June 27, 2007 LQD Adrenalina, LLC. 20855 NE 16TH Ave. Suite Suite #C-16 Miami, FL 33179 Attention: Jeffrey Geller, President Gentlemen:
June
27,
2007
LQD
Adrenalina, LLC.
00000
XX
00XX Xxx. Xxxxx
Xxxxx
#X-00
Xxxxx,
XX
00000
Attention: Xxxxxxx
Xxxxxx, President
Gentlemen:
This
letter agreement confirms the understanding between LQD Adrenalina, LLC. (the
“Company”) and Gilford Securities Corporation (“the Banking Advisor”) with
respect to a possible Transaction involving the Company
its
subsidiaries, affiliates and successors,
and a
merger or acquisition candidate introduced by the Banking Advisor (the
“Candidate”). The Candidate shall be specifically identified as an addendum to
this agreement. This agreement shall not apply to any other Candidates except
upon execution of an additional addendum or an additional agreement. For
purposes hereof, a “Transaction” shall mean a merger with the Candidate, the
purchase of all, substantially all or controlling interest of the Candidate,
its
subsidiaries, affiliates and successors, or the Company, its subsidiaries,
affiliates and successors, whether by means of a sale or purchase of stock
or
assets, merger, consolidation, exchange offer, or other such transaction of
a
like nature. The Banking Advisor shall be the exclusive investment banker for
the proposed Transaction with the Candidate for the period the transaction
is
ongoing, and for one year following the cessation, should discussions resume.
If
the
Company enters into an agreement or consummates a Transaction with the Candidate
during the term hereof (or within a twelve-month period following termination
hereof), then the Company shall pay a
fee
to
the
Banking Advisor in the form of cash at closing equal to five percent (5%) of
the
Legal Consideration (as defined below) received, exchanged or transferred by
the
Company, its affiliates or stockholders.
For
the
purposes of this Agreement, "Legal Consideration" shall mean the total market
value on the day of closing of stock, securities (in the case of stock or
securities, valued at market on the day of closing, or if there is no public
market, valued at fair market value as agreed or, if not, by an independent
appraiser), cash, assets and all other property (real or personal), debt
assumed, or benefits exchanged or received, by the Candidate or any of its
Management in connection with any Transaction, including without limitation
any
amounts paid or received by the Company or any person or entity to holders
of
warrants, stock purchase rights, straight or convertible securities of the
Candidate and any subsidiaries or affiliates that are included in the
Transaction. Legal consideration shall not include salary, sales incentives,
bonus payments, or similar payments that would ordinarily be considered as
part
of executive or employee compensation. All debt instruments or evidences thereof
and all amounts payable pursuant to any employment agreements, royalty,
consulting agreements, covenants not to compete, earn-out or contingent payment
rights or other similar agreements, arrangements or understandings shall be
valued at the aggregate amount payable there-under, whether such payments are
absolute or contingent, and irrespective of the period or uncertainty of
payment, the rate of interest, if any, or the contingent nature thereof. All
amounts payable pursuant to royalty, consulting agreements, covenants not to
compete, earn-out, or contingent payment rights shall be valued assuming that
the financial performance of the Company or the Candidate remains unchanged
from
its performance during the prior 12 months.
In
addition to any fees payable hereunder, the Banking Advisor shall be reimbursed
by the Company for its reasonable out-of-pocket expenses.
This
engagement shall continue in effect until the Company ceases consideration
of
the Candidate, another party closes a purchase of the Candidate, or until
cancelled in writing by either party, except that the provisions of the
paragraphs regarding compensation, expense reimbursement, indemnification and
contribution shall survive the term of this Agreement.
At
the
end of the earlier of six (3) months from the date hereof, or the end of the
engagement, for any reason, including but not limited to, those reasons
referenced above, the Banking Advisor shall be free to show the Candidate to
other potential buyers and any further professional obligation owed by the
Banking Advisor to the Company regarding a Transaction with the Candidate shall
cease, unless both the Banking Advisor and the Company mutually agree in writing
to continue to pursue a Transaction with the Candidate on a nonexclusive basis.
The
Company agrees to provide the Banking Advisor with the financial and other
information concerning the Company as the Banking Advisor may reasonably request
from time to time in connection with the services performed or to be performed
hereunder. Any information provided by the Company shall be treated by the
Banking Advisor as confidential and may not be released to any other party
except upon prior written authorization of the Company.
Any
financial advice rendered by the Banking Advisor pursuant to this agreement
is
intended solely for the benefit and use of the Company in considering the
matters to which this agreement relates, and may not be disclosed to any third
party in any manner without the Banking Advisor’s prior written approval and
will be treated by the Company as confidential. However, the Company may
disclose pertinent information to its affiliates and financial backers as
necessary to evaluate and decide whether to consummate a Transaction.
The
Company agrees to indemnify and hold the Banking Advisor harmless from and
against any losses, claims, damages or liabilities (or actions, including
securityholder actions, in respect thereof) related to or arising out of the
Banking Advisor’s engagement hereunder or its role in connection herewith, and
will reimburse the Banking Advisor for all reasonable expenses (including
counsel fees) as they are incurred by the Banking Advisor in connection with
investigating, preparing for or defending any such action or claim, whether
or
not in connection with pending or threatened litigation in which the Banking
Advisor is a party. The Company will not, however, be responsible for any
claims, liabilities, losses, damages or expenses which are finally judicially
determined to have resulted primarily from the bad faith or gross negligence
of
the Banking Advisor. The Company also agrees that the Banking Advisor shall
not
have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with such engagement, except
for
any such liability for losses, claims, damages, liabilities or expenses incurred
by the Company that result primarily from the bad faith or gross negligence
of
the Banking Advisor. In the event that the foregoing indemnity is unavailable
(except by reason of the bad faith or gross negligence of the Banking Advisor),
then the Company shall contribute to amount paid or payable by the Banking
Advisor in respect of its losses, claims, damages and liabilities in such
proportion as appropriately reflects the relative benefits received by, and
fault of, the Company and the Banking Advisor in connection with the matters
as
to which such losses, claims, damages or liabilities relate and other equitable
considerations; provided, however, that in no event shall the amount to be
contributed by the Banking Advisor exceed the amount of the fee actually
received by the Banking Advisor. The foregoing shall be in addition to any
rights that the Banking Advisor or any other indemnified person may have at
common law or otherwise and shall extend to and inure to the benefit of any
director, officer, employee, agent, member, stockholder, or controlling person
of the Banking Advisor. The Company hereby consents, to personal jurisdiction,
service and venue in any court in which any claim which is subject to this
agreement is brought against the Banking Advisor or any other person entitled
to
indemnification or contribution hereunder. The Company will not, without the
prior written consent of the Banking Advisor, settle, compromise or consent
to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the Banking Advisor is an actual or
potential party to such claim or action), unless such settlement, compromise
or
consent (i) includes an unconditional release of the Banking Advisor from all
liability arising out of such claim, action, suit or proceeding and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of the Banking Advisor.
This
Agreement may not be amended or modified except in writing and shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to conflict of laws provisions. The Company irrevocably submits
to
the jurisdiction of any courts of the State of New York or the United States
District Court for the Southern District of the State of New York for the
purpose of any suit, action, or other proceeding arising out of this Agreement,
or any of the agreements or transactions contemplated hereby, which is brought
by or against the Company.
Please
confirm that the foregoing is in accordance with your understandings and
agreements with the Banking Advisor by signing and returning to us this letter
enclosed herewith.
Very
truly yours,
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Gilford
Securities Incorporated
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By:
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/s/
Xxxxxx X. Xxxxx
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Name:
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Title:
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CONFIRMED
AND AGREED:
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LQD
Adrenalina, LLC.
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By:
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/s/
Xxxxxxx Xxxxxx
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Name:
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Title:
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