Jesup & Xxxxxx
SECURITIES CORPORATION
Exhibit 10.11
000 XXXXX XXXXXX
XXX XXXX, XX 00000
NASD TELEPHONE: (000) 000-0000
SIPC FAX: (000) 000-0000
July 25, 2003
Linsang Manufacturing, Inc.
0000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xx
Gentlemen:
The purpose of this letter agreement (the "Agreement") is to confirm the
engagement of Jesup & Xxxxxx Securities Corporation ("Jesup & Xxxxxx") as
exclusive financial advisor and placement agent to LMIC, Inc., together with its
affiliates and subsidiaries, (the "Company"), in connection with the raising of
approximately $3 million of equity and/or equity-linked securities (the
"Offering") via a private placement.
1. In connection with its engagement hereunder, Jesup & Xxxxxx will
perform the following services as necessary:
(a) Review the assets and business of, as well as the prospects
for, the Company;
(b) Evaluate and recommend financial and strategic alternatives
with respect to the Transaction;
(c) Advise the Company as to the timing, structure and pricing of
the Offering;
(d) Make, with the Company's assistance, appropriate presentations
to relevant parties, based on a list of names to be approved
by the Company (the "Approved Sources"), concerning the
Offering, and will prepare an appropriate financing
information and placement memorandum (the "Memorandum") to be
reviewed by the Company. The Company shall approve the
Memorandum prior to its use and will advise Jesup & Xxxxxx in
writing that it has so approved the Memorandum and the Company
shall represent to Jesup & Xxxxxx that the Memorandum does not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
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Jesup & Xxxxxx
(e) Use its diligent and good faith efforts to obtain financing
commitment(s) for the contemplated Offering on the best terms
and conditions for the Company. The Company will cooperate
fully with Jesup & Xxxxxx in evaluating and approving any
potential commitment(s), but the Company reserves the right to
reject any potential lender, investor or joint venture
partner; and
(f) Provide such other financial advisory and investment banking
services as are customary for similar transactions and as may
be mutually agreed upon by the Company and Jesup & Xxxxxx.
2. The Company shall provide full cooperation to Jesup & Xxxxxx as may
be reasonably necessary for the efficient performance by Jesup &
Xxxxxx of its services hereunder.
3. As compensation for the Services rendered hereunder, the Company
hereby agrees to pay Jesup & Xxxxxx:
(a) A retainer fee of $25,000 payable in cash upon the execution
of this Agreement [and an additional $5,000 per month
thereafter];
(b) A financing fee for any capital raised in the Offering,
payable on the Financial Closing Date, if during the term of
this Agreement or within 12 months thereafter, the Offering is
consummated, as follows: (i) a cash fee equal to 8.0% of the
securities issued in the Offering and (ii) grant to Jesup &
Xxxxxx 5 year warrants (the "Warrants") to purchase shares of
common stock of the Company in an amount equal to 8.0% of the
amount of the Offering. The exercise price of the Warrants
shall be the offering price of the equity securities in the
Offering. The Warrants shall otherwise contain provisions
normal and customary in warrants offered in similar
transactions. The "Financial Closing Date" shall be the date
on which the documentation for the Offering is signed and
funding has occurred.
4. In addition to any fees that may be payable to Jesup & Xxxxxx
hereunder, the Company shall reimburse Jesup & Xxxxxx for its
out-of-pocket expenses incurred in connection with its engagement
hereunder, including the reasonable fees and expenses of its legal
counsel and any other advisor. If any expenses have not previously
been reimbursed at the time this Agreement terminates, the Company
shall promptly reimburse Jesup & Xxxxxx for any such expenses
incurred or accrued prior to termination.
5. To the extent that, at any time during the term of this Agreement
and for the 12 month period following the termination of this
Agreement, the Company determines to raise debt, equity or
equity-linked securities via a public offering or private placement,
pursue a merger, acquisition or divestiture or require other
investment banking services, then Jesup & Xxxxxx shall have the
first right of refusal, but not the obligation, to act as the
Company's exclusive placement agent, lead manager, financial advisor
or dealer-manager, as appropriate, in each case pursuant to a
separate engagement letter which shall provide for, among other
things, mutually acceptable terms, conditions, indemnification and
compensation for such services.
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Jesup & Xxxxxx
6. None of the advice, either oral or written, provided to the Company
by Jesup & Xxxxxx hereunder shall be publicly disclosed or made
available to third parties without the prior written consent of
Jesup & Xxxxxx, which consent shall not be unreasonably withheld,
except the information may be disclosed (i) to the Company's
counsel, accountants and other advisors having a need to know, (ii)
in the course of any litigation or court proceeding involving the
Company including, without limitation, the enforcement of any claim
against the Company, whether inside or outside the context of a
bankruptcy proceeding, (iii) as the Company reasonably believes to
be otherwise required by law pursuant to legal process or any
judicial, administrative, legislative, regulatory or self-regulatory
body or committee having, or claiming to have, jurisdiction over the
proposed Offering or the Company, or any other governmental agency
or representative thereof, (iv) in the event that the Company is
requested (by oral questions, deposition, interrogatories, requests
for information or documents, subpoena, court order, civil
investigative demand or other process) to disclose such information.
If the Company is requested pursuant to clause (iv) to disclose any
information, the Company will (x) give Jesup & Xxxxxx prompt notice
of such request so that Jesup & Xxxxxx may seek an appropriate
protective order and (y) consult with Jesup & Xxxxxx as to the
advisability of taking legally available steps to resist or narrow
such a request. The Company will cooperate fully with Jesup & Xxxxxx
in obtaining such an order. If in the absence of a protective order
the Company is nonetheless compelled to disclose information, Jesup
& Xxxxxx agrees that it may make such disclosure without liability
hereunder, provided that it gives Jesup & Xxxxxx written notice of
the information to be disclosed as far in advance of its disclosure
as is practicable and, upon Jesup & Lamont's request and at its
expense, uses its best efforts to obtain reasonable assurances that
confidential treatment will be accorded to such information. All
references to the Company in this paragraph shall be deemed to
include their representatives.
7. In connection with Jesup & Lamont's engagement hereunder, the
Company agrees, subject to the further provisions of this Section 7,
to indemnify and hold harmless Jesup & Xxxxxx, and its affiliates,
the respective directors, partners, officers, agents,
representatives and employees of Jesup & Xxxxxx and its affiliates
and each other person, if any, controlling Jesup & Xxxxxx and its
affiliates (each an "Indemnified Party") to the full extent lawful,
from and against any losses, claims, damages or liabilities (or
actions, including shareholder actions, in respect thereof) and will
reimburse any Indemnified Party for all reasonable costs and
expenses (including reasonable counsel fees and disbursements) as
they are incurred by such Indemnified Party in connection with
investigating, preparing or defending any such action or claim,
whether or not in connection with pending or threatened litigation
in which Jesup & Xxxxxx or any other Indemnified Party is a party,
caused by or arising out of any transaction contemplated by this
Agreement or Jesup & Lamont's performing any service contemplated
hereunder. The Company will not, however, be liable to the extent
that any claims, liabilities, losses, damages, costs or expenses of
any Indemnified Party have resulted primarily from the gross
negligence or willful misconduct of such Indemnified Party. In the
event that the Company shall have reimbursed expenses to an
Indemnified Party in such circumstances, the Indemnified Party so
reimbursed shall repay to the Company the amount of such reimbursed
expenses. The Company also agrees that neither Jesup & Xxxxxx nor
any Indemnified Party shall have any liability to the Company for,
or in connection with, such engagement except for any such liability
for losses, claims, damages, liabilities, costs or expenses incurred
by the Company that have resulted primarily from the gross
negligence or willful misconduct of any Indemnified Party. In no
event shall either party be liable to the other party for any
special, consequential or punitive damages arising under or related
to this Agreement.
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Jesup & Xxxxxx
If the Company so elects, it may assume the defense of such
proceeding, including the employment of counsel selected by the
Company and reasonably satisfactory to the Indemnified Parties and
payment of the fees and expenses of such counsel. In any proceeding
the defense of which the Company assumes, the Indemnified Parties
will have the right to participate in such litigation and to retain
its own counsel at the Indemnified Parties' expense, provided,
however, that if the named parties to such proceeding include the
Company and one or more Indemnified Parties as a result of which
having common counsel would present a conflict of interest due to
differing interests between the Company and such Indemnified
Parties, such Indemnified Parties may employ separate counsel to
represent or defend them in such proceeding and the Company will pay
the reasonable fees and expenses of not more than one separate
counsel for such Indemnified Parties. Also, if the Company shall
have failed to employ counsel or assume that defense of the
proceeding in a timely manner, the Indemnified Parties may assume
the defense of such proceeding with counsel selected by the
Indemnified Parties and reasonably satisfactory to the Company. The
Company will not be obligated to indemnify any Indemnified Party
with respect to any loss, claim, damage or liability settled,
compromised or consented to by the Indemnified Party without prior
written consent of the Company.
The Company agrees that should Jesup & Xxxxxx and/or any other
Indemnified Party incur any reasonable costs or expenses in
connection with enforcing this Agreement (including, without
limitation, in connection with an action or actions brought by Jesup
& Xxxxxx and/or any other Indemnified Party to collect any fees,
commissions and/or other amounts due to or payable to Jesup & Xxxxxx
and/or such other Indemnified Party pursuant to this Agreement),
then the Company, not later than three business days after demand by
Jesup & Xxxxxx and/or such other Indemnified Party (which written
demand may be made from time to time), shall pay to Jesup & Xxxxxx
(and/or such other Indemnified Party) all reasonable costs and
expenses, including, without limitation, reasonable attorney's fees
and expenses.
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Jesup & Xxxxxx
The foregoing agreements shall be in addition to any rights that
Jesup & Xxxxxx or any Indemnified Party may have at common law or
otherwise.
No compromise or settlement by the Indemnifying Party of any action
or proceeding relating to the transactions contemplated hereby shall
be effective unless it also contains an unconditional release of
each Indemnified Party. Notwithstanding anything to the contrary
herein, the indemnification obligations under this section shall
survive the termination of this Agreement for a period not to exceed
the statute of limitations under applicable law.
8. (a) The engagement of Jesup & Xxxxxx pursuant to this Agreement
shall automatically terminate six months from the date of this
Agreement or the date set forth in a termination notice
delivered by either party to the other in accordance with the
provisions set forth below. This Agreement may be extended if
agreed to in writing by both parties.
(b) The Company may terminate this Agreement upon 30 days' written
notice to Jesup & Xxxxxx; provided, however, that the
Company's obligations set forth in paragraphs 3, 4, 5, 6 and 7
hereunder shall survive any termination or expiration of this
Agreement.
(c) Jesup & Xxxxxx may terminate this Agreement upon 30 days'
written notice to the Company without further liability or
obligation on the part of Jesup & Xxxxxx.
9. (a) This Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and supersedes
and cancels any prior communications, understanding and
agreements between the parties. This Agreement cannot be
modified or changed, nor can any of its provisions be waived,
except in writing signed by both parties.
(b) Any term or condition of this Agreement which is prohibited or
unenforceable in any applicable jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof; and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
To the extent permitted by any applicable law, the Company
hereby waives any provisions of such applicable law which
render any provisions hereof prohibited or unenforceable in
any respect.
10. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, including
all matters of construction, validity and performance.
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Jesup & Xxxxxx
(b) Any dispute arising out of or relating to this Agreement or
its performance that the parties are unable to resolve by
agreement shall be finally settled by arbitration. Such
arbitration shall be effected in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of
Commerce and shall be conducted in New York. Judgment upon the
award rendered by the Arbitrator may be entered in any court
having jurisdiction thereof.
Jesup & Xxxxxx 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 agreement 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.
JESUP & XXXXXX SECURITIES CORPORATION
By: /s/ Xxxxxxx XxXxxxx
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Name: Xxxxxxx XxXxxxx
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Title: Chairman
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Agreed to and accepted as of the date first above written:
LINSANG MANUFACTURING, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
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Title: Treasurer
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