Exhibit 10.5
BUSINESS CONSULTING AGREEMENT
This Agreement (the "Agreement") is dated June 20, 2001 and is entered into by
and between REMEDENT USA, INC.(hereinafter "REMM" or "CLIENT") and WINDSOR
PARTNERS, INC. (hereinafter "WPI").
1. Conditions. This Agreement will not take effect, and WPI will have no
obligation to provide any service whatsoever, unless and until CLIENT
returns a signed copy of this Agreement to WPI (either by mail or facsimile
copy). In addition, CLIENT shall be truthful with WPI in regard to any
relevant or material information provided by CLIENT, verbally or otherwise
which refers, relates, or otherwise pertains to the CLIENT's business, this
Agreement or any other relevant transaction. Breach of either of these
conditions shall be considered a material breach and will automatically
grant WPI the right to terminate this Agreement and all moneys, and other
forms of compensation, paid or owing as of the date of termination by WPI
shall be forfeited without further notice.
Upon execution of this Agreement, CLIENT agrees to fully
cooperate with WPI in carrying out the purposes of this Agreement, keep WPI
informed of any developments of importance pertaining to CLIENT's business and
abide by this Agreement in its entirety.
2. Scope and Duties. During the term of this Agreement, WPI will perform the
following services for CLIENT:
2.1 Advice and Counsel. WPI will provide advice and counsel regarding
CLIENT's strategic business plans, strategy and negotiations with
potential business strategic partnering, corporate planning and or
other general business consulting needs as expressed by CLIENT.
2.2 Mergers and Acquisitions. WPI will provide assistance to CLIENT, as
mutually agreed, in identifying merger and / or acquisition
candidates, assisting in any due diligence process, recommending
transaction terms and providing advice and assistance during
negotiations, as needed.
2.3 CLIENT and/or CLIENT's Affiliate Transaction Due Diligence. WPI will
participate and assist CLIENT in the due diligence process, where
possible, on all proposed financial transactions affecting CLIENT of
which WPI is notified in writing in advance, including conducting
investigation of and providing advice on the financial, valuation and
stock price implications of the proposed transaction(s).
2.4 Ancillary Document Services. If necessary, WPI will assist and
cooperate with CLIENT in the development, editing and production of
such documents as are reasonably necessary to assist in any
transaction covered by this Agreement. However, this Agreement will
not include the preparation or procuring of legal documents or those
documents normally prepared by an attorney.
2.5 Additional Duties. CLIENT and WPI shall mutually agree, in writing,
for any additional duties that WPI may provide to CLIENT for
compensation paid or payable by CLIENT under this Agreement. Although
there is no requirement to do so, such additional agreement(s) may be
attached hereto and made a part hereof by written amendments to be
listed as "Exhibits" beginning with "Exhibit A" and initialed by both
parties.
2.6 Standard of Performance. WPI shall devote such time and efforts to the
affairs of the CLIENT as is reasonably necessary to render the
services contemplated by this Agreement. Any work or task of WPI
provided for herein which requires CLIENT to provide certain
information to assist WPI in completion of the work shall be excused
(without effect upon any obligation of CLIENT) until such time as
CLIENT has fully provided all information and cooperation necessary
for WPI to complete the work. The services of WPI shall not include
the rendering of any legal opinions or the performance of any work
that is in the ordinary purview of a certified public accountant, or
other licensed professional. WPI cannot guarantee results on behalf of
CLIENT, but shall use commercially reasonable efforts in providing the
services listed above. If an interest is communicated to WPI regarding
satisfying all or part of CLIENT's business and corporate strategic
planning needs, WPI shall notify CLIENT and advise it as to the source
of such interest and any terms and conditions of such interest.
2.7 Non-Guarantee. WPI MAKES NO GUARANTEE THAT WPI WILL BE ABLE TO
SUCCESSFULLY LOCATE A MERGER OR ACQUISITION TARGET AND IN TURN
CONSUMMATE A MERGER OR ACQUISITION TRANSACTION FOR CLIENT, OR TO
SUCCESSFULLY COMPLETE SUCH A TRANSACTION WITHIN CLIENT'S DESIRED TIME
FRAME. NEITHER ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOR THE
PAYMENT OF DEPOSITS TO WPI BY CLIENT PURSUANT TO FEE AGREEMENTS FOR
SERVICES NOT CONTEMPLATED HEREIN SHALL BE CONSTRUED AS ANY SUCH
GUARANTEE. ANY COMMENTS MADE REGARDING POTENTIAL TIME FRAMES OR
ANYTHING THAT PERTAINS TO THE OUTCOME OF CLIENT'S NEEDS ARE
EXPRESSIONS OF OPINION ONLY, AND FOR PURPOSES OF THIS AGREEMENT ARE
SPECIFICALLY DISAVOWED.
3. Compensation to WPI. COMPENSATION TO WPI.
3.1 Issuance of Shares for Entering into Agreement. As consideration
for WPI entering into this Agreement, Client agrees to cause 300,000
shares of its common stock, par value $.001 per share, to be issued in
amounts of 150,000 shares to Xxxxxxx Xxxxxx and 150,000 shares to Xxxxx
Xxxxxx , affiliates of WPI. When issued, said shares shall be free
trading shares, registered with the U.S. Securities and Exchange
Commission on its Form S-8 or similar registration. The registration
and issuance of said shares shall take place by no later than 15 days
following the execution and delivery of this Agreement, and all costs
in connection therewith shall be borne by Client.
NOTE: WPI SHALL HAVE NO OBLIGATION TO PERFORM ANY DUTIES PROVIDED FOR
HEREIN IF PAYMENT [CASH AND/OR STOCK] IS NOT RECEIVED BY WPI WITHIN 15
DAYS OF MUTUAL EXECUTION OF THIS AGREEMENT BY THE PARTIES. IN ADDITION,
WPI'S OBLIGATIONS UNDER THIS AGREEMENT SHALL BE SUSPENDED IF ANY
PAYMENT OWING HEREUNDER IS MORE THAN FIFTEEN (15) DAYS DELINQUENT.
FURTHERMORE, THE RECEIPT OF ANY FEES DUE TO WPI UPON EXECUTION OF THIS
AGREEMENT ARE NOT CONTINGENT UPON ANY PRIOR PERFORMANCE OF ANY DUTIES
WHATSOEVER DESCRIBED WITHIN THIS AGREEMENT.
3.2 Fees for Merger/Acquisition. In the event that WPI, assists CLIENT
and / or introduces CLIENT (or a CLIENT affiliate) to any third party,
merger partner(s) or joint venture(s) who then enters into a merger,
joint venture or similar agreement with CLIENT or CLIENT's affiliate,
CLIENT hereby agrees to pay WPI advisory fees pursuant to the following
schedule which are based on the aggregate amount of such merger, joint
venture or similar agreement with CLIENT or CLIENT's affiliate.
Advisory fees are deemed earned and shall be due and payable at the
first close of the transaction, however, in certain circumstances when
payment of advisory fees at closing is not possible, within 24 hours
after CLIENT has received the proceeds of such business combination.
This provision shall survive this Agreement for a period of one year
after termination or expiration of this Agreement. In other words, the
advisory fee shall be deemed earned and due and payable for any merger,
joint venture or similar transaction which first closes within a year
of the termination or expiration of this Agreement as a result of an
introduction as set forth above.
Merger/Acquisition Advisory Fees Schedule. For a merger/acquisition
entered into by CLIENT as a result of the efforts of, or an
introduction by WPI during the term of this Agreement, Client shall pay
WPI Merger/Acquisition Advisory Fees as follows:
-- For the first merger and/or acquisition of approximate annual
revenue equal to or exceeding $ 35 million, 2,200,000 shares
of its common stock, 950,000 of which shall be free trading
shares, registered with the U.S. Securities and Exchange
Commission on its Form S-8 or similar registration. The
remaining 1,250,000 shares shall be restricted subject to Rule
144.
-- When the annual revenue run rate for the aggregate of all
businesses WPI has assisted CLIENT and/or introduced CLIENT
(or a CLIENT affiliate) to any third party, merger partner(s)
or joint venture(s) who then entered into a merger, joint
venture or similar agreement with CLIENT or CLIENT's
affiliate, reaches fifty-five million ($55,000,000), 750,000
shares of its common stock, 375,000 of which shall be free
trading shares, registered with the U.S. Securities and
Exchange Commission on its Form S-8 or similar registration.
The remaining 375,000 shares shall be restricted subject to
Rule 144.
-- Thereafter, for a merger/acquisition entered into by CLIENT as
a result of the efforts of, or an introduction by WPI during
the term of this Agreement, Client shall pay WPI, eight (8)
percent of the total value of the transaction. For a
merger/acquisition entered into by CLIENT as a result of the
efforts of WPI and the introduction by CLIENT during the term
of this Agreement, Client shall pay WPI, five (5) percent of
the total value of the transaction. Such percentage(s) shall
be paid to WPI in the same ratio of cash and / or stock as the
transaction.
3.3 Expenses. After initial acquisition, CLIENT shall reimburse WPI for
reasonable expenses incurred in performing its duties pursuant to this
Agreement (including printing, postage, express mail, photo
reproduction, travel, lodging, and long distance telephone and
facsimile charges); provided, however, that WPI must receive prior
written approval from CLIENT for any expenses over $ 500. Such
reimbursement shall be payable within 7 seven days after CLIENT's
receipt of WPI invoice for same.
3.4 Additional Fees. CLIENT and WPI shall mutually agree upon any
additional fees that CLIENT may pay in the future for services
rendered by WPI under this Agreement. Such additional agreement(s)
may, although there is no requirement to do so, be attached hereto and
made a part hereof as Exhibits beginning with Exhibit A.
4. Indemnification. The CLIENT agrees to indemnify and hold harmless WPI, each
of its officers, directors, employees, agents, and shareholders against any
and all liability, loss and costs, expenses or damages, including but not
limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever or howsoever caused by reason of any
injury (whether to body, property, personal or business character or
reputation) sustained by any person or to any person or property, arising
out of any act, failure to act, neglect, any untrue or alleged untrue
statement of a material fact or failure to state a material fact which
thereby makes a statement false or misleading, or any breach of any
material representation, warranty or covenant by CLIENT or any of its
agents, employees, or other representatives. WPI agrees to indemnify and
hold harmless the CLIENT, each of its officers, directors, employees,
agents, and shareholders against any and all liability, loss and costs,
expenses or damages, including but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever or
howsoever caused by reason of any injury (whether to body, property,
personal or business character or reputation) sustained by any person or to
any person or property, arising out of any act, failure to act, neglect,
any untrue or alleged untrue statement of a material fact or failure to
state a material fact which thereby makes a statement false or misleading,
or any breach of any material representation, warranty or covenant by WPI
or any of its agents, employees, or other representatives. Nothing herein
is intended to nor shall it relieve either party from liability for its own
willful act, omission or negligence. All remedies provided by law, or in
equity shall be cumulative and not in the alternative.
5. Confidentiality.
5.1 WPI and CLIENT each agree to keep confidential and provide reasonable
security measures to keep confidential information where release may
be detrimental to their respective business interests. WPI and CLIENT
shall each require their employees, agents, affiliates, other
licensees, and others who will have access to the information through
WPI and CLIENT respectively, to first enter appropriate non-disclosure
Agreements requiring the confidentiality contemplated by this
Agreement in perpetuity.
5.2 WPI will not, either during its engagement by the CLIENT pursuant to
this Agreement or at any time thereafter, disclose, use or make known
for its or another's benefit any confidential information, knowledge,
or data of the CLIENT or any of its affiliates in any way acquired or
used by WPI during its engagement by the CLIENT. Confidential
information, knowledge or data of the CLIENT and its affiliates shall
not include any information that is, or becomes generally available to
the public other than as a result of a disclosure by WPI or its
representatives.
6. Miscellaneous Provisions.
6.1 Amendment and Modification. This Agreement may be amended, modified
and supplemented only by written agreement of WPI and CLIENT.
6.2 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The obligations of either
party hereunder cannot be assigned without the express written consent
of the other party.
6.3 Governing Law; Venue. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with
the laws of the State of California, without regard to its conflict of
law doctrine. CLIENT and WPI agree that if any action is instituted to
enforce or interpret any provision of this Agreement, the jurisdiction
and venue shall be Orange County, California.
6.4 Attorneys' Fees and Costs. If any action is necessary to enforce and
collect upon the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees and costs, in addition to
any other relief to which that party may be entitled. This provision
shall be construed as applicable to the entire Agreement.
6.5 Survivability. If any part of this Agreement is found, or deemed by a
court of competent jurisdiction, to be invalid or unenforceable, that
part shall be severable from the remainder of the Agreement.
6.6 Counterparts. This Agreement may be executed in several counterparts
and it shall not be necessary for each party to execute each of such
counterparts, but when all of the parties have executed and delivered
one of such counterparts, the counterparts, when taken together, shall
be deemed to constitute one and the same instrument, enforceable
against each party in accordance with its terms.
6.7 Facsimile Signatures. The Parties hereto agree that this Agreement may
be executed by facsimile signatures and such signatures shall be
deemed originals. The parties further agree that within ten days
following the execution of this Agreement, they shall exchange
original signature pages.
7. Arbitration. ALL DISPUTES, CONTROVERSIES, OR DIFFERENCES BETWEEN CLIENT,
WPI OR ANY OF THEIR OFFICERS, DIRECTORS, LEGAL REPRESENTATIVES, ATTORNEYS,
ACCOUNTANTS, AGENTS OR EMPLOYEES, OR ANY CUSTOMER OR OTHER PERSON OR
ENTITY, ARISING OUT OF, IN CONNECTION WITH OR AS A RESULT OF THIS
AGREEMENT, SHALL BE RESOLVED THROUGH ARBITRATION RATHER THAN THROUGH
LITIGATION. WITH RESPECT TO THE ARBITRATION OF ANY DISPUTE, THE UNDERSIGNED
HEREBY ACKNOWLEDGE AND AGREE THAT:
A. ARBITRATION IS FINAL AND BINDING ON THE PARTIES;
B. THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDY IN COURT, INCLUDING
THEIR RIGHT TO JURY TRIAL;
C. PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND DIFFERENT FROM
COURT PROCEEDING;
D. THE ARBITRATOR'S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
REASONING AND ANY PARTY'S RIGHT OF APPEAL OR TO SEEK MODIFICATION OF RULING
BY THE ARBITRATORS IS STRICTLY LIMITED;
E. THIS ARBITRATION PROVISION IS SPECIFICALLY INTENDED TO INCLUDE ANY AND ALL
STATUTORY CLAIMS WHICH MIGHT BE ASSERTED BY ANY PARTY;
F. EACH PARTY HEREBY AGREES TO SUBMIT THE DISPUTE FOR RESOLUTION TO THE
AMERICAN ARBITRATION ASSOCIATION, IN ORANGE COUNTY, CALIFORNIA WITHIN FIVE
(5) DAYS AFTER RECEIVING A WRITTEN REQUEST TO DO SO FROM THE OTHER PARTY;
G. IF EITHER PARTY FAILS TO SUBMIT THE DISPUTE TO ARBITRATION ON REQUEST, THEN
THE REQUESTING PARTY MAY COMMENCE AN ARBITRATION PROCEEDING, BUT IS UNDER
NO OBLIGATION TO DO SO;
H. ANY HEARING SCHEDULED AFTER AN ARBITRATION IS INITIATED SHALL TAKE PLACE IN
ORANGE COUNTY, CALIFORNIA;
I. IF EITHER PARTY SHALL INSTITUTE ANY COURT PROCEEDING IN AN EFFORT TO RESIST
ARBITRATION AND BE UNSUCCESSFUL IN RESISTING ARBITRATION OR SHALL
UNSUCCESSFULLY CONTEST THE JURISDICTION OF ANY ARBITRATION FORUM LOCATED IN
ORANGE COUNTY, CALIFORNIA, OVER ANY MATTER WHICH IS THE SUBJECT OF THIS
AGREEMENT, THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER FROM THE
LOSING PARTY ITS LEGAL FEES AND ANY OUT-OF-POCKET EXPENSES INCURRED IN
CONNECTION WITH THE DEFENSE OF SUCH LEGAL PROCEEDING OR ITS EFFORTS TO
ENFORCE ITS RIGHTS TO ARBITRATION AS PROVIDED FOR HEREIN;
J. THE PARTIES SHALL ACCEPT THE DECISION OF ANY AWARD AS BEING FINAL AND
CONCLUSIVE AND AGREE TO ABIDE THEREBY;
K. ANY DECISION MAY BE FILED WITH ANY COURT AS A BASIS FOR JUDGMENT AND
EXECUTION FOR COLLECTION.
8. Term/Termination. This Agreement is an agreement for the term of
approximately twenty-four (24) months ending June 30, 2003.
9. Non Circumvention. In and for valuable consideration, CLIENT hereby agrees
that WPI may introduce (whether by written, oral, data, or other form of
communication) CLIENT to one or more opportunities, including, without
limitation, natural persons, corporations, limited liability companies,
partnerships, unincorporated businesses, sole proprietorships and similar
entities (hereinafter an "Opportunity" or ""Opportunities""). CLIENT
further acknowledges and agrees that the identity of the subject
Opportunities, and all other information concerning an Opportunity
(including without limitation, all mailing information, phone and fax
numbers, email addresses and other contact information) introduced
hereunder are the property of WPI, and shall be treated as confidential and
proprietary information by CLIENT, it affiliates, officers, directors,
shareholders, employees, agents, representatives, successors and assigns.
CLIENT shall not use such information, except in the context of any
arrangement with WPI in which WPI is directly and actively involved, and
never without WPI's prior written approval. CLIENT further agrees that
neither it nor its employees, affiliates or assigns, shall enter into, or
otherwise arrange (either for it/him/herself, or any other person or
entity) any business relationship, contact any person regarding such
Opportunity, either directly or indirectly, or any of its affiliates, or
accept any compensation or advantage in relation to such Opportunity except
as directly though WPI, without the prior written approval of WPI. WPI is
relying on CLIENT's assent to these terms and their intent to be bound by
the terms by evidence of their signature. Without CLIENT's signed assent to
these terms, WPI would not introduce any Opportunity or disclose any
confidential information to CLIENT as herein described.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
REMEDENT USA, INC. (REMM)
Print Name: Xxxxxxx Xxxxxxx/Xxxxxxxx
Sign Name: /s/ Xxxxxxx Xxxxxxx/Xxxxxxxx
Title: CEO
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Date: June 28, 2001
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Address: 0000 Xxxxx Xxx
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Xxxxxxxxx, XX 00000
WINDSOR PARTNERS, INC. ( WPI)
Print Name: Xxxxxxx X. Xxxxxx
Sign Name: /s/ Xxxxxxx X. Xxxxxx
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Title: President
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Date: June 28, 2001
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Address: 00000 Xxxxx Xxxx, Xxxxx 000
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Xxxxxx Xxxxxx, XX 00000
