INVESTMENT BANKING SERVICES AGREEMENT
SINOFRESH HEALTHCARE, INC. ITS AFFILIATES AND ASSIGNS
(THE "COMPANY") AND
SARGON CAPITAL, INC., ITS SUCCESSORS AND ASSIGNS ("SARGON")
OCTOBER 24, 2002
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SCOPE OF SERVICES: The Company is engaging Sargon on an exclusive basis to
perform investment banking and merger and acquisition
consulting services. The scope of such services shall
include the merger of the Company with another entity, or
the sale of part or all of the Company's fixed, technology
or intangible assets including the Company's product, its
website and any related systems (the "Transactions").
For the purposes of this Agreement a "sale" shall mean any
transaction or series or combination of transactions, other
than in the ordinary course of trade or business, whereby,
directly or indirectly, control of or any interest in the
Company or its subsidiaries or affiliates, or any of their
respective businesses (a "Business") or any of their
respective assets, is transferred for consideration,
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
recapitalization, a tender or exchange offer, a leveraged
buy-out, the formation of a joint venture, minority
investment or partnership, or any similar transaction.
(a) Except as provided in subsection (b) below,
"consideration" shall mean the full transaction value of any
sale of the Company including, without limitation, the total
value of all cash, securities, other property and any
contingent, earned or other consideration paid or payable,
directly or indirectly, by an acquiring party to a selling
party or to a participant in the transaction in connection
with a sale of the Company. The value of any such securities
(whether debt or equity) or other property or items of value
shall be determined as follows: (i) the value of securities
that are freely traceable in an established public market
shall be the last closing market price of such securities
prior to the public announcement of the sale; (ii) the value
of securities which are not freely traceable or which have
no established public market, or if the consideration
utilized consists of property other than securities, the
value of such securities or other property shall be the fair
market value thereof; and (iii) the sum of all lease
payments. "Consideration" shall also include the face value
of any indebtedness (except to trade creditors) to which the
sale of the Company is subject or to which the Company or
its subsidiaries or affiliates (or portion thereof) to be
sold remains obligated, or indebtedness that is assumed in
connection therewith, the value of any consulting or
employment agreements received by the principals of the
Company in excess of their historical salary levels, and the
value of any payments to be received by the principals of
the Company for entering into non-compete or similar
agreements. In the case of a recapitalization,
"consideration" shall include the aggregate amount of
indebtedness incurred or equity raised by the Company or a
successor thereof in connection with such recapitalization.
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Sargon SinoFresh
SinoFresh HealthCare/Sargon Agreement
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If any consideration to be paid is computed in a foreign
currency, the value of such foreign currency shall, for
purposes hereof, be converted into U.S. Dollars at the
prevailing exchange rate on the date or dates on which such
consideration is paid.
(b) If the sale of the Company is structured in such a way
as to provide for the transfer of only part of the assets of
the Company or its subsidiaries or affiliates or one or more
of the Businesses of the Company or its subsidiaries or
affiliates and the retention of other assets or Business
(es), including, but not limited to, cash, cash equivalents,
investments, inventories and receivables, such retained
assets shall not be deemed to be part of the consideration
received in connection with the sale of the Company, as
follows: (A) with respect to investments, in an amount equal
to the market value of such investments, (B) with respect to
inventories and receivables, in an amount equal to the book
value thereof, and (C) with respect to any other assets, in
an amount to be reasonably determined by the parties.
RIGHT TO TERMINATE
NEGOTIATIONS: The Company may refuse to discuss or negotiate any
Transaction with any party for any reason whatsoever and may
terminate negotiations with any party at any time.
LIST OF PARTIES: Sargon shall maintain a comprehensive written list (the
"List") of parties (the "Parties") developed by Sargon and
the Company, which may be potential Parties to any
Transaction involving the Company. Sargon shall be entitled
to the compensation as described herein resulting from any
Transaction, during the term of this agreement, with any
Party that is on the List. Sargon shall provide a copy of
the List to the Company from time to time.
TERM OF SARGON
ENGAGEMENT: Five years from the date of execution of this agreement.
RESPONSIBILITIES OF
THE COMPANY: The Company agrees to make its executive staff and employees
available, upon reasonable notice, on a regular basis to
conduct meetings with Sargon and outside parties that Xxxxxx
xxxxx are necessary to perform its duties under this
agreement. The Company personnel also will provide
historical financial and operating data as well as other
information, reports, etc. within a reasonable time upon
being requested by Sargon. The Company would be responsible
for all direct reasonable expenses for services related to
Sargon's activities on behalf of (and approved by) the
Company, provided by outside professionals including, but
not limited to, law firm(s), accounting firm(s) and other
consultants. The Company acknowledges that Sargon is not
required to contribute any capital or provide legal or
auditing services in connection with the activities defined
in this agreement.
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Sargon SinoFresh
SinoFresh HealthCare/Sargon Agreement
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The Company represents and warrants that all information
made available to Sargon by the Company or contained in the
Documents will, at the time such information is made
available to Sargon, 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 therein not misleading in light
of the circumstances under which such statements are made.
The Company further represents and warrants that any
projections provided to Sargon or contained in the Documents
will have been prepared in good faith and will be based upon
assumptions which, in light of the circumstances under which
they are made, are reasonable. The Company acknowledges and
agrees that in rendering its services hereunder, Sargon will
be using and relying, without any independent investigation
or verification thereof, on all information that is or will
be furnished to Sargon by or on behalf of the Company and on
publicly available information, and Sargon will not in any
respect be responsible for the accuracy or completeness of
any of the foregoing kinds of information (included in the
Documents or otherwise), and that Sargon will not undertake
to make an independent appraisal of any of the assets of the
Company or any of its subsidiaries or affiliates. The
Company understands that in rendering services hereunder
Sargon will also rely upon the advice of counsel to the
Company and other advisors to the Company as to legal, tax
and other matters relating to any transaction or proposed
transaction contemplated by this Agreement.
ROLE OF SARGON: Sargon is being retained to serve as financial advisor
solely to the Company, and it is agreed that the engagement
of Sargon is not, and shall not be deemed to be, on behalf
of, and is not intended to confer rights or benefits upon,
any shareholder or creditor of the Company or its
subsidiaries or upon any other person or entity. No one
other than the Company is authorized to rely upon this
engagement of Sargon or any statements, conduct or advice of
Sargon, and no one other than the Company is intended to be
a beneficiary of this engagement. All opinions, advice or
other assistance (whether written or oral) given by Sargon
in connection with this engagement are intended solely for
the benefit and use of the Company and will be treated by
the Company as confidential.
In connection with our engagement, Sargon will develop, in
consultation with the Company, a List of entities that
Sargon believes might be potential purchasers of the
Company, its securities, its subsidiaries, its affiliates
and/or any of their respective assets. Sargon will initiate
discussions with potential purchasers, participate in the
negotiation of possible transactions and advise the Company
as to negotiating strategy and other matters in connection
therewith. The Company will xxxxxxx Xxxxxx with all
available information and material regarding the Company as
Sargon may request in connection with the performance of its
obligations hereunder. Sargon will assist the Company in
preparing a document or documents (collectively,
"Documents") to describe the Company and its management and
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Sargon SinoFresh
SinoFresh HealthCare/Sargon Agreement
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financial status for use in discussions with prospective
purchasers.
NON-CIRCUMVENT: The Company further agrees not to attempt to circumvent this
agreement in an attempt to deprive Sargon or any other party
of any fees, commissions, of any other remuneration. To that
end this document shall be considered to apply to any and
all corporations of the Parties, divisions, subsidiaries,
employees, consultants, principals, agents, associates,
family members, assignees, or other associated persons.
Should the Company circumvent Sargon and complete a
Transaction with any party on the List then Sargon will be
compensated as defined herein for any Transaction occurring
within two (2) years from any such circumvention.
TRANSACTION FEES: In the event that Sargon identifies a Transaction with a
party on the List and introduces the Company to an entity
that subsequently is acquired by or merged into the Company
or if such entity acquires any ownership interest (including
placement of shareholders' stock) in, or merges the Company
into such entity in any form, then Sargon would be paid, at
the closing of each such acquisition or merger, a fee based
of the value of such transaction calculated with respect to
the amount of the aggregate purchase price including assumed
debt (or the value of the consideration given, whichever is
greater) for each such Transaction (the "Purchase Value") as
follows:
(a) 10% of the 1st one million dollars of Purchase Value
(b) 8% of the 2nd one million dollars of Purchase Value
(c) 6% of the 3rd one million dollars of Purchase Value
(d) 4% of the 4th one million dollars of Purchase Value
(e) 2% of the Purchase Value in excess of four million
dollars
TIMING OF
PAYMENT: As compensation for the services rendered by Sargon
hereunder, the Company shall pay or cause Sargon to be paid
as follows:
(a) If a merger or sale of the Company occurs, or the
parties reach a preliminary or definitive agreement of
such merger or sale, either:
(i) during the term of Sargon's engagement and (a) if
the party or parties to the recapitalization,
merger or sale were identified by Sargon as
reflected on the List or
(ii) at any time during a period of two (2) years
following the effective date of termination of
Sargon's engagement hereunder, and the merger or
sale involves a party introduced by Sargon, and
included on the List, then, upon consummation of
such transaction, the Company shall pay to Sargon
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Sargon SinoFresh
SinoFresh HealthCare/Sargon Agreement
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the applicable fees for the Transactions described
herein.
(b) Compensation which is payable to Sargon pursuant to (a)
above shall be paid by the Company to Sargon at the
closing of a merger or sale of the Company, provided
that compensation attributable to that part of
consideration which is contingent upon the occurrence
of some future event (e.g., the realization of earnings
projections) ("Contingent Consideration") shall be paid
by the Company to Sargon at the earlier of (i) the
receipt of such consideration or (ii) the time that the
amount of such consideration can be determined.
(c) In the event that Contingent Consideration described in
(b) above is payable by an individual, group or legal
entity other than the Company, or by a successor to the
Company, after the closing of a recapitalization,
merger or sale of the Company, the Company shall cause
such individual, group, entity or successor to pay
compensation payable to Sargon hereunder, or, at the
closing, to enter into an agreement to pay such
compensation to Sargon according to the terms hereof.
BEST EFFORTS
BASIS All activities conducted by Sargon on behalf of the Company
are on a best-efforts basis only. Sargon makes no
representation or warranty that the achievement of any of
the goals or objectives outlined in this agreement is
guarantied. The Company acknowledges the best efforts nature
of this agreement and that Sargon's efforts may not result
in any of these goals and objectives being realized or in
any capital being raised for the Company.
NO OTHER BROKERS: The Company and Sargon represents and warrants that there
are no brokers, representatives or other persons, which have
an interest in any compensation due to Sargon from any
transaction contemplated herein.
ANNOUNCEMENTS: The Company agrees that, following the closing or
consummation of a recapitalization, merger or sale of the
Company, Sargon has the right to place advertisements in
financial and other newspapers and journals at its own
expense, describing its services to the Company hereunder,
provided that Sargon will submit a copy of any such
advertisements to the Company for its prior approval, which
approval shall not be unreasonably withheld.
INDEMNIFICATION: In connection with engagements of the nature covered by this
Agreement, it is Sargon's practice to provide for
indemnification, contribution, and limitation of liability.
By signing this Agreement, the Company agrees to the
provisions attached to this Agreement (Attachment A), which
provisions are expressly incorporated by reference herein.
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Sargon SinoFresh
SinoFresh HealthCare/Sargon Agreement
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GOVERNING LAW: The terms and provisions of this Agreement are solely for
the benefit of the Company and Sargon and the other
Indemnified Persons and their respective successors,
assigns, heirs and personal representatives, and no other
person or entity shall acquire or have any right by virtue
of this Agreement. This Agreement represents the entire
understanding between the Company and Sargon with respect to
Sargon's engagement hereunder, and all prior discussions are
merged herein. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of
Florida without regard to such state's principles of
conflicts of laws, and may be amended, modified or
supplemented only by written instrument executed by each of
the parties hereto.
RESOLUTION OF
DISPUTES: Any dispute related to this Agreement, any transaction
contemplated hereby, or any other matter contemplated hereby
shall be settled by arbitration in the County of Palm Beach,
Florida, in accordance with the commercial arbitration rules
then in effect of the American Arbitration Association,
before a panel of three arbitrators. Any award entered by
the arbitrators shall be final, binding and non-appealable
and judgment may be entered thereon by any party in
accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be
specifically enforceable. The fees of the American
Arbitration Association and the arbitrators and any expenses
relating to the conduct of the arbitration shall be paid by
the Company.
RIGHT TO
INVESTIGATE: The Company authorizes Sargon to have investigative
background inquiries made relating to the legal, credit,
employment and other histories of the Company and its
principals. If such investigations provide information that
Sargon determines, in its sole discretion, will impede its
ability to effectively perform the activities defined in
this engagement agreement, then Sargon shall have the right
to terminate this agreement without advance notice during
the first thirty days of the engagement and fully refund any
amounts, other than out-of-pocket expenses, paid by the
Company to Sargon.
MODIFICATION: Any modification, alteration, or change to this agreement,
including but not limited to modification of the services to
be performed, extension of time of performance, or changes
to the amount or form of compensation, shall be made only by
written supplemental agreements executed by each of the
parties.
AUTHORITY: Each individual executing this agreement on behalf of any
party expressly represents and warrants that such individual
has the authority to so execute, and thereby to bind the
party on behalf of which such individual signs, to the terms
of this agreement. The Company represents and warrants to
Sargon 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 the transactions contemplated hereby
requires the approval or consent of any governmental or
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Sargon SinoFresh
SinoFresh HealthCare/Sargon Agreement
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regulatory agency or violates any law, regulation, contract
or order binding on the Company.
INVALID PROVISIONS: If any provision of this agreement is held to be illegal,
invalid or unenforceable under present or future laws, such
provisions shall be fully severable and this agreement shall
be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof or
thereto. The remaining provisions hereof shall remain in
force and effect and shall not be affected by the illegal,
invalid or unenforceable provision.
PRIOR AGREEMENTS: Both parties agree that this Agreement is the complete and
exclusive statement of the Agreement between the parties,
superseding all proposals or prior agreements, oral and/or
written, between the parties relating to the specific
subject matter of the Agreement and shall have no effect
upon that certain Investment Banking Advisory Services and
Placement Agent Agreement between the parties dated October
24, 2002.
In recognition of the preceding, this agreement is executed and accepted as of
the first date written herein by:
SARGON CAPITAL, INC SINOFRESH HEALTHCARE, INC.
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By: Xxxxxx X. Xxxxxxxx, its CEO By: Xxxxx Xxxx, Director
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Sargon SinoFresh
SinoFresh HealthCare/Sargon Agreement
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ATTACHMENT A
INDEMNIFICATION, CONTRIBUTION AND
LIMITATION OF LIABILITY PROVISIONS
(a) SinoFresh HealthCare, Inc. and its affiliates (collectively the
"Company") agrees to indemnify and hold harmless Sargon Capital, Inc.,
("Sargon") and its affiliates and their respective officers,
directors, employees and agents, and any persons controlling Sargon or
any of its affiliates within the meaning of Section 15 of the
Securities Act of 1933 or Section 20 of the Securities Exchange Act of
1934 (Sargon and each such other person or entity being referred to
herein as an "Indemnified Person"), from and against all claims,
liabilities, losses or damages (or actions in respect thereof) or
other expenses which (A) 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 or its affiliates or
(ii) actions taken by an Indemnified Person with the consent or in
conformity with the actions or omissions of the Company or its
affiliates or (B) are otherwise related to or arise out of Sargon's
activities on behalf of the Company. The Company will not be
responsible, however, for any losses, claims, damages, liabilities or
expenses pursuant to the preceding sentence which are determined to
have resulted from such Indemnified Person's negligence or willful
misconduct. In addition, the Company agrees to reimburse each
Indemnified Person (who is entitled to be indemnified pursuant to the
two previous sentences) for all out-of-pocket expenses (including fees
and expenses of counsel) as they are incurred by such Indemnified
Person in connection with defending any such action or claim in which
such Indemnified Person is a named party, or in connection with
enforcing the rights of such Indemnified Person under this Agreement
if a judgment is found on behalf of the Indemnified Person in
conjunction with enforcing such rights under this Agreement..
(b) If for any reason, except pursuant to the second sentence of Paragraph
(a) above, the foregoing indemnity is unavailable to an Indemnified
Person or insufficient to hold an Indemnified Person harmless, then
the Company shall contribute to the amount paid or payable by such
Indemnified Person as a result of such claim, liability, loss, damage
or expense in such proportion as is appropriate to reflect not only
the relative benefits received by the Company on the one hand and
Sargon on the other, but also the relative fault of the Company and
such Indemnified Person, as well as any relevant equitable
considerations. It is hereby further agreed that the relative benefits
to the Company on the one hand and Sargon on the other with respect to
any transaction or proposed transaction contemplated by this Agreement
shall be deemed to be in the same proportion as (i) the total value
the transaction (minus the fees in (ii)) bears to (ii) the fees paid
to Sargon with respect to such transaction.
(c) No Indemnified Person shall have any liability to the Company or any
other person in connection with the services rendered pursuant to this
Agreement, except for any liability for losses, claims, damages,
liabilities or expenses determined to have resulted from such
Indemnified Person's negligence or misconduct.
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SinoFresh HealthCare/Sargon Agreement
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(d) The Company agrees that it will not settle or compromise or consent to
the entry of any judgment in any pending claim, action, suit or
proceeding in respect of which indemnification may be sought from the
Company by any Indemnified Person unless such settlement, compromise
or consent includes an unconditional release of such Indemnified
Persons hereunder from all liability arising out of such claim,
action, suit or proceeding.
(e) The provisions of this Attachment A shall be in addition to any
liability the Company may have to any Indemnified Person at common law
or otherwise, and shall survive the expiration of the term of this
Agreement and the closing of any sale of the Company.
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Sargon SinoFresh
