Exhibit 2.3
Xxxxxxx Securities, LLC
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
(000) 000-0000 fax
November 3, 2004
Mr. Xxxxx Xxxxxxx, President Micro Interconnect Technology, 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 Micro Interconnect Technology, Inc.
and its 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. In its capacity as financial advisor, Xxxxxxx
will assist the Company by undertaking the following activities, to the
extent that such activities are required or requested by the Company.
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.
A. Reverse Merger Services. Xxxxxxx shall act as the Company's
exclusive advisor concerning matters pertaining to the
Company's efforts to acquire a private company with an
operating business in a "going public" or reverse merger
transaction ("Reverse Merger"). Xxxxxxx will assist the
Company in: (i) the identification and presentation of
suitable private company acquisition targets; (ii) the
corporate, business and financial due diligence evaluation of
the target company; (iii) the capital and transaction
structuring; (iv) development of capital markets strategy; (v)
valuation analysis; (vi) company, market and industry
research; (vii) analysis of various exchange listing
requirements; and (viii) transaction negotiation and
execution. The services set forth in this paragraph shall be
referred to herein in as "Reverse Merger Services".
B. Capital Raising Services. Xxxxxxx shall act as the Company's
exclusive placement agent to raise equity capital on behalf of
the Company in private placements or public offerings, and to
sell securities of the Company held by selling shareholders in
secondary public offerings, in such manner and amounts as
determined by the Board in its sole discretion from time to
time ("Capital Raising Services"). The obligations of Xxxxxxx
to perform Capital Raising Services under this Agreement shall
be limited to private placements or public offerings to raise
equity capital on behalf of the Company and secondary public
offerings of the Company's securities by selling shareholders
that the Company and Xxxxxxx mutually agree are financially
viable based on the terms and conditions proposed by the Board
(the "Placements").
C. Mergers and Acquisitions Services. On a non-exclusive basis
and when requested by the Company, Xxxxxxx shall advise the
Company with respect to mergers, acquisitions, sales and
divestitures, including, without limitation, identification of
counterparties, assessment of acquisition opportunities,
approach and financial strategy, structure, evaluation, and
assistance in negotiation and execution ("M&A Services").
D. Other Financial Advisory Services. On a non-exclusive basis
and when requested by the Company, Xxxxxxx shall make itself
available to consult with the Board and the officers, senior
managers, representatives and agents of the Company at
reasonable times, concerning matters pertaining to investment
banking, capital markets strategy and approach, business and
financial operations, regulatory matters, business and market
development, and any other matter of importance concerning the
business of the Company. Xxxxxxx may, at the request of the
Company, assist in the preparation of written reports on
financial, accounting or marketing matters, review financial
information, analyze markets and business opportunities,
develop short-term and long-term strategic business plans, and
report to the Board on proposed acquisition, merger and
investment opportunities. Xxxxxxx may provide liaison services
to the Company with respect to the Company's current or
potential relationships with unaffiliated third parties. The
services set forth in this paragraph shall be referred to
herein in as "Other Financial Advisory Services".
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"), unless terminated by the Company as
set forth in this Section 2. The Company may terminate this Agreement
at any time after the ninetieth (90th) day following the date that
either the Company's registration statement is declared effective by
the U.S. Securities and Exchange Commission or a private placement
memorandum is completed by the Company in a form for distribution to
prospective investors, provided, however, notwithstanding such
termination, Xxxxxxx shall be paid the Commissions and Warrants set
forth in Section 3.B. hereof for any securities sold by Company during
the one (1) year period following such termination to any investor
introduced by Xxxxxxx during the Term hereof. 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.
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3. Compensation. As compensation for the services to be rendered by
Xxxxxxx under this Agreement, the Company shall pay Xxxxxxx as follows:
A. Reverse Merger Fees. In consideration of the Reverse Merger
Services rendered by Xxxxxxx, upon closing of a Reverse Merger
involving the Company, the Company shall pay Xxxxxxx a fee of
$150,000 at the closing of the Reverse Merger.
B. Capital Raising Fees. For the Capital Raising Services
rendered by Xxxxxxx, the Company and/or the selling
shareholders shall pay Xxxxxxx a commission ("Commission")
equal to 10% of the gross proceeds from the sale of the
Company's securities by the Company in private placements or
public offerings. The Company shall also issue and sell, at
each closing, to Xxxxxxx and/or its designees, 5-year warrants
to purchase such number of shares of common stock of the
Company as shall equal 10% of the number of shares of common
stock sold at the particular closing at a price of $.0001 per
warrant (the "Warrants"). The Warrants shall be exercisable at
any time during a period of four (4) years commencing on the
first anniversary of their issuance at an exercise price
equaling one hundred twenty (120%) percent of the offering
price of the shares sold at such closing. The Warrants to be
issued under this paragraph (including the underlying common
stock) shall have piggyback registration rights, and if such
securities have not been included in one or more registration
statements of the Company, Xxxxxxx may demand registration
thereof beginning one year after the issuance of the Warrants.
The Warrants shall allow the holder to exercise the instrument
on a cashless basis. The Company shall pay Xxxxxxx a
non-accountable expense allowance equal to 1% of the gross
proceeds of any offering, $25,000 of which is payable upon the
decision by the Company's board of directors to proceed with
the proposed offering and the balance of which is payable by
the Company at each closing.
C. Merger and Acquisition Fees. For any M&A Transaction after the
Reverse Merger which Xxxxxxx is explicitly requested by the
Company to serve as an advisor, Company shall pay Xxxxxxx such
retainer fees ("M&A Retainer Fees") and success fees ("Success
Fees") as mutually agreed to by the parties. The Success Fee
shall be due and payable at the closing of the M&A
Transaction.
D. Other Financial Advisory Fees. During any period that the
Company requests Xxxxxxx to provide Other Financial Advisory
Services, the Company shall pay Xxxxxxx a monthly retainer fee
in such amount as mutually agreed to by the parties.
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, an
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.
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5. Board Participation Rights. Upon closing of the Reverse Merger, or any
time for one (1) year following the closing thereof, Xxxxxxx may
designate one person to attend all meetings of the Company's Board of
Directors for a period of one (1) year following the closing of the
Reverse Merger. Such person shall be entitled to attend all such
meetings and to receive all notices and other correspondence and
communications sent by the Company to members of its Board of
Directors. Xxxxxxx'x designee shall be reimbursed for out-of-pocket
expenses incurred in connection with attendance at Board of Directors
meetings in the same manner as members of the Board of Directors are
reimbursed for such expenses.
6. Exclusivity. During the Term hereof, the Company agrees to deal
exclusively with Xxxxxxx with respect to the Reverse Merger Services
and Capital Raising Services to be provided by Xxxxxxx hereunder and to
refer all inquiries from any prospective reverse merger candidate or
financing source to Xxxxxxx. Whether or not so referred, Xxxxxxx shall
be entitled to the compensation set forth herein for any Reverse Merger
and Placements completed during the Term hereof with any of such
parties. Xxxxxxx shall refer to the Company any reasonable proposal for
Reverse Merger or Placements it receives, and the Company agrees to
approve or reject such proposal promptly.
7. Definitions. For purposes of this Agreement, the term "M&A Transaction"
shall mean any transaction or series or combination of transactions,
whereby, directly or indirectly, control of an interest in a company or
any of its businesses or assets, other than in the ordinary course of
business, is transferred to or by the Company or its affiliates for
Consideration (as defined herein), including, without limitation, a
sale or exchange of capital stock or assets, a lease of assets with or
without a purchase option, a merger or consolidation, a share exchange,
a tender or exchange offer, a reorganization, a leveraged buyout, the
formation of a joint venture, minority investment or partnership, or
any similar transaction. A Reverse Merger shall not be deemed an M&A
Transaction. Further, for purposes of this Agreement, the term "dollar"
and the symbols "$" and "US$" shall mean the Dollars of the United
States of America.
8. 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/or any potential
acquisition target 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/or any potential acquisition target ("Information"). The
Company also agrees to make available to Xxxxxxx such representatives
of the Company, 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
business or finances. The Company represents and warrants that the
Information provided or made available to Xxxxxxx by the Company, 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. The selling, placement agent and/or
underwriting agreements, as applicable, that are executed between
Xxxxxxx and the Company in connection with any Placement hereunder
shall include customary broker-dealer representations by Xxxxxxx and
issuer representations by Company.
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9. 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 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 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.
10. 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.
11. Miscellaneous.
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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 (including all exhibits and any addenda or schedules
attached hereto) 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. This Agreement specifically amends and restates in
its entirety that certain financial advisory agreement between the
parties dated November 15, 2003. 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.
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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
xx@xxxxxxxxxxxxxxxxxx.xxx
-------------------------
If to the Company:
Micro Interconnect Technology, 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.
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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:
Micro Interconnect Technology, Inc.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Xxxxx X. Xxxxxxx, President
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