July 21, 2006
Akeena Solar, Inc.
605 University Avenue
Los Gatos, CA 95032
Ladies and Gentlemen:
This letter shall set forth our agreement ("Agreement") with respect to the
non-exclusive services to be provided by Westminster Securities Corp.
("Westminster") to Akeena Solar, Inc. (the "Company"), In connection with the
Company's desire to raise up to $2.5 million from the sale of its equity
securities ("Transaction"), upon terms and conditions proposed by or agreeable
to the Company. Westminster will endeavor to introduce to the Company, in
writing (via email, facsimile, or hard copy letter), individuals or entities
that are "accredited investors" as defined in Rule 501(a) of the Securities Act
of 1933 and who may have an Interest in investing in the Transaction (such
Introduced persons, together with their affiliated employees, funds and
management companies, "Investors"). For clarity, "Investors" shall only include
such Investors introduced by Westminster and shall not include any persons
completing any Transaction with the Company who are not investors. We hereby
agree as follows:
1. Services. Westminster shall use reasonable efforts to introduce to the
Company potential investors. The Company agrees to pay Westminster the fees set
forth in Paragraph 2 with respect to a Transaction entered into with any
investor (a "Completed Transaction"). Westminster represents that:
(i) It will introduce to the Company only to accredited investors who reside in
states where Westminster is registered as a broker-dealer.
(ii) It is a member in good standing of the National Association of Securities
Dealers, Inc. and a registered broker-dealer with the Securities and Exchange
Commission.
(iii) It has the power and authority to enter Agreement, and that the Agreement
will be binding and enforceable against it in accordance with its terms, subject
to bankruptcy laws and other laws applicable to the enforcement of creditors'
rights generally.
2. Compensation. As compensation for the assistance described above, the Company
agrees to pay to Westminster, with respect to any Completed Transaction and upon
each closing thereof, an amount equal to:
(i) Six percent (6%) of all gross cash proceeds received by the Company from any
Investors WESTMINSTER INTRODUCES in a Completed Transaction; and
(ii) Warrants to purchase six percent (6%) of the total number of shares of
common stock issued and issuable to Investors WHOM WESTMINSTER INTRODUCES in a
Completed Transaction (including common stock underlying warrants and
convertible securities). exercisable at the price paid by the Investors for the
common stock and expiring on the third anniversary of the issuance of the
warrants.
Such compensation shall be due and payable with respect to any Investor
introduced by Westminster in a Completed Transaction during the term hereof or
for up to twenty four (24) months following termination, completion or
abandonment of the Transaction. Notwithstanding anything to the contrary
contained herein, the Company shall have the sole and absolute discretion to
accept or not accept, in whole or in part, any subscriptions.
3. Term. This retention of Westminster by the Company hereunder shall commence
on the date hereof and shall continue until terminated by either party
immediately upon written notice to the other or, if earlier, the completion,
termination or abandonment of the Transaction, subject to the survival of
Section 2 for the period described therein and the survival of Section 5.
4. Independent Contractor. Westminster shall at all times act as and be an
independent contractor, and in no event shall either Westminster or any of its
employees, agents or representatives be deemed to be an employee, agent or
representative of the Company. Westminster shall have no authority to bind the
Company to any obligation, express or implied.
5. Indemnification. The Company shall indemnify Westminster and its agents and
hold them harmless from and against any and all losses, claims, damages,
actions, expenses (including without limitation reasonable attorneys' fees and
disbursements) and liabilities (collectively, "Claims") arising in any manner
out of or in connection with statements made in the written materials provided
by the Company to investors, directly or indirectly, except to the extent the
claims are caused by the gross negligence or willful misconduct of Westminster
or its agents.
6. Non-Circumvention. Westminster and the Company hereby represent, warrant and
covenant that neither party will directly or indirectly interfere with, seek to
terminate, limit, circumvent or otherwise damage or alter in any respect the
relationship, rights, duties and obligations of the Parties established hereby
or the interests of the Parties created hereby, and the Company represents that
it will not seek to arrange any transaction involving the Investor(s) which is
similar to the Transaction contemplated hereby other than pursuant to the terms
hereof to the benefit of all.
7. Miscellaneous. This Agreement constitutes the entire agreement of the parties
pertaining to the subject matter hereof, and the parties have made no
agreements, representations or warranties relating to the subject matter of this
Agreement that are not set forth herein. This Agreement may not be modified or
amended in any manner except by an instrument in writing signed by each of the
parties hereto. The waiver by either party of compliance with any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any other provision of this Agreement, or of any other breach by such party
of a provision of this Agreement. Neither party may assign its rights or
obligations hereunder. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof. In the event that any controversy or claim
arising out of this Agreement cannot be settled by the parties hereto, such
controversy or claim may be settled by arbitration in accordance with the then
current rules of the American Arbitration Association, in the State of New York,
and judgment upon the award may be entered into any court having jurisdiction
thereof. The prevailing party shall be reimbursed by the nonprevailing party for
all reasonable attorney's fees and costs (including all arbitration costs)
incurred by the prevailing party in resolving any such dispute. This Agreement
may be executed in counterparts, each of which shall be deemed an original and
all of which together will constitute one and the same instrument.
if the foregoing represents our agreement, please sign below where indicated and
return to me. We look forward to assisting you in this matter.
Sincerely,
WESTMINSTER SECURITIES CORP.
By: /s/ John P. O'Shea
---------------------------------
John P. O'Shea
President/CEO
APPROVED AND ACCEPTED THIS
24 DAY OF July, 2006:
AKEENA SOLAR INC.
By: /s/ Barry Cinnamon
---------------------------------
Name: Illegible
Title: CEO
