Infinium Labs Hit With Suit By Investment Banking Firm

Infinium didn’t comment on the suit by our deadline. The company said in Jan. that it received a $15 million financing commitment from SBI-USA division SBI-Brightline and Trilogy Capital Partners. Infinium then announced in April that HaDavar HaNachon joined SBI and Infinium Investment as part of a revised stock purchase deal that replaced the $15 million commitment with new commitments of $44 million. That amount was later apparently increased to $46 million. But Infinium revealed in July that investment banking company HPC Capital Management, which became an adviser to Infinium, helped get a $50 million equity line of credit from an institutional investor -- which it said was a new line of financing that replaced the earlier deal for an equity investment of $46 million from SBI, Trilogy, HaDavar HaNachon and Reich Capital that was cancelled by Infinium. Roberts said then that his company decided to accept the offer of a new set of investors because the deal was “less dilutive to shareholders, provides better terms and is a better fit for the company’s capital plan and budgetary needs.”

SBI said in its suit that it entered into the investment banking/advisory agreement with Infinium “on or about March 6.” It said the deal called for it to act as Infinium’s financial advisor “for a period of 6 months from the date of the agreement.” SBI said Infinium agreed to pay it 2% of any gross offering funds received during the effective period of the deal “and for a period of 6 months after the expiration of the agreement, in the event that the offering funds were not received from a party introduced” to Infinium by SBI. The latter said it “used its best efforts under the agreement to identify and obtain financing and merger opportunities” for Infinium. SBI claimed that it obtained the $44 million in financing commitments announced in April and, as part of the terms of the deal, it was entitled to 7% of the gross proceeds from that financing. But SBI said that through no fault of its own, Infinium “failed to consummate the financing arrangement” announced in April and, instead, Infinium announced the new $50 million equity line in July. SBI claimed that although the Infinium-SBI deal was still in effect in July, it was “not provided the right of first refusal to act” as Infinium’s investment banker for the transaction with HPC, violating the Infinium-SBI deal.

SBI charged that Infinium received more than $15 million in debt financing and more than $15 million in equity financing during the effective period of their deal. It also claimed that because the deal would still be in effect until March 2005, it “will seek to amend its complaint” as Infinium “continues to incur obligations” to it.

Separately, peripheral maker Logitech and Universal Electronics (UE) said they settled a patent infringement suit and Logitech licensed certain UE technologies to be used in the Logitech Harmony line of advanced remote controls. The companies said they also agreed to “explore mutually beneficial opportunities related to the supply and manufacture of remote controls, including the opportunity for UE to license certain technology from Logitech.” They said specific terms of the settlement were “confidential.”