THIS TRANSACTION FEE AGREEMENT is made as of the 22nd day of April, 2004.
BETWEEN:
SUNBURST ACQUISITIONS IV INC.
000-00000 00xx Xxx.
Xxxxxxx, Xxxxxxx Xxxxxxxx
XXXXXX X0X0X0
(the "Company")
OF THE FIRST PART
AND:
X.X. XXXXXXX & COMPANY, LLC
1999 Ave. of the Stars
Xxx Xxxxxxx, XX 00000
(the "Broker")
OF THE SECOND PART
W H E R E A S:
A. The Company has entered into agreements with respect to the acquisition
of interests in mineral properties in Mexico;
B. The Broker is a licensed broker-dealer with the National Association of
Securities Dealers;
C. The Broker introduced the Company to the individuals responsible for
finding the mineral properties and securing such mineral properties for the
Company (such individuals to be called the "Mineral Investor"), and the Broker
assisted the Company with follow up transactions;
D. The Company wishes to reward the Broker for its services in the manner
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
conditions, warranties and representations hereinafter set forth, the parties
hereto agree as follows:
1. The Company agrees to compensate the Finder as follows: the
option to purchase three million (3,000,000) shares of common stock at the
purchase price of one xxxxx ($0.01) (the "Shares"). Such option agreement terms
are in the Option Agreement attached hereto as Exhibit A and incorporated herein
as part of this Agreement.
2. The Shares shall carry piggy-back registration rights and as such
Company is required to include the Shares in any registration statement filed by
the Company for the registration of any shares of common stock in the Company.
Notwithstanding, upon demand by the holder of the Shares to the Company, the
Shares shall be registered pursuant to an effective registration statement duly
filed with the U.S. Securities and Exchange Commission, including a registration
on Form S-8.
1
3. The parties hereto, and each of them, covenant and agree that
each of them shall and will upon reasonable request by the other party, make,
do, execute or cause to be made, done or executed all such further and other
lawful acts, deeds, things, devices and assurances whatsoever for the better or
more perfect and absolute performance of the terms and conditions of this
Agreement.
4. By execution hereof, the Company acknowledges that the Broker
does not provide investment advice or financial planning services. In that
regard, the Broker is not registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and cannot therefore provide any
advice regarding the desirability or value of purchasing, selling, transacting
in, investing in, or holding any security. Rather, the Broker's services will be
limited to those properly provided by a licensed broker-dealer. Broker is
registered with the NASD as an "Introducing Broker/Dealer".
5. The Company hereby agrees to indemnify and hold harmless the
Broker, its managers, members, agents and employees (collectively referred to as
the Broker for purposes of this Section 6) from and against any and all claims,
actions, suits, proceedings (including those of shareholders), damages,
liabilities and expenses as incurred by any of them (including the fees and
expenses of counsel) which are related to or arise out of any actions taken or
omitted to be taken (including any untrue statements made or omitted to be made)
by the Company or any actions taken or omitted to be taken by the Broker (except
in the case of gross negligence or willful misconduct on the part of such
Broker) in connection with the transactions contemplated by the Purchase
Agreement or otherwise related to or arising out of the Broker's activities on
behalf of the Company. The Company shall reimburse Broker for all expenses
(including the fees and expenses of counsel) incurred by such Broker in
connection with investigating, preparing or defending any such claim, action,
suit or proceeding, including in connection with pending or threatened
litigation to which Broker is a party.
6. The Company and the Broker acknowledge that Xxxxx Xxxxxx Xxxxxxx
serves as the registered representative of the Broker that is overseeing this
transaction, and that Xxxxx Xxxxxx-Xxxxxxx also has an interest in the Company
by virtue of the fact that her husband Xxxx Xxxxxxx is a shareholder in the
Company. Xxxx Xxxxxxx has filed a Form 13(g) disclosing his own ownership
interest in the Company.
7. This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective heirs, administrators, successors and
assigns.
8. This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State. In the event that any provision
of this Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof. The parties hereto hereby submit to the exclusive
jurisdiction of the United States Federal Courts located in New York with
respect to any dispute arising under this Agreement or the transactions
contemplated hereby. The party which does not prevail in any dispute arising
under this Agreement shall be responsible for all fees and expenses, including
attorneys' fees, incurred by the prevailing party in connection with such
dispute.
9. This Agreement consists of a total of 3 pages. This Agreement may
be signed in any number of counterparts and the combination of the same shall
constitute a binding agreement. A signed copy of this Agreement received via
facsimile shall be deemed an original signature of a party for purposes of
making this Agreement a binding agreement.
2
IN WITNESS WHEREOF the parties hereto have hereunto executed this
Agreement as of and from the day first above written.
SUNBURST ACQUISITIONS IV INC.
By:
-------------------------------------
Name: Xxxxx Xxxxxx
Title: President
X.X. XXXXXXX & COMPANY, LLC
By:
-------------------------------------
3
EXHIBIT 'A'
NON-QUALIFIED STOCK OPTION AGREEMENT
This Agreement is made as of the ____th day of April, 2004
BETWEEN: SUNBURST ACQUISITIONS IV INC.
103-20120 00xx Xxx.
Xxxxxxx, Xxxxxxx Xxxxxxxx
XXXXXX X0X0X0
hereinafter referred to as "Company"
AND: X.X. XXXXXXX & COMPANY, LLC
1999 Ave. of the Stars
Xxx Xxxxxxx, XX 00000
Xxxxxx Xxxxxx
hereinafter referred to as "Optionee"
WHEREAS, the Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Optionee, for services to be rendered by Optionee as,
in accordance with the terms of a Finder's Agreement ("Finder's Agreement")
between the Company and Optionee entered into on even date herewith, of a
non-qualified stock option to purchase the number of shares of common stock
("Common Stock") of the Company specified in Paragraph 1 hereof at the price
specified therein, such option to be for the term and upon the terms and
conditions hereinafter stated in this Option Agreement.
NOW THEREFORE, in consideration of the premises and of the undertakings of the
Parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES: OPTION PRICE
Pursuant to said action of the Board of Directors, the Company hereby
grants to Optionee, in consideration of consulting services to be
performed for the benefit of the Company, the option ("Option") to
purchase up to Three Million (3,000,000) shares ("Option Shares") of
Common Stock of the Company, at the exercise price equal to one xxxxx
($0.01) (the "Exercise Price").
Notwithstanding anything in this Option Agreement to the contrary, in no
event will the Optionee be entitled to exercise the Option to purchase
Option shares in excess of such number of shares of Common Stock
beneficially owned by the Optionee and its affiliates (other than shares
of Common Stock which may be deemed beneficially owned through the
ownership of the unexercised Warrants and the unexercised or unconverted
portion of any other securities of the Company, subject to a limitation on
conversion or exercise) that would result in beneficial ownership by the
Holder and its affiliates of more than 4.9% of the outstanding shares of
Common Stock. For purposes of the immediately preceding sentence,
beneficial ownership is determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13D-G
thereunder.
4
2. TERM
This option will expire five (5) years from the date of signing of this
Option Agreement.
3. SHARES SUBJECT TO EXERCISE
The options are immediately exercisable and remain subject to exercise for
the term specified in Section 2, regardless of the termination of the
Finder's Agreement.
4. METHOD AND TIME OF EXERCISE
The Option may be exercised by written notice delivered to the Company
stating the number of shares with respect to which the Option is being
exercised together with a check made payable to the Company in the amount
of the purchase price of the shares. Not less than one hundred (100)
shares may be purchased at any one time unless the number purchased is the
total number purchasable under the Option at the time. Only whole shares
may be purchased. The Company must carry out any and all acts to ensure
that the Company and its transfer agent duly and properly issue the shares
underlying the options to Optionee.
5. EXERCISE ON TERMINATION
This Option will not terminate as a result of the termination of
Optionee's services as a consultant to the Company or as a result of an
early termination of the Finder's Agreement by Company.
6. TRANSFERABILITY
This Option may not be assigned or transferred except, (i) by will or by
the laws of descent and distribution, or (ii) with consent of the Company.
7. OPTIONEE NOT A SHAREHOLDER
Optionee has no rights as a shareholder with respect to the Common Stock
of the Company covered by the Option until the date of issuance of a stock
certificate or stock certificates to him upon exercise of the Option. No
adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate or certificates are
issued.
8. REGISTRATION RIGHTS --PIGGY BACK AND DEMAND
Optionee represents and agrees that, upon Optionee's exercise of the
Option in whole or part, unless there is in effect at that time under the
Securities Act of 1933 a registration statement -- relating to the shares
issued to him, he will acquire the shares issuable upon exercise of this
Option for the purpose of investment and not with a view to their resale
or further distribution.
The Shares shall carry piggy-back registration rights and as such Company
is required to include the Shares in any registration statement filed by
the Company for the registration of any shares of common stock in the
Company. Notwithstanding, upon demand by the holder of the Shares to the
Company, the Shares shall be registered pursuant to an effective
registration statement duly filed with the U.S. Securities and Exchange
Commission, including a registration on Form S-8.
5
9. REPRESENTATION.
Company represents that it has carried out any and all acts necessary to
effect the issuance of this Agreement.
10. NOTICES
All notices to the parties may be sent at the addresses and numbers listed
above, or to such other address and fax number as either may designate to
the other in writing. A notice will be deemed to be duly given if and when
enclosed in a properly addressed sealed envelope deposited, postage
prepaid and followed by facsimile to the addressee. In lieu of giving
notice by mail as aforesaid, written notices under this Agreement may be
given by personal delivery to the Optionee or to the Company (as the case
may be), or by a recognized courier.
11. ADJUSTMENTS
If there is any change in the capitalization of the Company affecting in
any manner the number or kind of outstanding shares of Common Stock of the
Company, whether by stock dividend, stock split, reclassification or
recapitalization of such stock, or because the Company has merged or
consolidated with one or more other corporations (and provided the Option
does not thereby terminate pursuant to Section 2 hereof), then the number
and kind of shares then subject to the Option and the price to be paid
therefore will be appropriately adjusted by the Company; provided however,
that in no event will any such adjustment result in the Company's being
required to sell or issue any fractional shares. Any such adjustment will
be made without change in the aggregate purchase price applicable to the
unexercised portion of the Option, but with an appropriate adjustment to
the price of each Share or other unit of security covered by this Option.
12. CESSATION OF CORPORATE EXISTENCE
Notwithstanding any other provision of this Option, under the dissolution
or liquidation of the Company, the reorganization, merger or consolidation
of the Company with one or more corporations as a result of which the
Company is not the surviving corporation, or the sale of substantially all
the assets of the Company or of more than fifty percent (50%) of the then
outstanding stock of the Company to another corporation or other entity,
the Option granted hereunder will terminate; provided, however, that
within five (5) days before the effective date of such dissolution or
liquidation, merger or consolidation or sale of assets in which the
Company is not the surviving corporation, the Company may, but will not be
so obligated to, tender to any Optionee, an option to purchase shares of
the surviving corporation, and such new option or options will contain
such terms and provisions as required substantially to preserve the rights
and benefits of this Option.
13. INVALID PROVISIONS
In the event that any provision of this Option Agreement is found to be
invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability will not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such
other provisions will be given full force and effect to the same extent as
though the invalid or unenforceable provision were not contained therein.
6
14. APPLICABLE LAW
This Agreement shall be enforced, governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and
to be performed entirely within such State. In the event that any
provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform with such statute or rule of law. Any provision
hereof which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision hereof. The
parties hereto hereby submit to the exclusive jurisdiction of the United
States Federal Courts located in New York with respect to any dispute
arising under this Agreement or the transactions contemplated hereby. The
party which does not prevail in any dispute arising under this Agreement
shall be responsible for all fees and expenses, including attorneys' fees,
incurred by the prevailing party in connection with such dispute.
15. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
is deemed an Original but all of which constitute but one Agreement. A
copy of this Agreement signed by a party and delivered by facsimile
transmission to the other party has the same effect as the delivery of an
original of this Agreement containing the original signature of such
party.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day and date first above written.
X.X. XXXXXXX & COMPANY, LLC SUNBURST ACQUISITIONS IV INC.
____________________________ By: __________________________________
Name: Name:
7
