MEMORANDUM OF UNDERSTANDING
This
Memorandum of Understanding
("Memorandum") is entered into on this , 25thday
May, 2007, by and among SinoFresh
HealthCare, Inc. (SinoFresh)
and a group of
investors to be named (The
Financial
Group-or
"Nominee" or "Investors") hereto, collectively,
(the "Parties") and sets
forth those points upon which the Parties have agreed in principle.
This Memorandum
confirms the Parties' joint intentions to finalize details and execute final
documentation related to an investment in SinoFresh by the The Financial Group pursuant
to the
following terms:
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1.
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Investment
- An initial
investment by the The Financial Group, of Five
Million
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($5,000,000-00)
USD in consideration of
Twenty Five Million (25,000,000)
Common shares of stock in SinoFresh HealthCare, Inc., said investment to be
Common shares of stock in SinoFresh HealthCare, Inc., said investment to be
allocated
as
follows:
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2.
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To
Immediate
Advance - A total
of
One Hundred Fifty Thousand
($150,000.00)
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USD
shall be advanced upon execution of
this agreement to SinoFresh. In
consideration
for the $150,000.00
advance, Seven Hundred Fifty
Thousand
(750,000)
Common shares shall be granted
to The Financial Group. Registration
rights, (SB :2),
shall be filed in conjunction with this
conveyance.
3.
Upon
Closing:
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a.
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Of
the Initial Five Million
($5,000,000.00) USD commitment, after
setting
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aside
the One Hundred Fifty
Thousand ($150,000.00) USD described
in
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paragraph
(2) above, the remaining
Four Million Eight Hundred
Fifty
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Thousand
($4,850,000.00) USD will
be allocated as
follows:
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b.
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Two
Million Eight Hundred Fifty
Thousand ($2,850,000.00) USD shall
be
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invested
in SinoFresh, which
amount, in addition to the One
Hundred
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Fifty
Thousand ($150,000.00) USD
described in paragraph (2) above
shall
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constitute
a total investment of
Three Million ($3,000,000.00) USD
in
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SinoFresh.
SinoFresh guarantees,
upon closing, that the debenture
holders
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shall
be paid in full. It is
further agreed, if the debenture holders wish
to
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accept
the principal amount of
their note in full, amounting
to
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approximately
One Million Five Hundred
Thousand ($1,500,000.00) USD, and re-invest their interest and penalties,
approximately Five Hundred
Thousand ($500,000.00) USD, they shall be given that
right
SinoFresh
further agrees as to the
approximate following Use of Proceeds:
1. Completion
of the Phase n
components of Drug Development for Antibiotic Resistant Staphylococcus Aureus
(MRSA). An amount budgeted
approximately at One Million Two Hundred Thousand ($1,200,000.00)
USD.
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2.
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Sales
and Marketing budgeted at
One Million Two
Hundred
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Thousand
($1,200,000.00)
USD
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3.
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Unsecured Debt budgeted at Seven Hundred Thousand
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($700,000.00)
USD.
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4.
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The
remaining Two Hundred Fifty
($250,000.00) USD budgeted
to
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Product
Manufacturing and
Operational needs supplemented
by
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revenue
generated from the
SinoFresh national distribution
system
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(25,000
points of retail
purchase).
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5.
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Three
(3) Board seats on a five
(5) member Board of Directors
for
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SinoFresh
Healthcare,
Inc.
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(NOTE:
If the Debenture Holders elect
not to participate with an equity arrangement,
all budgets will be
adjusted accordingly.)
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c.
In consideration for an
additional Two Million ($2,000,000.00) USD investment,
The Financial Group
shall be granted Fifty Percent Interest (50%), in
profits generated from
ALL foreign sales. This shall include but not be limited
to: Technology
Transfer Fees, Royalties, Licensing Fees or any other
funds received in
connection with a SinoFresh transaction. These fees
are considered to be a
"Net" amount as opposed to a "Gross" amount) allowing
for certain
agreed upon expenses to be deducted such as Regulatory
Administration, Patent
Maintenance, Travel associated with Foreign Partnering,
Technology
Transfer, and other related
expenses.
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In
further consideration of the above
representations, The Financial Group shall receive the following
considerations:
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1.
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If
the need arises, and is agreed
upon by both parties, to form a new
entity
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for
foreign transactions, in
addition to conditions set forth above,
The
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Financial;
Group shall receive
three (3) board seats on a five (5)
member
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board
for any such
entity.
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2.
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It
is agreed upon, SinoFresh shall
provide a list of all unsecured
debtors
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listing
the amount of discount
agreed upon by both the Creditor
and
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3. The
Financial Group
shall have full access to the Patents, Technology, Scientific
Pursuits, and any other
related resources associated with SinoFresh
products. SinoFresh
further agrees not to encumber any such resources'" without the
full
approval of The Financial Group. These rights shall apply
to all SinoFresh
staff, Board Members, affiliates and pertain to issues, past,
present, and the
future.
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4.
Closing.
Unless mutually extended
by
agreement of all the patties, closing shall occur within, but no later
than, 45 days from
the date set forth below, in the offices of Xxxx Law * Group, Seattle Washington
or at a
mutually acceptable designated address in San Francisco, j. California Bay
area. ...
Closing
period is get forth to allow due
diligence for the parties to review documents by Dubai/Middle East
counsel. .
5.
Representations and Warranties of the
Parties
To
induce Investors to enter into and
perform this Agreement, the parties mutually represent and warrant
as
follows:
a.
Organization,
Good Standing, etc. - Sinofresh
is a corporation
duly
organized,
validly existing and in good
standing under the laws of the State of
Florida.
SinoFresh has all requisite
corporate power and authority to own, operate
and
lease its assets and to carry its
business as now being conducted. Sinofresh is
duly
-qualified, to do business, and is
in good standing in the jurisdictions required.
b.
Corporate
Authority
Sinofresh
and Investors have full
corporate power and authority to execute and deliver this Agreement
and the Ancillary
Agreements to which it is a party and to preform its obligations hereunder
and
thereunder. The execution and delivery by the parties of this Agreement and
the
Ancillary Agreements, the performance by the parties of its obligations
hereunder and
thereunder, and the consummation by the parties of the transactions
contemplated
hereby and thereby have been duly authorized, by all
necessary corporate
action, and constitute valid and binding obligations of parties, enforceable
against each other in accordance with their terms.
c.
No
Conflict
The
execution, delivery arid performance
of this Agreement or the Ancillary Agreements by Buyer
and the
consumination of the transactions contemplated hereby or thereby will
not (a) violate,
conflict with, or result in any breach of, any provision of the parties charter
documents; or (b) violate, conflict with, result in any breach of, or constitute
a default (or
an event that, with notice or lapse
of time or both, would, constitute
a default) under
any Contract or Judgment to which the parties are a party
or by which they are
bound; violate any applicable law, statute, rule, ordinance or
regulation of any
Governmental Body; or (d) violate or result in the suspension, revocation,
modification, invalidity or limitation of any Permit relating to the Parties
business; or (e)
give any party with rights under any Contract, Judgment or other restriction
to which
the parties are a party or by which it is bound or which relates to its
business, the right to terminate, modify or accelerate any rights, obligations
or performance under
such Contract, Judgment or restriction.
d. Consents
and Approvals
No
consent, approval or authorization
of, or declaration, filing or registration with,
MEMORANDUM
OF UNDERSTANDING SINOFRESH
HEALTHCARE, INC-AUGUST 6,
2004-3
any
Governmental Body is required for
the execution, delivery and performance by the patties of this
Agreement and the
Ancillary Agreements to which they are a party and for the consummation
by the parties
of the transactions contemplated hereby and thereby, and the parties have
obtained the approval of the holders of the requisite number of
shares of the
parties capital stock required to approve this Agreement and the Ancillary
Agreements and the transactions contemplated herein and therein, including,
without limitation, issuance of the shares representing the investment Consideration,
and no other
consent, approval or authorization of any third party is required
for die
execution, delivery and performance by the Parties of this Agreement and
the Ancillary
Agreements.
e.
Absence of Certain
Changes.
Since
December 31, 2006, SinoFresh has
conducted its business in the ordinary course consistent with
past practice and
there has not occurred (a) any change, event or condition (whether
or not covered by
insurance) that has resulted in, or could reasonably be expected to result
in, a
Material Adverse Effect on Investor; (b) any acquisition, sale or transfer
of
any material asset of SinoFresh odier than in the ordinary course the
business and
consistent with past practice; (c) any change in accounting methods
or practices (including any change in depreciation or amortization
policies or rates) by SinoFresh or any revaluation by SinoFresh of
any of its assets;
(d):any
declaration, setting aside, or
payment of a dividend or other distribution with respect
to the shares
of SinoFresh or any direct or indirect redemption, purchase
or other
acquisition by SiaoFresh of any of its shares of capital stock} (e) any material
Contract entered
into by SinoFresh, other than in the ordinary course of business
and as provided to
Invester or its counsel, or any material amendment or termination
of, or default
under, any material Contract to which SinoFresh is a party
or by which it is
bound; (f) any amendment or change to the Articles of Incorporation
or Bylaws of
SinoFresh; (g) any increase in or modification of the compensation
or benefits payable
or to become payable by SinoFresh to any of its directors, officers
or employees;
or (h) any negotiation, or agreement by SinoFresh to do any
of the things
described in the preceding clauses (a) through (h) (other than negotiations
-with The
Investors and its representatives regarding die transactions contemplated
by
this Agreement).
f.
Taxes
All
Tax' obligation of SinoFresh have
been timely paid, and, except as reflected in the Financial Statements,
SinoFresh has
no liability for any Tax obligation.
SinoFresh
has performed the obligations
required to be performed by it under all material Contracts, and no breach
or
default by SinoFresh of any provision thereof, nor any condition or event
that,
with notice or lapse of time or both, would constitute such a breach
or default, has occurred.
No breach or default by any other party to any such material Contract of any provision
thereof, nor
any condition or event that, with notice or lapse of time or both, would
constitute such a breach or default, has occurred. SinoFresh has not received
any notice of any modification, termination or cancellation of any such
material
MEMORANDUM
OF UNDERSTANDING SINOFRESH
HEALTHCARE, INC-AUGUST 6,
2004-3
Contract
and knows of NO intent to
effect the same or any reasonable basis therefor. No consent, approval or
authorization of
any third party is required as a result of the transactions contemplated
under this
Agreement, and all such material Contracts will continue to be binding on
the
other parties thereto following the Closing. SinoFresh has no reason to believe
that any obligations that remain to be performed under any such material
Contract cannot be fulfilled. No such material Contract will result in a
material loss to or have a material adverse effect on the assets or the conduct,
business, operations, properties, condition (financial
or otherwise) or
prospects of SinoFresh, and there is no dispute with any party under any
such
material Contract.
h.
Claims and Legal
Proceedings
There
are no Claims
pending or threatened against the Parties, before or by any Governmental
Body or
nongovernmental department, commission, board, bureau, agency or instrumentality
or any other person. To The Parties knowledge, there is no valid basis for
any
Claim, adverse to the parties by or before any Governmental Body or
nongovernmental department, commission, board, bureau, agency or instrumentality,
or any
other person. There are no outstanding or unsatisfied judgements,
orders,
decrees or stipulations to which the Parties is a party, that would,
alone or in the
aggrecate, or could reasonably be expected to have, a Material Adverse
Effect on the Parties.
I.
Labor
Matters
There
are no disputes, employee
grievances or disciplinary actions pending or threatened between Sinofresh
and
any employees of Sinofresh. SinoFresh has complied
in all respects
with all provisions of all
laws relating to the employment of labor and has no liability for any arrearages
of wages or Taxes or
penalties for failure to comply with any such laws. SinoFresh
has no knowledge of any organizational efforts presently being made
or threatened by or on behalf of any labor union with respect to any
employees of
SinoFresh.
j.
Intellectual Property
Rights
Sinofresh
owns all right, title and
interest in and has legally enforceable rights to exclusive use and
exploit without limitation all Intellectual Property used or useful
in the business
of SinoFresh free and clear of all Encumbrances. No Person
other than
SinoFresh has any right, claim or respect to any such
IP
Sinofresh
is not in breach of any
license, sublicense or other agreement relating to its IP. Neither the execution,
delivery or
performance of thisAgreement or
any of Ancillary Agreements, nor the
consummation of the transactions contemplated
hereby will
contravene, conflict with or result in an infringement on SinoFresh's right
to
own or use any IP, including any licenses, sublicenses
and other
agreements to which SinoFresh is a party and pursuant to which
they are
authorized to use in its business.
SINOFRESH
HEALTHCARE, INC-
AUGUST
6,
2004-3
k.
No Adverse
Events
The
Parties
have no
knowledge of any facts or
circumstances that hinder or adversely affect, or
in the future are
reasonably likely to hinder or adversely affect, its assets or the conduct,
business,
operations, properties, condition (financial or otherwise) or prospects of
the
Parties. Furthermore, there has not been any material adverse change in,
or any event,
condition or contingency or any damage, destruction or loss (whether or not
covered by insurance) that may result in any material adverse change in, the assets
or the conduct,
business, operations, properties, condition (financial or otherwise)
or prospects of
Buyer.
1.
Compliance With
Law
The
Parties are and have been in
compliance with all laws, statutes, rules, ordinances and regulations promulgated
by any
Governmental Body and all Judgments applicable to the ownership
or operation
of its assets or the conduct of its business. The parties have not received
any
notice of any alleged violation (whether past or present and whether remedied
or
not), nor are they aware of any basis for any claim of any such violation
of any such law,
statute, rule, ordinance, regulation or Judgment. There is no law, statute,
rule, ordinance or regulation promulgated by anyGovermental Body or
any Judgment that materially
and adversely
affects or is reasonably expected to have a Material Adverse
Effect on the
Parties.
m.
Permits and
Qualifications
All
permits that are required for the
ownership or operation of Parties assets or the conduct of its business
have been
obtained by the parties, are in full force and effect.
The
Parties are and.have been in
compliance with all such Permits, and the Parties
have
not received any notice of any
alleged violation (whether past or present and
whether
remedied or not) of, nor any
threat of the suspension, revocation, modification, invalidity
or limitation
of, any such Permit, nor are the Parties aware of any basis for any claim
of any such
violation or any such threat.
n.
Insurance
The
Parties maintain and have maintained
adequate insurance protection against all liabilities, Claims
and risks against
which they believes customary for corporations engaged in the same
or a similar
business similarly situated to insure.
o.
Brokerage
The
Parties have not retained any broker
or finder in connection with the transactions contemplated by this Agreement.
Any brokerage or finder's fee due to any broker or finder in violation of
the
foregoing representation shall be paid by Sinofresh
p.
Customers and Suppliers
No
customers, suppliers, advertisers,
reseller or distributor of SinoFresh is involved in, threatened with or affected
by, any Claim, Judgment or circumstances that may affect the Assets or the conduct,
business,
operations, properties, condition (financial or
SINOFRESH
HEALTHCARE, INC-
AUGUST
6,
2004-3
otherwise)
or prospects of SinoFresh,
(b) there is no indication that any customer, supplier, advertiser/reseller
or
distributor intends to terminate or modify its relationship with SinoFresh,
and (c) the
consummation of the transactions contemplated by this
Agreement and the
Ancillary Agreements will not adversely affect the post-Closing relationship
of
SinoFresh with any customer or supplier of Buyer.
q.
Full
Disclosure
The
Parties will disclose to each other
in writing all material facts and information relating to the transaction,
assets and
the conduct of their business. None of the representations or
warranties made by
the Parties, nor any statement made in any schedule, exhibit or
certificate
furnished by the Parties as a condition to this Agreement contains, or will
contain at the Closing, any untrue statement of a material fact, or omits
or will omit at
the Closing to state any material fact necessary in order
to make the
statements contained herein or therein, in light of the circumstances under
which made, not
misleading.
6. Documentation
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The parties agree that full
documentation, in compliance with SEC
regulations,
shall follow execution of
this MOU. The parties
agree to exercise their
best
efforts
to execute and deliver said
documents in a timely manner consistent with the
projected
closing
date.
7. Fees
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Each
party shall pay its own fees and
expenses incident to closing date set forth
herein.
8. Confidentiality
- The Parties to this Memorandum agree to maintain the
confidentiality
of the existence and terms
of
this Memorandum, including
(without
limitation)
the nature and payment of
consideration referred to in this Memorandum and to
make
no voluntary statement concerning
this Memorandum, except as may be necessary for
the
purposes of audit, tax returns, or
other disclosures
required by
law. The-Parties agree
that
die provisions contained in this
paragraph are legally binding and shall survive the
termination,
of this Memorandum or other
indication by the
Parties
hereto of
their
intention
not
to proceed with the
settlement
9. No
Shop
Agreement - The parties mutually
agree
to suspend discussions
regarding
investments
in SinoFresh with parties
other than each other up to and including me
"Closing
Date", plus any extensions
thereof, as set forth herein.
10.
Expression of Understanding
- This
Memorandum
constitutes an expression
of
understanding
relating to the parties
intent and does not contain all matters upon which
agreement
must be reached A complete
transaction will result only from the execution of
definitive
agreements, subject to the
terms and conditions expressed
therein. This
Memorandum
is not intended to be
legally binding
upon the Parties hereto, except
to the
MEMORANDUM
OF UNDERSTANDING SINOFRESH HEALTHCARE,
INC AUGUST 6,2004 -
6
extent
the provisions of the
confidentiality acknowledgements in the preceding paragraph hereof are meant
to
be binding obligations,
11.
Execution
in
Counterpart - This
Memorandum may be signed in counterparts and be transmitted by facsimile,
but
may not be assigned -without the -written consent of all the parties
hereto.
[Signature
Page Follows]
| SinoPrcsh Healthcare, | |||
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Agreed
and accepted this 22nd day of May, 2007
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By:
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/s/ Xxxxxxx Xxxx | |
| Xxxxxxx xxxx | |||
| The Financial Group, "Nominees" or "Investors" | |||
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By:
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/s/ Razek Xxxxx | |
| Xxxxx Xxxxx | |||
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By:
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/s/ Xxxxx X. Xxxxxx | |
| Xxxxx X. Xxxxxx | |||
