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FINANCIAL ADVISORY AND INVESTMENT BANKING SERVICES RETENTION AGREEMENT

Financial Services Agreement

FINANCIAL ADVISORY AND INVESTMENT BANKING SERVICES RETENTION AGREEMENT You are currently viewing:
This Financial Services Agreement involves

GURUNET CORP | Maxim Group LLC

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Title: FINANCIAL ADVISORY AND INVESTMENT BANKING SERVICES RETENTION AGREEMENT
Governing Law: New York     Date: 3/31/2005

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Unassociated Document

 

MAXIM

GROUP

 

 

January 20, 2005

 

Robert S. Rosenschein

Chairman and CEO

GuruNet Corporation

441 Route 306

Wesley Hills, NY 10952-1233

 

Dear Mr. Rosenschein:

 

We are pleased that GuruNet Corp. (“GuruNet” or the “Company”) has decided to retain Maxim Group LLC (“Maxim”) to provide general financial advisory and investment banking services to the Company as set forth herein. This letter agreement (this “Agreement”) will confirm Maxim’s acceptance of such retention and set forth the terms of our engagement.

 

1. Retention. The Company hereby retains Maxim as its non-exclusive financial advisor and investment banker to provide general financial advisory and investment banking services, and Maxim accepts such retention on the terms and conditions set forth in this Agreement. In such capacity, Maxim shall: (i) familiarize itself to the extent appropriate and feasible, with the business, operations, properties, financial condition, management and prospects of the Company; (ii) act, at the Company’s request, as an underwriter or a placement agent in a public offering or a private placement, respectively, (iii) advise the Company on matters relating to its capitalization; (iv) evaluate alternative financing structures and arrangements; (v) assist the Company in developing appropriate acquisition criteria and identifying target industries; (vi) provide such other financial advisory and investment banking services upon which the parties may mutually agree. For the avoidance of doubt, the statements contained in this Section 1 regarding the services are preliminary in nature and subject to change and definitive documentation to be agreed upon the Company and Maxim.

 

2. Information. In connection with Maxim’s activities hereunder, the Company will cooperate with Maxim and furnish Maxim upon request with all information regarding the business, operations, properties, financial condition, management and prospects of the Company (all such information so furnished being the “Information”) which Maxim deems appropriate and will provide Maxim with access to the Company’s officers, directors, employees, independent accountants and legal counsel. The Company represents and warrants to Maxim that all Information made available to Maxim hereunder will be complete and correct 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 herein not misleading in light of the circumstance under which such statements are or will be made. The Company further represents and warrants that any projections and other forward-looking information provided by it to Maxim will have been prepared in good faith and will be based upon assumptions which, in light of the circumstances under which there are made, are reasonable. The Company recognizes and confirms that Maxim (i) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (ii) does not assume responsibility for the accuracy or completeness of the Information and such other information; and (iii) will not make an appraisal of any assets of the Company. Any advice rendered by Maxim pursuant to this Agreement may not be disclosed publicly without Maxim’s prior written consent nor may Maxim disclose the same about the Company. Maxim hereby acknowledges that certain of the Information received by Maxim may be confidential and/or proprietary, including Information with respect to the Company’s technologies, products, business plans, marketing, and other Information which must be maintained by Maxim as confidential. Maxim agrees that it will not disclose such confidential and/or proprietary Information to any other companies in the industry in which the Company is involved, either during or after the term of the Agreement.

 


3. Compensation. As consideration for Maxim’s services pursuant to this Agreement, Maxim shall be entitled to receive, the Company agrees to pay Maxim, the following compensation:

 

The Company shall pay Maxim a non-refundable monthly retainer fee of $5,000 commencing on the signing of this Agreement and payable on the first day of cash subsequent month for the duration of the Agreement (as detailed in Section 8 of the Agreement). The fees appearing on the Fee Schedule (as defined below) shall be earned by and paid to Maxim by the Company in connection with the services provided by Maxim.

 

Upon the signing of this Agreement, the Company shall deliver to Maxim (or its designated nominees) 100,000 warrants to purchase shares of the Company’s common stock (the “Warrants”). The Warrants shall be exercisable at any time during the five-year period commencing on the date hereof at an exercise price equal to $11.10. The Warrants shall contain provisions, including, without limitation, those pertaining to cashless exercise, anti-dilution protection and one demand and two piggyback registration rights (subject to underwriter’s crowdout), contained in the Warrant certificated delivered to the Company together with this Agreement.

 

The Company and Maxim acknowledge and agree that, in the course of performing services hereunder, Maxim may provide advisory services as described in Section 1 as well as merger and acquisition advisory services and introduce the Company to the third parties who may be interested in entering into a transaction with the Company, including, without limitation, a merger, acquisition or sale of stock or assets (in which the Company may be the acquiring or the acquired entity), joint venture, strategic alliance or other similar transaction (any such transaction, the “Transaction”).

 

The Company agrees to compensate Maxim for the services provided in conjunction with the Transaction pursuant to the financing fee terms as listed on Exhibit B hereto, the “Fee Schedule”:

 

(i)  

If the Company consummates the Transaction with the candidate initially in writing by Maxim or following the request by the Company from M&A services from Maxim, and for which Maxim is expressly engaged to act as one of the Company’s investment bankers to investigate, structure, negotiate and finance the Transaction, or

 

(ii)  

If, during the term of this Agreement or within twelve 12 months from the effective date of the termination of this Agreement, the Company consummates a Transaction initially introduced in writing by Maxim, and Maxim is not engaged as the Company’s financial advisor, agent and/or investment banker in connection with such Transaction pursuant to Section 6 hereof.

 

Such fees shall be payable to Maxim in cash at the closing or closings of the Transaction to which it relates, except as otherwise stated.

 

The amount of consideration paid in a Transaction shall include, for purposes of calculating such fee, all forms of consideration paid or received, directly or indirectly, by the Company and/or its stockholders in such Transaction, including, without limitation, cash, securities, notes or other evidences of indebtedness, assumption of liabilities (whether by operation of law or otherwise), or any combination thereof. If all or portion of the consideration paid in the Transaction is other than cash or securities, then the value of such non-cash consideration shall be the fair market value thereof on the date of the Transaction is consummated as mutually agreed upon in good faith by the Company and Maxim. If such non-cash consideration consists of common stock, options, warrants or rights for which a public trading market existed prior to the consummation for the Transaction, then the value of such secu

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