EXHIBIT 10.1
SERVICES AND LICENSE AGREEMENT
THIS SERVICES AND LICENSE AGREEMENT ("Agreement") is entered into as of this 1st
day of October, 2004 by and between BestBet Media Group, Inc., a Nevada
Corporation ("BMG") and SinoFresh Healthcare, Inc., a Florida Corporation and
its wholly owned subsidiaries (herein collectively referred to as "Company").
BACKGROUND
WHEREAS Xx XxXxxxx ("XxXxxxx") is a nationally known celebrity and spokesman;
and
WHEREAS Company wishes to utilize XxXxxxx'x likeness and image along with his
personal services for the promotion of its products and, each subject to prior
written approval and attached in Exhibit "C," offered by Company or Company's
subsidiaries; and
WHEREAS BMG has entered into certain contracts, licenses, and other arrangements
whereby BMG is authorized to furnish the services of XxXxxxx as described herein
and to grant a limited license to use XxXxxxx'x approved likeness and approved
image pursuant to the terms and conditions of this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. SERVICES - XxXxxxx shall perform the services more particularly described in
Exhibit "A". The scope of services contained in Exhibit "A" may be modified from
time to time by mutual written consent of the parties.
2. COMPENSATION - BMG shall receive the compensation described in the
compensation schedule attached to Exhibit "A" for the licenses and services
provided by BMG and XxXxxxx under this Agreement. The parties agree that if
additional services are added to Exhibit "A" by mutual written consent BMG and
XxXxxxx shall be entitled to additional compensation to be negotiated in good
faith
a. Payments - Any payments due hereunder shall be made to BMG at BMG's
address listed in Section 15 of this Agreement titled "Notice".
b. Travel and Expenses - If XxXxxxx makes an appearance on the behalf of
Company, Company shall provide XxXxxxx with the following on an "if used" basis:
(1) Two (2) round trip, first class or business class, as
available, commercial airline tickets between the Los Angeles
International Airport and the place, within the United States,
where Company shall require XxXxxxx to render the services
more particularly described in Exhibit A ("Location") provided
that the location is more than 50 miles from XxXxxxx'x primary
residence in Beverly Hills, California.
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(2) First class hotel accommodations (i.e. a suite within a first
class hotel) within a thirty (10) mile radius of the Location.
(3) A per diem of two hundred dollars ($200.00) a day if the
Location is more than one hundred (50) miles from XxXxxxx'x
primary residence.
(4) Company shall furnish first class ground transportation (i.e.
private first class limousine and driver) between airports,
hotel and the Location(s) and otherwise available on call at
the location.
c. Payments to XxXxxxx - Company shall pay directly to BMG all of the
compensation which would have been payable to XxXxxxx had XxXxxxx directly
contracted with Company for rendering the services and granting the rights
hereunder. BMG shall be solely responsible for making the payments to
XxXxxxx required for the rights and services granted under this Agreement
including any payments required to be made to any governmental authority,
or pursuant to any guild, union or other professional organization
provided that Company shall be soley responsible for pension, health and
welfare, residuals, etc., if any, as a result of XxXxxxx rendering the
services and granting the rights contemplated under this Agreement. BMG
shall indemnify and hold Company harmless from and against any liability
or obligation resulting from BMG's failure to comply with the terms of
this paragraph. Provided Company timely pays BMG, in no event shall BMG's
failure to pay any amount(s) to XxXxxxx constitute a breach of this
Agreement by Company.
d. Fees - BMG shall be paid the fees listed on Exhibit "A."
e. Stock and Warrants - BMG shall be granted stock and warrants listed on
Exhibit "A."
f. Royalties - BMG shall be paid the royalty listed on Exhibit "A" subject
to the following terms and conditions:
(1) Payout - All fees, stock and warrants, and royalties earned
shall be due and payable as stipulated in Exhibit A
(2) Audit Procedures - Company shall provide BMG with quarterly
royalty reports clearly specifying all royalties earned by BMG the
calculation thereof including all gross revenue broken down by source and
distribution channel, expenses deducted, and all other relevant
information. Company shall keep, maintain, and preserve, in its principal
place of business, for at least three years following the termination or
expiration of this Agreement, complete and accurate records of accounts
including without limitation, invoices, correspondence, banking and
financial and other records pertaining to the various items required to be
submitted by Company. Such records and accounts shall be available for
inspection and audit not more than once during any twelve (12) month
period at any time or times during or after the expiration or termination
of this Agreement during
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reasonable business hours and upon five (5) days notice to Company by BMG
or its nominees. Such inspection may only be made by a certified public
accounting firm. Company agrees not to cause or permit any interference
with BMG or nominees of BMG in the performance of their duties of
inspection and audit. Company agrees to pay costs of the audit if any
discrepancy is greater than 5%. Company further agrees to pay reasonable
interest on all improperly withheld amounts.
3. TERM - The initial term of this Agreement ("Initial Term") shall be for one
year commencing on October 1, 2004. Unless sooner terminated as provided herein,
this Agreement shall automatically renew for two additional one-year terms
unless either party provides the non-terminating party written notice of its
intent to terminate this Agreement at least ninety (90) days prior to the
expiration of the then current term. Notwithstanding anything to the contrary in
this agreement, all televisions created during the term of the Agreement, or any
renewal thereof, maybe broadcast for no less than one year from the date
production is completed.
4. INTELLECTUAL PROPERTY - Subject to the following terms and conditions, BMG
grants Company a limited non-exclusive license to use the likeness and image of
XxXxxxx, subject to approvals set forth herein. It is understood and agreed by
the parties that the grant of the rights contemplated hereunder is strictly
limited to the development, marketing, and promotion of the approved products
and services offered by Company and Company's distributors set forth in Exhibit
C and not for commercial broadcast.
a. Name and Likeness- Subject to BMG's and XxXxxxx'x prior written
approval for each proposed use, Company may use XxXxxxx'x name, likeness, voice,
and image as a part of various promotional campaigns. The use of XxXxxxx'x name,
approved likeness, approved voice and approved image by Company may include any
of the following: mailers, brochures, posters, other printed materials, but
subject to BMG's and XxXxxxx'x prior written approval in each case.
b. Video Footage: - Subject to BMG's and XxXxxxx'x prior written approval
of the use of any video footage of XxXxxxx by Company, Company may use approved
video footage of XxXxxxx as a part of various promotions, Internet web content
or commercials. All shooting scripts and final edits are subject to BMG's and
XxXxxxx'x prior written approval. All video footage of XxXxxxx shall be filmed
at a time and at a location approved by BMG and XxXxxxx. Company shall pay for
all production costs associated with the video footage and shall use a video
production company mutually agreed upon by both parties. Company agrees that it
shall not use any video footage of XxXxxxx for commercial broadcast to the
general public without first obtaining the written authorization of BMG and
XxXxxxx which authorization may be withheld at BMG's sole discretion.
c. Appearances - Any approved video footage, pictures, voice recordings,
or images created from XxXxxxx appearances on behalf of Company may be used by
Company for internal commercial purposes. Company must obtain prior written
approval before filming, videotaping, or photographing any appearances.
d. Approvals - All approvals must be specified in writing. Unless
otherwise stated herein, any approvals contemplated under this Section 4 shall
not be exercised so as to
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frustrate the purpose and intent of this agreement. In the event requested
approvals are not responded to within ten (10) business days after the Company
makes such written request the request shall be deemed to be approved by all
parties.
e. Ownership- Upon expiration or termination of this Agreement, any and
all intellectual property rights related to the use of XxXxxxx'x image, voice,
likeness or name used by Company under this Section 4 shall automatically revert
back to BMG and Company shall cease use of all such items immediately.
Notwithstanding the foregoing, to the extent that Company uses preexisting
trademarks, logos, designs or copyrighted artwork owned by Company, BMG agrees
that such property shall continue to be solely owned by Company and BMG shall
not register as a trademark any xxxx that includes such property. BMG shall
indicate on any copyright application in which the deposit specimen incorporates
an element of Company property that the Company property is a preexisting work
excluded from the scope of copyright sought.
5. XXXXXXX PROTOCOL - When Company wishes to utilize the services and license
rights provided under Agreement, Company and BMG agree to adhere to the
following procedures:
a. Appearances - Unless Company is otherwise notified in writing by BMG or
XxXxxxx, all XxXxxxx appearances on behalf of the Company shall be scheduled
exclusively through BMG. Unless expressly authorized by BMG or XxXxxxx, Company
shall not contact XxXxxxx directly for any reason regarding any proposed
appearance or otherwise. Company shall not schedule, represent to a third party,
or advertise any XxXxxxx appearance without first obtaining the express
authorization of BMG and XxXxxxx, which authorization will not be withheld with
the intent of frustrating the purpose of this agreement.
b. Approvals - Company and BMG with XxXxxxx'x written approval, shall each
designate one representative to handle all communications between the companies
including, but not limited to, appearance requests, scheduling issues, and
consent, authorization, and/or approval requests. Unless otherwise notified in
writing by the Company on one hand, or BMG or XxXxxxx on the other, all
communication between Company and BMG shall be conducted exclusively through the
designated representatives. The designated representative may be changed by
Company or BMG, or XxXxxxx as applicable, upon five (5) day written notice to
the other party.
6. REPRESENTATIONS AND WARRANTIES - Each party represents and warrants that: (i)
it is a duly organized and existing corporation in good standing under the laws
of the state where it is incorporated; (ii) it has the full right, power and
authority to enter into this Agreement, and (iii) it shall comply with all
applicable law, statutes, ordinances, government directives and regulations
regarding its utilization of the rights and other performance under this
Agreement.
a. BMG Representations and Warranties - BMG represents and warrants to
Company, and Company materially relies on such representations and warranties as
follows: (i) BMG has the right to grant the licenses and rights and commit to
the services of XxXxxxx described herein for the entire term of this Agreement;
subject to the terms, conditions and restrictions set forth herein, (ii) no part
of the rights conveyed to Company hereunder have in any way been encumbered,
conveyed, granted or otherwise disposed of
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and are free of any liens or claims whatsoever; (iii) to best of knowledge there
are no claims or litigation pending, outstanding or threatened which will
prejudice, interrupt or interfere with the use by Company of the rights granted
hereunder; (iv) XxXxxxx is or will become and will remain to the extent
necessary to enable the performance of this Agreement, a member in good standing
of all labor unions or guilds, membership in which may be lawfully required for
the performance of XxXxxxx'x services hereunder; (v) neither BMG nor XxXxxxx
will enter into any other agreement which would interfere with the full and
prompt performance of its obligations hereunder.
b. Company Representations and Warranties - Company represents and
warrants that all claims made on behalf of the products and services are true
and accurate.
7. INDEMNIFICATION - Each of the parties shall defend, indemnify and hold
harmless the other party, including XxXxxxx Communications, Inc. and Xx XxXxxxx,
its successors, assigns, affiliates, licenses, and sub-licenses, and their
respective officers, directors agents and employees, from and against any
action, suit, claim, damages, liability, costs and expenses (including
reasonable outside attorney's fees and court costs) arising out of or in any way
connected with the negligence or willful misconduct of such indemnifying party,
the violation of law by such party, or any breach of any representation,
warranty, promise or agreement made by such party herein. Company also shall
defend, indemnify and hold harmless BMG, XxXxxxx Communications, Inc., Xx
XxXxxxx, and their successors, assigns, affiliates, licenses, and sub-licenses,
and their respective officers, directors agents and employees, from and against
any action, suit, claim, damages, liability, costs and expenses (including
reasonable attorney's fees and court costs) arising out of the exploitation of
the rights granted hereunder and/or the development, production, distribution or
exploitation of the products, services and/or any material created hereunder.
Additionally, BMG, XxXxxxx Communications, Inc. and Xx XxXxxxx shall be named as
additional insureds under the Company's error and omissions, general liability
and product liability policies. These indemnification and insurance obligations
shall survive the termination of this Agreement.
8. EARLY TERMINATION & SUSPENSION
(a) The Initial Term shall be deemed terminated automatically upon
XxXxxxx'x death. Not withstanding the foregoing, any commissions or other
compensation resulting from services performed under this agreement in the
initial or any subsequent terms will remain due and owing to BMG.
(b) Without waiving any other right or remedy available to Company,
Company shall have the right, by notice to XxXxxxx, to terminate the Initial
Term, upon the occurrence of any of the following:
(i) XxXxxxx'x breach of this Agreement (subject to paragraph 10
below;
(ii) XxXxxxx becoming mentally or physically disabled; and such
disability lasts greater than 60 days, the expiration date of the then current
term of the Agreement shall be extended to compensate for such disability.
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(iii) If XxXxxxx engages in conduct inconsistent with his current
celebrity status.
9. RELATIONSHIP OF THE PARTIES - BMG represents that it is an independent
business, and neither BMG nor BMG's employees or contract personnel are, or
shall be deemed from Company, Company's employees. Nothing contained in this
Agreement shall be construed to constitute BMG as an agent, employee, partner,
or independent contractor of Company.
10. DEFAULT- Neither party shall be considered in breach of this Agreement
unless such party fails to observe or perform any of its material duties or
obligations under this Agreement, and such failure continues for twenty (20)
days after written notice by the non-breaching party. Notwithstanding the
foregoing, if the nature of the breach is such that it cannot be cured within
twenty (20) days, the defaulting party shall not be deemed to be in default as
long as such party commences to cure such default within the twenty (20) day
period and diligently pursues such cure until completion.
11. ARBITRATION - Prior to filing any cause of action in state court regarding
any matter between BMG and Company, including but not limited to the formation
of this Agreement, both parties agree to first submit any dispute, controversy,
or claim arising out of this Agreement to non-binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
("AAA"), pursuant to which full discovery will be allowed. This is without any
waiver of right to jury trial. All arbitrations, hearings, and proceedings
related thereto shall take place in Los Angeles, California, and the arbitration
decision is not admissible in any court proceeding. Except as may be otherwise
specifically stated in this Agreement, all taxable arbitration costs, exclusive
of attorneys fees, shall be shared equally between the parties, and the parties
shall bear their own attorneys fees and costs which are not normally taxable in
the arbitration.
12. GOVERNING LAW AND JURISDICTION - The laws of the State of Florida shall
govern this Agreement. Each party agrees that jurisdiction and venue for any and
all claims, disputes, or other matters arising out of this Agreement will lie in
Sarasota County, Florida, or, if appropriate, a federal district court located
in Tampa, Florida for resolution of any dispute, action or proceeding arising in
connection with this Agreement, and both parties irrevocably waives any right
they may have to trial by jury in any dispute, action or proceeding arising out
of this Agreement. If any action at law or in equity is brought to enforce or
interpret the provisions of this Agreement, the prevailing party in such action
shall be entitled to all reasonable costs to include reasonable attorney fees of
outside counsel
13. SEVERABILITY - In the event that any term or provision of this Agreement is
held by a court of competent jurisdiction to be illegal, unenforceable or
invalid in whole or in part for any reason, the remaining provisions of this
Agreement shall remain in full force and effect. The invalid or unenforceable
provision will be deemed superseded by a valid, enforceable provision that most
closely matches the intent of the original provision and the remainder of the
Agreement and shall continue in full force and effect.
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14. ASSIGNMENT - BMG and Company agree that any assignment of this contract,
whole or in part, will only be allowable under mutual consent.
15. NOTICES - All notices and payments required by this Agreement shall be in
writing and shall be deemed to have been made when: (i) delivered by hand; (ii)
delivered by facsimile or overnight delivery service; or (iii) delivered or 3
days after the date mailed by registered or certified mail, postage prepaid,
addressed as follows, until notice of another address and/or facsimile number
shall have been received by the other party: All notices shall be sent to the
addresses and representatives provided below.
BestBet Media Group Sinofresh Healthcare, Inc.
0000 X Xxxxxxx Xxxx, Xxx 0 000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000 Xxxxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx Attn: Xxxxxxx Xxxx
Copies to:
Xx XxXxxxx
c/o Hansen, Jacobson, Teller, Hoberman, Xxxxxx, Xxxxxx,
Sloane & Xxxxxxx, LLP
000 X. Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
(000) 000-0000
Attn: Xxxxx Xxxxxxxx
16. MISCELLANEOUS - (a) this Agreement constitutes the entire Agreement between
the parties, and represents the complete and entire understanding of the parties
with respect to the subject matter of this Agreement and no modification to this
Agreement shall be effective unless signed by both BMG and Company. (b) No
failure on the part of either party to exercise, and no delay in exercising, any
right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right or remedy granted
hereby or by law. (c) This Agreement shall be construed in accordance with its
fair meaning and not against the drafting party. (d) Except as expressly
provided to the contrary, the various rights and remedies granted to both
parties hereunder shall be cumulative and the exercise or enforcement of any one
or more of them shall not preclude the enforcing party from exercising or
enforcing any of the others or any right or remedy provided by law. (e) This
Agreement and all rights and obligations hereunder, shall be binding on and
inure to the benefit of the parties hereto and their respective heirs,
successors, licensees and assigns. (f) No party shall be liable by reason of any
failure to delay in the performance of its obligations due to any cause beyond
its reasonable control, including act of war, acts of God, earthquake, flood,
embargo, riot, sabotage, labor shortage or dispute, governmental act or failure
of the Internet, fires or explosions.
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17. AMENDMENTS AND ADDENDUMS - The following Exhibits and Addendums are attached
hereto and hereby incorporated by reference into this Agreement: Exhibit A
"Services to be Performed by XxXxxxx", and Exhibit B "Acknowledgement by
XxXxxxx"
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of this day and year written above.
Best Bet Media Group "BMG": Sinofresh Healthcare, Inc "COMPANY"
By: /s/ Xxxxxx Mesitrich By: /s/ Xxxxxxx Xxxx
-------------------------------- --------------------------------
Name: Xxxxxx Mesitrich Name: Xxxxxxx Xxxx
Title: President Title: President
Date: Date:
------------------------------ ------------------------------
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EXHIBIT A
"SERVICES TO BE PERFORMED BY XXXXXXX"
In accordance with the terms and conditions of the Agreement and this Exhibit A,
and provided that neither party is in default hereunder, XxXxxxx shall perform
the following services on behalf of Company:
1. APPEARANCES - XxXxxxx shall make four personal appearances on the behalf of
Company during the Initial term of the Agreement. The appearances shall be
scheduled for times and locations to be mutually agreed by the Company, BMG and
XxXxxxx and are subject to the following:
x. XxXxxxx shall receive reasonable advance notice of any proposed
appearance.
x. XxXxxxx reserves the right to refuse any proposed appearance.
x. XxXxxxx'x maximum required appearance time at any Company function
shall be limited to four (4) hours.
d. Both parties agree to use their reasonable efforts to accommodate each
other's schedule. If XxXxxxx has agreed to a particular date, time and place,
Company agrees to make reasonable accommodations regarding last minute conflicts
that may arise as a result of XxXxxxx'x celebrity and stature.
2. VIDEO FOOTAGE - Subject to approval as set forth herein, XxXxxxx shall appear
on various Company video tapes. Unless otherwise agreed between the parties, the
total cumulative time of all footage used by Company of XxXxxxx on all Company
video tapes during the Initial Term of this Agreement shall not exceed ten (10)
minutes. Pursuant to Section 4 of this Agreement, BMG and XxXxxxx shall have
final approval over the script, use and presentation of XxXxxxx on any Company
video tape; and final edit of the tape and any related materials.
3. BASE COMPENSATION - Upon commencement of the Initial Term of this Agreement,
Company shall pay to BMG the guaranteed sum of Seventy-Five Thousand Dollars
($75,000). All funds required to be paid by Company to BMG shall be wired to BMG
on or before the dues date and payable as follows:
(a) Twenty Five Thousand Dollars ($25,000) upon execution of this
Agreement;
(b) Twelve Thousand Five Hundred Dollars ($12,500) on or before October
30, 2004;
(c) Twelve Thousand Five Hundred Dollars ($12,500) on or before November
30, 2004;
(d) Twelve Thousand Five Hundred Dollars ($12,500) on or before December
30, 2004:
(e) Twelve Thousand Five Hundred Dollars ($12,500) on or before January
30, 2005;
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4. STOCK AND WARRANTS - Subject to the terms and conditions contained in Section
2 of this Agreement BMG shall be entitled to the following:
(a) One Hundred Fifty Thousand (150,000) shares of restricted common
stock upon execution of this agreement with piggy-back registration
rights pursuant to the Registration Rights Agreement attached hereto
as Schedule A-1.
(b) BMG shall receive three warrants for 200,000 shares each of the
Company's common stock, assuming Xx. XxXxxxx'x active participation
over the Agreement term and renewal periods, granted as follows:
At signing of Agreement:
A warrant for 200,000 shares priced at 50% of closing market
price on date the Agreement is signed, vesting in twelve
(12) months and exercisable for sixty (60) months.
On first day of the first renewal:
A warrant for 200,000 shares priced at 75% of closing market
price on date the Agreement is signed, vesting in twelve
(12) months and exercisable for sixty (60) months.
On first day of the second renewal:
A warrant for 200,000 shares priced at 100% of closing market
price on the date the Agreement is signed, vesting in
twelve (12) months and exercisable for sixty (60) months.
The warrant agreements shall be substantially in the form attached hereto as
Schedule A-2 and shall include, among other terms, a cashless exercise provision
and piggy-back registration rights.
5. ROYALTY SCHEDULE - Subject to the terms and conditions contained in Section 2
of this Agreement BMG shall be entitled to the following:
The Company shall pay to BMG, for the Initial One Year Term of the Agreement and
any mutually agreed Renewal Terms thereof, a royalty (the "Royalty") equal to
three and one-half (3 1/2%) percent of the increase in Gross Sales of the
Product Line by Company (or by any Company Affiliate, successor, or assign) over
the Base Period when compared with the immediately preceding twelve month period
specified in Exhibit D. "Gross Sales" shall be defined as the total dollars paid
from all sources to, and received by or
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credited to, Company (or by any Company Affiliate, successor, or assign) for the
sale of the Product Line to the retail distribution chain within the United
States of America, less actual refunds or rebates to customers, shipping and
handling charges, and sales and use taxes. "Affiliate" shall be defined as an
entity which controls or is controlled by, is under common control with, or is
related by at least majority common ownership with, a specified entity. "Base
Period" shall mean the twelve (12) month period commencing with the roll-out
date of the first commercial in which XxXxxxx appears.
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EXHIBIT B
"ACKNOWLEDGEMENT BY XXXXXXX"
As a material inducement to you to enter into this Agreement, I hereby
represent, warrant and agree as follows:
1. BMG has the right and authority to enter into the Agreement and to furnish
to you my rights and services upon all the terms and conditions specified
insofar as it pertains to me in the Agreement, including without
limitation the rights as provided in Section 4 of the Agreement;
2. I am familiar with each and all of the terms, covenants and conditions of
the Agreement and hereby consent to BMG's execution of the Agreement;
3. I agree to be and will be bound by and will duly observe, perform and
comply with each and all of the terms, covenants and conditions of the
Agreement on my part to be performed or complied with;
4. I shall render to you all of the services and grant to you all of the
rights which are to be rendered and/or granted by me pursuant to the
Agreement even if BMG shall be dissolved or should otherwise cease to
exist;
5. I am under no obligation or disability by law or otherwise which would
prevent or restrict me from performing and complying with all of the
terms, covenants and conditions of the Agreement on my part to be
performed or complied with.
6. Provided timely payment to BMG, I will look solely to BMG or its
associated or subsidiary companies and not to you for all compensation and
other remuneration for any and all services and rights which I may render
and grant to you under the Agreement.
----------
XX XXXXXXX
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EXHIBIT C
"APPROVED PRODUCTS"
Sinofresh Nasal Spray
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EXHIBIT D
"GROSS SALES PRIOR TO BASE PERIOD"
Gross sales for the period, October 1, 2003 to September 30, 2004 was
$4,879,078. The actual base period gross sales shall be determined by the
Company at the completion of the production of the commercials and shall be
communicated to BMG and XxXxxxx in writing within thirty (30) days.
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SCHEDULE A-1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (THIS "AGREEMENT"), dated as of October
1, 2004 by and between SinoFresh HealthCare, Inc., a Florida corporation (the
"Company"), and BestBet Media Group, Inc. (the "Holder.")
WHEREAS, pursuant to that certain Services and License Agreement, dated
October 1, 2004, by and between the Company and the Holder (as amended and
supplemented, the "Services Agreement"), the Company has agreed to issue to
Holder One Hundred Fifty Thousand (150,000) shares (the "Common Stock Shares")
of its common stock, no par value per share (the "Common Stock"), in return for
those certain services described in the Services Agreement; and
WHEREAS, pursuant to the terms of the Services Agreement and in order to
induce the Holder to enter into such other agreements with Company, as the
Company may deem necessary in its sole discretion, to purchase Common Stock
Shares, the Company has agreed to enter into this Agreement and grant to the
Holder the registration rights herein.
NOW, THEREFORE, in consideration of the premises, promises and the mutual
covenants contained herein and the Services Agreement, the Company and Holder
hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following capitalized
terms shall have the following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean the date the Company executes the
Services Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Registrable Stock" shall mean the Common Stock Shares issued in
connection with the Services Agreement, excluding Common Stock Shares: (a) which
have been registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them; or (b) which could be, in the opinion of
counsel to the Company, publicly sold as of the date in question pursuant to
Rule 144 under the Securities Act.
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"Securities Act" shall mean the Securities Act of 1933, as amended.
2. Registration Rights.
(a) "Piggyback Registration". If the Company at any time or from
time to time proposes to register any of its Common Stock under the Securities
Act (other than in connection with: (i) a registration on Form S-4 pertaining to
a merger or similar transaction; or (ii) registration on Form S-8, or similar
forms) the Company shall request that the managing underwriter (if any) of such
underwritten offering include the Registrable Stock in the registration
statement for the underwritten offering in such registration. If such managing
underwriter agrees to include the Registrable Stock in the registration
statement relating to the underwritten offering, the Company shall at such time
give prompt written notice to the Holder of its intention to effect such
registration and of such Holder's right under such proposed registration, and
upon the request of the Holder delivered to the Company within ten (10) days
after giving such notice (which request shall specify the Registrable Stock
intended to be disposed of by the Holder), the Company shall use its reasonable
best efforts to include such Registrable Stock held by the Holder requested to
be included in such registration; provided, however, that:
(i) if the managing underwriter in such underwritten offering
shall advise the Company that it declines to include a portion or all of the
Registrable Stock requested by the Holder to be included in the registration
statement, then distribution of all or a specified portion of the Registrable
Stock shall be excluded from such registration statement (in case of an
exclusion as to a portion of the Registrable Stock, such portion to be excluded
shall be allocated among the Holder and any affiliates of the Company including
securities to be registered in such underwritten offering in proportion to the
respective number of Registrable Stock and other securities requested to be
registered by the Holder and affiliates). In such event the Company shall give
the Holder prompt notice of the number of Registrable Stock excluded from such
registration at the request of the managing underwriter. No such exclusion shall
reduce the securities being offered by the Company for its own account to be
included in such registration statement;
(ii) the Company may, in its sole discretion and without the
consent of the Holder, delay the filing or effectiveness of the registration
statement or withdraw such registration statement and abandon the proposed
offering in which the Holder had requested to participate, but any abandonment
shall not preclude subsequent request for registration pursuant to this Section
2 (a).
(b) Option to Include Registrable Stock in Offering. The Holder,
subject to the provisions of Section 2(a), shall have the option to include any
of the Holder's Registrable Stock in the registration statement. The Company
shall not be required to include the Holder's Registrable Stock in the
registration statement relating to an underwritten offering of the Company's
securities unless the Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it (provided such
terms are usual and customary for selling stockholders) and the Holder agrees to
execute and/or deliver such documents in connection with such registration as
the Company or the managing underwriter may reasonably request.
(c) Cooperation with Company. The Holder will cooperate with the
Company in all respects in connection with this Agreement, including, timely
supplying all information reasonably requested by the Company and executing and
returning all
16
documents reasonably requested in connection with the registration and sale of
the Registrable Stock.
3. Registration Procedures.
(a) In connection with any registration under Section 2(a) hereof,
the Company agrees as follows:
(i) use its reasonable best efforts to cause such registration
statement to become effective and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided).
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in Section 3(a) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Stock covered by such registration statement in accordance with the sellers'
intended method of disposition set forth in such registration statement for such
period;
(iii) furnish to each seller of Registrable Stock such numbers
of copies of a summary prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus, in conformity with
the requirements of the Securities Act, and such other documents, as such
persons may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Stock covered by such registration statement;
(iv) use its reasonable best efforts to register and qualify
the Registrable Stock covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the sellers of the
Registrable Stock or, in the case of an underwritten public offering, the
managing underwriter, reasonably shall request, and do any and all other acts
and things which may be necessary or advisable to enable such seller of
Registrable Stock to consummate the public sale or other disposition in such
jurisdictions of the Registrable Stock owned by such seller, except that the
Company shall not for any such purpose be required to: (i) qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified or to file therein any general consent to service of process or be
subject to any escrow or other similar conditions; or (ii) take any other
actions or submit itself or its directors or officers to any restrictions,
obligations or burdens having a material adverse economic effect on it or them;
(v) use its reasonable best efforts to list or cause to be
quoted such securities on any securities exchange or national quotation service
on which any securities of the Company are then listed or quoted, if the listing
or quotation of such securities is then permitted under the rules of such
exchange or national quotation service;
(vi) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering; and
17
(vii) notify each seller of Registrable Stock and each
underwriter under such registration statement, if any, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
(b) For purposes of Sections 3(a) and 3(b) hereof, the period of
distribution of Registrable Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Registrable Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Registrable Stock covered thereby or 30 days (or
such other amount of time as determined by the Company in its sole discretion).
(c) The Holder will cooperate with the Company in all respects in
connection with this Agreement, including, timely supplying of all information
reasonably requested by the Company and executing and returning all documents
reasonably requested in connection with the registration and sale of the
Registrable Stock.
4. Expiration of Registration Rights. The obligations of the Company to register
shares of the Registrable Stock under Section 2 of this Agreement, shall
terminate two (2) years after the Effective Date, unless such obligations
terminate earlier in accordance with the terms of this Agreement.
5. Expenses. All expenses incurred by the Company in complying with the
provisions of this Agreement, including, without limitation, all filing fees,
printing expenses, fees and disbursements of Company counsel and independent
public accounts for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., fees of transfer
agents and registrars and costs of issuance, but excluding any Selling Expenses
and expenses of counsel for any Holder of the Registrable Stock, are called
"Registration Expenses." All underwriting discounts, selling commissions and
underwriter expense reimbursement allowances applicable to the sale of
Registrable Stock, any stock transfer taxes incurred with respect to the sale of
Registrable Stock, as well as all fees and expenses of Holder's legal counsel
and other advisors, are called "Selling Expenses."
The Company will pay all Registration Expenses in connection with each
registration of Registrable Stock pursuant to the provisions of this Agreement.
All Selling Expenses in connection with each such registration statement shall
be borne by the Holder.
6. Indemnification. In the event any Registrable Stock are included in a
registration statement pursuant to this Agreement:
(a) Company Indemnity. To the extent permitted by law, the Company
shall indemnify and hold harmless the Holder thereunder, its officers and
directors, each underwriter of such Registrable Stock thereunder and each other
person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act, against any losses, claims, damages, liabilities or expenses
to which they may become
18
subject under the Securities Act or other federal or state law, insofar as such
losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto; (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and the Company shall reimburse the Holder, each such
underwriter and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, expense or action; provided, however, that
the Company shall not be liable in any such case if and to the extent that any
such loss, claim, damage, liability, expense or action arises out of or is based
upon: (i) an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Holder,
any such underwriter or any such controlling person in writing specifically for
use in such registration statement or prospectus; or (ii) such Holder's failure
to deliver a copy of the final prospectus as then amended or supplemented after
the Company has furnished such Holder with a sufficient number of copies of the
same, but only if delivery of same is required by law and the same would have
cured the defect giving rise to any such loss, claim, damage, liability, expense
or action.
(b) Holder Indemnity. In the event of a registration of any of
Holder's Registrable Stock under the Securities Act pursuant to the provisions
of this Agreement, the Holder shall furnish to the Company in writing such
information and affidavits with respect to such Holder as the Company reasonably
requests for use in connection with any such registration statement (or
prospectus contained therein) and the Holder will indemnify and hold harmless to
the extent permitted by law, the Company, each person, if any, who controls the
Company within the meaning of the Securities Act, each officer and director of
the Company, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims, damages,
liabilities or expenses to which the Company or such officer, director,
underwriter or controlling person may become subject under the Securities Act or
other-wise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) arise out of or are based upon any statements or
information provided by the Holder to the Company or underwriter in connection
with the offer and sale of Registrable Stock. Notwithstanding the foregoing, the
amount Holder shall be obligated to indemnify pursuant to this Agreement shall
be limited to an amount equal to the proceeds received by Holder of the
Registrable Stock sold pursuant to the registration statement which gives rise
to such obligation to indemnify.
(c) Notice; Right to Defend. Any person entitled to indemnification
hereunder agrees to give prompt written notice to the indemnifying party after
the receipt by such person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing for
which such person will claim indemnification or contribution pursuant to this
Agreement and, unless in the reasonable judgment of such indemnified party a
conflict of interest may exist between such indemnified party and the
indemnifying party, shall permit the indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to such indemnified party. If
the indemnifying party is not entitled to, or elects not to, assume the defense
of a claim, it will not be obligated to pay the fees and expenses of more than
one counsel for the indemnified party with respect to such claim. The
indemnifying party will not be subject to any liability for any settlement made
without its consent. Failure of
19
notice by a seller of Registrable Stock entitled to indemnification hereunder
will not relieve the Company of its obligations under this Section 6 unless the
Company is actually prejudiced thereby.
(d) Contribution. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) Survival of Indemnity, The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive the
registration and sale of any Registrable Stock by any person entitled to
indemnification hereunder and the expiration or termination of this Agreement.
8. Assignment of Registration Rights. The rights of the Holder under this
Agreement, including the rights to cause the Company to register Registrable
Stock may not be assigned without the written prior consent of the Company. In
the event of any transfer, the transfer will only be permitted if the transferee
agrees to be bound by the provisions of this Agreement.
9. Notices.
(a) All communications under this Agreement shall be in writing and
shall be mailed by certified mail return receipt requested, postage prepaid, or
telegraphed or telexed with confirmation of receipt or delivered by hand or by
overnight delivery service,
(i) If to the Company, at:
SinoFresh HealthCare, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Chief Executive Officer
or at such other address as it may have furnished in writing to the Holder of
Registrable Stock at the time outstanding, or
(ii) if to the Holder of any Registrable Stock, to the address
of such Holder as it appears in the stock ledger of the Company.
20
(b) Any notice so addressed, when mailed by certified mail return
receipt requested shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted, or when
delivered by hand or overnight delivery service shall be deemed to be given when
delivered.
10. Successors and Assigns. Except as otherwise expressly provided herein, this
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the Company and the Holder.
11. Amendment, Waiver and Termination. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holder.
12. Counterparts. One or more counterparts of this Agreement may be signed by
the parties, each of which shall be an original but all of which together shall
constitute one and the same instrument.
13. Governing Law. This Agreement shall be construed in accordance with and
governed by the internal laws of the State of Florida, without giving effect to
conflicts of law principles.
14. Invalidity of Provisions. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
15. Headings. The headings in this Agreement are for convenience of reference
only and shall not be deemed to alter or affect the meaning or interpretation of
any provisions hereof.
16. Entire Agreement. This Agreement expresses the entire understanding of the
company and the Holder with respect to the subject matter hereof and supersedes
all prior and contemporaneous agreements and undertakings of the Company and the
Holder with respect to the subject matter hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement effective
as of the day and year first above written.
SINOFRESH HEALTHCARE, INC. BESTBET MEDIA GROUP, INC.
By:_______________________________ By:_________________________________
Name: ______________________ Name: _________________________
Position: __________________ Position: _____________________
21
SCHEDULE A-2
THE SECURITIES REPRESENTED BY THIS WARRANT AND ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE
SECURITIES LAWS, BUT MAY BE ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR
PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER THE 1933
ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES AND THE
SECURITIES ISSUED UPON EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
ASSIGNED, NOR MAY THIS WARRANT BE EXERCISED, EXCEPT IN A TRANSACTION WHICH IS
EXEMPT UNDER PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT.
WARRANT TO PURCHASE ________________________ SHARES OF COMMON STOCK
DATE: _________ , 200___
1. GRANT OF WARRANT.
1.1 SinoFresh HealthCare, Inc., a Florida corporation (the
"Company"), hereby agrees that BestBet Media, Group, Inc., or registered assigns
thereof (the "Holder") is entitled, subject to the provisions of this Warrant,
to purchase from the Company _______________________________________
(____________) fully paid and non-assessable shares of Common Stock, at a price
of $_______ per share (the "Exercise Price"). Holder may purchase said shares
commencing on the date that is twelve months from and including the date
above-written (the "Vesting Date") up until 5:00 p.m. Eastern Time, on
_________________, 200___ (60 months from and including the Vesting Date) (the
"Expiration Date").
1.2 The term "Common Stock" means the Common Stock, no par value per
share, of the Company as constituted on the date hereof, together with any other
equity securities that may be issued by the Company in substitution therefore.
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the Exercise Price may be adjusted from time to time as hereinafter
set forth. The shares
22
of Common Stock deliverable upon such exercise, and as adjusted from time to
time, are hereinafter referred to as "Warrant Shares." The term "Company" means
and includes the Company as well as (i) any successor corporation resulting from
the merger or consolidation of such corporation with another corporation, or
(ii) any corporation to which such corporation has transferred its property or
assets as an entirety or substantially as an entirety.
2. EXERCISE OF WARRANT.
2.1 EXERCISE PERIOD. Subject to the limitations set forth in Section
5 below, this Warrant may be exercised in whole or in part at any time or from
time to time during the period commencing on the Vesting Date and expiring at
5:00 p.m. Eastern Time on the Expiration Date or, if such day is a day on which
banking institutions in Florida are authorized by law to close, then on the next
succeeding day that shall not be such a day.
2.2 CASH PAYMENT. The Holder may exercise this Warrant, in whole or
in part (but not as to fractional shares), by presentation and surrender of this
Warrant to the Company at its principal office with the Election to Purchase
Form attached hereto duly executed for the number of shares specified in such
form. The Exercise Price for the Warrant Stock shall be paid in cash or by check
and shall be delivered to the Company concurrently with the Election to Purchase
Form.
2.3 NET EXERCISE ISSUE. Notwithstanding the foregoing, in lieu of
payment to the Company as set forth in Section 2.2 above, the Holder may convert
this Warrant, in whole or in part (but not as to fractional shares), into the
number of Warrant Shares determined by dividing (i) the aggregate Fair Market
Value of the number of Warrant Shares issuable upon the proposed exercise of
this Warrant (on an as converted basis) minus the aggregate Exercise Price of
the number of Warrant Shares issuable upon the proposed exercise of this Warrant
by (ii) the Fair Market Value of one Warrant Share. "Fair Market Value" shall
mean: (A) if the Company's Common Stock is quoted or traded on NASDAQ National
Market System, NASDAQ SmallCap Market, or a national securities exchange, the
average closing price of the Warrant Shares reported for the ten (10) business
days immediately before the Holder delivers its Notice of Exercise to the
Company, or if there have been no sales on any such business day, the average of
the bid and asked prices on such business day; (B) if instead the Company's
Common Stock is quoted on the OTC Electronic Bulletin Board or other interdealer
quotation service, the average of the bid and asked prices for the ten (10)
business days immediately before the Holder delivers its Notice of Exercise to
the Company; and (C) at all other times, the fair market value of the Warrant
Shares as determined in good faith by the Board of Directors of the Company.
2.4 MISCELLANEOUS. If this Warrant should be exercised in part only,
the Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the Warrant Shares purchasable hereunder.
23
3. RESERVATION OF SHARES. The Company will at all times reserve for
issuance and delivery all shares of Common Stock issuable upon exercise of this
Warrant. All such shares shall be duly authorized and, when issued upon exercise
in compliance with the terms of this Warrant, shall be validly issued, fully
paid and non-assessable.
4. RESTRICTIONS ON EXERCISE AND TRANSFER.
4.1 EXERCISE. As a condition to the exercise hereof, the Holder
shall make any truthful representation or warranty reasonably required to
facilitate the application of any exemption(s) from federal and state
registration requirements in connection therewith.
4.2 HOLDER'S INTENT. The Holder of this Warrant, by acceptance
hereof, represents and warrants to the Company that such Holder is acquiring
this Warrant and the Warrant Shares for investment for the Holder's own account
and not with a view to, or for resale in connection with, any distribution
thereof.
4.3 TRANSFER. Neither this Warrant nor the Warrant Shares have been
registered under the Act, and none of the foregoing may be sold or transferred
in whole or in part unless pursuant to an effective registration statement or
unless the Holder shall have first given notice to the Company describing such
sale or transfer and furnished to the Company an opinion of counsel (which
counsel and opinion (in form and substance) shall be reasonably satisfactory to
the Company) to the effect that the proposed sale or transfer may be made
without registration under the 1933 Act. Certificates representing Warrant
Shares purchased hereunder shall bear restrictive legends in conformance with
the foregoing.
5. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES FOR SUBDIVISION OR
COMBINATION OF COMMON STOCK.
5.1 ADJUSTMENTS.
(1) SUBDIVISION. In the event that the Company at any time or
from time to time after the date of this Warrant shall declare or pay any
dividend on the shares of Common Stock payable in shares of Common Stock or in
any right to acquire shares of Common Stock, or shall effect a subdivision of
the outstanding shares of Common Stock into a greater number of shares of Common
Stock (by stock split, reclassification or otherwise), then the Exercise Price
in effect immediately prior to such event and the number of Warrant Shares
purchasable hereunder shall, concurrently with the effectiveness of such event,
be proportionately decreased and increased, respectively.
(2) COMBINATION. In the event that at any time or from time to
time after the date of this Warrant the outstanding shares of Common Stock shall
be combined or consolidated into a lesser number of shares of Common Stock (by
reclassification, reverse split or otherwise), then the Exercise Price in effect
immediately prior to such event and the number of Warrant Shares purchasable
hereunder shall, concurrently with the effectiveness of such event, be
proportionately increased and decreased, respectively.
24
5.2 ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE, OR SUBSTITUTION. In
the event of any reorganization or any reclassification of the capital stock of
the Company, any consolidation or merger of the Company with or into another
corporation or corporations or the conveyance of all or substantially all of the
Company's assets to another corporation (except for any such transaction which
is treated as a liquidation, dissolution or winding up of the Company), this
Warrant shall thereafter be exercisable for the number of shares of stock or
other securities or property (including cash) to which a holder of the number of
remaining Warrant Shares purchasable hereunder would have been entitled upon the
record date of (or date of, if no record date is fixed) such reorganization,
reclassification, consolidation, merger or conveyance; and, in any case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interests thereafter of the Holder of this Warrant to the end that the
provisions set forth herein shall thereafter be applicable, as nearly as
equivalent as is practicable, in relation to any shares of stock or the
securities or property (including cash) thereafter deliverable upon the exercise
of this Warrant.
6. REGISTRATION RIGHTS.
6.1 "PIGGYBACK REGISTRATION". If the Company at any time or from
time to time proposes to register any of its Common Stock under the Securities
Act (other than in connection with: (i) a registration on Form S-4 pertaining to
a merger or similar transaction; or (ii) registration on Form S-8, or similar
forms) the Company shall request that the managing underwriter (if any) of such
underwritten offering include the Warrant Shares (but excluding Warrant Shares
which have been registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with such
registration statement, or, which could be, in the opinion of Counsel to the
Company, publicly sold as of the date in question pursuant to Rule 144 under the
Securities Act) (hereinafter defined as "Registrable Stock" for purposes of this
Section 6) in the registration statement for the underwritten offering in such
registration. If such managing underwriter agrees to include the Registrable
Stock in the registration statement relating to the underwritten offering, the
Company shall at such time give prompt written notice to the Holder of its
intention to effect such registration and of such Holder's right under such
proposed registration, and upon the request of the Holder delivered to the
Company within ten (10) days after giving such notice (which request shall
specify the Registrable Stock intended to be disposed of by the Holder), the
Company shall use its reasonable best efforts to include such Registrable Stock
held by the Holder requested to be included in such registration; provided,
however, that:
(1) if the managing underwriter in such underwritten offering
shall advise the Company that it declines to include a portion or all of the
Registrable Stock requested by the Holder to be included in the registration
statement, then distribution of all or a specified portion of the Registrable
Stock shall be excluded from such registration statement (in case of an
exclusion as to a portion of the Registrable
25
Stock, such portion to be excluded shall be allocated among the Holder and any
affiliates of the Company including securities to be registered in such
underwritten offering in proportion to the respective number of Registrable
Stock and other securities requested to be registered by the Holder and
affiliates). In such event the Company shall give the Holder prompt notice of
the number of Registrable Stock excluded from such registration at the request
of the managing underwriter. No such exclusion shall reduce the securities being
offered by the Company for its own account to be included in such registration
statement;
(2) the Company may, in its sole discretion and without the
consent of the Holder, delay the filing or effectiveness of the registration
statement or withdraw such registration statement and abandon the proposed
offering in which the Holder had requested to participate, but any abandonment
shall not preclude subsequent request for registration pursuant to this Section
6.1.
6.2 OPTION TO INCLUDE REGISTRABLE STOCK IN OFFERING. The Holder,
subject to the provisions of Section 6.1, shall have the option to include any
of the Holder's Registrable Stock in the registration statement. The Company
shall not be required to include the Holder's Registrable Stock in the
registration statement relating to an underwritten offering of the Company's
securities unless the Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it (provided such
terms are usual and customary for selling stockholders) and the Holder agrees to
execute and/or deliver such documents in connection with such registration as
the Company or the managing underwriter may reasonably request.
6.3 COOPERATION WITH COMPANY. The Holder will cooperate with the
Company in all respects in connection with this Agreement, including, timely
supplying all information reasonably requested by the Company and executing and
returning all documents reasonably requested in connection with the registration
and sale of the Registrable Stock.
7. REGISTRATION PROCEDURES.
7.1 In connection with any registration under Section 6 hereof, the
Company agrees as follows:
(1) use its reasonable best efforts to cause such registration
statement to become effective and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided).
(2) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in Section 3(a) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Stock covered by such registration statement in accordance with the
26
sellers' intended method of disposition set forth in such registration statement
for such period;
(3) furnish to each seller of Registrable Stock such numbers
of copies of a summary prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus, in conformity with
the requirements of the Securities Act, and such other documents, as such
persons may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Stock covered by such registration statement;
(4) use its reasonable best efforts to register and qualify
the Registrable Stock covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the sellers of the
Registrable Stock or, in the case of an underwritten public offering, the
managing underwriter, reasonably shall request, and do any and all other acts
and things which may be necessary or advisable to enable such seller of
Registrable Stock to consummate the public sale or other disposition in such
jurisdictions of the Registrable Stock owned by such seller, except that the
Company shall not for any such purpose be required to: (i) qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified or to file therein any general consent to service of process or be
subject to any escrow or other similar conditions; or (ii) take any other
actions or submit itself or its directors or officers to any restrictions,
obligations or burdens having a material adverse economic effect on it or them;
(5) use its reasonable best efforts to list or cause to be
quoted such securities on any securities exchange or national quotation service
on which any securities of the Company are then listed or quoted, if the listing
or quotation of such securities is then permitted under the rules of such
exchange or national quotation service;
(6) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering; and
(7) notify each seller of Registrable Stock and each
underwriter under such registration statement, if any, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
27
7.2 For purposes of Sections 7.1(1) and 7.1(2) hereof, the period of
distribution of Registrable Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Registrable Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Registrable Stock covered thereby or 30 days (or
such other amount of time as determined by the Company in its sole discretion).
7.3 The Holder will cooperate with the Company in all respects in
connection with this Agreement, including, timely supplying of all information
reasonably requested by the Company and executing and returning all documents
reasonably requested in connection with the registration and sale of the
Registrable Stock.
8. EXPIRATION OF REGISTRATION RIGHTS. The obligations of the Company to
register shares of the Registrable Stock under Section 6 of this Agreement,
shall terminate two (2) years after the Effective Date, unless such obligations
terminate earlier in accordance with the terms of this Agreement.
9. EXPENSES. All expenses incurred by the Company in complying with the
registration provisions of this Agreement, including, without limitation, all
filing fees, printing expenses, fees and disbursements of Company counsel and
independent public accounts for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
fees of transfer agents and registrars and costs of issuance, but excluding any
Selling Expenses and expenses of counsel for any Holder of the Registrable
Stock, are called "Registration Expenses." All underwriting discounts, selling
commissions and underwriter expense reimbursement allowances applicable to the
sale of Registrable Stock, any stock transfer taxes incurred with respect to the
sale of Registrable Stock, as well as all fees and expenses of Holder's legal
counsel and other advisors, are called "Selling Expenses." The Company will pay
all Registration Expenses in connection with each registration of Registrable
Stock pursuant to the provisions of this Agreement. All Selling Expenses in
connection with each such registration statement shall be borne by the Holder.
10. INDEMNIFICATION. In the event any Registrable Stock are included in a
registration statement pursuant to this Agreement:
10.1 COMPANY INDEMNITY. To the extent permitted by law, the Company
shall indemnify and hold harmless the Holder thereunder, its officers and
directors, each underwriter of such Registrable Stock thereunder and each other
person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act, against any losses, claims, damages, liabilities or expenses
to which they may become subject under the Securities Act or other federal or
state law, insofar as such losses, claims, damages, liabilities, or expenses (or
actions in respect thereof) arise out of or are based upon: (i) any untrue
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statement or alleged untrue statement of a material fact contained in such
registration statement including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto; (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and the Company shall reimburse the
Holder, each such underwriter and each such controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, expense or action; provided,
however, that the Company shall not be liable in any such case if and to the
extent that any such loss, claim, damage, liability, expense or action arises
out of or is based upon: (i) an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by
any such Holder, any such underwriter or any such controlling person in writing
specifically for use in such registration statement or prospectus; or (ii) such
Holder's failure to deliver a copy of the final prospectus as then amended or
supplemented after the Company has furnished such Holder with a sufficient
number of copies of the same, but only if delivery of same is required by law
and the same would have cured the defect giving rise to any such loss, claim,
damage, liability, expense or action.
10.2 HOLDER INDEMNITY. In the event of a registration of any of
Holder's Registrable Stock under the Securities Act pursuant to the provisions
of this Agreement, the Holder shall furnish to the Company in writing such
information and affidavits with respect to such Holder as the Company reasonably
requests for use in connection with any such registration statement (or
prospectus contained therein) and the Holder will indemnify and hold harmless to
the extent permitted by law, the Company, each person, if any, who controls the
Company within the meaning of the Securities Act, each officer and director of
the Company, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims, damages,
liabilities or expenses to which the Company or such officer, director,
underwriter or controlling person may become subject under the Securities Act or
other-wise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) arise out of or are based upon any statements or
information provided by the Holder to the Company or underwriter in connection
with the offer and sale of Registrable Stock. Notwithstanding the foregoing, the
amount Holder shall be obligated to indemnify pursuant to this Agreement shall
be limited to an amount equal to the proceeds received by Holder of the
Registrable Stock sold pursuant to the registration statement which gives rise
to such obligation to indemnify.
10.3 NOTICE; RIGHT TO DEFEND. Any person entitled to indemnification
hereunder agrees to give prompt written notice to the indemnifying party after
the receipt by such person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing for
which such person will claim indemnification or contribution pursuant to this
Agreement and, unless in the reasonable judgment of such indemnified party a
conflict of interest may exist between such indemnified party
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and the indemnifying party, shall permit the indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to such indemnified
party. If the indemnifying party is not entitled to, or elects not to, assume
the defense of a claim, it will not be obligated to pay the fees and expenses of
more than one counsel for the indemnified party with respect to such claim. The
indemnifying party will not be subject to any liability for any settlement made
without its consent. Failure of notice by a seller of Registrable Stock entitled
to indemnification hereunder will not relieve the Company of its obligations
under this Section 6 unless the Company is actually prejudiced thereby.
10.4 CONTRIBUTION. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
10.5 SURVIVAL OF INDEMNITY. The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive the
registration and sale of any Registrable Stock by any person entitled to
indemnification hereunder and the expiration or termination of this Agreement.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights of the Holder under this
Warrant, including the rights to cause the Company to register Registrable
Securities, may not be assigned without the written prior consent of the
Company. In the event of any transfer, the transfer will only be permitted if
the transferee agrees to be bound by the provisions of this Warrant.
12. NOTICES. All notices required hereunder must be in writing and shall
be deemed given when telefaxed, delivered personally or within three days after
mailing when mailed by certified or registered mail, return receipt requested,
if to the Company, at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxx, XX 00000, Attention:
Chief Financial Officer; and if to the Holder, at BestBet Media Group, Inc.,
0000 X. Xxxxxxx Xxxx, Xxxxx 0, Xxx Xxxxx, Xxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxxxx, or such other address of which the Company or Holder has been advised
by notice hereunder.
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13. NO RIGHTS AS SHAREHOLDERS. Nothing contained in this Warrant confers
or shall be construed as conferring upon the Holder hereof the right to vote or
to consent or to receive notice as a shareholder in respect of any meetings of
shareholders for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company.
14. EXCHANGE AND REPLACEMENT OF CERTIFICATE.
14.1 This Warrant is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal office of the
Company, for a new Warrant of like tenor and date representing in the aggregate
the right to purchase the same number of Warrant Shares as are purchasable
hereunder in such denominations as shall be designated by the Holder hereof at
the time of such surrender.
14.2 Upon receipt by the Company of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company, and return and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant.
15. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required
to issue certificates representing fractions of Warrant Shares on the exercise
of this Warrant, nor shall it be required to issue scrip or pay cash in lieu of
fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated.
16. WITHHOLDING TAXES.
16.1 Whenever Warrant Shares are to be issued upon the exercise of
this Warrant, the Company shall have the right to require the Holder to remit to
the Company in cash an amount sufficient to satisfy U.S. federal, state and
local withholding tax requirements, if any, prior to the delivery of any
certificate or certificates for such Warrant Shares.
16.2 Notwithstanding Section 16.1, at the election of a Holder,
subject to the approval of the Board of Directors of the Company, when Warrant
Shares are to be issued upon the exercise of this Warrant, the Holder may tender
to the Company a number of Warrant Shares, or the Company shall withhold a
number of such Warrant Shares, the fair market value of which is sufficient to
satisfy the tax requirements, if any, attributable to such exercise or
occurrence.
17. APPLICABLE LAW. The Warrant is issued under and shall for all purposes
be governed by and construed in accordance with the internal laws of the State
of Florida, without regard to conflicts of laws principles.
18. SEVERABILITY. If one or more provisions of the Warrant are held to be
unenforceable under applicable law, such provision shall be excluded from the
Warrant and the balance of the Warrant shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms.
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19. SUCCESSORS. All of the covenants, agreements, representations and
warranties contained in this Warrant shall bind the parties hereto and their
respective heirs, executors, administrators, distributes, successors and
assigns.
20. HEADINGS. The headings in this Warrant are intended for convenience
only and shall have no substantive effect.
NOW THEREFORE, the Company has caused this Warrant to be signed as of and
effective on the date first written above.
SINOFRESH HEALTHCARE, INC.
By: ________________________________
Name: _____________________________
Title: _____________________________
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