FINANCING AND CONDITIONAL REGISTRAT ON AGREEMENT
This Financing and Conditional Registration Agreement (the Ag eement ), effective June 3,
2013 (the Closing Date ), is between ISA Intemationale, Inc., ( SAT ), a Delaware
corporation located at 2564 No Rice St., St. Paul, MN 55113, and Diesel TEK, Inc.
( Company ), with address at 3265 East Warm Springs Road Las Vegas, NV 89120 (lSAT and
Company, collectively, the Parties ).
RECITALS
I
Company is dedicated to improving air qjity and other attribute of the environment by
providing advanced technology products tdl the heavy-duty transp rtation industry to improve the
efficiencies of diesel engines.; and
ISA T is a Business Development Company ( BDC ) as defined b the Securities
Exchange
Commission ( SEC ), Investment Company Act of 1940. ISAT i focused on recruiting,
mentoring, coaching and enhancing the investment opportunity fo oil, gas and technology based
companies in the process of becoming public entities. ISAT provo es its experience, world class
advisors, additional intellectual properties, management expertise, etc. to enhance the value and
profile of the companies it represents; and
To further its business plans and raise needed capital, Company is seeking to raise funds through
debt, equity or a combination of the above ( Financing Transactio ) in the amount of
approximately $5,000,000.00 with further Financing Transactions to follow, and
It is the intention of the parties hereto that ISA T shall assist Comp y with completing such
Financing Transaction,
It is the intention of the parties that after such initial Financing Tr nsaction is completed, parties
will contemplate the following transaction, to be entered into only if both parties agree to do so
in writing: the registration of Company's shares for public trading through an S-l registration
filing with the SEC ( Registration ) through a transaction includi g a purchase of Company's
shares by ISAT and consequent distribution of such shares to ISA 's shareholders, and
The boards of directors of ISA T and Company deem it to be in th best interest of ISA T and
Company to proceed with these actions.
NOW, THEREFORE, in consideration of the mutual covenants, a reements, representations and
warranties contained in this Agreement, the parties hereto agree
follows:
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1. DEFINITION OF FINANCING TRA
I SACTION
Company is looking to secure an initial Financing Transaction of pproximately $5,000,000.00
with further Financing Transactions to follbw. For purposes ofthi engagement, Financing
Transaction means any transaction or seri~s of transactions, whi h mayor may not involve a
securities transaction, not in the ordinary cburse of business, resul ing directly or indirectly in the
injection of new capital into the Company, lincluding its affiliated' nvestments or companies
through a merger or consolidation, with the assistance, directly or indirectly, by ISAT. A
Financing Transaction shall also include a currently unanticipated course of action, such as,
without limitation, divestiture, licensing agreement, strategic alli ce, joint venture or
partnership, credit enhancement, non-recourse grant or any other orm of capital injection.
2. TERM
Either Party may terminate the engagement at any time, with or w thout cause, upon fifteen (15)
days written notice to the other Party. If the Company terminates he engagement for any reason,
the Company shall remain liable for the Financing Transaction C mpletion Compensation only
pursuant to Section 4(B).
3. SERVICES
ISAT intends and agrees to provide the following services on a be t efforts basis to facilitate a
Financing Transaction:
A. Approach those potential investors, as pre-approved by t e Company, to gauge their
interest in entering into a Financing Transaction with th Company.
B.
In cooperation with the Company, coordinate:
1. meetings for the Company to present their operatio s and investment materials to
prospective investors; and
ii. review of final due diligence.
C.
Provide the Company with comments on the investment greements and any other
relevant agreements.
D. ISAT may also provide additional Financing Transactio consulting services as may be
required and coordinated with the Company in order to f cilitate a successful Financing
Transaction( s).
E
Company to Control Transactions. The prices, terms and conditions under which the
Company shall offer or sell any of its securities shall be etermined by the Company in
its sole discretion. The Company shall have the authority to control all discussions and
negotiations regarding any proposed or actual offering 0 sale of any of its securities.
Nothing in this Agreement shall obligate the Company t actually offer or sell any J
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securities or consummate any transaction. The Compan may terminate any
negotiations or discussions at any time and reserves the .ght not to proceed with any
offering or sale of securities. Other than the Fee Compe ation, as defined in Section
4(A) below, compensation pursuant to this Agreement s all only be paid upon
consummation of a Financing Transaction(s), and
F.
Potential Registration. After completion of initial transa tion, Parties shall consider
entering into a separate agreement for the purposes of R gistration, which shall include
a purchase of Company's shares by ISAT and conseque t distribution of such shares to
ISAT's shareholders.
4. Compensation
In consideration of ISA T' s services descri~ed above, the Compan agrees to pay ISA T as
follows:
A. Fee Compensation. The company shall remit the follo ng: (i) on the date hereof, a
$15,000.00 non - refundable amount payable in cash to IS T and (ii) a non - refundable
amount of $35,000.00 payable in cash to ISAT within 30 alendar days after the date
hereof.
B.
Financing Transaction Completion Compensation. If d . g the term of the engagement
or during the two (2) years following the termination ofth engagement the Company
consummates a Financing Transaction with the assistance f ISA T the Company will
compensate ISAT (the Financing Transaction Completio Compensation ) in the
amount of 10.0% of the Consideration received, with such Financing Transaction
Completion Compensation being convertible into equity s ares of the Company at
ISAT's option.
C.
Consideration. Consideration shall include, but not be li ited to, the total of any cash
received by the Company from investors plus: (i) the face alue of any convertible debt
or similar securities issued or assumed in connection with he Financing Transaction; (ii)
the higher of the book or market value, on the date receive , of any shares of capital
stock of another corporation; and (iii) the fair market valu of any other property or assets
received by Company.
D.
Payment of Compensation. Unless converted to equity b ISAT at its sole option,
ISAT's compensation set forth in Section 4(B) above are d e and payable in cash in U.S.
dollars on the date of actual receipt of consideration at closi g, or, in the event of
multiple closings or subsequent interim tenders of conside tion, upon actual receipt of
each installment of consideration.
5. EXPENSES
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The Company will reimburse ISA T 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 of the Company, with prior written authorization by the Co pany.
6. DUE DILIGENCE
The Company agrees that it has the exclusive responsibility to ve fy, through its own due
diligence, any information on which the Company bases its decisi n to pursue or reject any
Financing Transaction proposal. The Company will rely on its 0
legal and financial resources
in negotiating the terms and conditions of any Financing Transact on. The Company agrees that
neither ISA T nor any of its employees, shareholders, directors, ag nts, representatives, or
controlling persons shall have any liability to the Company, its sh reholders, officers, directors,
employees, or representatives, resulting from any of the terms or onditions of any Financing
Transaction.
7. INFORMATION
A. The Company will furnish ISA T with such information as SA T believes appropriate to
this engagement and will provide ISAT with access to its fficers, employees, directors,
accountants, legal counsel and other advisors. In recogniti n by ISAT of the absolute
sensitivity of the engagement represented by this Agreeme t, ISA T agrees that no such
access will be granted except with the Company's permiss on. ISAT acknowledges that
in some cases such access may be denied, and the Comp
agrees that the information
sought by ISAT will be supplied through some means ace table to both ISAT and the
Company. Any financial information or forward-looking i ormation which Company
provides to ISA T will be provided by the Company in goo faith, based on
management's best estimates then available, based on fact and assumptions which the
Company believes to be reasonable, in conformit~ with U ited States generally accepted
accounting principles in all material respects and subject t SEC and other regulatory
rules and constraints. ISA T agrees to treat all information
ceived from the Company as
Confidential Information as more fully set forth in Section 9 below.
B. The Company acknowledges that ISA T will be using and r lying upon such information
without any independent investigation or verification there f or independent appraisal by
ISAT of the Company or its business or assets or any pote tial investor or its business or
assets and that ISA T makes no representation or warranty t the Company of the
accuracy or completeness of such information.
8. ABILITY TO CONTRACT
A. The Company represents and warrants to ISAT that the en agement does not violate or
constitute a breach or default under any contract, agreeme ,arrangement or
understanding, whether written or oral, to which the Comp y or any of its subsidiaries is
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a party or by which its or their assets are bound. Furtherm re, that there are not brokers,
representatives, fmders or other persons with an interest i the compensation due and
payable by Company to ISAT in connection with any tran action contemplated herein.
9. CONFIDENTIALITY
A. Definition. As used herein, Confidential Information me s all information about the
Company or a potential investor, other than information w ich: (a) is authorized in
writing by the Company; (b) was publicly known at the ti e of disclosure; (c)
subsequently becomes publicly known other than as a res t of a disclosure by ISAT or
its agents or advisors; or (d) has become, or hereafter beco es, available to ISA T on a
non-confidential basis from a source other than the Comp y, a potential investor or their
respective advisors, provided that such source is not kno
by ISAT to be bound by a
confidentiality agreement or other obligation of secrecy fo the Company's or the
investor's benefit.
B. Restrictions on ISAT. ISAT agrees to hold in confidence
d not to disclose the
Confidential Information to any third party except: (a) as ay be required by law or by
order of a court of competent jurisdiction; provided that in such event, ISA T shall
provide the Company with such advance notice of any dis losure deemed required by
ISAT as is reasonably necessary in order to permit the Co pany to seek a court order or
other appropriate remedy to prevent or limit the scope of s ch disclosure; (b) that ISAT
may disclose Confidential Information to those of its offic rs, directors and employees
and representatives of its agents and advisors who have a eed to know such information
in connection with ISA T' s engagement and who have agre d not to disclose such
information otherwise than as permitted by this letter; and c) to any potential investor
who has signed a confidentiality agreement.
C. Restrictions on the Company. Any written or oral advice p ovided by ISAT in connection
with a Financing Transaction will be exclusively for the befit and use of the Company,
its Board of Directors, officers, accountants, legaladvisors and expert consultants and,
except as required by law or by order of a court o~ compet nt jurisdiction, may not be
disclosed to any third party or circulated or referred to pub .cly (other than in a proxy
statement or in the course oflitigation to which sUFh advic is relevant) without ISAT's
prior written consent, which shall not be unreasonably wit eld. If any disclosure of
ISAT's advice is to be made in the course oflitigation, the Company shall provide ISAT
with such advance notice of any proposed disclosure as is asonably necessary in order
to permit ISA T to seek a court order or other appropriate r medy to prevent or limit the
scope of such disclosure.
10. ARBITRA nON AND CHOICE OF LAW
All disputes, controversies, claims of differences which arise betw en the parties out of or in
connection to the engagement, including the scope and applicabili of this arbitration clause,
shall be finally settled under the rules of the American Arbitration ssociation by an arbitrator
appointed in accordance with said rules. The place of the arbitratio shall be New York City. The
.b?. tJ
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interpretation, construction and legal effect of this Agreement sha I be determined by reference
to in the following order: (i) the language of the Agreement; (ii) e intention of the parties to the
Agreement; and (iii) by reference to the laws of the State of New ork.
11. INDEMNIFICATION
The Company agrees that neither ISAT, nor any of its employees, directors, agents,
representatives, or controlling persons shall have any liability to t e Company, its shareholders,
officers, directors, employees, agents, representatives, controlling persons, or third parties,
resulting from any of the terms or provisions of this Agreement.
e Company further agrees to
defend, indemnify and hold harmless ISA T, its employees, direct rs, agents, representatives, or
controlling persons from any losses, claims, liability, damages, co ts and expenses (including
reasonable attorneys' fees and expenses as well as settlement cost ) arising out of or related to
the terms and provisions of this Agreement. Company agrees to p ace same indemnification as
specified in this Section 11 in any subscription agreement or .simi document that the company
may enter into as part of any Financing Transaction.
12. SURVIVING TERMS
Sections 2, 4,5,9, 10, 11, 12, 15, 16, 17 shall survive the termina ion of this Agreement. Any
mutual Non-Disclosure Agreement between the Company and IS T shall survive the
termination of this Agreement.
13. INTEGRATION AND MODIFICATION
This writing contains the entire agreement of ISA T and the Comp y and there are no promises,
understandings or agreements, either oral or written, of any kind t at relate to the engagement
other than those stated above. This Agreement may not be change except in writing and signed
by the Parties to be bound hereby.
14. ASSIGNMENT
The benefits of this Agreement shall inure to the respective succes ors and permitted assigns of
the parties hereto. This Agreement may not be assigned without t prior written consent of the
non-assigning party (or parties). In the case oflSAT, such consen shall not be unreasonably
withheld. In the case of the Company, and in recognition that the ervices of ISAT are
specialized and dependent upon performance by particular individ Is with specialized expertise,
the Company may withhold such consent for any reason if it dete ines that such assignment
will result in the loss to it of the services of such individuals.
15. NOTICES
All notices required or permitted hereunder shall be in writing and deemed sufficiently given for
all purposes hereof if (a) delivered in person, by courier or by regi tered or certified United
States Mail to the Chief Executive Officer or President of ISAT at address specified above and to
the Chief Executive Officer or President the Company at Diesel T K, Inc. 3265 East Warm
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Springs Road Las Vegas, NY 89120, with receipt obtained, or (ii) sent by telecopy, telefax or
other facsimile or electronic transmission, with answer back or ther advice of receipt
obtained, in each case to the appropriate address or number as set orth below. Each notice shall .
be deemed effective on receipt by the addressee as aforesaid; pro ided that, notice received by
telex, telecopy, telefax or other facsimile or electronic transmissi
after 5:00 p.m. at the location
of the addressee of such notice shall be deemed received on the fi st business day following the
date of such electronic receipt. Notice shall be sent to the address r facsimile number set forth
on the first page of this Agreement, or at such other address or to uch other telecopy, telefax or
other facsimile or electronic transmission number as the Parties
y provide in writing.
16. AUTHORITY
ISA T and Company hereby represent that the undersigned have al requisite power and authority
to execute and deliver this Agreement, to bind the Parties to the te s of this Agreement and to
cause the respective Party to perform its obligations hereunder ( d under all documents required
to be executed and delivered and actions to be performed by each f ISAT and Company
pursuant hereto).
17.
COMPLIANCE WITH LAWS.
Both parties represent that they shall comply with applicable fede al and state laws. ISA T and
Company represent that it is not a party to any other agreement, w .ch would conflict with or
interfere with the terms and conditions of this Agreement.
18. IDENTITY DISCLOSURE.
To help the U.S Government prevent the funding of terrorism and oney laundering activities,
Federal law requires all financial institutions to obtain, verify, and record information that
identifies client corporations and senior management and or owne s of corporate clients. In
accordance with these requirements, ISAT will request certain inti rmation which may include
name, address, date of birth (for individuals), corporate tak ID an other information that will
allow us to identify Company and senior management and or own rs of Company. ISAT may
also request to see certain documents such as Certificate ofIncorp ration, driver's license or
other identifying documents. ISAT is committed to mainthining th privacy of our current and
former clients.
19.
COUNTERPARTS
This Agreement may be executed in two or more counterparts, eac of which shall be deemed an
original, but all of which shall constitute one and the same inst
ent and which may be
transmitted electronically without a paper copy being necessary.
20.
MISCELLANEOUS
ISAT will provide services to the Company as an 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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are required to be provided to the Company in connection with th transaction contemplated by
this Agreement and which will be provided by others (e.g., indep ndent auditors or appraisers).
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