EXHIBIT 10.8
XXXXXXX & COMPANY (UK) LTD.
00 XXXX XXXXXX
XXX XXXX, XX 00000
May 5, 2005
Ruby Mining Company
0 Xxxxxxxxxx Xxxxxx
Xxxxx 000
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: G. Xxxxxx Xxxxxxxxxxx, CEO
RE: FINANCIAL ADVISORY AGREEMENT
Dear X. Xxxxxx:
Xxxxxxx & Company (UK) Ltd. ("Xxxxxxx") is pleased to act as the non-exclusive
financial advisor for Ruby Mining Company, a Colorado corporation, located in
Atlanta, Georgia (the "Company"), in connection with your proposed capital
transaction. The terms of our engagement are set forth below. We look forward to
working with you.
1. THE OFFERING.
We understand you wish to raise up to five million dollars ($5,000,000)
through a private placement involving the sale of equity or debt
securities to high net worth individuals and institutional investors
(the "Offering"). You understand the actual terms of the Offering may
depend on market conditions, and may be subject to negotiation between
the Company and prospective investors. The Offering will be conducted in
accordance with the exemption from the registration requirements of the
Securities Act of 1933, as amended, and the rules and regulations
promulgated there under (collectively, the "Securities Act"), and the
qualification and registration requirements of applicable state and
foreign securities or blue sky laws and regulations pursuant to a
private placement memorandum and/or other disclosure materials prepared
by the Company. We agree that we will not knowingly take any action in
connection with the Offering that will prevent the Offering from
complying with the requirements for such exemptions
2. FEES AND EXPENSES.
Concurrently with the closing of any part of the Offering, the Company
will pay Xxxxxxx in cash, a fee equal to 8% of the gross proceeds
received from the sale of securities to investors introduced to the
Company by Xxxxxxx. The Company may, in its discretion, reject any
proposed terms from a prospective investor.
(a) In addition, the Company agrees to reimburse Xxxxxxx for its
non-accountable expenses, including but not limited to reasonable
fees of its legal counsel, of up to $25,000. Such fees will be
payable out of the proceeds of the closing. In the event that the
Company does not accept any proceeds pursuant to the Offering, then
no fees shall be due.
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(b) Furthermore, upon the closing of the Offering, the Company shall
xxxxx Xxxxxxx five (5) year warrants for the purchase of an amount
of shares equal to 5%of the securities issued in the Offering to
investors introduced to the Company by Xxxxxxx. The Warrants shall
be identical to those warrants sold in the Offering. The shares
underlying the warrants shall have the same registration rights as
those afforded the investors relative to the shares and warrants
they purchase in the Offering.
3. TERMS.
(a) The term of this engagement shall be six months, however, either
party may terminate this engagement at any time upon 10 days written
notice to the other party. Upon termination, we will be entitled to
collect all fees and warrants earned and expenses incurred through
the date of termination.
(b) The Company agrees to keep the contents of this agreement and the
names of the parties with whom it has been negotiating with in
confidence until the Closing. Further, the Company agrees that
during the 60 days following the signing of this agreement it will
not solicit investments from, or negotiate terms upon which it may
be willing to sell securities to, any investor other than Xxxxxxx
and potential investors who may be approached by Xxxxxxx to invest
pursuant to this agreement.
(c) If any part of the Offering is not closed during the term, for
reasons other than termination of this letter by Xxxxxxx, and during
the one year following termination of the engagement, any person or
entity which we introduced, directly or indirectly, to the Company
or with which we have had discussions or negotiations during the
term on behalf of the Company, purchases securities from the Company
(other than through an underwritten public offering) or enters into
a definitive agreement to purchase securities of the Company, you
agree to pay Xxxxxxx upon the close, a cash fee and warrant in the
amount that would otherwise have been payable to Xxxxxxx had such
transaction occurred during the term.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) You hereby authorize Xxxxxxx to transmit to the prospective
purchasers of the securities material prepared by the Company with
such exhibits and supplements as may from time to time be delivered
by the Company to Xxxxxxx for such purpose and or copies of the
Company's most recent filings with the Securities and Exchange
Commission together with summary materials prepared by the Company
(collectively "Material"). The Company authorizes Material to be
sent out to prospective investors and upon specific request Xxxxxxx
shall undertake to have prospective investors execute a
confidentiality agreement. The Company represents and warrants the
Material will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein or in prior Materials, in
light of the circumstances under which they were made, not
misleading. The Company will advise Xxxxxxx immediately of the
occurrence of any event or any other change known to the Company
which results in the Material containing an untrue statement of a
material fact or omitting to state a material fact required to be
stated therein or necessary to make the statements therein or
previously made, in light of the circumstance under which they were
made, not misleading. Xxxxxxx agrees not to distribute to any
investor or prospective investor any information concerning the
Company, which has not been approved for
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such distribution by the Company. The Company will be responsible
for updating, amending and supplementing the Materials prior to the
closing of the Offering as required by applicable laws.
(b) You agree that if you accept a subscription from a proposed investor
you will enter into subscription, registration rights and other
customary agreements that are negotiated as a part of the Offering.
You also agree that your counsel will supply an opinion letter,
satisfactory in form and substance to our counsel, which will be
addressed to the investors. Such opinion will include customary
items contained in legal opinions rendered in connection with
private placement transactions, including, among other things,
opinions on matters relating to organization and good standing,
capitalization, corporate power and authority, non-contravention,
exemption of the Offering and 10b-5 statements. In addition, at the
closing of the Offering, the Company will provide Xxxxxxx with the
same certificates of the officers of the Company as are furnished to
the investors. If requested, the Company will, at the closing of the
Offering, furnish Xxxxxxx with the same favorable opinion of its
outside counsel as is furnished to the investors.
(c) Xxxxxxx represents and warrants to the Company that (i) Xxxxxxx is a
registered broker/dealer with the Securities and Exchange Commission
("SEC") and any state in which such registration is required and has
and shall maintain such registrations as well as other necessary
licenses and permits to conduct its activities under this letter,
which shall be in compliance in all material respects with all
federal and state laws relating to the offer and sale of securities;
(ii) Xxxxxxx is a member in good standing of the National
Association of Securities Dealers ("NASD"); and (iii) Xxxxxxx is not
a party to any other agreement which would conflict with the terms
of this letter.
5. NO CONFLICT.
Neither the execution and delivery of this letter by the Company
nor the enumeration of the transactions contemplated hereby will,
directly or indirectly, with or without the giving notice or
lapse of time, or both: (i) violate any provisions of the
Certificate of Incorporation or By-Laws of the Company, or (ii)
violate, or be in conflict with, or constitute a default under,
any agreement, lease, mortgage, debt or obligation of the Company
or require the payment or pre-payment or other penalty with
respect thereto.
6. INDEMNIFICATION, CONTRIBUTION, AND CONFIDENTIALITY.
The Company agrees to indemnify Xxxxxxx and related persons in
accordance with the indemnification letter annexed hereto as
Schedule A, the provisions of which are incorporated herein in
their entirety, and shall survive the termination or expiration
of this Agreement.
7. GOVERNING LAW.
This letter shall be governed by and construed in accordance with
the laws of the state of New York applicable to contracts
executed and to be wholly performed therein without giving effect
to its conflicts of laws principles or rules. Each party hereto
(1) agrees that any legal suit, action or proceeding arising out
of or relating to this letter shall be instituted exclusively in
New York State Supreme
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Court, County of New York, or in the United States District Court
for the Southern District of New York, (2) waives any objection
which the Company may have now or hereafter to the venue of any
such suit, action or proceeding, and (3) irrevocably consents to
the jurisdiction of the New York State Supreme Court, County of
New York, and the United States District Court for the Southern
District of New York in any such suit, action or proceeding. Each
party hereto further agrees to accept and acknowledge service of
any and all process which may be served in any such suit, action
or proceeding in the New York State Supreme Court, County of New
York, or in the United States District Court for the Southern
District of New York and agrees that service and process upon
such party mailed by certified mail to such party's address shall
be deemed in every respect effective service of process upon such
party, in any suit action or proceeding. THE PARTIES HERETO AGREE
TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
8. ANNOUNCEMENT OF OFFERING.
If the Offering is consummated, Xxxxxxx may at its expense and
with the consent of the Company (which shall not be unreasonably
withheld), place an announcement in such newspapers and
periodicals as Xxxxxxx may desire in a manner that complies with
all applicable laws, rules and regulations.
9. ADVICE TO THE BOARD.
The Company acknowledges that any advice given by Xxxxxxx to you
is solely for the benefit and use of the Board of Directors of
the Company and may not be used, reproduced, disseminated, quoted
or referred to, without our prior written consent, except as may
be required by law or in connection with any action or proceeding
under paragraph 6.
10. CONFLICTING ENGAGEMENTS.
Nothing in this letter shall be construed to limit the ability of
Xxxxxxx or its affiliates to pursue, investigate, analyze, invest
in, or engage in investment banking, financial advisory or any
other business relationship with entities other than the Company,
notwithstanding that such entities may be engaged in a business
which is similar to or competitive with the business of the
Company, and notwithstanding that such entities may have actual
or potential operations, products, services, plans, ideas,
customers or supplies similar or identical to the Company's, or
may have been identified by the Company as potential merger or
acquisition targets or potential candidates for some other
business combination, cooperation or relationship. The Company
expressly acknowledges and agrees that it does not claim any
proprietary interest in the identity of any other entity in its
industry or otherwise, and that the identity of any such entity
is not confidential information.
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11. INDEPENDENT CONTRACTOR.
In carrying out its responsibilities under this letter, Xxxxxxx
shall be an independent contractor and shall have no right or
authority to assume or create any obligation on behalf of the
Company.
12. MISCELLANEOUS.
The parties acknowledge and agree that with respect to phrases
contained herein such as "as a results of our efforts,"
"introduced to the Company by Xxxxxxx " or similar language, such
phrases are intended to include any person or entity, directly or
indirectly introduced to the Company by the undersigned. Thus, to
the extent that the Company consummates any part of the Offering
with any person or entity, whose introduction to the Company can
be traced back, directly or indirectly, to a person or entity who
was originally introduced to the Company by Xxxxxxx, Xxxxxxx is
entitled to the compensation described herein.
This Agreement, including its Schedules, constitutes the entire
understanding of the parties with respect to the subject matter
hereof and may not be altered or amended except in a writing
signed by both parties. Upon expiration or termination of this
Agreement, it is understood that the fee, expense,
indemnification, reimbursement, contribution, and "tail"
obligations of the Company (as provided in Section 3(b) hereto)
shall survive any such expiration or termination and all fees and
to the extent theretofore paid shall be retained by Xxxxxxx on a
non-accountable basis.
The execution of this Agreement does not constitute a commitment
by Xxxxxxx or the Company to consummate any transaction
contemplated hereunder and does not ensure the successful
placement of securities of the Company or the success of Xxxxxxx
with respect to securing any financing on behalf of the Company.
The Companys engagement of Xxxxxxx is not intended to confer
rights upon any person not a party hereto (including
shareholders, directors, officers, agents, employees, or
creditors of the Company) as against Xxxxxxx or its affiliates,
or their respective directors, officers, employees or agents,
successors or assigns. Xxxxxxx'x engagement by the Company is not
intended to confer rights upon any person not a party hereto
(including shareholders, directors, officers, agents, employees,
or creditors of the Company) as against the Company or its
affiliates, or their respective directors, officers, employees or
agents, successors or assigns. No promises or representations
have been made except as expressly set forth in this agreement
and the parties have not relied on any promises or
representations except as expressly set forth in this agreement.
Nothing contained herein should be construed as creating any
fiduciary duties between the parties.
The rights and obligations of either party under this Agreement may not be
assigned or delegated by such party without the prior written consent of the
other party, and any other purported
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assignment or delegation shall be null and void. If any provision of this
Agreement is determined to be invalid or unenforceable in any respect, then such
determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect. No
material provision of this agreement shall be deemed waived and no breach
excused, unless such waiver or consent excusing the breach shall be in writing
and signed by the party to be charged with such waiver or consent.
We look forward to working with you and developing a long-term relationship with
the Company.
Very truly yours,
XXXXXXX & COMPANY (UK) LTD.
By: __________________________
Xxxxxx Xxxxxxxxxxx, President
Confirmed and accepted as of
the ______ day of May, 2005
RUBY MINING COMPANY
By: _______________________________
G. Xxxxxx Xxxxxxxxxxx, CEO
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SCHEDULE
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INDEMNIFICATION
Recognizing that matters of the type contemplated in this engagement
sometimes result in litigation and that Xxxxxxx'x role is advisory, the Company
agrees to indemnify and hold harmless Xxxxxxx, its affiliates and their
respective officers, directors, employees, agents and controlling persons
(collectively, the "Indemnified Parties"), from and against any losses, claims,
damages and liabilities, joint or several, related to or arising in any manner
out of any transaction, financing, proposal or any other matter (collectively,
the "Matters") contemplated by the engagement of Xxxxxxx hereunder, and will
promptly reimburse the Indemnified Parties for all expenses (including fees and
expenses of legal counsel) as incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim related to or
arising in any manner out of any Matter contemplated by the engagement of
Xxxxxxx hereunder, or any action or proceeding arising there from (collectively,
"Proceedings"), whether or not such Indemnified Party is a formal party to any
such Proceeding. Xxxxxxx agrees to provide prompt written notice to the Company
with respect to any Proceeding brought against any of the Indemnified Parties
with respect to indemnification sought hereunder. Notwithstanding the foregoing,
the Company shall not be liable in respect of any losses, claims, damages,
liabilities or expenses that a court of competent jurisdiction shall have
determined by final judgment resulted solely from the gross negligence or
willful misconduct of an Indemnified Party. The Company, at its sole discretion
and sole cost and expense, may, after notice to Xxxxxxx, assume the defense of
any such pending or threatened Proceeding, including the employment of counsel
reasonably satisfactory to Xxxxxxx. Notwithstanding the Company's election to
appoint counsel to represent the Indemnified Parties in an action, the
Indemnified Parties shall have the right to employ one separate counsel for
themselves, and the Company shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the Indemnifying
Parties to represent the Indemnified Parties would present such counsel with a
conflict of interest, (ii) the Company shall not have employed counsel
reasonably satisfactory to the Indemnified Parties to represent the Indemnified
Parties within a reasonable time after notice of the institution of such action
or (iii) the Company shall authorize in writing the Indemnified Parties to
employ separate counsel at the expense of the Company. The Company further
agrees that it will not, without the prior written consent of Laidlaw, settle,
compromise or consent to the entry of any judgment in any pending or threatened
Proceeding in respect of which indemnification may be sought hereunder (whether
or not Xxxxxxx or any Indemnified Party is an actual or potential party to such
Proceeding), unless such settlement, compromise or consent includes an
unconditional release of Xxxxxxx and each other Indemnified Party hereunder from
all liability arising out of such Proceeding.
The Company agrees that if any indemnification or reimbursement sought
pursuant to this letter were for any reason not to be available to any
Indemnified Party or insufficient to hold it harmless as and to the extent
contemplated by this letter, then the Company shall contribute to the amount
paid or payable by such Indemnified Party in
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respect of losses, claims, damages and liabilities in such proportion as is
appropriate to reflect the relative benefits to the Company and its stockholders
on the one hand, and Xxxxxxx on the other, in connection with the Matters to
which such indemnification or reimbursement relates or, if such allocation is
not permitted by applicable law, not only such relative benefits but also the
relative faults of such parties to the Company and/or its stockholders and to
Xxxxxxx with respect to Xxxxxxx'x engagement shall be deemed to be in the same
proportion as (i) the total value paid or received or to be paid or received by
the Company and/or its stockholders pursuant to the Matters (whether or not
consummated) for which Xxxxxxx is engaged to render financial advisory services
bears to (ii) the fees paid to Xxxxxxx in connection with such engagement. In no
event shall the Indemnified Parties contribute or otherwise be liable for an
amount in excess of the aggregate amount of fees actually received by Xxxxxxx
pursuant to such engagement (excluding amounts received by Xxxxxxx as
reimbursement of expenses).
The Company further agrees that no Indemnified Party shall have
any liability (whether direct of indirect, in contract or tort or otherwise) to
the Company for or in connection with Xxxxxxx'x engagement hereunder except for
losses, claims, damages, liabilities or expenses that a court of competent
jurisdiction shall have determined by final judgment resulted solely from the
gross negligence or willful misconduct of such Indemnified Party. The indemnity,
reimbursement and contribution obligations of the Company shall be in addition
to any liability which the Company may otherwise have and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company or an Indemnified Party.
The indemnity, reimbursement, contribution provisions set forth herein
shall remain operative and in full force and effect regardless of (i) any
withdrawal, termination or consummation of or failure to initiate or consummate
any Matter referred to herein, (ii) any investigation made by or on behalf of
any party hereto or any person controlling (within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange
Act of 1934, as amended) any party hereto, (iii) any termination or the
completion or expiration of this letter or Xxxxxxx'x engagement and (iv) whether
or not Xxxxxxx'x shall, or shall not be called upon to, render any formal or
informal advice in the course of such engagement.
