Keating Securities, LLC Greenwood Village, Colorado 80111-2739
EXHIBIT
10.7
Xxxxxxx
Securities, LLC
0000
XXX Xxxxxxx, Xxxxx 0000
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
(000)
000-0000
(000)
000-0000 fax
June
29,
2005
Mr.
Xxxxx
Xxxxxxx, President
Purezza
Group, Inc.
000X
Xxxxxxxxx Xxxxxxxxx, Xxxxx 00
Xxxx
Xxxxx, Xxxxxxx, 00000
Re:
Financial Advisory Agreement
Dear
Xx.
Xxxxxxx:
This
letter will confirm our agreement (“Agreement”) that Xxxxxxx Securities, LLC
(“Xxxxxxx”) is authorized to represent Purezza Group, Inc. and its current and
future affiliates, subsidiaries and related entities (collectively, the
"Company”) and to assist the Company as its financial advisor on the terms and
conditions set forth herein. This Agreement shall become effective upon the
execution hereof by both Xxxxxxx and the Company.
| 1. |
Performance
of Services.
Xxxxxxx shall act as the Company's exclusive advisor concerning matters
pertaining to the Company's efforts to acquire Puda Investment Holding
Limited and its subsidiaries, affiliates and related parties (collectively
“Puda”) in a reverse merger or similar transaction ("Reverse Merger").
Xxxxxxx will assist the Company in: (i) the corporate, business and
financial due diligence evaluation of Puda; (ii) the capital and
transaction structuring; (iii) development of capital markets strategy;
(iv) valuation analysis; (v) company, market and industry research;
(vi)
analysis of various exchange listing requirements; and (vii) transaction
negotiation and execution. The services set forth in this paragraph
shall
be referred to herein in as “Reverse Merger Services”.
|
The
services being provided by Xxxxxxx hereunder are being rendered solely to the
Board of Directors of the Company (the “Board”). These services are not being
rendered by Xxxxxxx as an agent or as a fiduciary of the shareholders of the
Company, and Xxxxxxx shall not have any obligation or liability with respect
to
its services hereunder to such shareholders or any other person, firm or
corporation absent fraud or willful misconduct by Xxxxxxx.
The
parties hereto acknowledge and agree that Xxxxxxx is not rendering legal advice
or performing accounting or auditing services as part of the services provided
under this Agreement. Xxxxxxx shall be free to provide services for other
persons, which services shall not be deemed to be in conflict with the services
to be performed by Xxxxxxx under this Agreement.
| 2. |
Term.
The term of this Agreement shall commence on the date of this Agreement
and continue until the first anniversary of the closing of the Reverse
Merger (the "Term"). The Term hereof may be extended by the mutual
written
agreement of the parties hereto. Notwithstanding anything contained
herein
to the contrary, the provisions of Section 2 (Term), Section 3
(Compensation), Section 9 (Indemnification), Section 10 (Disclosure)
and
Section 11 (Miscellaneous) shall survive the termination and expiration
of
this Agreement.
|
| 3. |
Compensation.
As compensation for the Reverse Merger Services rendered by Xxxxxxx
under
this Agreement, upon closing of the Reverse Merger between the Company
and
Puda, the Company shall pay Xxxxxxx a fee of $400,000 at the closing
of
the Reverse Merger.
|
| 4. |
Affiliated
Companies.
The Company acknowledges and agrees, and enters into this Agreement
with
the full knowledge that, Xxxxxxx and its officers, directors and
affiliates: (i) own, directly or indirectly, a majority interest
in the
Company as of the date of this Agreement; (ii) own, directly or
indirectly, an interest in certain investment funds that have provided
or
may provide equity or debt financing to the Company for which Xxxxxxx
or
one of its affiliates would be entitled to compensation hereunder
with
respect to financing raised from such funds during the Term hereof;
and
(iii) manage certain investment funds that have provided or may provide
equity or debt financing to the Company for which Xxxxxxx or one
of its
affiliates would be entitled to compensation hereunder with respect
to
financing raised from such funds during the Term
hereof.
|
| 5. |
Capital
Raising.
During the term, Xxxxxxx shall act as the Company's exclusive placement
agent and/or managing underwriter to raise equity capital on behalf
of the
Company and Puda, following the closing of the Reverse Merger, in
private
placements or public offerings of securities of the Company, in such
manner and amounts and under such terms as mutually determined by
the
Board and Xxxxxxx from time to time (“Capital Raising Services”). The
Company and Xxxxxxx agree to enter into such placement and/or underwriting
agreements during the Term hereof which will provide the specific
terms
and conditions (including the compensation payable to Xxxxxxx) upon
which
Xxxxxxx will provide such Capital Raising Services.
|
| 6. |
Availability
and Accuracy of Information.
The Company shall furnish Xxxxxxx with all reasonable information
and
material requested or required by Xxxxxxx involving the Company and
Puda
including, without limitation, information concerning historical
and
projected financial results, public and regulatory filings, material
contracts and commitments, proposed financings, acquisitions or other
transactions, and possible and known litigation, environmental and
other
contingent liabilities of the Company and Puda ("Information"). The
Company also agrees to make available to Xxxxxxx such representatives
of
the Company and Puda, including, among others, directors, officers,
employees, outside counsel and independent certified public accountants,
as Xxxxxxx may reasonably request. The Company will promptly advise
Xxxxxxx of any material changes in the Company’s or Puda’s business or
finances. The Company represents and warrants that the Information
provided or made available to Xxxxxxx by the Company and Puda, at
all
times during the Term hereof, is and shall be complete and true 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 thereof not misleading in light of the circumstances under
which such statements are made. The Company further represents and
warrants that any projections provided to Xxxxxxx will have been
prepared
in good faith and will be based upon assumptions that, in light of
the
circumstances under which they are made, are reasonable. The Company
acknowledges and agrees that in rendering its services hereunder
Xxxxxxx
will be using and relying on the Information, without independent
investigation, appraisal or verification, and Xxxxxxx assumes no
responsibility for the accuracy or completeness of the Information.
|
| 7. |
Indemnification.
The Company agrees to indemnify and hold harmless Xxxxxxx, its affiliates
and their respective officers, directors, members, partners, employees,
agents and affiliates and control persons of any of the above (each
an
“Indemnified Person”) from and against all claims, liabilities, losses or
damages (or actions in respect thereof) or other expenses that are
related
to or arise out of (i) actions taken or omitted to be taken (including
any
untrue statements made or any statements omitted to be made) by the
Company, (ii) any breach of any warranty, representation or agreement
of
Company contained in this Agreement, or (iii) actions taken or omitted
to
be taken by an Indemnified Person with the consent of or in conformity
with the actions or omissions of the Company. The Company shall not
be
responsible, however, for any losses, claims, damages, liabilities
or
expenses pursuant to the preceding sentence that are finally judicially
determined to have resulted from Xxxxxxx’x or such other Indemnified
Person’s grossly negligent, reckless or wrongful conduct, and Xxxxxxx
agrees to indemnify and hold Company harmless from any claims, losses,
liabilities or damages incurred by the Company arising out of Xxxxxxx’x
grossly negligent, reckless or wrongful conduct as determined in
a final
judicial determination. The Company agrees to reimburse each Indemnified
Person for all reasonable out-of-pocket expenses (including reasonable
fees and expenses of counsel for such Indemnified Person) of such
Indemnified Person in connection with investigating, preparing, conducting
or defending any such action or claim, whether or not in connection
with
litigation in which any Indemnified Person is a named party, or in
connection with enforcing the rights of an Indemnified Person under
this
Agreement. The indemnity agreements under this Section shall survive
the
completion of services rendered for Company by Xxxxxxx and the termination
or expiration of this Agreement.
|
| 8. |
Disclosure
and Confidentiality.
Any financial or other advice, descriptive memoranda or other
documentation rendered by Xxxxxxx pursuant to this Agreement may
not be
disclosed publicly or to any third party without the prior written
approval of Xxxxxxx. All non-public information provided by the Company
to
Xxxxxxx will be considered confidential information and shall be
maintained as such by Xxxxxxx, except as required by law or as required
to
enable Xxxxxxx to perform its services pursuant to this Agreement,
until
the same becomes known to third parties or the public without release
thereof by Xxxxxxx. This provision is intended to insure, among other
things, that the parties at all times comply with the provisions
of SEC
Regulation FD.
|
| 9. |
Miscellaneous.
|
| A. |
Before
the Company releases any information referring to Xxxxxxx’x role as the
Company’s financial advisor under this Agreement or uses Xxxxxxx’x name in
a manner which may result in public dissemination thereof, the Company
shall furnish drafts of all documents or prepared oral statements
to
Xxxxxxx for comments, and shall not release any information relating
thereto without the prior written consent of Xxxxxxx. Nothing herein
shall
prevent the Company from releasing any information to the extent
that such
release is required by law.
|
| B. |
The
Company agrees that, following the consummation of any transaction
covered
by this Agreement, Xxxxxxx shall have the right to place advertisements
in
financial and other newspapers and journals at Xxxxxxx'x expense,
describing its services to the Company hereunder, provided that Xxxxxxx
will submit a copy of any such advertisements to the Company for
its prior
approval, which approval shall not be unreasonably
withheld.
|
| C. |
The
Company represents and warrants that this Agreement has been duly
authorized and represents the legal, valid, binding and enforceable
obligation of the Company and that neither this Agreement nor the
consummation of any transactions contemplated hereby requires the
approval
or consent of any governmental or regulatory agency or violates or
conflicts with any law, regulation, contract or order binding the
Company.
|
| D. |
The
terms, provision and conditions of this Agreement are solely for
the
benefit of the Company and Xxxxxxx and the other Indemnified Persons
and
their respective heirs, successors and permitted assigns and no other
person or entity shall acquire or have a right by virtue of this
Agreement. This Agreement may not be assigned by either party without
prior written consent of the other
party.
|
| E. |
This
Agreement contains the entire understanding and agreement between
the
parties hereto with respect to Xxxxxxx’x engagement hereunder, and all
prior writings and discussions are hereby merged into this Agreement.
No
provision of this Agreement may be waived or amended except in a
writing
signed by both parties. A waiver or amendment of any term or provision
of
this Agreement shall not be construed as a waiver or amendment of
any
other term or provision.
|
| F. |
Each
party represents and warrants that it will comply with all applicable
securities and other laws, rules and regulations relating hereto
and that
it shall not circumvent or frustrate the intent of this
Agreement.
|
| G. |
This
Agreement may be executed by facsimile signatures and in multiple
counterparts, each of which shall be deemed an original. It shall
not be
necessary that each party executes each counterpart, or that any
one
counterpart be executed by more than one party so long as each party
executes at least one counterpart.
|
| H. |
If
any provision of this Agreement is declared by any court of competent
jurisdiction to be invalid for any reason, such invalidity shall
not
affect the remaining provisions of this
Agreement.
|
| I. |
This
Agreement shall be governed by and constructed under the laws of
the State
of Colorado without regard to such state’s conflicts of law principles,
and may be amended, modified or supplemented only by written instrument
executed by parties hereto.
|
| J. |
All
disputes, controversies or claims (“Disputes”) arising out of or relating
to this Agreement shall in the first instance be the subject of a
meeting
between a representative of each party who has decision-making authority
with respect to the matter in question. Should the meeting either
not take
place or not result in a resolution of the Dispute within twenty
(20)
business days following notice of the Dispute to the other party,
then the
Dispute shall be resolved in a binding arbitration proceeding to
be held
in Denver, Colorado in accordance with the international rules of
the
American Arbitration Association. The arbitrators may award attorneys’
fees and other related arbitration expenses, as well as pre- and
post-judgment interest on any award of damages, to the prevailing
party,
in their sole discretion. The parties agree that a panel of three
arbitrators shall be required, all of whom shall be fluent in the
English
language, and that the arbitration proceeding shall be conducted
entirely
in the English language. Any award of the arbitrators shall be deemed
confidential information for a minimum period of five years, except
to the
extent public disclosure of such information is required by applicable
securities laws or regulations.
|
| K. |
All
notices required by the terms of this Agreement shall be in writing
and
delivered to the other party at the addresses set forth below, either
by
personal delivery, by a recognized international overnight courier
service, or by facsimile or e-mail transmission. Notices will be
deemed
given as of the date of receipt, which date shall be evidenced by
the
signature of an authorized representative of the receiving party
or by
written evidence of a successful transmission of either a facsimile
or
e-mail message.
|
If
to
Xxxxxxx:
Xxxxxxx
Securities, LLC
Attn:
Xxxxxxx X. Xxxxxxx, President
0000
XXX
Xxxxxxx, Xxxxx 0000
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
(000)
000-0000 telephone
(000)
000-0000 fax
If
to the
Company:
Purezza
Group, Inc.
Attn:
Xxxxx Xxxxxxx, President
000X
Xxxxxxxxx Xxxxxxxxx, Xxxxx 00
Xxxx
Xxxxx, Xxxxxxx, X.X.X 00000
(000)
000-0000
(000)
000-0000 fax
or
such
other address as indicated by the Company as its primary business address in
its
SEC filings.
[Remainder
of this page intentionally left blank.]
If
the
forgoing correctly sets forth the entire understanding and agreement between
the
Company and Xxxxxxx, please so indicate by executing this Agreement as indicated
below and returning an executed copy to Xxxxxxx together, whereupon this
Agreement shall constitute a binding agreement as of the date first above
written.
Very
truly yours,
XXXXXXX
SECURITIES, LLC
By:
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx, President
ACCEPTED
AND AGREED TO:
Purezza
Group, Inc.
By:
/s/ Xxxxx X. Xxxxxxx
Xxxxx
X.
Xxxxxxx, President
Date: June 29, 2005
