EXHIBIT 10.3
SERVICES AGREEMENT
This Services Agreement (this "Agreement") is entered into as of May 24, 2004 by
and between Cinapsys, Inc., a Delaware Corporation located at 000 X. Xxxxx Xxx.
Xxxxx X, Xxxxxx Xxxxx, Xxxxxxxxxx ("Cinapsys"), and Kiwa Bio-Tech Products Group
Corporation, 00000 Xxxxxxxxx Xx. Ste: 000, Xxxx xx Xxxxxxxx, Xxxxxxxxxx
("Company"), based on the following facts:
RECITALS
A. Cinapsys is an independent Investor Relations firm that provides
IR/PR, Internet development and communications services to publicly held
companies.
B. Company wishes Cinapsys to perform, and Cinapsys wishes to perform,
certain IR/PR services, Internet development and communication services for
Company, as more particularly described below and in accordance with the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree to the following terms and conditions, which set
forth the rights, duties, and obligations of the parties:
1. PERFORMANCE OF SERVICES
1.1. PERFORMANCE OF SERVICES. Unless this Agreement is earlier
terminated as set forth in Section 7 below, for a period of twelve (12) months
following the date of this Agreement, Cinapsys agrees to perform the following
(the "Services") attached as appendix A.
1.2. REVIEW OF COMMUNICATIONS. Cinapsys shall provide Company with
an advance copy of each communication intended to be disseminated to the public
for review of facts prior to publication of such communications.
1.3. ADDITIONAL SERVICES. If Company requires additional Services
from Cinapsys, the parties agree to negotiate in good faith the terms and
conditions of such additional Services, including, without limitation, if
applicable, any deliverables, specifications, payment and delivery schedules
relating thereto.
1.4. COOPERATION BY COMPANY. Company shall provide Cinapsys such
support, cooperation, information and materials as are reasonably necessary for
Cinapsys to perform the Services. Notwithstanding anything in this Agreement to
the contrary, Cinapsys shall have no liability resulting from or relating to any
delay or failure by Company in providing to Cinapsys
such support, cooperation, information and/or materials. Company warrants that
all information and materials that either provides to Cinapsys will be true and
accurate in all material respects.
2. COMPENSATION
2.1. VALUE OF SERVICES. Company shall cause to be paid to Cinapsys
$4,000.00 (four thousand dollars) per month USD and 75,000K shares of restricted
(Rule 144) shares, for twelve (12) months beginning on the date of this
agreement, for the Services described and detailed in Appendix A. This payment
is due upon the signing of this Agreement. Company shall make the monthly cash
retainer payment in United States dollars. Partial months will be pro-rated at
the rate of $150.00 USD per day.
3. OWNERSHIP
Company shall own all right, title and interest (including, without
limitation, all intellectual property rights) in and to any work product or
deliverables provided to Company as part of the Services. Except as otherwise
provided in Section 7.1.2, Cinapsys hereby grants to Company a non-exclusive
license to copy and distribute any or all of the communications and collateral
regarding Company.
4. REPRESENTATIONS AND WARRANTIES
4.1. LIMITED WARRANTY. Cinapsys represents and warrants to Company
that (a) Cinapsys has full power to enter into this Agreement and to perform its
obligations hereunder, and (b) Cinapsys has not made and will not make any
commitments or agreements inconsistent with this Agreement.
4.2. EXCLUSIVE WARRANTY. THE EXPRESS WARRANTIES SET FORTH IN
SECTION 4.1 CONSTITUTE THE ONLY WARRANTIES MADE BY CINAPSYS WITH RESPECT TO THE
SERVICES (INCLUDING, WITHOUT LIMITATION, ANY DELIVERABLES). CINAPSYS MAKES NO
OTHER REPRESENTATION OR WARRANTY OR CONDITION OF ANY KIND WHETHER EXPRESS OR
IMPLIED (EITHER IN FACT OR BY OPERATION OF LAW) WITH RESPECT TO THE SERVICES
(INCLUDING, WITHOUT LIMITATION, ANY DELIVERABLES). CINAPSYS EXPRESSLY DISCLAIMS
ALL WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. CINAPSYS DOES NOT WARRANT, GUARANTEE OR MAKE ANY REPRESENTATIONS
REGARDING THE SERVICES (INCLUDING, WITHOUT LIMITATION, ANY DELIVERABLES) IN
TERMS OF CORRECTNESS, ACCURACY, RELIABILITY, CURRENTNESS OR OTHERWISE, OR THAT
THE SERVICES (INCLUDING, WITHOUT LIMITATION, ANY DELIVERABLES) WILL BE
ERROR-FREE (EXCEPT FOR ANY ERROR THAT RESULTS FROM CINAPSYS' BAD FAITH, WILLFUL
NEGLIGENCE OR UNTRUE STATEMENT NOT MADE IN RELIANCE UPON AND IN CONFORMITY WITH
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INFORMATION PROVIDED TO CINAPSYS BY COMPANY), AND CINAPSYS HEREBY DISCLAIMS ANY
AND ALL LIABILITY ON ACCOUNT THEREOF. THERE IS ALSO NO IMPLIED WARRANTY OF
NON-INFRINGEMENT; THE SOLE REMEDY FOR INFRINGEMENT IS PROVIDED IN SECTION 5.
This Section 4.3 shall be enforceable to the maximum extent allowed by
applicable law.
5. INDEMNIFICATION
5.1. INDEMNIFICATION BY CINAPSYS. Cinapsys shall indemnify, hold
harmless and defend Company (and its and their directors, officers, employees,
and agents) against any and all damages, costs, expenses, settlements and other
liabilities (including reasonable attorneys' fees and costs) arising out of or
relating to any claim, suit, action or proceeding to the extent based on any
claim that the Services in the form provided to Company by Cinapsys, infringe,
misappropriate or violate any U.S. copyright or U.S. trade secret, or that
result from Cinapsys' bad faith, willful negligence or contain any untrue
statement that is not based upon and in conformity with information provided by
Company. This Section 5.1 states the entire liability of Cinapsys and the
exclusive remedy of Company with respect to infringement of any intellectual
property rights or Cinapsys' bad faith, willful negligence or untrue statements,
whether under theory of warranty, indemnity or otherwise.
5.2. EXCLUSIONS. Cinapsys shall have no liability for, and Company
shall indemnify and hold Cinapsys harmless from and against, any claim arising
out or relating to: (a) use, operation or combination of any deliverables with
any other documentation not provided or authorized by Cinapsys, if liability
would have been avoided but for such use or combination; (b) Company's or
Company's agents' activities after Cinapsys has notified Company that Cinapsys
believes such activities may, if Company engages in such activities, result in
any claim, suit, action or proceeding for which Cinapsys would be liable under
Section 5.1, (c) any modifications or marking of any deliverables not
specifically made or authorized in writing by Cinapsys; (d) third party product,
software or data; (e) any negligent or willful acts or omissions of Company; or
(f) any use of the Services (including, without limitation, any deliverables)
outside the geographical boundaries of the United States or Canada.
5.3. INDEMNIFICATION BY COMPANY. Company shall indemnify, hold
harmless and defend Cinapsys (and its and their directors, officers, employees,
and agents) against any and all damages, costs, expenses, settlements and other
liabilities (including reasonable attorneys' fees and costs) arising out of or
relating to any claim, suit, action or proceeding (including, without
limitation, reasonable attorneys' fees) arising from or relating to any use of
the Services, including, without limitation, any reproduction, modification,
distribution or other use of any deliverables, by Company or any party under
license from Company (including, without limitation, any claim of infringement
of third party rights or any breach of warranty), or that results from Company's
bad faith, willful negligence or delivery of untrue information or statements to
Cinapsys.
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5.4. NOTICE; COOPERATION; CONTROL. A party ("Indemnifying Party")
shall not be obligated to indemnify, hold harmless and defend the other party
("Indemnified Party") hereunder unless (and only to the extent) the Indemnified
Party (a) promptly notifies the Indemnifying Party of any such claim, suit,
action or proceeding for which indemnification is sought (provided that any
failure to provide such notice shall not diminish Indemnifying Part's
obligations under this Section 5 unless, and only to the extent that, the
Indemnifying Party is materially prejudiced as a result of any such failure to
provide such prompt notice); (b) provides reasonable cooperation to the
Indemnifying Party at the Indemnifying Party's expense; and (c) allows the
Indemnifying Party to control the defense and any settlement of such claim,
suit, action or proceeding, provided that (i) the Indemnified Party may, at its
option expense, participate and appear with the Indemnifying Party in such
claim, suit, action or proceeding and (ii) neither party may settle any such
claim, suit, action or proceeding without the other party's prior written
approval, which will not be unreasonably withheld or delayed.
6. LIMITATION OF LIABILITY
6.1. TO THE EXTENT ALLOWED BY APPLICABLE LAW, IN NO EVENT SHALL ANY
PARTY BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR
PUNITIVE DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS,
LOSS OF BUSINESS, LOSS OF USE OF DATA OR INTERRUPTION OF BUSINESS) ARISING FROM
OR RELATING TO THIS AGREEMENT OR THE SERVICES (INCLUDING, WITHOUT LIMITATION,
ANY DELIVERABLES), EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES, HOWEVER CAUSED, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY OR LIMITATION OF LIABILITY.
6.2. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY OR
THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITATION OF LIABILITY OR LIMITED
REMEDY, CINAPSYS' ENTIRE AGGREGATE LIABILITY FOR ANY AND ALL CLAIMS ARISING
UNDER OR RELATING TO SECTION 4.1 (LIMITED WARRANTY) AND/OR SECTION 5.1
(INDEMNIFICATION BY CINAPSYS), UNDER ANY LEGAL THEORY (WHETHER IN CONTRACT,
TORT, INDEMNITY OR OTHERWISE), SHALL NOT EXCEED THE AMOUNT PAID BY COMPANY TO
CINAPSYS UNDER THIS AGREEMENT.
7. TERM AND TERMINATION
7.1. TERM
7.1.1 Except as hereinafter provided, this Agreement shall
commence on the date first set forth above and, unless sooner terminated as
provided in this
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Agreement, shall continue thereafter in full force and effect for twelve (12)
months.
7.1.2 Notwithstanding Section 7.1.1, Cinapsys may terminate
this Agreement immediately if (a) Company fails to make when due any payments to
Cinapsys under this Agreement; (b) if Cinapsys determines, in its sole
discretion, that Company has failed to provide complete and accurate information
necessary for Cinapsys to perform the Services, or that Company is acting or has
acted in a manner that damages or could potentially damage Cinapsys' reputation
in the business community, or (c) if Company (i) becomes insolvent; (ii) fails
to pay its debts or perform its obligations in the ordinary course of business
as they mature; (iii) is declared insolvent or admits in writing its insolvency
or inability to pay its debts or perform its obligations as they mature; (iv)
becomes the subject of any voluntary or involuntary proceeding in bankruptcy,
liquidation, dissolution, receivership, attachment or composition or general
assignment for the benefit of creditors, provided that, in the case of an
involuntary proceeding, the proceeding is not dismissed with prejudice within
sixty (60) days after the institution thereof; or (v) becomes the subject of a
Federal, SEC or NASD investigation into its business practices, accounting or
officers and directors. If Cinapsys terminates this Agreement in accordance with
this Section 7.1.2, then the license granted to Company pursuant to SECTION 3
shall immediately terminate.
7.1.3 Notwithstanding Section 7.1.1, Company may terminate
this Agreement, upon an aggregate thirty (30) business days' prior written
notice and opportunity for Cinapsys to cure, if Cinapsys breaches any material
term of this Agreement, including, for example only, Cinapsys' failure to
deliver any of the reports referred to in Section 1.1 on a timely basis.
7.2. EFFECT OF TERMINATION.
7.2.1 TERMINATION OF RIGHTS AND OBLIGATIONS; RETURN OF
PROPERTY. Upon any termination of this Agreement, all obligations and rights
hereunder shall terminate, except to the extent otherwise provided in this
Agreement. Within ten (10) business days after any such termination of this
Agreement, each party shall return to the other party, or destroy all copies or
portions of, all of the other party's property. At either party's request, the
other party shall furnish to the requesting party an affidavit signed by an
officer of the other party certifying that, to the best of its knowledge, such
delivery or destruction has been fully effected.
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7.2.2 NO WAIVER OR RELEASE. Termination of this Agreement
by either party shall not act as a waiver of any breach of this Agreement and
shall not act as a release of either party from any liability for breach of such
party's obligations under this Agreement. Neither party will be liable to the
other for damages of any kind which arise solely as a result of terminating this
Agreement in accordance with its terms; and termination of this Agreement by a
party will be without prejudice to any other right or remedy of such party under
this Agreement or applicable law.
7.2.3 SURVIVAL. The provisions of Sections 1.4, (to the
extent any expenses not previously reimbursed), 3 (except as provided in Section
7.1.2), 4.1, 5, 6, 7, 9 and 10 shall survive any termination of this Agreement.
8. ASSIGNMENT
Neither party shall assign, sell, transfer, delegate or otherwise
dispose of, whether voluntarily or involuntarily, by operation of law or
otherwise, this Agreement or any rights or obligations under this Agreement
without the prior written consent of the other party (or any successor thereto).
Any purported assignment, transfer, or delegation by any party other than in
accordance with the foregoing shall be null and void. Subject to the foregoing,
this Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns.
9. GOVERNING LAW
This agreement is to be construed in accordance with and governed by
the internal laws of the State of California (as permitted by Section 1646.5 of
the California Civil Code or any similar successor provision) without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties.
10. ENTIRE AGREEMENT
This Agreement constitutes the complete and exclusive statement of
agreement between the parties with respect to the subject matter herein and
replaces and supersedes all prior written and oral agreements or statements by
and between the parties. No representation, statement, condition or warranty not
contained in such agreements will be binding on the parties or have any force or
effect whatsoever.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by duly authorized representatives of the parties as of the date
hereof.
COMPANY CINAPSYS
Kiwa Bio-Tech Products Group Cinapsys, Inc.
00000 Xxxxxxxxx Xxxxxx, Xxxxx 000 305 No. Coast Hwy. Suite Q
City of Industry, CA 91748 Xxxxxx Xxxxx, XX 00000
By: /S/ XXXXX XXXX By: /S/ XXXX X. XXXXXX
---------------------------- ----------------------------
Signature Signature
By: Xxxxx Xxxx Name: Xxxx X. Xxxxxx
Title: Executive Vice President Title: Chief Operations Officer
Date: May 24, 2004 Date: May 24, 2004
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APPENDIX A
o XXXXXXXXXXXXXXX.XXX AUDIO INTERVIEW - WSA INTERVIEWS
o Question & Answer format, 6-8 questions pre-approved by
management and your compliance department;
o Targeted to institutional money managers as well as retail
investors in the U.S. and Europe, reaching Xxxxxx'x desktops,
Bloomberg terminals and Dow Xxxxx Newswire. PLUS, National US
press distribution;
o Distribution for the Interview through the Best Calls(TM)
platform. Event listings will be distributed on the Web sites
of OpenCompany(TM) Disclosure Network members, including the
National Investor Relations Institute (xxxx://xxx.xxxx.xxx),
the National Association of Investors Corporation
(xxxx://xxx.xxxxxx-xxxxxxxxx.xxx), Investor Relations Magazine
(http:/xxx.xxxxxxxxxx.xxx) and Institutional Investor Magazine
(xxxx://xxx.xxxxxxxxxx.xxx). The OpenCompany(TM) network
includes more than 500,000 individual and institutional
investors, securities lawyers, CEOs, corporate secretaries and
other members of the shareholder communications community;
o Distribution (for qualified companies) throughout Europe, via
our partners;
o Transcription of your interview in .pdf form;
o TAP (Technical Analysis Program) we will provide a TAP for
your Company;
o Quantitative analysis of audience;
o Corporate profile on WSA;
o Prominently featured in our WSA Newsletter, which reaches over
5,000 investors.
o WEBSITE AND INVESTOR DATABASE DEVELOPMENT
o Ground up conception to development. We handle the creative,
backend programming and day-to-day management of your website;
o Website hosting and unlimited email accounts;
o Installation and maintenance of an SEC compliant IR datafeed
(professional IR section for your investors!);
o Investor database. We will build an interactive investor
database on your website that will collect names and
information and email your releases and SEC filings DIRECTLY
to your investors.
o INVESTOR SERVICES AND FULFILLMENT
o We will communicate with investors on behalf of the Company;
o Investor call in number. We will provide a toll-free number
for investors to call for information on your Company;
o We will provide you with an investor email address at Cinapsys
(i.e. xx_xxx@xxxxxxxx.xxx) and a toll-free number for your
investors to reach us;
o We will handle the Mailing of materials on behalf of the
Company.
o PUBLIC WIRE RELEASES
o We will review your press releases and make editorial
suggestions, copy editing and/or;
o We will write your releases from scratch or simply edit your
copy.
o DEVELOPMENT OF INVESTOR COLLATERAL
o Our editorial staff will develop a broker `tear sheet' and 6-7
page corporate profile on your Company, suitable for inclusion
with your investor kit;
o We will draft shareholder letters, speeches and investor
presentations when requested;
o We will work with you to develop an investor kit if none is
currently available.**
o We will coordinate third-party research for the Company***
o PRESS AND MEDIA MANAGEMENT CAMPAIGN
o We will work with you to develop a full release calendar,
timing releases and important press announcements for utmost
effectiveness;
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o Periodicals and trade publications contacted. We will
establish relationships with the editors of periodicals
important to your industry;
o News clipping service. We will perform competitive analysis
and track your news and the news of your competitors to keep
you on top of what is happening in your industry.
o PRODUCTION AND HOSTING OF QUARTERLY CONFERENCE CALL
o We will coordinate your quarterly conference call;
o We will host your quarterly conference call and archive it on
WSA;
o Distribution of the conference call through the Best Calls(TM)
platform. Event listings will be distributed on the Web sites
of OpenCompany(TM) Disclosure Network members, including the
National Investor Relations Institute (xxxx://xxx.xxxx.xxx),
the National Association of Investors Corporation
(xxxx://xxx.xxxxxx-xxxxxxxxx.xxx), Investor Relations Magazine
(http:/xxx.xxxxxxxxxx.xxx) and Institutional Investor Magazine
(xxxx://xxx.xxxxxxxxxx.xxx). The OpenCompany(TM) network
includes more than 500,000 individual and institutional
investors, securities lawyers, CEOs, corporate secretaries and
other members of the shareholder communications community;
o ROADSHOW AND RELATIONSHIP MANAGEMENT
o We will coordinate periodic investor/broker roadshows and
conferences;
o We will create collateral materials for presentations and
communications;
o We will interface with our retail broker/dealer network to
facilitate exposing the Company to potential investors;
o We will work to establish introductions to investment banking
relationships for our clients.
Notwithstanding anything contained herein to the contrary, it is clearly
understood and agreed to by the parties hereto that the aforementioned services
to be provided by Cinapsys may or may not involve any promotion of the Company's
securities. Any such efforts will be expressly stated, with pertinent details
outlining the promotion. It shall be expressly understood that Cinapsys shall
have no power to bind Company to any contract or obligation or to transact any
business in Company's name or on behalf of Company in any manner and Company is
not obligated to accept any recommendations or close any transactions submitted
by Cinapsys. Cinapsys shall at all times comply with all State and Federal
Securities Laws, rules and regulations and shall not make any statements
concerning the Company to any third parties without Company consent. Cinapsys
agrees to indemnify and hold Company harmless from any breach of the securities
laws of any state or any federal law, rule, or regulation unless such breach is
caused by the direct action of the Company.
** Printing and postage is not included in this Agreement
***Research is handled through licensed third-party research firms.
Cinapsys is not a research firm. Research is billed directly by the
provider and is not included in this Agreement.
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