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Palladium Capital Advisors, LLC
230 Park Avenue, Suite 539
New York, New York 10169

Tel (646) 485-7297     Fax (646) 390-6328

August 12, 2013

Rick Walchuk, CEO
American Graphite Technologies, Inc.
3651 Lindell Road
Suite D#422
Las Vegas, NV 89103

Re:           Placement Agent Agreement

Dear Mr. Jones:

This will confirm the understanding and agreement (the “Agreement”) between
PALLADIUM CAPITAL ADVISORS, LLC, a Delaware limited liability company
(“Palladium”), and AMERICAN GRAPHITE TECHNOLOGIES, INC., a Nevada corporation
(the “Company”), as follows:

1.           The Company hereby engages Palladium on a best efforts basis as its
non-exclusive agent in the private placement or similar unregistered transaction
of equity or equity-linked securities of the Company (the “Securities”) to a
limited number of institutional, accredited individual or strategic investors
(each an “Investor”) at a price and upon terms satisfactory to the Company (the
“Transaction”). For purposes hereof, the term “Securities” also includes a
convertible loan or other type of investment convertible into or exchangeable
for or otherwise linked to the equity of the Company.

2.           The appointment and authorization of Palladium under Section 1 of
this Agreement shall commence on the date hereof and shall expire 12 months
after the date hereof, (the “Term”).
 
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3.           The Company acknowledges and agrees that Palladium will be using,
and relying upon, the Company to furnish Palladium with written materials and
information, including but not limited to financial statements, to be provided
to potential Investors (the “Materials”) describing the Company and the
Transaction (or Related Transaction, as defined below) concerning the Company’s
business, operations, assets, liabilities and receivables, and Palladium will be
using, and relying upon, such Materials supplied by the Company, its officers,
agents, and others and any other publicly available information without any
independent investigation or verification thereof or independent appraisal by
Palladium of the Company or its business or assets. Palladium does not assume
responsibility for the accuracy or completeness of the Materials, including but
not limited to any disclosure materials related to the Transaction (or Related
Transaction), except for such information that is provided in writing by
Palladium to the Company that is independently produced by Palladium and not
based on Materials provided by the Company or information available from
generally recognized public sources. The Company shall provide Palladium with
access to the Company’s officers, directors, accountants, counsel and other
advisors, and shall keep Palladium fully informed of any events that might have
a material effect on the financial condition of the Company. The Company
represents and warrants to Palladium that all information concerning the
Company, including, without limitation, all information contained in the
Materials, will be true, complete and accurate 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 light
of the circumstances under which such statements are made. If at any time prior
to the completion of a Transaction (or Related Transaction) an event occurs
which would cause the Materials (as supplemented or amended) to contain an
untrue statement of a material fact or to omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Company will notify Palladium
immediately of such event. Notwithstanding any previously executed
non-disclosure agreement, Company agrees Palladium is permitted to show
Materials to prospective investors in order to induce them to participate in a
Transaction as contemplated by this Agreement.

4.           The Company agrees to pay Palladium, upon the closing of each
Transaction with Investors (each, a “Closing”), the following compensation: (i)
7% of the aggregate consideration raised in each Closing, payable in cash by
wire transfer at the time of the Closing, (ii) 3% of the aggregate consideration
raised in each Closing, payable in the Company’s common stock, calculated based
upon the price of the common stock as offered in the Transaction, and (iii)
warrants to purchase 7% of the number of shares of the common stock of the
Company sold to Investors at such Closing, taking into consideration any
increase in shares under a ratchet or similar provision pursuant to which the
number of shares initially purchased is subsequently increased (the “Warrants”).
The Warrants will be identical to any warrants issued to Investors.

In the event the Company executes a letter of intent or binding agreement to
enter into a merger, spinoff, share exchange, stock swap, business combination
or reorganization, acquisition of some or all of the stock or assets of another
company, purchase or sale of some or all of the stock or assets of the Company,
joint venture, licensing agreement, royalty agreement, distribution agreement or
any similar transaction or combination thereof (any such transaction being
referred to herein as a “Related Transaction”), at any time during the Term with
an entity introduced to the Company by Palladium, then the Company shall pay
Palladium a fee of 2% in cash and 2% in Company common stock of the aggregate
consideration (per Section 5 below) received by the Company and its security
holders in connection with such Related Transaction.

The foregoing fees are payable for any sale of Securities that occurs during the
Term or within 24 months thereafter with respect to Investors identified by
Palladium.
 
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5. For purposes of this Agreement:

(a)           Aggregate consideration shall mean the total consideration (stock,
cash, assets and all other property (real or personal, tangible or intangible)
plus debt and liabilities assumed (including, without limitation, loans,
indebtedness for borrowed money, pension liabilities and guarantees), funding,
advances, license fees, royalty fees, joint venture interests or other property,
obligations or services) exchanged or received, or to be exchanged or received,
directly or indirectly by the Company or any of its security holders in
connection with any Transaction or Related Transaction, including, without
limitation, any amounts paid or received, or to be paid or received, pursuant to
any employment agreement, consulting agreement, loan agreement, covenant not to
compete, option, warrant, escrow payment or any amount payable in the future
when such funds are paid to the Company, earn-out or contingent payment right or
similar arrangement, agreement or understanding, whether oral or written,
associated with such Transaction or Related Transaction.

(b)           In the event consideration is to be paid in whole or in part by
installment payments, the portion of Palladium’s fee relating thereto shall be
calculated and paid when and as such installment payments are made.

(c)           Consideration received by the Company paid in whole or in part in
the form of securities or other noncash consideration will be valued at its fair
market value, as reasonably determined by an independent third party to be
mutually agreed upon by the Company and Palladium, as of the day prior to the
Closing (or later date on which a contingent payment is made), provided,
however, that if such consideration consists of securities with an existing
trading market, such securities will be valued at the average of the last sales
price for such securities on the five trading days prior to the date of the
Closing (or later date on which a contingent payment is made).

6.           The Company shall reimburse Palladium periodically for its
reasonable and customary out-of-pocket and incidental expenses incurred during
the term of its engagement hereunder, including the fees and expenses of its
legal counsel and those of any advisor retained by Palladium. Any fees and
expenses in excess of $15,000 require prior written authorization from the
Company.

7.           The Company agrees to provide indemnification as set forth in Annex
A attached hereto and made a part hereof.

8.           Upon a Closing, the Company agrees that Palladium has the right to
place notices and/or advertisements in financial and other newspapers and
journals (whether in print or on the internet), and to publicize on its own
website and/or marketing materials, at its own expense, describing its services
to the Company hereunder.

9.           The provisions of Sections 4, 6, and 7 (including, without
limitation, the provisions of indemnification referred to in Section 7) shall
survive the expiration or termination of this Agreement.
 
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10.           Intentionally left blank.

11.           Nothing contained in this Agreement shall limit or restrict the
right of Palladium or of any member, employee, agent or representative of
Palladium, to be a shareholder, member, partner, director, officer, employee,
agent or representative of, or to engage in, any other business, whether of a
similar nature or not, nor to limit or restrict the right of Palladium to render
services of any kind to any other corporation, company, firm, individual or
association.

12.           The failure or neglect of the parties hereto to insist, in any one
or more instances, upon the strict performance of any of the terms or conditions
of this Agreement, or their waiver of strict performance of any of the terms or
conditions of this Agreement, shall not be construed as a waiver or
relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.

13.           Any notices hereunder shall be in writing, and shall be sent to
the Company and to Palladium at their respective addresses set forth above. Any
notice shall be given by registered or certified mail, postage prepaid, and
shall be deemed to have been given when deposited in the United States mail.
Either party may designate any other address to which notice shall be given by
giving written notice to the other party of such change of address in the manner
herein provided.

14.           This Agreement shall inure to the benefit of and be binding upon
the respective, Affiliates, successors and assigns of the parties hereto. The
term “Affiliates” shall mean, with respect to any person or entity, any other
person or entity who, directly or indirectly, through one or more intermediaries
controls, is controlled by, or is under common control with such person or
entity and any spouse, parent or issue of any such person; “control” means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of a person or entity whether through ownership of
voting securities, by contract or otherwise.

15.           Any dispute arising under or relating to this Agreement or the
parties' respective rights and duties hereunder shall be resolved by binding
arbitration to be held in New York, New York under the Simplified Rules of the
Judicial Arbitration and Mediation Service (JAMS). Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Any party may commence arbitration under this provision by the delivery
to the other party of a written dispute notice setting forth a brief description
of the matter to be resolved (the “Dispute Notice”).
 
Subject to the foregoing, this Agreement has been made in the State of New York
and shall be construed and governed in accordance with the laws thereof without
giving effect to principles governing conflicts of law. The parties irrevocably
agree that any legal action or proceeding under, arising out of or in any manner
relating to this Agreement shall be brought exclusively in any court of
competent jurisdiction in the County of New York, State of New York. Each of the
parties, by its execution and delivery of this Agreement, expressly and
irrevocably assents and submits to the jurisdiction of any of such courts in any
such action or proceeding. The parties further irrevocably consent to the
service of any complaint, summons, notice or other process relating to any such
action or proceeding by delivery thereof to such party by hand or by registered
or certified mail in the manner prescribed in Section 13 hereof. The parties
further irrevocably consent that any judgment rendered by such court in the
State of New York may be entered in other court having competent jurisdiction
thereof.
 
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16.           This Agreement contains the entire agreement between the parties,
may not be altered or modified, except in writing and signed by the party to be
charged thereby, and supersedes any and all previous agreements between the
parties relating to the subject matter hereof.

17.           Palladium will not have any rights or obligations in connection
with the sale and purchase of the Securities contemplated by this Agreement
except as expressly provided in this Agreement. In no event will Palladium be
obligated to purchase the Securities for its own account or for the accounts of
its customers. Palladium will have the right, but not the obligation, however,
to determine the allocation of the Securities among potential purchasers
introduced by Palladium, provided that such allocation is reasonably acceptable
to the Company.

18.           Palladium is acting as financial advisor and is not an expert on,
and cannot render opinions regarding, legal, accounting, regulatory, or tax
matters. The Company should consult with its other professional advisors
concerning these matters before undertaking any Transaction or Related
Transaction. All services, advice and information and reports provided by
Palladium to the Company in connection with this assignment shall be for the
sole benefit of the Company and shall not be relied upon by any other person.

Palladium is delighted to accept this engagement and looks forward to working
with you on this assignment. Please confirm that the foregoing correctly sets
forth our understanding by signing the enclosed duplicate of this letter in the
space provided and returning it, whereupon this letter shall constitute a
binding agreement as of the date first above written.
 

 Very truly yours,     ACCEPTED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN:  
 PALLADIUM CAPITAL ADVISORS, LLC     AMERICAN GRAPHITE TECHNOLOGIES, INC.  
By: /s/Joel Padowitz
   
By: /s/Rick Walchuk
 
Name: Joel Padowitz
   
Name: Rick Walchuk
 
Title: Chief Executive Officer
   
Title: Chief Executive Officer
 

 
[Annex A follows]
 
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Annex A
 
Indemnification Provisions

In connection with the engagement of Palladium by the Company pursuant to the
Agreement, the Company hereby agrees as follows:

1.
In connection with or arising out of or relating to the engagement of Palladium
under the Agreement, or any actions taken or omitted, services performed or
matters contemplated by or in connection with the Agreement, the Company agrees
to reimburse Palladium, its affiliates and their respective members, officers,
employees, agents and controlling persons (each an “Indemnified Party”) promptly
upon demand for actual, out-of-pocket expenses (including reasonable fees and
expenses for legal counsel) as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim,
or any litigation, proceeding or other action in respect thereof (collectively,
a “Claim”). The Company also agrees (in connection with the foregoing) to
indemnify and hold harmless each Indemnified Party from and against any and all
out-of-pocket losses, claims, damages and liabilities, joint or several, to
which any Indemnified Party may become subject, including any amount paid in
settlement of any litigation or other action (commenced or threatened) to which
the Company shall have consented in writing (such consent not to be unreasonably
withheld), whether or not any Indemnified Party is a party and whether or not
liability resulted; provided, however, that the Company shall not be liable
pursuant to this paragraph in respect of any loss, claim, damage or liability to
the extent that a court or other agency having competent jurisdiction shall have
determined by final judgment (not subject to further appeal) that such loss,
claim, damage or liability was incurred solely as a direct result of the willful
misconduct or gross negligence of such Indemnified Party. 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 its partners,
security holders or creditors related to or arising out of the engagement of
Palladium pursuant to, or the performance by Palladium of the services
contemplated by, this Agreement except to the extent that any loss, claim,
damage or liability is determined in a final judgment (not subject to further
appeal) by a court to have resulted solely from willful misconduct or gross
negligence of Palladium.

2.
An Indemnified Party shall have the right to retain separate legal counsel of
its own choice to conduct the defense and all related matters in connection with
any Claim. The Company shall pay the reasonable fees and expenses of such legal
counsel, and such counsel shall to the fullest extent, consistent with its
professional responsibilities, cooperate with the Company and any legal counsel
designated by the Company.

3.
The Company will not, without the prior written consent of each Indemnified
Party, settle, compromise or consent to the entry of any judgment in any pending
or threatened Claim in respect of which indemnification may be reasonably sought
hereunder (whether or not any Indemnified Person is an actual or potential party
to such Claim), unless such settlement, compromise or consent includes an
unconditional, irrevocable release of each Indemnified Person against whom such
Claim may be brought hereunder from any and all liability arising out of such
Claim.

 
 

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4.
In the event the indemnity provided for in paragraphs 1 and 2 of this Annex A is
unavailable or insufficient to hold any Indemnified Party harmless, then the
Company shall contribute to amounts paid or payable by an Indemnified Party in
respect of such Indemnified Party’s losses, claims, damages and liabilities as
to which the indemnity provided for in paragraphs 1 and 2 of this Annex A is
unavailable or insufficient (i) in such portion as appropriately reflects the
relative benefits received by the Company, on the one hand, and the Indemnified
Party, on the other hand, in connection with the matters as to which losses,
claims, damages or liabilities relate, or (ii) if the allocation provided by (i)
above is not permitted by applicable law, in such proportion as appropriately
reflects not only the relative benefits referred to in clause (i) but also the
relative fault of the Company, on the one hand, and the Indemnified Parties, on
the other hand, as well as any other equitable considerations. The amounts paid
or payable by a party in respect of losses, claims, damages and liabilities
referred to above shall be deemed to include any reasonable legal or other
out-of-pocket fees and expenses incurred in defending any litigation, proceeding
or other action or claim. Notwithstanding the provisions hereof, Palladium’s
share of the liability hereunder shall not be in excess of the amount of fees
actually received by Palladium under the Agreement (excluding any amounts
received as reimbursement of expenses by Palladium).

 
5.
In the event any Indemnified Party is requested or required to appear as a
witness in any action, suit or proceeding brought by or on behalf of or against
the Company or any affiliate or any participant in a Transaction (or Related
Transaction) covered hereby in which such Indemnified Party is not named as a
defendant, the Company agrees to reimburse Palladium and such Indemnified Party
for all reasonable disbursements incurred by them in connection with such
Indemnified Party’s appearing and preparing to appear as a witness, including,
without limitation, the fees and disbursements of their legal counsel, and to
compensate Palladium and such Indemnified Party in an amount to be mutually
agreed upon.

6.
All amounts due under the Indemnification Provisions of this Annex A shall be
payable within ten (10) days after written notice of such event giving rise to
the indemnification obligations, and if not paid within such 10-day period, such
amounts shall bear interest at a rate of 1.5% per month or at the highest rate
permitted under the laws of the State of New York, whichever rate is lower.

7.
These Indemnification Provisions shall remain in full force and effect in
connection with the transactions contemplated by the Agreement whether or not
consummated, and shall survive the expiration or termination of the Agreement,
and shall be in addition to any liability that the Company might otherwise have
to any Indemnified Party under the Agreement or otherwise.

8.
Each party hereto consents to personal jurisdiction and service of process and
venue in any court in the State of New York in which any claim for indemnity is
brought by any Indemnified Person.

Very truly yours,         PALLADIUM CAPITAL ADVISORS, LLC     AMERICAN GRAPHITE
TECHNOLOGIES, INC.  
By: /s/Joel Padowitz
   
By: /s/Rick Walchuk
 
Name: Joel Padowitz
   
Name: Rick Walchuk
 
Title: Chief Executive Officer
   
Title: Chief Executive Officer
 

                    
 
 

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