CONSULTING AGREEMENT AND FINDERS FEE AGREEMENT
This Agreement is made and entered into as of this 9th day of August, 1999, by
and between REMEDENT USA, INC. a Nevada corporation (the "Company"), and RUBICON
CAPITAL PARTNERS, INC. (the "Consultant").
In consideration of and for the mutual promises and covenants contained herein,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Purpose. The Company hereby retains the Consultant during the term specified
in Section 2 hereof to render consulting advice to the Company, upon the terms
and conditions as set forth herein.
2. Term. Subject to the provisions of sections 8, 10 and 23 hereof, this
Agreement shall be effective for a period of twenty-four (24) months commencing
August 9, 1999.
3. Duties of Consultant. During the term of this Agreement, the Consultant will
provide the Company with such regular and customary consulting advice as is
reasonably requested by the Company, provided that the Consultant shall not be
required to undertake duties not reasonably within the scope of the consulting
service contemplated by this Agreement. In performance of these duties, the
Consultant shall provide the Company with the benefits of its best judgment and
efforts. It is understood and acknowledged by the parties that the value of the
Consultant's advice is not measurable in any quantitative manner, and that the
Consultant shall be obligated to render advice, upon the request of the Company,
in good faith, but shall not be obligated to spend any specific amount of time
in doing so.
Company grants Consultant permission to act on Company's behalf in assisting
Company in its business reorganization, recapitalization, and mergers and
acquisition programs. Consultant's services shall be provided on a non-exclusive
basis. Consultant shall have no authority to bind the Company. Consultant shall
provide its services on a best-efforts basis. The Consultant's duties may
include, but will not necessarily be limited to:
1. Advise, assist and introduce the Company to various professionals
with respect to documentation, disclosure policies and required
statutory security law compliance.
2. Advise and assist the Company's financing during the term.
3. Advise and assist on the expansion of the Company's management
team to include qualified Board members, etc.
4. Assist in the dissemination of corporate information regarding
the Company to the investment community at large.
5. Arranging, on behalf of the Company and its representatives, at
appropriate times, meetings with investment banks.
6. Assisting in the Company's financial relations, including
discussions between the Company and the financial community.
4. Relationships with Others. The Company acknowledges that the Consultant and
its affiliates are in the business of providing consulting advice (of all types
contemplated by this Agreement) to others. Nothing herein contained shall be
construed to limit or restrict the Consultant or its affiliates from rendering
such services or advice to others.
5. Consultant's Liability. In the absence of negligence, gross negligence or
willful misconduct on the part of the Consultant, or the Consultant's breach of
this Agreement, the Consultant shall not be liable to the Company, for any act
or omission in the course of or in connection with the rendering or providing of
advice hereunder. Except in those cases where the negligence, gross negligence
or willful misconduct of the Consultant or the breach by the Consultant of this
Agreement is alleged and proven, the Company agrees to defend, indemnify and
hold the Consultant harmless as set forth in Exhibit A attached hereto and made
a part hereof.
6. Expenses. The company, upon receipt of appropriate supporting documentation,
shall reimburse the Consultant for any and all reasonable out-of-pocket expenses
incurred by the Consultant in connection with services rendered by the
Consultant to the Company pursuant to this Agreement, including, but not limited
to, hotel, food and associated expenses, all charges for travel and
long-distance telephone calls and all other expenses incurred by the Consultant
in connection with services rendered by the Consultant to the Company pursuant
to this Agreement. Expenses payable under this Section 6 shall not include
allocable overhead expenses of the Consultant, including, but not limited to,
secretarial charge and rent. Expenses that are incurred on the behalf of the
Company in excess of $1,000 per month must be preapproved by the Company.
7. Consulting Compensation. As compensation for the consulting services to be
rendered by the Consultant to the Company pursuant to Section 3 hereof, the
Company shall pay the Consultant an up front consulting fee of ten thousand
dollars ($10,000 USD) to be paid within 60 days of signing of this agreement or
upon closing of the first trench of financing. Consulting compensation is
separate from the Finders Fee compensation as explained below in 7(A) through
7(C).
Finders Fee-Compensation. Consultant shall be entitled to receive the following
compensation:
A. Fees -- Subject to and deferred until the Company obtains one million
dollars ($1,000,000) of additional financing from "Qualified Persons" (as
defined below) by October 1, 1999, Company shall pay a finders fee of 15%
(fifteen percent) of the total amount raised.
B. Options -- Subject to and delivery deferred until the Company obtains one
million dollars ($1,000,000) of additional financing from "Qualified
Persons" (as defined below) by October 1, 1999, Consultant shall be granted
a three year option (the "Option") for the purchase of an amount equal to
205 of the Company's stock issued pursuant to the o ne million dollars
($1,000,000) of additional financing from "Qualified Persons" with an
exercise price of one dollar ($1.30) per share (such being the market price
of the common stock on the date hereof). The Options may be exercised via
cashless exchange. The shares of common stock issuable upon exercise of the
Option shall have full piggyback registration rights and shall be included
in a Registration Statement on any form available under the Securities Act
of 1933, as amended (the "Act") as soon as practicable after or concurrent
to any filed registration statement. The Company shall determine, in its
sole discretion, when and whether to file a registration statement and
which form to use in doing so. Said shares underlying the options shall be
restricted securities and subject to any and all lockup agreements that are
placed upon the founders shares of the Company unless the Company and the
Consultant mutually agree to the contrary. The number of options shall be
adjusted pursuant to a reasonable anti-dilution formula approved by the
parties hereto.
C. Additional Fees-Additional Financings -- Consultant shall receive the
following finders fees for the following additional transactions which
close during the term or during the twenty four month period immediately
following thereafter:
(1) Ten percent (10%) cash fee based upon the total consideration for any and
all equity including debt convertible into equity from "Qualified Persons"
hereinafter defined for the amount between $1,000,000 and $5,000,000 of
financing, five percent (5%) for the next $5,000,000 of financing and two
and one-half percent (2.5%) for amounts of financing raised in excess of
$10,000,000;
(2) Two and one half percent (2.5%) cash fees for any and all debt raised from
"Qualified Persons" as defined herein (including warrant exercises) and;
(3) Warrants to purchase shares of stock in the Company equal to ten percent
(10%) of the total consideration received by the Company pursuant to (C)(1)
and/or equal to two and one half percent (2.5%) of the total consideration
if the consideration is other cash pursuant to (2) herein of the shares or
warrants issued or shares into which debt may be Converted exercisable by a
price equal to the lesser of fair market value or the pricing of the shares
of the equity or warrants at the close of such financing. Said warrants
shall be exercisable for a period of three years and may be exercised via
cashless exchange. The shares of common stock issuable upon exercise of the
Warrants shall have full piggyback registration rights and shall be
included in a Registration Statement on any form available under the
Securities Act of 1933, as amended (the "Act") as soon as practicable after
or concurrent to any filed registration statement. The Company shall
determine, in its sole discretion, when and whether to file a registration
statement and which form to use in doing so. Said shares underlying the
warrants shall be restricted securities and subject to a lock-up agreement
as defined 7(b).
For purposes of Section 7 herein, the term "Qualified Person" shall mean any
person with respect to whom Consultant either provides an initial personal
introduction to the Company or, at the request of the Company, advises and
assists the Company in arranging a financing for the Company.
8. Other Advice. In addition to the duties set out in Section 3 hereof, the
Consultant agrees to furnish advice to the Company in connection with the
acquisition of and/or merger with other companies, joint ventures with any third
parties.
In the event that the Consultant directly originates any such transactions for a
period of two (2) years from the date hereof, the Company shall pay fees to the
Consultant as follows:
Finders Fee Associated with Other Transactions.
(a) $1 to $5,000,000, 3% of monetary consideration, received by the Company.
(b) Above $5,000,000 amount calculated pursuant to (a) of this computation,
plus 2 and 1/2% of excess over $5,000,000.
Legal consideration is defined, for purposes of this Agreement, as the total of
cash and assets and property received by the Company or its shareholders (all
valued at fair market value as agreed or, if not, by any independent appraiser),
irrespective of period of payment or terms.
9. Form of Payment. All fees due to the Consultant pursuant to Section 7 & 8
hereof are due and payable to the Consultant, in cash or by certified check, at
the closing or closings of a transaction specified in such Section 8 or as
otherwise agreed between the parties hereto.
10. Limitation upon the Use of Advice and Services.
(a) No person or entity, other than the Company or any of its subsidiaries,
shall be entitled to make use of or rely upon the advice of the Consultant to be
given hereunder, and the company shall not transmit such advice to others, or
encourage or facilitate the use of or reliance upon such advice by others,
without the prior written consent of the Consultant.
(b) The use of the Consultant's name in any annual report or other report of the
Company, or any release or similar document prepared by or on behalf of the
Company, must have the prior written approval of the Consultant unless the
company is required by law to include the Consultant's name in such annual
report, other report or release, in which event the Consultant will be furnished
with a copy of such annual report, other report or release using Consultant's
name in advance of publication by or on behalf of the Company.
(c) The Consultant shall not use or disclose confidential information, which it
learns about the Company as a result of its engagement hereunder, except as such
use or disclosure as may be required for Consultant to perform its duties
hereunder. All information is to be preapproved, a confidentiality agreement
will be signed and a list of intended investors will be provided to the Company.
11. Indemnification. Since the Consultant will be acting on behalf of the
Company in connection with its engagement hereunder, the Company and Consultant
have entered into a separate indemnification agreement substantially in the form
attached hereto as Exhibit A and dated the date hereof, providing for the
indemnification of Consultant by the Company. The Consultant has entered into t
his Agreement in reliance on the indemnities set forth in such indemnification
agreement.
12. Severability. Every provision of this Agreement is intended to be severable.
If any term or provision hereof is deemed unlawful or in valid for any reason
whatsoever, such unlawfulness or invalidity shall not affect the validity of the
remainder of this Agreement.
13. Waiver of Breach. The waiver by a party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of this Agreement.
14. Assignment. Except as otherwise provided herein, the rights and benefits of
the parties contained in this Agreement shall inure to the benefit of and be
binding upon the successors, assigns, administrators, and personal
representatives of the parties hereto. Consultant's duties under this Agreement
shall be non-delegable without the prior written consent of the Company. Neither
party shall have the right to assign this Agreement or any obligation set forth
hereunder without the written consent of the other party, which consent will not
be unreasonably withheld; provided however, that consultant may without such
consent assign any or all rights to any compensation hereunder (whether direct
or contingent) if accomplished in compliance with Section 18 hereof and in
accordance with any and all applicable laws.
15. Compliance with Law. During the Term, Consultant shall comply with all laws
and regulations applicable to Consultant in the conduct of his business.
16. Incorporation by Reference. The Confidentiality Agreement attached hereto as
an exhibit is incorporated herein by reference in its entirety.
17. Arbitration. Any controversy or claim arising out of or relating to any
interpretation, breach or dispute concerning any of the terms or provisions of
this Agreement, which disagreement is not settled within thirty days after it
arises, shall be settled by binding arbitration in California in accordance with
the laws of the State of California and under the rules then obtaining of the
American Arbitration Association and judgment upon the award rendered in said
arbitration shall be final and may be entered in any court of the State of
California having jurisdiction thereof. Any party hereto may apply for such
arbitration.
18. Attorneys Fees. In the event that an action at law or in equity is brought
to enforce the provisions of this Agreement or to prevent a breach thereof, the
successful party in such action or arbitration proceeding shall be entitled to
an award of attorney's fees and other costs as shall be established by the court
or pursuant to a binding arbitration proceeding.
19. Applicable Law. This Agreement shall be construed as a whole and in
accordance with its fair meaning. This Agreement shall be interpreted in
accordance with the laws of the State of California.
20. Entire Agreement. This Agreement, together with the documents and exhibits
referred to herein, embodies the entire understanding among the parties and
merges all prior discussions or communications among them, and no party shall be
bound by any definitions, conditions, warranties, or representations other than
as expressly stated in this Agreement, or as subsequently set forth in writing,
signed by the duly authorized representatives of all of the parties hereto.
21. No Oral Change; Waiver. This Agreement may only be changed, modified, or
amended in writing by the mutual consent of the parties hereto. The provisions
of this Agreement may only be waived in or by writing signed by the party
against whom enforcement of any waiver is sought.
22. Conflict of Interest. Company acknowledges that, in the course of
Consultant's non-exclusive services and the term, Consultant may now or in the
future have certain potential or actual conflicts of interest. Without the
Company's written consent, Consultant shall not engage in any commercial
activity or transaction that may result in any actual or potential conflicts to
the extent such conflicts may reasonably prove to be substantially and
materially injurious to the Company. Notwithstanding any provision contained in
this Agreement to the contrary, if Consultant so engages without such consent in
any commercial activity or transaction (consulting or otherwise) with any third
party that may reasonably result in such injury (whether actual or potential) to
the Company, then the Company may terminate this Agreement immediately upon
written notice and thereafter, the Company shall have no further obligation to
compensate Consultant hereunder.
23. Termination. Either party may terminate this Agreement with fifteen days
prior written notice. All compensation shall be pro-rated to the date of
termination. If the Company closes any transaction with any Qualified Person
referred to Company by Consultant prior to termination, during the 24 month
period following any termination of this Agreement, the Consultant shall be
entitled to receive any and all compensation and consideration provided for
hereunder as if the transaction(s) closed during the term hereof.
24. Interpretation. Each of the parties acknowledge that it has been represented
by independent counsel of its choice throughout all negotiations that have
preceded the execution of this Agreement, and that it has executed the same with
consent and upon the advice of said independent counsel. Each party and its
counsel cooperated in the drafting and preparation of this Agreement and the
documents referred to herein, and any and all drafts relating thereto shall be
deemed the work product of the parties and may not be construed against any
party by reason of its preparation. Accordingly, any rule of law, including but
not limited to any decision that would require interpretation of any ambiguities
in this Agreement against the party that drafted it, is of no application and is
hereby expressly waived. The provisions of this Agreement shall be construed as
a whole and in accordance with its fair meaning to affect the intentions of the
parties and this Agreement.
25. Miscellaneous.
(a) Any notice or other communication between the parties hereto shall be sent
by certified or registered mail, postage prepaid, if to the Company, addressed
to it at Remedent USA, Inc. Attention: Ms. Rebecca Inzumza with a copy to Mark
Rinehart, Esq. Salt Lake City, UT, or, if to the Consultant, addressed to it at
8255 Vickers Street, Suite B, San Diego 92111, Attention: George Malasek, with a
copy to William M. Aul, Esq., 4275 Executive Square, Suite 800, La Jolla,
California 92037, or to such address as may hereafter be designated in writing
by one party to the other. Such notice or other communication shall be deemed to
be given on the date of receipt.
(b) If, during the term hereof, the Consultant shall cease to do business, the
provisions hereof relating to the duties of the Consultant and compensation by
the Company as it applies to the Consultant shall thereupon cease to be in
effect, except for the Company's obligation of payment for services rendered
prior thereof. This Agreement shall survive any merger of, acquisition of, or
acquisition by the Consultant and, after any such merger or acquisition, shall
be binding upon the Company and the corporation surviving such merger or
acquisition.
(c) This Agreement embodies the entire agreement and understanding between the
Company and the Consultant and supersedes any and all negotiations, prior
discussions and preliminary and prior agreements and understandings related to
the central subject matter hereof.
(d) This Agreement has been duly authorized, executed and delivered by and on
behalf of the Company and the Consultant.
(e) This Agreement and the rights hereunder may not be assigned by either party
(except by operation of law) and shall be binding upon and inure to the benefit
of the parties and their respective successors, assigns and legal
representatives.
(f) This Agreement may be executed in two or more counterparts, in original or
facsimile form, each of which shall be deemed an original, but all of which
together shall constitute but one and same agreement.
Very truly yours,
REMEDENT USA, INC.
By: /s/ Rebecca Inzunza
---------------------------
Ms. Rebecca Inzunza
President
CONFIRMED AND AGREED TO:
RUBICON CAPITAL PARTNERS, INC.
By: /s/ George Malasek
----------------------------
Mr. George Malasek
Managing Director
By: /s/ Kenneth Yonika
----------------------------
Mr. Kenneth Yonika
Managing Director
