Exhibit 10.5
SC CAPITAL
PARTNERS, LLC
0000 X. Xxxx Xxxx
Xxxxxx, XX 00000
520-290-5052
February 24, 2008
MedPro, Inc.
Attn: Xxxxx Xxxxxx, Chief Executive Officer
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Re: Financial Advisory Agreement
Dear Xxxxx,
This letter will confirm the understanding and agreement ("Financial Advisory
Agreement" or "Agreement") between SC Capital Partners, LLC, ("SCCP") a
California limited liability company and MedPro, Inc. ("MedPro" or the
"Company") a Nevada Corporation. Each hereinafter is referred to individually as
a "Party" and both are referred to collectively as the "Parties." The Company
hereby engages SCCP to act as a non-exclusive financial advisor to the Company
and SCCP agrees to provide financial advisory services ("Services") as requested
by the Company from time to time during the term of the Engagement.
1. Scope of Services. The Services, either collectively or individually
("Services"), to be provided by SCCP will include:
(a.) Advisory Services. SCCP will provide advice and assistance in
connection with the following:
(i) Representation in the Equity Financing. SCCP will work with
the Company as to the timing, feasibility, pricing, and
structure of the financing of the company.
(ii) Strategic planning. SCCP will collaborate with the Company to
create a strategic plan that shall include:
o Updated March 20, 2007 Confidential Company Memorandum.
o A review of alternative business strategies.
o Assistance with the execution of the selected strategic
direction of the Company.
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(iii) Support the Company's shareholder liquidity building efforts.
Assist Vision with programs to improve stock liquidity such as
coordination of research reports, investor conferences, road
shows, investor relations, and other activities.
(b.) Finder Services. SCCP will assist with future equity or debt
financings including. but not limited to, the warrant conversions
associated with the Convertible Preferred Transaction or other
financing transactions undertaken by the Company.
(c.) Merger and Acquisition Services. SCCP will provide the Company with
merger and acquisition advice to include: (i) assist in the
identification of businesses, assets or technologies; (ii) assist in
financial modeling: (iii) assist with the form and structure of the
Transaction; (iv) conduct discussions and negotiations; and (v)
provide other related advice and assistance as the Company may
reasonably request in connection with a Transaction.
(d.) Strategic Alliances Services. SCCP shall provide the Company with
potential strategic alliances. These services may include: (i)
assist in the identification of businesses, assets or technologies;
(ii) assist in the evaluation of third parties; (iii) assist with
structure of the Strategic Alliance; (iv) conduct discussions and
negotiations with a Strategic Alliance; and (v) provide other
related advice and assistance to the Company.
2. Term. SCCP's initial engagement herein shall commence upon signing and is
expected to be completed no later than six (6) months from signing date
("Minimum Term"). It shall continue thereafter on a month-to-month basis unless
terminated in writing with 30 days notice by SCCP or the Company.
3. Termination. Subject to clause 2, either party may terminate this Agreement
for any reason upon giving thirty (30) days prior written notice to the other.
It is understood that upon termination, this Engagement shall have no further
force or effect, except that any termination of SCCP's engagement hereunder for
any reason shall not affect the Company's obligation to pay SCCP fees for which
a definitive agreement specifically identified by the Advisor has been signed
within 24 months after such dates specified and to reimburse expenses as set
forth herein and therein.
4. Compensation. The Company agrees to pay SCCP as compensation for its services
under this Engagement the following fees:
(a.) Advisory Fees:
i. A Consulting fee of $15,000 per month for the length of the
term. The first payment of $15,000 is due upon signing the
Agreement and is, thereafter, payable every 30 days.
ii. Equity Financing. The Company and SCCP entered into an
agreement regarding future compensation arrangements related
to the exercise of Warrants associated with the Convertible
Preferred Stock investment by Vision Opportunity Fund and
other investors (the "Convertible Preferred
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Transaction"). At the Closing of equity Financing Transaction
completed by other investors not covered under that
Convertible Preferred Transaction, the Company will provide
the following compensation.
(a.) Fees. Pay SCCP a consulting fee equal to 8% of
the principal cash amount of all Company's
securities and institutional PIPE and secondary
financings introduced by SCCP.
(b.) Warrants. The Company will provide SCCP or to
its designees, warrants to purchase a number of
Shares or Units equal to 8% of the number of
Shares or Units sold under the equity
financing. Each warrant shall be identical in
all respects to those publicly or privately
offered by the Company and exercisable on the
same terms.
iii. Debt Financing. The Company shall pay SCCP a consulting fee
equal to 3% on any gross proceeds received by the Company in
connection with a Debt Financing. In the case of a committed
Debt facility the placement fee will be calculated on the
gross available amount committed to the Company.
(b.) Merger and Acquisition Services Fees:
In connection with any Merger and Acquisition Transaction during the
term of this Agreement other than "Unilife," SCCP shall be paid a
Merger and Acquisition Transaction fee equal to 2.5% on the first
$20 million and 2.0% for any amount over $20 million based upon the
total Transaction Consideration as defined below:
For purpose of this Agreement, "Transaction Consideration" means the
aggregate value, whether in cash, securities, assumption (or
purchase subject to) of debt or liabilities (including, without
limitation, indebtedness for borrowed money, pension liabilities or
guarantees) or other property, obligations or services, paid or
payable directly or indirectly (in escrow or otherwise) or otherwise
assumed in connection with a Merger and Acquisition Transaction, or
the net present value of the estimated benefits to the Company of
any joint venture, licensing or marketing agreement.
(c.) Strategic Alliances. A consulting fee equal to 8% of the equivalent
value of any strategic alliance or other business realignment
resulting from the SCCP Financial Advisory Engagement not otherwise
considered in this agreement. The equivalent value shall be mutually
defined and paid in cash or in the form of payment of the particular
transaction.
5. Expenses. The Company agrees to reimburse SCCP for all reasonable
out-of-pocket expenses, up to and including $1,000 per instance without
pre-approval and over $1,000 preapproved in writing by the Company, incurred by
SCCP in connection with performance of the services discussed herein, including
but not limited to printing, copying, office supplies, and travel related
expenses.
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6. Company Representations. The Company represents and warrants that it has all
requisite corporate power and authority to execute and perform this agreement;
that it constitutes a valid and binding obligation of the Company; and the
execution and performance of this agreement will not violate any provision of
the Company's charter or bylaws or any agreement or other instrument to which
the Company is a party or by which it is bound.
7. SCCP Representations. SCCP represents and warrants that it is not registered
as a brokerdealer pursuant to the Exchange Act; and is not a member of the NASD,
and is not presently, and does not intend upon, making any offer of Securities
on behalf of Company. SCCP shall only provide financial advisory services and
act as a Finder in all instances related to the provision of Services herein.
8. Confidentiality. Subject to the exclusions set forth below, all information
exchanged between the Parties under this Agreement or during the negotiations
preceding this Agreement is confidential. Neither party shall disclose to any
third party (other than assigns specific to this agreement) the other Party's
confidential information; unless required by law or needed by a Party to assert
claims or defend against claims made against the Party. Each Party shall use
reasonable efforts to minimize such disclosure, and shall use reasonable efforts
to obtain assurance that the recipient shall treat the information as
confidential. In addition, either Party may disclose any such information that
becomes generally available to the public, provided it is not the result of
disclosure in violation of the Section. Upon termination of this Agreement. the
receiving Party shall return all confidential information of the disclosing
Party or destroy any material and shall confirm in writing such destruction.
Notwithstanding the forgoing, the Company may disclose this Agreement and its
terms to any potential investor in, or Purchaser of, the Company and their
respective representatives.
9. Indemnification. The Company agrees to indemnify and hold harmless SCCP and
its officers, directors, agents, employees and legal representatives controlling
SCCP or any of its affiliates within the meaning of Section 15 of the Securities
Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934,
as amended and its respective successors, assigns, executors and personal
representatives ("Indemnified Person(s)"). The Company will hold each
Indemnified Person harmless from and against any and all losses, claims,
damages, and liabilities caused by, related to or arising out of, directly or
indirectly, the engagement referred to in the Agreement, whether under any
statute, under common law, or otherwise. The Company will also reimburse SCCP
and any other Indemnified Person for all reasonable expenses (including
reasonable fees and disbursements of legal counsel), in connection with
investigating or defending any such action. However, the Company will not be
liable under this paragraph to the extent that any loss, claim, damage,
liability or expense is found in final judgment by a court of competent
jurisdiction from which no appeal can be or is taken to have resulted from the
gross negligence, willful misconduct or bad faith of SCCP.
If for any reason the foregoing indemnification is unavailable or insufficient
to any Indemnified Person, then the Company will contribute the pro-rata dollar
amount in such proportion as is appropriate to reflect the relative benefits
received, the relative fault assigned, or any other relevant equitable
considerations by the Company and SCCP. However, in no event will the aggregate
contribution by SCCP and other Indemnified Persons hereunder exceed the amount
of fees actually received by them pursuant to the Agreement.
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If notice of any such action is received by an Indemnified Person in respect,
the Indemnified Person shall notify the Company in writing of the commencement
thereof. However, the omission to so notify the Company will not relieve the
Company from any liability to such Indemnified Person hereunder, except to the
extent that such failure will have actually prejudiced the defense of such
action, SCCP will have the right to retain counsel of its own choice to
represent SCCP and all other Indemnified. Such counsel will cooperate with the
Company and any counsel designated by the Company will pay the reasonable fees
and expenses of such counsel retained by SCCP. The Company will not be liable
hereunder for any settlement made by SCCP or any other Indemnified Person
without the Company's prior written consent, which will not be unreasonably
withheld.
These indemnifications, contribution and expense reimbursement provisions are in
addition to, and not in lieu of, any other obligation or liability, which the
Company might otherwise have to SCCP or any other Indemnified Person. Neither
termination nor completion of the engagement of SCCP referred to in the
Agreement will affect the provisions of this agreement, which will remain
operative and in full force. This agreement may not be amended orally.
10. Survivability. This Agreement and any rights, duties or obligations
hereunder may not be waived, amended, modified or assigned, in any way, in whole
or in part, including by operation of law, without the prior written consent of,
and shall inure to the benefit of and be binding upon the successors, assigns
and personal representatives of, each of the parties hereto. In case any
provision of this Engagement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this letter
agreement shall not in any way be affected or impaired thereby.
11. Miscellaneous.
a) Unless subject to a separate Selling Agreement in their performance
hereunder, the Parties are acting as independent contractors, and
nothing contained herein shall be construed to create a partnership,
joint venture or other agency relationship between the Parties.
Neither Party shall make any communication to any person indicating
that such Party has the right to act on behalf of, bind or make
promises or representatives for the other Party for any reason.
b) This Agreement and any attached exhibits set forth the entire
understanding and agreement of the Parties and supersedes all prior
and contemporaneous agreements and understandings, both oral and
written, related thereto. This Agreement may be executed by
facsimile and in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and
the same instrument. Only a written instrument signed by both
Parties may modify this Agreement.
c) Any notice or communication required or contemplated hereunder shall
be in writing and shall be delivered by hand, deposited with an
overnight courier, sent by confirmed email, sent by facsimile with a
sheet demonstrating successful transmission, or mailed by registered
or certified mail, return receipt requested, postage prepaid, in
each case to the address or number listed below. Such notice shall
be deemed given as of the date it is delivered, mailed, emailed,
faxed or sent.
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d) This Agreement shall be binding to SCCP, MedPro and their respective
successors and assigns. Neither Party may assign this Agreement
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld.
e) No delay or omission by either Party to exercise any right or power,
under this Agreement shall impair or be construed as a waiver of
such right or power. All waivers must be in writing and signed by
the Party waiving its right(s). A waiver by either Party of any
breach or covenant shall not be construed to be a waiver of any
other breach or covenant.
f) The laws of the State of California shall govern this Agreement,
without application of the principles of conflicts of laws.
g) The parties shall attempt in good faith to resolve any such dispute
through good faith negotiation. Any dispute which has not been
resolved by negotiation within a 30 day period shall be settled by
binding arbitration in Orange County, California, in accordance with
the then current rules of the American Arbitration Association,
before one (1) independent and impartial arbitrator, mutually
designated by both parties. If the parties cannot agree upon such
arbitrator, then the American Arbitration Association shall be
empowered to designate such arbitrator. The arbitrator's award shall
be final and any court having jurisdiction thereof may render
judgment thereon. The arbitrator may, subject to any limitations
placed on remedies by the terms of this Agreement, grant any relief
authorized by law, including but not limited to, equitable relief,
declaratory relief, and damages including punitive damages. In the
event that any arbitration proceeding or other action is instituted
concerning or arising out of this Agreement, the prevailing party
shall recover all of such party's out-of-pocket costs and reasonable
attorney's fees incurred in each and every such proceeding. If any
judicial proceeding is required to enforce an arbitration ruling or
to obtain equitable or injunctive relief, the parties hereby consent
to the exclusive jurisdiction and venue of Orange County, California
or the U.S. District Court for the Southern District of California,
whichever is applicable, for any such proceeding.
I am pleased to accept this engagement and look forward to working with the
Company. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
letter, which shall thereupon constitute a binding agreement.
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Very truly yours,
SC Capital Partners, LLC MedPro, Inc
By: /s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxx Xxxxxx
------------------------- ------------------- -------------------
Xxxxx X. Xxxxxxxxxx Xxxxxx Xxxxxxx Xxxxx Xxxxxx
Managing Partner Managing Partner Chief Executive Officer
SC Capital Partners SC Capital Partners MedPro, Inc.
Date: 3/6/08 Date: 3/11/08 Date: 3/6/08
----------------------- ---------------- -----------------
Address for notices:
SC Capital Partners LLC MedPro, Inc.
0000 X. Xxxx Xxxx 000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000
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