ors and permitted assigns of
the parties hereto. This Agreement may not be assigned without t prior written consent ofthe
non-assigning party (orparties). Inthe case oflSAT, such consen shall not beunreasonably
withheld. Inthe case ofthe Company, and inrecognition that the ervices ofISAT are
specialized and dependent upon performance byparticular individ Iswith specialized expertise,
the Company may withhold such consent for any reason ifitdete inesthat such assignment
will result inthe loss to itofthe services ofsuch individuals.
15. NOTICES
All notices required orpermitted hereunder shall be inwriting and deemed sufficiently given for
allpurposes hereof if(a) delivered inperson, by courier orbyregi tered orcertified United
States Mail tothe Chief Executive Officer orPresident ofISAT ataddress specified above andto
the Chief Executive Officer orPresident the Company atDiesel T K,Inc. 3265 East Warm
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Springs Road LasVegas, NY 89120, with receipt obtained, or(ii) sent bytelecopy, telefax or
other facsimile orelectronic transmission, with answer back or ther advice ofreceipt
obtained, ineach case tothe appropriate address ornumber asset orth below. Each notice shall .
bedeemed effective onreceipt bythe addressee asaforesaid; pro ided that, notice received by
telex, telecopy, telefax orother facsimile orelectronic transmissi
after 5:00 p.m. atthe location
ofthe addressee ofsuch notice shall bedeemed received onthe fi stbusiness day following the
date ofsuch electronic receipt. Notice shall besent tothe address rfacsimile number setforth
onthe first page ofthis Agreement, oratsuch other address orto uch other telecopy, telefax or
other facsimile orelectronic transmission number asthe Parties
yprovide inwriting.
16. AUTHORITY
ISATand Company hereby represent that the undersigned have al requisite power and authority
toexecute and deliver this Agreement, tobind the Parties tothe te softhis Agreement andto
cause the respective Party toperform itsobligations hereunder ( dunder all documents required
tobe executed and delivered and actions tobeperformed by each fISAT and Company
pursuant hereto).
17.
COMPLIANCE WITH LAWS.
Both parties represent that they shall comply with applicable fede aland state laws. ISATand
Company represent that itisnot aparty to any other agreement, w .chwould conflict with or
interfere with the terms and conditions ofthis Agreement.
18.IDENTITY DISCLOSURE.
Tohelp the U.S Government prevent the funding ofterrorism and oney laundering activities,
Federal law requires allfinancial institutions to obtain, verify, and record information that
identifies client corporations and senior management and orowne sofcorporate clients. In
accordance with these requirements, ISAT will request certain inti rmation which may include
name, address, date ofbirth (for individuals), corporate tak IDan other information that will
allow usto identify Company and senior management and orown rs ofCompany. ISAT may
also request to seecertain documents such asCertificate ofIncorp ration, driver's license or
other identifying documents. ISAT iscommitted tomainthining th privacy ofour current and
former clients.
19.
COUNTERPARTS
This Agreement may beexecuted intwo ormore counterparts, eac ofwhich shall bedeemed an
original, but all ofwhich shall constitute one and the same inst
ent and which may be
transmitted electronically without apaper copy being necessary.
20.
MISCELLANEOUS
ISAT will provide services to the Company asan independent con actor. The parties hereto do
not intend to create any fiduciary relationship between them. Ther may be other services which
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arerequired tobeprovided tothe Company inconnection with th transaction contemplated by
this Agreement and which will beprovided by others (e.g., indep ndent auditors orappraisers).