CONSULTING/RETAINER AGREEMENT
This Agreement (the "Agreement") is made and entered into as of the
26th day of August, 2004 ("Effective Date"), by and between Synova Healthcare,
Inc., a Delaware corporation having offices at Rose Tree Corporate Center, 0000
Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxx XX, Xxxxx, XX 00000 ("Client" or
"SHI"), and KSR Associates, Inc. ("KSRA"), a Delaware corporation having offices
at 00 Xxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000 ("Consultant") jointly referred to as
"the Parties".
WHEREAS Client is both considering and seeking the infusion of
financial resources and advice regarding the best sources and ways to approach
entities, hereinafter collectively referred to as "Targets", amenable to Capital
Infusions, Capital Transactions and Licensing Agreements; and,
WHEREAS KSRA is prepared to provide assistance to Client on these
matters;
The Parties have agreed that an advisory and consulting relationship
will be jointly beneficial and have entered into the following Agreement to
reflect the Parties' understandings.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, and for other good and valuable legal
consideration, the Parties hereby agree as follows:
SERVICES OF KSRA
KSRA agrees to provide such consulting and advisory services as are
necessary to assist Client in developing a comprehensive and complete business
and marketing approach with respect to identifying Targets and entering into
acceptable business transactions ("Consulting Services").
1. Definitions.
(a) Capital Infusion. For the purposes of this Agreement, "Capital
Infusion" (sometimes referred to herein as "CI") shall mean
any form of equity financing made available to and accepted by
Client, including, but not limited to, equity of any type,
where such Capital Infusion is effectuated by a Closing during
the term of this Agreement.
(b) Licensing Agreement. For the purposes of this Agreement, the
term "Licensing Agreement" (sometimes referred to herein a
"LA") is any arrangement, effectuated by a written agreement
during the term of this Agreement, whereby Client grants
permission to any person or legal entity to use its
proprietary technology, patents, or know-how, in return for
any form of compensation, including, but not limited to, cash
or stock.
(c) Capital Transaction. For the purposes of this Agreement, the
term "Capital Transaction" (sometimes referred to herein as
"CT") is any arrangement effectuated by a Closing during the
term of this Agreement whereby Client either:
(i) acquires any equity position in or significant debt of
another business;
(ii) acquires all, or substantially all, of another business;
(iii) sells all, or a portion of, its assets; or
(iv) merges into another business entity or has another
business entity merged into Client,
(v) grants permission to any legal entity to use its
proprietary technology, patents, or know-how, in return
for any form of compensation, including but not limited
to cash or stock.
(d) Closing or Closings. The terms "Closing" or "Closings" shall
mean the consummation and funding of an LA or CI or CT,
whether the same is completed in one or multiple sessions.
2. Outline of Services to be Provided by KSRA. In consideration for the
agreements and undertakings of Client set forth herein including, but not
limited to, the payment of the Retainer Fee to be paid to KSRA hereunder, KSRA
will be available to provide Client with the following Consulting Services:
(a) Define the objectives of the Client and its principal
investors and shareholders and assist in the process of
identifying and initiating those strategies that will achieve
such objectives;
(b) Assist Client in the preparation of documentation and
materials suitable for presentation to potential strategic
partners, alliance partners, vendors and professional
investors;
(i) Deliverables will include summary documents, supportive
research, investor presentations "road shows" and
correspondence materials;
(c) Develop a comprehensive funding strategy, which focuses on
funding initiatives that are most favorable to protecting
current shareholder value;
(i) Identify Targets and obtain from Client its goal,
acceptable valuation, and priorities as related to forms
of transaction;
(ii) Assist in the qualification and negotiation with
potential Targets for the purpose of Closing one or more
transactions, including but not limited to Capital
Infusions and Licensing Agreements;
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(d) Coordinate the due diligence necessary to close a Capital
Infusion, Licensing Agreement, or any other form of
transaction contemplated in this Agreement;
3. Exclusivity - Capital Infusion Transactions. Except as set forth
herein, Client understands and agrees that during the term of this Agreement,
KSRA shall serve as the exclusive consultant of Client hereunder in regard to
Capital Infusion transactions, and that Client will disclose all contacts,
negotiations, understandings, or agreements it has entered into to KSRA, and
KSRA shall continue dialogue or negotiations with both Client's previous
contacts or any Targets with the goal of completing transaction(s), which
transaction(s) shall be subject to the applicable provisions of Section 4
hereof. It is further understood, however, that KSR shall not be entitled to
fees on capital raised from existing shareholders (or their affiliates or family
members) or from any of the targets identified in writing by directors of the
Client within thirty (30) days of the date hereof where KSR is not involved in
the Capital Infusion process.
4. Fees.
(a) Upon the execution of this Consulting/Retainer Agreement by
the Parties, SHI shall pay KSRA as a non-refundable Retainer
Fee, for value received, ten thousand (10,000) shares of
common stock. The Parties understand and agree that the
Retainer Fee shall be paid in consideration of KSRA Consulting
Services as described in Section 2 herein, and that KSRA will
make its best efforts to identify and introduce Client to
Targets that it reasonably believes may provide capital,
resources or revenue for SHI. Should these effort fail to
result in the infusion of such financial resources or should
such infusion occur as a result of the efforts of a third
party, then KSRA shall have no obligation to repay such
Retainer Fee, provided it has fulfilled its obligations as
defined by this Agreement,
(b) In consideration of the performance of its services hereunder,
and, if Targets identified and introduced by KSRA result in
either a Capital Infusion and/or a Capital Transaction and/or
a Licensing Agreement for Client, KSRA shall be paid the
following fees:
(i) Capital Infusion. SHI shall pay KSRA seven percent (7%)
of the aggregate face amount of each such CI, plus a
five year warrant to purchase, at the exercise price of
the capital round of the CI, shares of common stock in
SHI equal to ten percent (10%) of the aggregate number
of shares sold in such Capital Infusion;
(ii) Licensing Agreement. Fees for any Licensing Agreement
entered into by SHI resulting from Target(s) identified,
introduced, or facilitated by KSRA shall be negotiated
by the Parties on a case by case basis;
(iii) Capital Transaction. For any CT, SHI shall pay KSR five
percent (5%) of the first Two Million Dollars
($2,000,000) of consideration received by SHI or its
stockholders; four percent (4%) of the next Two Million
Dollars ($2,000,000); three percent (3%) of the next Two
Million Dollars ($2,000,000); two percent (2%) of the
next Two Million Dollars ($2,000,000); and one percent
(1%) of any excess.
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(c) The Parties understand and agree that payment of such fees by
Client to KSRA will be cumulative in regard to a CI, CT or LA
outlined in a single transaction. In the event that multiple
targets syndicate or act separately to provide an infusion of
capital into Client within one set of executed documents, such
infusion will be construed as a single transaction. However,
subsequent transactions by Targets identified and introduced
by KSRA will be treated as new transactions and paid on a
non-cumulative basis according to the fee schedule described
in Section 4 and all sub-sections of Section 4 herein;
(d) Such fees net of any prepayments including, but not limited to
the Retainer Fee, will be paid to KSRA at the Closing of each
such transaction. In a single arrangement with multiple
Closings, KSRA shall be paid at each Closing the proportionate
part of its Consulting Fee which reflects that proportion of
the aggregate value involved in such Closing;
(e) In the event that Client agrees with any Target to a deferred
or delayed payment arrangement such as a stock option, stock
warrant or other staged or seriatim Capital Infusion, Capital
Transaction or any other form of transaction contemplated
herein, then KSRA shall be entitled to receive, at the Closing
on each such action, its relevant Consulting Fee adjusted to
reflect the total value received by Client in connection with
the aggregate amount Client receives from such seriatim
Closings taken as a whole to the date of each deferred
Closing;
(f) KSRA shall be paid its Consulting Fee on each arrangement for
CI or CT. An "arrangement" for purposes of calculating KSRA's
fees shall be a CI or CT with or without multiple Closings,
where such transaction is detailed in one set of executed
documents. However, amendments which extend or enlarge or
diminish the transaction shall be treated as part of the
original transaction and hence part of the "arrangement";
(g) KSRA may employ subagents to assist it in locating Targets.
All fees, considerations, and other forms of compensation paid
by KSRA to such subagents, are the sole responsibility of
KSRA, and Client shall have no obligation under this Agreement
to pay any third party.
(h) All warrants or shares paid to KSRA under this Agreement shall
be transferable and assignable,
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5. Out-of-pocket Expenses. In addition to the fees described herein,
Client agrees to reimburse KSRA, upon request from time to time, for all
reasonable out-of-pocket expenses incurred by KSRA including, but not limited to
printing, reproduction, and travel. All expenses exceeding Four Hundred Dollars
($400) must be approved by Client in advance of KSRA incurring such expenses.
6. Results. This project will involve the gathering and analysis of
data and the formulation of ideas as to the possible pathways to Client's goals.
KSRA offers no assurances as to results for Client from following its consulting
advice.
7. Effective Date and Term and Termination.
(a) The effective term of this Agreement shall commence as of the
date of execution hereof, and shall continue in full force for
one hundred twenty (120) days. The agreement will
automatically renew for additional terms of sixty (60) days,
unless terminated in writing by either party, thirty (30) days
in advance of such renewal. It is understood and agreed that
Client indemnifies and will hold harmless KSRA against any
claims by any other financial advisory organizations should
KSRA's Agreement with Client or its actions hereunder infringe
upon any such organization's rights or prior arrangements with
Client.
(b) Notwithstanding the foregoing, this Agreement may be
terminated at any time by either party upon delivery to the
non-terminating party of written notice to such effect given
by Certified Mail return receipt requested not less than sixty
(60) days prior to the date on which this Agreement is to
terminate. This Agreement may also be terminated immediately
through the transmission of a notice of termination by "fax",
upon the material breach by either party of any agreement,
covenant, representation or warranty contained herein, or upon
the bankruptcy, insolvency or the filing of any voluntary or
involuntary petition for bankruptcy by or against either party
hereto. However, in the event of termination, no fees or
warrants paid or owing pursuant to Section 4 shall be withheld
and the provision for such fees or warrants shall survive such
termination.
(c) Termination of this Agreement by either party for any reason
shall not relieve the Client of its obligation to pay any
compensation due to KSRA after termination of this Agreement,
provided KSRA's right to receive such compensation arises out
of services performed by it hereunder, prior to such date of
termination, and any such CI or CT or LA is consummated within
eighteen (18) months of the termination date.
(d) The provisions of Sections 3, 4, 5, 6 and 8 hereof shall
survive the termination of this Agreement by either party for
a period of eighteen (18) months from the termination date.
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8. Representations and Warranties of the Parties. In entering into this
Agreement, each party hereto shall rely on the representations and warranties of
the other party hereto, which representations and warranties are true and
correct as of the date hereof, and none of which representations and warranties
are materially misleading or omit to state a material fact which, if known to
the other party hereto, would reasonably be expected to cause such other party
to refrain from entering into this Agreement:
(a) Each party represents to the other that the following is true
and correct as of the date hereof:
(i) Such party is a corporation validly organized and
existing under the laws of its state or jurisdiction of
establishment with full power to enter into, execute and
perform this Agreement in accordance with its terms, and
the person signing this Agreement for and on behalf of
such party is the duly authorized executive officer
thereof, holding the position set forth below his name
at the end of this Agreement, with full power and
authority to enter into, execute and bind such party to
this Agreement;
(ii) Once executed by such authorized representative, this
Agreement shall be the legally binding obligation of
such party, enforceable against it by any court of
competent jurisdiction in accordance with its terms; and
(iii) Such party is not bound by or subject to any law,
regulation, order, ruling, judgment, contract, agreement
or other arrangement which would prohibit it from
entering into or performing this Agreement, or which
requires the approval or consent of any third party in
connection therewith;
(iv) Client warrants to KSRA that information concerning
Client furnished to KSRA in connection with KSRA's
performance of its services hereunder will be true and
substantially complete as of the date such information
is furnished to KSRA and will fairly describe the
operations and financial structure of Client.
9. Miscellaneous.
(a) The Client will not be responsible for any claims,
liabilities, losses, damages or expenses, which are finally
judicially determined to have resulted primarily from the bad
faith or gross negligence of KSRA. The Client also agrees that
KSRA shall not have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Client for or in
connection with such engagement, except for any such liability
for losses, claims, damages, liabilities or expenses incurred
by the Client that result primarily from the bad faith or
gross negligence of KSRA. The Client will not, without the
prior written consent of KSRA, settle, compromise or consent
to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder
(and in which KSRA is an actual or potential party to such
claim or action).
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(b) Nothing herein shall be deemed to make KSRA an agent or
employee of Client in any matter whatsoever and KSRA agrees to
make clear to all relevant third parties its status as an
independent consultant to Client. Client agrees that it will
not represent to anyone that KSRA is a principal or
participant in any way in Client.
(c) The laws of the State of Delaware shall govern the validity
and interpretation of this Agreement.
(d) This Agreement sets forth the entirety of the agreement
between the parties relative to the subject matter hereof and
there are no warranties, promises or assurances of any kind
not specified herein.
(e) This Agreement may not be modified except in writing executed
by both parties hereto.
(f) Notices, except as described in Section 6 herein, shall be in
writing and shall be sent certified mail return receipt
requested, postage prepaid to the address of the parties
specified in this agreement.
(g) The agreements contained herein shall be binding upon, and
inure to the benefit of, the successors and assigns of the
parties hereto.
(h) For the convenience of the parties, the parties may execute
any number of counterparts of this Agreement hereto. Each such
counterpart shall be, and shall be deemed to be, an original
instrument, but all such counterparts taken together shall
constitute one and the same Agreement. This Agreement may not
be modified or amended except in writing signed by the parties
hereto.
(i) Execution of facsimile transmissions or copies of this
Agreement shall be treated and acknowledged by the parties as
though they are originals and shall have the same force and
effect as originals.
IN WITNESS WHEREOF, the Parties, intending to be legally bound, hereby
agree to the foregoing as of the date first above written.
Synova Healthcare, Inc. KSR Associates, Inc.
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------- ----------------------------------
Xxxxxxx X. Xxxx, CEO Xxxxxxx X. Xxxxxxxxxx, President
8/26/04 August 20, 2004
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January 13, 2005
Xx. Xxx Xxxxxxxxxx
Xx. Xxxxxx Xxxxxxx
c/o KSR Associates, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Gentlemen:
Reference is made to that Consulting/Retainer Agreement (the
"Agreement") dated August 26, 2004, between KSR Associates, Inc. ("KSR") and
Synova Healthcare, Inc. (the "Company"). Pursuant to the Agreement, KSR is
entitled to commissions on financing and related activities of the Company. The
Company has agreed to merge with Synova AGBL Merger Sub, Inc., a wholly-owned
subsidiary of Advanced Global Industries Corporation ("AGBL"), pursuant to an
agreement and Plan of Merger dated the date hereof among the Company, Synova
AGBL Merger Sub, Inc., and AGBL (the "Merger"). Concurrently with the
consummation of the Merger, AGBL intends to raise up to an aggregate of
$3,500,000 in equity financing on substantially the terms set forth on Exhibit A
(the "Financing"). In connection with the Merger and the Financing, and as an
inducement to the Company engaging in the Merger and the Financing, KSR has
agreed to a modified fee structure under the Agreement. Accordingly, the parties
agree as follows with the intent to be legally bound:
1. Fees. Notwithstanding anything contained in Section 4.b. of the
Agreement to the contrary, KSR shall only be entitled to the following
compensation in connection with the Merger and the Financing:
(a) a cash payment equal to two percent (2%) of the total
aggregate amount of cash proceeds raised in the Financing, such amount to be
paid in cash at the closing of the Financing;
(b) 40,132 shares of Company common stock (the "Equity"),
which shares are being issued to KSR concurrently with the execution of this
Letter, but which will be subject to forfeiture if KSR does not comply with the
conditions in Section 3 below.
2. KSR acknowledges and agrees that, other than as described in Section
1 above, the Company has no obligations to KSR in connection with the Merger and
Financing (and transactions ancillary thereto), including without limitation,
any obligation to make any payments or issue any securities. KSR hereby
expressly releases the Company from any other obligations it may have to KSR
(under the Agreement or otherwise) in connection with the Merger or Financing.
January 12, 2005
Page 2
3. The Equity issued to KSR under Section 1(a) above shall be subject
to forfeiture in the event that (i) the Merger is not consummated on or before
February 15, 2005 or (ii) KSR fails to continuously honor its obligations to the
Company under the Agreement after the date hereof. If the Merger is not
consummated on or before February 15, 2005, then KSR shall promptly transfer the
Equity back to the Company. If the Company determines, in its sole but
reasonable discretion, that KSR has failed to honor its obligations under the
Agreement, it may notify KSR of such determination and request that KSR forfeit
the Equity, in which case KSR shall promptly transfer the Equity back to the
Company. If the Merger is not consummated by February 15th, 2005, the original
Agreement will be reinstated.
Please acknowledge your agreement to the terms and provisions set forth
in this Letter above by executing it in the space provided below.
SYNOVA HEALTHCARE, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx, Chief Executive Officer
Agreed to and Accepted as
of the Date Written Above:
KSR ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
