EXHIBIT 10.12
BENTLEY SECURITIES CORPORATION
885 Third Avenue
24th Floor
New York, New York 10022
__________
Tel: 212-848-1040
Fax: 212-826-2390
May 17, 1996
Amerac Energy Corporation
700 Louisiana, Suite 3330
Houston, Texas 77002
ATTN: Mr. Jeffrey B. Robinson
President
Chief Executive Officer
Gentlemen:
Bentley Securities Corporation ("Bentley") in conjunction with Nicoletti
& Company Inc. is pleased to assist Amerac Energy Corporation ("Amerac" or the
"Company) in raising Equity Financing through a best efforts private placement.
This letter (the "Agreement") is to confirm our mutual understanding with
respect to this engagement.
I. Proposed Transaction Amerac desires to raise new long-term capital
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for refinancing, acquisitions and capital expenditures.
II. Services to be Provided. Bentley will provide the following financial
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advisory services on behalf of the Company, as the Company may request:
A. Appropriate review and analysis of Amerac's operations, capital
structure, financial information (historical and projected) and business
plan;
B. Appropriate assistance in the preparation of a Private Placement
Memorandum of the Company (the "Financing Memorandum"), including
structuring the proposed financing as may be appropriate;
C. Identifying and contacting appropriate potential institutional and
other "accredited investors," as defined in Regulation D under the
Securities Act of 1933, as amended (the "Investors") and assisting the
Company in the negotiation of appropriate financing arrangements;
Member of the National Association of Securities Dealers (N.A.S.D)
D. Other appropriate financial advisory assistance to the Company as may
pertain to this Agreement (including advice with regard to its
existing Senior Preferred Stock) and as may be mutually agreed upon
by the Company and Bentley. Any services outside the scope of this
Agreement shall be covered by a separate engagement letter.
III. Definitions. For the purposes of this Agreement:
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A. Equity Financing shall mean the raising of funds by the Company
through the issuance of common stock, preferred stock, and/or other
securities convertible, exchangeable or exercisable into common
stock. No fees, however, will be paid in connection with common stock
sold by the Company to any party or an affiliate of any party who
participated as a purchaser in the purchase of the Company's common
stock from Investment Limited Partnership or the purchase of the
Company's $4.00 Senior Preferred Stock from Snyder Oil Corporation.
B. Financing shall include the availability or commitment of funds
which can be drawn down immediately or otherwise as agreed to by the
Company, whether or not such funds are taken down by the Company. The
Financing Fee shall apply to any or all Financing, whether taken down
or not.
C. The Financing Fee is due and payable pro rata upon the takedown of
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any portion of the Financing committed pursuant to the terms of any
Financing. The entire balance of the Financing Fee is due at the time
of the final takedown.
IV. Exclusive Financial Advisor. During the Term of this Agreement, Bentley
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will serve as exclusive financial advisor to, and private placement
agent, on a best efforts basis for, Amerac in order to identify and help
secure Equity Financing for the Company. During the Term of this
Agreement, any Equity Financing (as defined in Section III above) of the
Company, whether arranged by Bentley or otherwise, shall be considered
as a Equity Financing as to which the Company shall be subject to the
Financing Fees due to Bentley, as provided for below in Section V.
V. Professional Fees. The Company will pay Bentley for its services under
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this Agreement as provided for below:
A. A non-refundable financial advisory fee for services rendered of
50,000 shares of Amerac Common Stock payable to Bentley or its
designee upon execution of this Agreement.
B. A non-refundable financial advisory fee of $5,000 per month,
payable in Amerac common stock to Bentley or its designee. The
number of shares to be paid in connection with each month's fee
shall be determined by dividing the average of the closing common
stock bid price for each trading day of the month to which the
payment relates into $5,000. For purposes of this Section V.(B.), a
month will begin
on the date that Amerac requests that Bentley begin work on the
Equity Financing and end one day earlier in the following month.
C. Contingent upon the closing(s) of a Equity Financing, a contingent
fee (the "Financing Fee") in an amount equal to six percent (6%) of
the aggregate dollar amount of all Equity Financing raised.
D. In connection with any Equity Financing provided by Cardinal
Investment Company, Inc. or its principals, Bentley's contingent fee
described in Section V.(C.) above will be three percent (3%). In
connection with certain other Investors, Bentley may, upon the
Company's request, reduce its contingent fee to three percent (3%),
or remit up to one-half of its six percent (6%) contingent fee to
another securities firm.
E. Nicoletti & Company Inc. agrees that simultaneous with closing of an
Equity Financing it will directly, or through an affiliate, purchase
securities identical to those sold to Investors at any such closing.
The dollar amount of such purchase shall equal one-half of the
Equity Financing Fee paid by Amerac to Bentley (less any fee which
Bentley remits to another securities firm) at any given closing.
VI. Non Equity Financing. Should an Investor(s) with whom Bentley holds
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discussions concerning an Equity Financing provide funds to the Company
in other than an Equity Financing, Bentley and the Company will agree as
to what Financing Fees, if any, are due Bentley in connection with such
non-Equity Financing. In reaching such agreement Bentley and the Company
will consider, among other things, (1) whether or not the Investor was
introduced to Amerac by Bentley, (2) the nature and term of the non-
Equity Financing, and (3) Bentley's role in negotiating the terms of the
Non-Equity Financing. It is understood, however, that the maximum
Financing Fee requested by Bentley under this Section VI will be no
greater than three percent (3%) of the aggregate dollar amount of non-
Equity Financing provided by an Investor(s) with whom Bentley holds
discussions concerning an Equity Financing. Nicoletti & Company Inc.
will not be obligated to purchase securities associated with such non-
Equity Financing(s).
VII. Expenses. In addition to any fees that may be payable to Bentley under
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this Agreement and regardless of the result of any of Bentley's efforts,
the Company agrees to reimburse Bentley and/or Nicoletti & Company Inc.
from time to time, upon request, for their reasonable out-of-pocket
expenses associated with their activities contemplated under this
Agreement.
VIII. Use of Information The Company will furnish Bentley with such
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information as Bentley reasonably believes appropriate to this
assignment (and may, in its sole discretion, approve other information
provided by Bentley) (all such information so furnished and/or approved
by the Company being hereinafter referred to as the "Information"). The
Company recognizes and confirms that Bentley (I) will use and rely
primarily on the Information and on information available from generally
recognized public sources in performing the services, and in rendering
any advice contemplated by this Agreement without having independently
verified the same, (ii) does not assume responsibility for the accuracy
or completeness of the Information and
such other information, and (iii) will not make an appraisal of any
assets of the Company or any party to a transaction with the Company. To
the best of the Company's knowledge, the Information to be furnished by
the Company, when delivered, will be true and correct in all material
respects, and will not contain any material misstatement of fact or omit
to state any material fact necessary to make the statements contained
therein not misleading. The Company will promptly notify Bentley if it
learns of any material inaccuracy or misstatement in, or material
omission from, any Information delivered to Bentley.
IX. Indemnification. It is understood that Bentley is being engaged
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hereunder solely to provide the services described above to the Company
as an independent contractor, and that Bentley is not acting as an agent
or fiduciary of, and shall have no liability to, any party in connection
with its use of any Information. In addition, it is customary for
Bentley and Nicoletti & Company Inc. and their related persons to be
indemnified as provided in Annex A hereto, and the Company hereby so
indemnifies Bentley, Nicoletti & Company Inc. and their related persons
in accordance with the terms of Annex A, which is incorporated herein by
reference.
X. Term.
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A. This Agreement shall terminate the earlier of completion of the
Equity Financing or six months from the date that Amerac requests that
Bentley begin work on the Equity Financing, unless extended by both
parties in writing. Following the termination of this Agreement, Bentley
will identify in writing to the Company the names of all Investors.
Financing Fees will be due if at any time during an additional eighteen
months after this Agreement is terminated ("Additional Term") Investors
commit to provide Financing to the company.
B. The provisions of this Agreement relating to the payment of fees
and expenses and indemnification will survive any termination of this
Agreement, subject to the following provisions: (I) with regard to the
payment of fees, subject to the provisions noted in Section V above and
in this Section X, (ii) with regard to the payment of expenses noted in
Section VII, only to the extent that the expenses relate to Bentley
activities which occur before this Agreement is terminated or, if during
the Additional Term, only to the extent that the Bentley activities
relate to Investors, or (iii) with regard to indemnification, subject to
the provisions stated in Annex A.
XI. General Provisions. This Agreement may not be amended or modified
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except in writing signed by both parties. This Agreement shall be
governed by and construed in accordance with the laws of the State of
New York, without regard to principles of conflicts of laws. This
Agreement will be binding on and inure to the benefit of the Company,
Bentley, each Indemnified Party and their successors and assigns.
XII. Advertising. The Company acknowledges that, upon conclusion of the
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Financing, Bentley may place at Bentley's own expense, an
announcement(s) in such newspapers and periodicals as Bentley may
choose, stating that Bentley has acted as exclusive financial advisor to
the Company regarding the Financing.
XIII. Company's Authority. Bentley will have no authority under this
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Agreement to bind the Company in any way to any other party. In
addition, nothing contained in this Agreement will require the Company
to accept the terms of any proposal.
Please confirm that the foregoing correctly sets forth our Agreement by
signing and dating the enclosed duplicate of this letter Agreement in the space
provided and returning it, whereupon this letter Agreement shall constitute a
binding agreement as of the date of countersignature.
Sincerely,
BENTLEY SECURITIES CORPORATION
By: /s/ William P. Nicoletti
__________________________________
William P. Nicoletti
Senior Advisor
Investment Banking
NICOLETTI & COMPANY INC.
By: /s/ William P. Nicoletti
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William P. Nicoletti
Managing Director
ACCEPTED AND AGREED:
AMERAC ENERGY CORPORATION
By: /s/ Jeffrey B. Robinson
_________________________
Jeffrey B. Robinson
Chief Executive Officer
Date: 5/17/96
Amerac Energy Corporation
700 Louisiana, Suite 3330
Houston, Texas 77002
INDEMNIFICATION AGREEMENT
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May 17, 1996
Bentley Securities Corporation
885 Third Avenue, 24th Floor
New York, NY 10022
Gentlemen:
Amerac Energy Corporation (referred to herein as the "Company") hereby agrees
to indemnify and hold harmless Bentley Associates L.P. and Bentley Securities
Corporation ("Bentley"), Nicoletti & Company Inc., William P. Nicoletti, Oliver
D. Cromwell, and any directors, officers, agents, advisors and employees of
Bentley, (all of the foregoing being referred to herein individually as
"Indemnified Party" or collectively as "Indemnified Parties") from and against
any losses, claims, damages or liabilities, joint or several, (or actions in
respect thereof) to which such Indemnified Party may become subject related to
or arising out of (I) any Company transaction in which Bentley has become
involved or the engagement of Bentley under the letter Agreement to which this
is annexed or (ii) any Indemnified Party's activities in connection therewith,
and will reimburse each Indemnified Party for all expenses (including counsel
fees and expenses) as they are incurred by each Indemnified Party in connection
with investigating, preparing or defending any such action or claim, whether or
not in connection with pending or threatened litigation in which such
Indemnified Party is a party. The Company will not, however, be responsible
under the foregoing indemnification for any losses, claims, damages, liabilities
or expenses to the extent that it is finally judicially determined that the
losses,
claims, damages, liabilities or expenses resulted primarily from Bentley or any
Indemnified Party's bad faith, willful malfeasance or gross negligence. The
Company also agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company or the
Company's shareholders for or in connection with such engagement except for any
such liability for losses, claims, damages, liabilities or expenses incurred by
the Company or the Company's shareholders to the extent that it is finally
judicially determined that the losses, claims, damages, liabilities or expenses
resulted primarily from Bentley's or any Indemnified Party's bad faith, willful
malfeasance or gross negligence; provided, however, that in no event shall the
aggregate amount of any and/or all liabilities of the Indemnified Parties to the
Company exceed the fees paid or payable to Bentley with respect to the
engagement of Bentley under the letter Agreement to which this is annexed.
The Company and the Indemnified Parties agree that if any indemnification or
reimbursement sought pursuant to the preceding paragraph is finally determined
to be unavailable (except with respect to indemnification unavailable for the
reasons specified in the preceding paragraph), then (whether or not any
Indemnified Party is the person entitled to Indemnification or reimbursement)
the Company and the Indemnified Parties shall contribute to the losses, claims,
liabilities, damages and expenses for which such indemnification or
reimbursement is held unavailable in such proportion as is appropriate to
reflect the relative benefits to the Company, on the one hand, and the
Indemnified Parties on the other, in connection with the transaction
contemplated herein, subject to the limitation that in any event the Indemnified
Parties' aggregate contribution to all losses, claims, liabilities, damages and
expenses with respect to which contribution is available hereunder shall not
exceed the amount of fees actually received by the Indemnified Parties
hereunder. It is hereby agreed that the relative benefits to the Company, on
the one hand, and the Indemnified Parties, on the other, with respect to any
transaction or proposed transaction contemplated herein shall be deemed to be in
the same proportion as (I) the total value of the transaction contemplated
herein, less all payments made by Company for which Indemnity is due hereunder,
bears to (ii) the fee paid to the Indemnified Parties with respect to such
transaction.
The rights accorded to Indemnified Parties hereunder shall be in addition to
any rights that any Indemnified Party may have at common law, by separate
agreement or otherwise.
This agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed
entirely in such State. Both parties hereby consent, solely for the purpose of
allowing an indemnified party to enforce its rights hereunder, to personal
jurisdiction and service and venue in any court in which any claim for which
indemnification may be sought hereunder is brought against any other indemnified
party.
This agreement may not be amended or otherwise modified except by an
instrument signed by both Bentley and the Company. If any provision hereof
shall be determined to be invalid or unenforceable in any respect, such
determination shall not affect such provision in any other respect or any other
provision of this agreement, which shall remain in full force and effect. If
there is more than one indemnitor hereunder, each indemnifying person agrees
that its liabilities hereunder shall be joint and several.
The foregoing indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any Indemnified Party and shall
survive the completion or any termination of the services contemplated in the
letter Agreement to which this is annexed, and shall survive any termination of
the letter Agreement to which this is annexed.
Very truly yours,
AMERAC ENERGY CORPORATION
By: /s/ Jeffrey B. Robinson
____________________________
Mr. Jeffrey B. Robinson
President, Chief Executive Officer
Acknowledged and Agreed to:
BENTLEY SECURITIES CORPORATION
By: /s/ William P. Nicoletti
___________________________
William P. Nicoletti
Senior Advisor
Investment Banking