Exhibit 10.5





Exhibit 10.5




WFG Investments, Inc





July 15, 2009



Genesis Fluid Solutions, Inc.

6660 Delmonico Drive

Suite 242-D

Colorado Springs, Colorado 80919

Att: Michael Whaley, CFO



	 	 	 	 	 
	 

	 	Re:
	 	Placement Agent Agreement 






Dear Michael:




This letter agreement (the “Agreement”) confirms our understanding with respect to the
engagement by Genesis Fluid Solutions, Inc. (the “Company”) of WFG Investments, Inc (“PA”) as
placement agent in connection with the sale of equity or equity-linked securities on a best efforts
basis through a private placement or similar unregistered transaction on terms that have been or
will be determined by the Company and its advisors (the “Transaction”) to investors (the
“Investors”). For purposes hereof, the term “Transaction” also includes a convertible loan or other
type of investment convertible into or exchangeable for or otherwise linked to the equity of the
Company. The term of the Agreement (the “Term”) shall commence on the date hereof and shall expire
six (6) months after the date hereof.




	1.	 	Scope. The Company hereby engages PA to act as placement agent during the Term in
connection
with the Transaction(s). The goal of the engagement is to raise capital for the Company to be
used
for growth opportunities and general working capital purposes. PA shall assist the Company
and
shall, on behalf of the Company, contact such potential investors as PA and the Company agree
in
advance, including those investors referred to in Addendum
A, as amended by mutual agreement of
the parties from time to time. PA shall assist the Company in effecting the Transaction(s),
and
shall use its best efforts to offer and sell the securities in
accordance with this Agreement.
The
Company shall retain the right, in its sole discretion, to accept or reject investors
identified by PA.
PA’s engagement by the Company shall be exclusive solely as to the potential investors
included
in Addendum A. PA shall receive written approval from the Company prior to marketing
to any
other investors who have not been included on Addendum A. It is anticipated that the
Company
shall also engage its own legal counsel and may require the services of an accounting firm.







	2.	 	Company Information. The Company shall cooperate with PA in connection with its
financial
review and analysis of the Company and shall provide PA with such information concerning the
Company as PA deems necessary or appropriate for such review and analysis (collectively, the
“Information”).







PA shall keep in confidence and shall use only for the purposes of performing its
obligations pursuant to this Agreement, and shall not, without the Company’s consent,
disclose to any person any non-public Information furnished by the Company to PA except: (a)
its own counsel and other advisors on a confidential basis, (b) to the Investors approved by
the Company in accordance with the terms hereof and (c) to such other persons as such
counsel has advised is required by applicable
law, and then only after informing the Company of such legal requirement and providing
the Company sufficient time to seek a protective order or otherwise prevent or restrict
such disclosure.


 


 









 





Genesis Fluid Solutions, Inc.

July 15, 2009

Page 2 of 7





The Company represents and warrants to PA that all Information provided by the Company
shall be accurate and complete in all material respects and shall not contain any untrue
statement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not false
or misleading. PA does not assume responsibility for the accuracy or completeness of the
Information, including but not limited to any disclosure materials related to the
Transaction(s) except for such information that is provided in writing by PA to the
Company that is independently produced by PA and not based on Information provided by
the Company or information available from generally recognized public sources. The
Company acknowledges and agrees that PA will rely primarily on the Information and on
information available from generally recognized public sources in performing its
services hereunder, without having any obligation to independently verify the same and
that PA has no obligation to undertake an independent evaluation, appraisal or physical
inspection of any assets or liabilities of the Company. If at any time prior to the
completion of a Transaction an event occurs which would cause the Information (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 PA
immediately of such event.




	3.	 	Fees. The Company shall pay PA the following amounts:







	 	a.	 	Private Placement Fee. PA shall be paid upon consummation of the
Transaction: a transaction fee, payable in cash, as follows: (A) a cash fee in the
amount of eight (8%) percent of the Gross Proceeds (as defined below) from the
capital received, plus (B) warrants to purchase additional shares of common stock
(the “Warrants”) equal to two (2%) percent of number of shares issued or issuable
by the Company at closing of the Transaction from the capital received, directly or
indirectly, by the Company solely from investors identified by PA with respect to a
Transaction (the “Transaction Fee”). The Warrants shall be exercisable for a two
(2) year period following closing, in whole or in part, at a price per share equal
to one hundred and twenty-five (125%) percent of the purchase price for shares of
common stock (or the conversion price per share of common stock if equity linked
securities are sold) of the Company in the Transaction. The Warrants shall have
substantially the same terms and conditions as any warrants sold in the
Transaction, but shall in no event contain “cashless
exercise” features. For purposes hereof, “Gross Proceeds” shall mean the fair market
value of
all of the consideration (including, without limitation, cash, securities, other
assets, contingent payment amounts actually paid 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), 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, directly or indirectly, from the sale or exchange of the
Company’s securities issued in a 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, before the deduction of expenses related to such Transaction, including
but not limited to the fee payable to PA.





 


 









 











Genesis Fluid Solutions, Inc.

July 15, 2009

Page 3 of 7





	 	b.	 	In the event consideration is to be paid in whole or in part by installment
payments, the portion
of PA’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 the Company, as of the day prior to the closing of the Transaction (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).







	 	d.	 	The foregoing fees are payable for any Transaction that occurs (i) during the
Term or within
six months thereafter with respect to Investors identified by PA, or (ii) at any time
during the
one year period following termination of PA’s engagement hereunder if the sale involves
an
Investor identified by PA that has previously concluded a Transaction with the Company.
All
cash compensation payable hereunder by the Company to PA shall be paid by wire transfer.







	4.	 	Expenses. PA shall be solely responsible for its expenses incurred in connection with
this
engagement, unless approved in writing in advance by Company. Legal fees incurred by PA to
prepare, review and finalize this letter agreement will not be reimbursable by the Company.
PA
shall be responsible to pay any and all finder’s fees and other fees and expenses of persons
associated with PA, and shall comply with all laws, rules and regulations (including,
without
limitation, any and all filings and compliance with the FINRA rules and regulations)
applicable to
payments involving third parties.







	5.	 	Advertisements. Upon a closing of a Transaction, the Company agrees that PA has the
right to
place 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.







	6.	 	Indemnification. The Company shall indemnify PA, its agents and affiliates in
accordance with
Annex A attached hereto and made a part hereof.







	7.	 	Termination; Survival. Upon termination or expiration of this Agreement, the Company
shall have
no further obligation to PA other than with respect to fees payable to PA as provided
herein,
provided that the provisions of Sections 3 through 9, inclusive, (including, without
limitation, the
provisions of indemnification referred to in Annex A) and PA’s obligation to
preserve the
confidential information provided to it by Company for an indefinite period, shall survive
any such
expiration or termination.







	8.	 	Venue. The Company and PA agree that any legal suit, action, or proceeding arising
out of or
relating to this Agreement and/or the transactions contemplated by this Agreement shall be
instituted exclusively in the state or federal courts located in New York County, New York.
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 9(f) hereof. The parties
further
irrevocably consent that any judgment rendered by such court in the State of New York may be
entered in other courts having competent jurisdiction thereof. Without in any way limiting
the
indemnification provisions in Annex A below, the prevailing party shall have the
right to recover
any costs, including reasonable attorneys’ fees, in the event of any action brought to
enforce any of
the terms or provisions of this Agreement. The parties agree that service may be made by
overnight mail at its address set forth herein in any action to enforce any of the
provisions herein.





 


 









 











Genesis Fluid Solutions, Inc.

July 15, 2009

Page 4 of 7





	9.	 	Miscellaneous.







	 	a.	 	Successors and Assigns. This Agreement shall be binding on and inure to
the benefit of each
party’s agents, affiliates, successors and assigns, but may not be assigned without the
prior
written consent of the other party.







	 	b.	 	Governing Law. This Agreement shall be governed by and construed in
accordance with the
internal laws of the State of New York, without regard to conflicts
of laws or principles thereof.







	 	c.	 	Amendment. This Agreement may not be modified or amended except in
writing signed by
the parties hereto.







	 	d.	 	PA’s Obligations. The obligations of PA and the Company hereunder are
solely corporate obligations, and no officer, director, employee, agent, member,
shareholder, or controlling person shall be subject to any personal liability
whatsoever to any person, nor will any such claim be asserted by or on behalf of PA or
the Company or any of their respective affiliates. The Company acknowledges and agrees
that PA is acting as an independent contractor under this Agreement and that the
engagement of PA is not intended to confer rights on any person or entity other than
the Company and PA. Nothing contained in this Agreement shall limit or restrict the
right of PA or of any member, employee, agent or representative of PA, to be a member,
shareholder, 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 PA to render services of any kind to any other corporation,
company, firm, individual or association. PA is a registered broker-dealer in good
standing with the SEC under the Securities Act of 1934 and in all jurisdictions in
which the nature of its activities or the substance of its actions would require such
registration or qualification pursuant to the blue-sky laws of such
jurisdiction. PA
will comply with all laws, rules and regulations related to its activities on behalf
of Company pursuant to this Agreement. All consents, authorizations, and approvals
necessary or appropriate for PA to undertake its obligations set forth in this
Agreement have been obtained by PA prior to execution of this Agreement and PA shall
immediately use its best efforts to secure investors for the Company as set forth
herein.







	 	e.	 	Entire Agreement. This Agreement embodies the entire agreement and
understanding of the
parties hereto with respect to the subject matter hereof and supersedes any and all prior
agreements, arrangements and understandings whether written or oral, relating to matters
provided herein. This Agreement is entered into by each of the parties hereto without
reliance
on any statement, representation, promise, inducement or agreement not expressly contained
within this Agreement. Except as set forth in Annex A hereof, nothing in this
Agreement is
intended to confer upon any other person (including the stockholders, employees or
creditors
of the Company) any rights or remedies hereunder or by reason hereof. In case any
provision
of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any way be
affected
or impaired thereby.







	 	f.	 	Notices. All notices or communications hereunder shall be in writing and mailed or
delivered
to the Company and to PA at their respective addresses set forth above (with a copy (if to
the
Company) to Harvey J. Kesner, Esq.





 


 









 










Genesis Fluid Solutions, Inc.

July 15, 2009

Page 5 of 7





	 	g.	 	Opinions and Advice. PA 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 the proposed Transaction. PA 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 PA be obligated to purchase the securities for its own account or for the
accounts of its customers. PA will have the right, but not the obligation, however,
to determine the allocation of the securities among potential purchasers introduced
by PA, provided that such allocation is reasonably acceptable to the Company.







	 	h.	 	No Waiver. 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.






PA 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.



	 	 	 	 	 
	 	Sincerely,

 	 
	 	By:  	/s/ Trent W. Schneiter
 	 
	 	 	Trent W. Schneiter 	 
	 	 	Vice President & Compliance Manager 	 
	 



	 	 	 	 	 	 	 
	APPROVED AND ACCEPTED:	 	 
	 
	GENESIS FLUID SOLUTIONS, INC.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Michael Whaley	 	 
	 	 	 	 	 
	 

	 	Print name:
	 	Michael Whaley	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 






On July ___, 2009:



[Addendum A and Annex A follow]




 


 









 







Genesis Fluid Solutions, Inc.

July 15, 2009

Page 6 of 7




Addendum A




ANNEX A




The Company agrees that it will indemnify and hold harmless PA, its affiliates, and their
respective directors, members, officers, employees, agents, representatives and controlling
persons (collectively “PA” and each such entity or person
being an “Indemnified Party”) from and
against any and all losses, claims, damages and liabilities, joint or several, as incurred, to
which such Indemnified Party may become subject, and related to or arising out of the engagement
of PA hereunder, the activities performed or omitted by or on behalf of an Indemnified Party
pursuant to this Agreement, the Transactions contemplated thereby or
PA’s role in connection
therewith; provided that the Company will not be liable to the extent that any loss, claim, damage
or liability is found in a final judgment (not subject to further appeal) by a court to have
resulted primarily from actions taken or omitted to be taken by PA in bad faith or from PA’s gross
negligence or willful misconduct in performing the services described above. The Company also
agrees to reimburse any Indemnified Party for all expenses (including reasonable counsel fees and
disbursements) as they are incurred in connection with the investigation of, preparation for or
defense of any pending or threatened claim, or any action, investigation, suit or proceeding
arising therefrom, whether or not such Indemnified Party is a party, whether or not liability
resulted and whether or not such claim, action or proceeding is initiated or brought by or on
behalf of the Company. 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 security
holders or creditors related to or arising out of the engagement of PA pursuant to, or the
performance by PA of the services contemplated by, this Agreement except to the extent that any
loss, claim, damage or liability is found in a final judgment (not subject to further appeal) by a
court to have resulted primarily from actions taken or omitted to be taken by PA in bad faith or
from PA’s gross negligence or willful misconduct.



If the indemnification provided for in this Agreement is for any reason held unenforceable, the
Company agrees to contribute to the losses, claims, damages and liabilities, as incurred by any
Indemnified Person, for which such indemnification is held unenforceable in such proportion as is
appropriate to reflect the relative benefits to the Company, on the one hand, and PA, on the
other hand, of the Transaction (whether or not the Transaction is consummated). The Company
agrees that for the purposes of this paragraph the relative benefits to the Company and PA of
the Transaction shall be deemed to be in the same proportion that the total value of the
Transaction or contemplated Transaction by the Company as a result of or in connection with the
proposed Transaction bears to the Fee paid or to be paid to PA under this Agreement; provided
that, to the extent permitted by applicable law, in no event shall the Indemnified Parties be
required to contribute an aggregate amount in excess of the aggregate fees actually paid to PA
under this Agreement.



Within a reasonable period after receipt by an Indemnified Party of notice of any claim or the
commencement of any action, suit or proceeding with respect to which an Indemnified Party may be
entitled to indemnity hereunder, such Indemnified Party will notify the Company in writing of
such claim or of the commencement of such action or proceeding, and the Company will assume the
defense of such action, suit or proceeding and will employ counsel satisfactory to the
Indemnified Parties and will pay the fees and disbursements of such counsel, as incurred.
Notwithstanding the preceding sentence, any Indemnified Party will be entitled to employ counsel
separate from counsel for the Company and from any other party in such action if such Indemnified
Party reasonably determines that a conflict of interest exists which makes representation by
counsel chosen by the Company not advisable or if such Indemnified Party reasonably determines
that the Company’s assumption of the defense does not adequately represent its interest. In such
event, the fees and disbursements of such separate counsel will be paid by the Company.




 


 









 








Genesis Fluid Solutions, Inc.

July 15, 2009

Page 7 of 7




The Company agrees that, without PA’s prior written consent, it will not settle, compromise or
consent to the entry of any judgment in any pending or threatened claim, action or proceeding in
respect of which indemnification could be sought under the indemnification provision of this
Agreement (whether or not PA or any other Indemnified Party is an
actual or potential party to such
claim, action or proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out of such claim,
action or proceeding. PA agrees that, without the Company’s prior written consent, it will not
settle, compromise or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding in respect of which indemnification could be sought under the indemnification
provision of this Agreement (whether or not the Company is an actual or potential party to such
claim, action or proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out of such claim,
action or proceeding.



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 covered hereby in which such Indemnified Party is not named as a
defendant, the Company agrees to reimburse PA 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 reasonable fees and disbursements of
their legal counsel, and to compensate PA and such Indemnified Party in an amount to be mutually
agreed upon.



In the event that any amounts due under these indemnification provisions contained in this Annex A
are not paid within thirty days after written notice of such event giving rise to the
indemnification obligations, 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.



The provisions of Annex A shall be in addition to any liability which the Company may otherwise
have. These provisions shall be governed by the law of the State of New York and shall be
operative, in full force and in full effect, regardless of any termination or expiration of this
agreement.



	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael Whaley	 	 	 	By:	 	/s/ Trent W. Schneiter