Capitalink, L. C. Member NASD|SIPC Columbus Center One Alhambra Plaza, Suite 1410 Coral Gables, Florida 33134 Phone 305-446-2026 Fax 305-446-2926 www.capitalinklc.com
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Capitalink,
L. C.
Member
NASD|SIPC
Columbus
Center
Xxx
Xxxxxxxx
Xxxxx, Xxxxx 0000
Xxxxx
Xxxxxx,
Xxxxxxx 00000
Phone
000-000-0000
Fax
000-000-0000
xxx.xxxxxxxxxxxx.xxx
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Exhibit
10.6
February
9, 2004
Xx.
Xxxxx
Xxxxxxxxx
President
Bio-Lok
International Inc.
000
X.
Xxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxx, XX 00000
Dear
Xxxxx:
This
letter agreement (the “Agreement”) sets forth the terms and conditions under
which the Board of Directors of Bio-Lok International Inc. (the “Company”) has
exclusively retained Capitalink, L.C. (“Capitalink”) to render certain financial
advisory services in assisting the Company to seek strategic alternatives,
including a potential Transaction or Investment (each as defined below),
and
rendering a fairness opinion, if required.
1. Term.
The
term of this Agreement shall be for a one-year period and shall be renewed
for
an additional one-year period upon the agreement of parties (the
“Term”).
2. Financial
Advisory Services.
During
the Term, Capitalink shall provide the Company with financial advisory services
with respect to a potential sale of the Company, including its assets,
operations, or equity, or any type of merger, consolidation, reorganization,
recapitalization, business combination or other transaction pursuant to which
the Company is acquired by, combined with, or enters into a joint venture
with,
another party (the “Transaction”). In addition, if requested and as an
alternative to a strategic Transaction, Capitalink shall approach institutional
equity sources regarding both an investment in the Company, and potentially
financing a going-private transaction (the “Investment”). Capitalink’s
activities shall include, but not be limited to:
Assisting
in the derivation of a range of Company values;
Providing
the Company with key financial analyses necessary for decisions to be made
regarding the Transaction and the Investment;
Guiding
the Company through the process of communicating with and providing information
to interested parties;
Providing advisory services with respect to the structure and terms of the Transaction and the Investment including without limitation the terms of employment of management;
If
requested, approaching and negotiating with the applicable parties in a
Transaction or Investment; and
Taking
such other steps as may be necessary to assist in the completion of the
applicable transaction.
Fairness
Opinion Services.
If
requested to do so by the Company, Capitalink will render an opinion (whether
or
not favorable) to the Board of Directors of the Company as to whether, on
the
date of such opinion, the Transaction/Investment is fair, from a financial
point
of view, to the shareholders of the Company.
The
opinion shall be in such form and substance as are customary to transactions
of
a similar nature and shall be rendered on a basis that is consistent with
Capitalink’s professional responsibilities to the Company, the Board of
Directors and shareholders and shall be subject to the undertaking of certain
inquiries concerning the Transaction/Investment and the business and assets
of
the Company. In connection therewith, Capitalink shall be entitled to rely
upon
all reports of the Company and information supplied to it by or on behalf
of the
Company and Capitalink shall not in any respect be responsible for the accuracy
or completeness of any such report or information or for any obligation to
verify the same.
The
written opinion shall be used only (i) by the Board of Directors in evaluating
the Transaction/Investment, (ii) in filings made by the Company with the
Securities and Exchange Commission (by reference and/or as an exhibit), (iii)
by
reproduction in full in any proxy statement or similar disclosure document
disseminated to shareholders if required by the rules of the Securities and
Exchange Commission and (iv) in any litigation pertaining to matters relating
to
the Transaction/Investment and covered in the opinion. The opinion will be
provided to the Board of Directors for its evaluation and analysis of the
Transaction/Investment at or prior to the time the Company will execute
definitive transaction documents, and we are not required to update our opinion
as of a later date.
The
Company will make available to Capitalink all information concerning the
Transaction/Investment and the Company, including its business, assets,
operations, financial condition and other information that is reasonably
requested. In addition, the Company shall make available its officers,
directors, professionals and outside consultants as reasonably requested
by
Capitalink. The Company understands and agrees that delays in providing data
or
information may result in a delay of the completion of the opinion.
Capitalink’s
services hereunder may be terminated by you without liability or continuing
obligation except with respect to the mutually approved provisions set forth
in
Appendix A. If Capitalink’s services are terminated, other than for
non-performance, Capitalink will be entitled to receive and retain the balance
of fees due as if the assignment contemplated herein was completed.
With
respect to any opinion delivered prior to the completion of the
Transaction/Investment, it is understood that Capitalink may reconsider its
opinion upon review of any new or modified report, document, release or
communication published or filed on behalf of the Company in connection with
the
Transaction/Investment, or otherwise received by Capitalink, after the date
of
delivery of the oral or written opinion, as applicable, and upon review of
such
other information as may hereafter be disclosed or otherwise becomes
available.
Recognizing
that transactions of this nature sometimes result in litigation and that
the
role of Capitalink is limited to acting solely pursuant to this engagement,
the
Company and Capitalink agree to the indemnification, contribution and
reimbursement provisions set forth in Exhibit A attached hereto and incorporated
herein by reference. In the event a principal or employee of Capitalink is
required to testify in connection with the Transaction/Investment, an hourly
fee
of $375 shall be payable by the Company to Capitalink for the time required
of
such principal or employee, including testimony, preparation, and any other
time
required in connection with such testimony.
Fee
for Services.
During
the Term, and in connection with the services provided in Paragraph 2 above,
Capitalink shall receive a non-refundable monthly retainer of $5,000. The
initial payment shall be due on the date hereof, and thereafter, on the monthly
anniversary of the date hereof. One-half of the aggregate payments shall
be
credited toward any fee payable pursuant to sub-paragraphs c and d
below.
b. The
fee
for evaluating the Transaction/Investment and rendering an opinion as to
its
fairness, as set forth in Paragraph 3, shall be $60,000, of which, $30,000
shall
be forwarded when the Company notifies Capitalink that it will require the
opinion and $30,000 shall be forwarded when we notify the Board of Directors
that we are prepared to deliver the opinion.
c. In
the
event the Company enters into a Transaction with Sybron Dental Specialties
Inc.,
or a subsidiary thereof (“SDS”), the cash fee payable to Capitalink at closing
shall be equal to $80,000 based on the assumed per share cash consideration
of
$0.90. With respect to per share aggregate consideration greater than $0.90,
Capitalink shall receive an additional cash fee based on the formula set
forth
below. For example, if the per share consideration is $1.00, the formula
above
shall apply to the additional $0.10 per share of consideration (or approximately
$700,000 in the aggregate).
In
the
event the Company enters into a Transaction with Innova LifeSciences or
BioHorizons, or applicable subsidiaries thereof, the cash fee payable to
Capitalink at closing shall be equal to 50% of the formula set forth below.
Further, in the event the Company enters into a Transaction with Curasan,
or a
subsidiary thereof, the cash fee payable to Capitalink at closing shall be
equal
to 75% of the formula set forth below.
Other
than those noted above, if the Company enters into a Transaction during the
Term
(or within two years of the end of the Term with respect to parties contacted
during the Term), the Company hereby agrees that Capitalink shall receive
a cash
fee (payable at closing of such Transaction) based on the formula set forth
below. This section shall also apply to any entities related to the Company
or
in which the Company has an interest (i.e., subsidiary companies, joint
ventures):
5%
of the
Consideration (as defined on Exhibit A) from $1 and up to $2,000,000,
plus
4%
of the
Consideration in excess of $2,000,000 and up to $4,000,000, plus
3%
of the
Consideration in excess of $4,000,000 and up to $6,000,000, plus
2%
of the
Consideration in excess of $6,000,000.
In
the
event any potential Transaction is not consummated, but the Company receives
(i)
a “break up” fee or any other payment as a result of the termination of such
potential Transaction, (ii) a judgment for damages or an amount in settlement
of
any dispute relating to such potential Transaction, or (iii) any other payment
in connection with such potential Transaction, then the Company shall pay
to
Capitalink a cash fee of 20% of any such fee, payment, judgment or
amount.
d. In
connection with an Investment made during the Term (or within two years of
the
end of the Term with respect to parties contacted during the Term), Capitalink
shall receive a 6% commission, payable in cash, of the gross proceeds of
the
Investment. Upon completion of the Investment, Capitalink or its designees
shall
be issued five-year warrants to purchase the number of shares of the Company’s
common stock that is equivalent to 10% of the number of shares of common
stock
sold in the Investment (or into which the securities sold in the Investment
convert), at an exercise price equal to the per share equivalent paid in
the
Investment and under the same terms and conditions as the Investment. Such
warrants shall contain customary anti-dilution provisions and a piggyback
registration rights provision for the life of such security.
Reimbursement. The
Company
shall reimburse costs for all reasonable and necessary out of pocket expenses
in
connection with Capitalink’s performing its obligations under this Agreement,
including but not limited to, travel, lodging, and database searches, as
approved by the company, whether or not the Transaction/Investment is
consummated.
Additional
Services and Miscellaneous.
In the
event the Company requests Capitalink to provide services other than as set
forth in this Agreement, the parties agree that a fee arrangement will be
negotiated and a separate agreement will be entered into documenting such
agreement. Further, Capitalink shall have the ability to publicize (i.e.,
use of
the Company logo in its marketing materials) its role in providing the Company
with the services noted herein.
If
you
are in agreement with the foregoing, please so indicate by executing and
returning the enclosed copy of this letter, including the attached Exhibit
A.
Very
truly yours,
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CAPITALINK,
L.C.
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| /s/ Xxxxx X. Xxxxxx |
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| Name:
Xxxxx X. Xxxxxx Title: President |
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BIO-LOK
INTERNATIONAL INC.
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| /s/ Xxxxx X. Xxxxxxxxx |
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| Name:
Xxxxx X. Xxxxxxxxx Title: President & CEO |
LOGO]February
9, 2005
Xx.
Xxxxx
Xxxxxxxxx
President
Bio-Lok
International Inc.
000
X.
Xxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxx, XX 00000
Dear
Xxxxx:
Reference
is made to the letter agreement dated February 9, 2004 by and between Bio-Lok
International Inc. (the “Company”) and Capitalink, L.C. (“Capitalink”) (the
“Agreement”). Unless otherwise indicated, the defined terms set forth in the
Agreement are utilized herein. The Company and Capitalink hereby agree as
follows:
1. Pursuant
to Paragraph 1 of the Agreement, the Agreement is renewed for a one-year
period
and such additional one year is included in the Term.
2. The
Agreement and all of its terms remain in full force and effect subject, however,
to the following modifications:
| a. |
Paragraph
2 of the Agreement is hereby amended by the addition
of:
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“g.
If
requested, attend meetings of the Board of Directors.”
| b. |
Paragraph
4.c is deleted in its entirety and replaced with the
following:
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“c. If
the
Company enters into a Transaction during the Term (or within two years of
the
end of the Term with respect to parties contacted during the Term), the Company
hereby agrees that Capitalink shall receive a cash fee (payable at closing
of
such Transaction) based on the formula set forth below. This section shall
also
apply to any entities related to the Company or in which the Company has
an
interest (i.e., subsidiary companies, joint venturers):
5%
of the
Consideration (as defined on Exhibit A) from $1 and up to $2,000,000,
plus
4%
of the
Consideration in excess of $2,000,000 and up to $4,000,000, plus
3%
of the
Consideration in excess of $4,000,000 and up to $6,000,000, plus
2%
of the
Consideration in excess of $6,000,000.
In
the
event any potential Transaction is not consummated, but the Company receives
(i)
a “break-up” fee or any other payment as a result of the termination of such
potential Transaction, (ii) a judgment for damages or an amount in settlement
of
any dispute relating to such potential Transaction, or (iii) any other payment
in connection with such potential Transaction, then the Company shall pay
to
Capitalink a cash fee of 20% of any such fee, payment, judgment or
amount.”
| c. |
The
following shall be added at the end of Paragraph
4:
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“c. Notwithstanding
anything contained herein to the contrary, in the event the Company incurs
investment banking fees (for the particular service noted in 4.c above) in
excess of the amounts noted herein due to fees payable to a third party,
Capitalink agrees, subject to its prior approval, to reduce its applicable
fees
up to 50% in order for such aggregate fee not to be greater than the amount
calculated herein.”
If
you
are in agreement with the foregoing, please so indicate by executing and
returning the enclosed copy of this letter.
Very
truly yours,
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CAPITALINK,
L.C.
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| /s/ Xxxxx X. Xxxxxx |
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| Name:
Xxxxx X. Xxxxxx Title: President |
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BIO-LOK
INTERNATIONAL INC.
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| /s/ Xxxxx X. Xxxxxxxxx |
|
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| Name: Xxxxx
X. Xxxxxxxxx Title: President & CEO |
