November 8, 2004
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
President
Advanced Global Industries Corp.
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Dear ▇▇▇,
This engagement letter shall serve as our agreement (the
"Agreement") under which Oceana Partners LLC ("Oceana" or the "Advisor") is
retained as an advisor and placement agent to Advanced Global Industries, Corp
(the "Company") in connection with the Company's acquisition, through a reverse
merger, of Synova Healthcare, Inc. ("Synova") (the "Acquisition") and the
simultaneous placing of between $1 and $3.5 million of the Company's equity
securities to institutional and qualified investors ("Investors"). The offering
will consist of units ("Units") comprised of shares of common stock or
convertible preferred stock and common stock purchase warrants of the Company in
amounts, price and exercise price to be agreed to by the Company and the
investors. Oceana will market the Units in accordance with the offering
structured and agreed to by the Company and Oceana (the "Placement"). In
connection therewith, the parties hereto agree as follows:
1. Information and Coordination. The Company will supply Oceana with
all current publicly disclosed information respecting the Company's business
prospects and operations (the "Information"). The Company recognizes and
confirms that Oceana (a) will use and rely primarily on the Information in
performing the services contemplated by this Agreement without having
independently verified the same, (b) does not assume responsibility for the
accuracy or completeness of the Information and (c) will not make an appraisal
of any assets of the Company or any prospective investors or purchaser of the
Offering. To the best of the Company's knowledge, the Information to be
furnished by the Company, when delivered, will be true and correct in all
material respects and will not contain any material misstatement of fact or omit
to state any material fact necessary to make the statements contained therein
not misleading. The Company shall make available to Oceana and/or shall agree to
have professionally prepared at the Company's expense, all financial statements,
marketing materials, subscription documents and other information which in
Oceana's reasonable judgment shall be necessary or appropriate. The Company will
promptly notify Oceana if it learns of any material inaccuracy or misstatement
in or material omission from, any Information theretofore delivered to Oceana.
Advisor will coordinate its activities with the Company regarding the marketing
of the securities to investors during the term of this Agreement, as herein
defined. The Company will make senior management reasonably available for
meetings with prospective investors.
2. Co-Exclusive Engagement. During the Term, G. M Capital Partners,
Ltd. and Advisor shall serve as the co-exclusive advisors to the Company for
purposes of the Acquisition and the Company's financial and capital formation
activities.
3. Term. This Agreement shall become effective on the execution date
hereof and, unless previously terminated pursuant to Paragraph 10 below, shall
continue in effect until the earlier of the closing of the Acquisition and the
Placement (the "Closing"), or, if no terms, letter of intent or other agreement
with Investors has been agreed to by the Company regarding such Placement with
the Investors, then this Agreement shall be terminable by the Company at its
sole discretion on or after March 1, 2005 (the "Expiration Date"). The period
from the date hereof until the Expiration Date is hereafter referred to as the
"Term."
4. Compensation.
a.) Acquisition: In consideration for identifying Synova as an
acquisition candidate for the Company and for advising the Company on the terms
of the Acquisition, the Company shall issue Oceana an aggregate of 500,000
shares of common stock of the Company. The Company shall agree to include such
shares in the registration statement to be filed for the securities issued in
the Placement.
b.) Placement: On each date on which any securities are issued to
Investors and cash is received by the Company (each such date a "Closing Date"),
the Company shall pay to Oceana or its designee, in cash, a commission equal to
five percent (5%) of the gross purchase price for the securities and shall issue
to Oceana, or its designee, a Unit purchase option (the "Unit Purchase Option")
to purchase five percent (5%) of Units issued on the Closing Date or Closing
Dates at an exercise price per Unit equal to the price at which the Unit was
sold on such Closing Date. On each date on which any Warrants are exercised by
Investors and cash is received by the Company Date, the Company shall pay to
Oceana or its designee, in cash, a commission equal to one percent (1%) of the
gross purchase price for the securities.
The Unit Purchase Option and any underlying Warrants contained therein
shall be exercisable upon issuance, shall expire five years from the Closing
Date, unless otherwise extended by the Company, and shall have cashless exercise
provisions. The shares issuable upon exercise of the Unit Purchase Option and
any underlying Warrants shall have registration rights, anti-dilution and such
other similar provisions identical to the securities sold on the Closing Date.
The Company shall have the right to reject in whole or in part any proposed
purchaser of the securities in its sole and absolute discretion.
5. Monthly Retainer. No monthly retainer or any other compensation
shall be payable to Advisor under this Agreement other than the compensation
described in paragraph 4 hereof.
6. Expenses. Oceana will be promptly reimbursed by the Company for all
reasonable and authorized out-of-pocket expenses incurred in connection with its
activities hereunder. These expenses may include, but are not limited to, travel
and lodging expenses, due diligence and investor meetings and events, expenses
to print documents for the Company, and postal expenses incurred for mailing
documents, such as materials to investors, for the Company. Oceana agrees to
notify the Company in advance in writing of any expenses it expects to incur on
behalf of the Company greater than $500.
7. Indemnification. To the extent the Advisor becomes involved in any
capacity in any action, claim, proceeding or investigation brought or threatened
by any person, including the Company's stockholders, related to or arising out
of or in connection with this Agreement or the Placement, the Company will
promptly reimburse the Advisor for reasonable legal and other expenses as and
when they are incurred in connection therewith. The Company will indemnify and
hold the Advisor harmless from and against any losses, claims, damages,
liabilities or expense to which the Advisor may become subject under any
applicable Federal or state law, or otherwise, related to, arising out of or in
connection with this Agreement, whether or not any pending or threatened action,
claim, proceeding, or investigation giving rise to or on the Advisor's behalf
and whether or not in connection with any action, proceeding or investigation in
which the Advisor is a party, except as to that portion of any such loss, claim,
damage, liability or expense which is found by a court of competent jurisdiction
in a judgment which has become final, in that it is no longer subject to appeal
or review, to have resulted from the Advisor's bad faith or gross negligence.
The Advisor agrees to promptly notify the Company of any action, claim,
proceeding or investigation with regard to which the Company may be liable for
indemnification pursuant to the terms of this Agreement. Neither the termination
of this Agreement nor the completion of the services provided hereunder shall
affect these indemnification provisions which shall remain operative and in full
force and effect.
8. No Trial by Jury. The Company (for itself, anyone claiming through
it or in its name, and on behalf of its equity holders) and Oceana each hereby
irrevocably waives any right they may have to a trial by jury in respect to any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby. The prevailing party in litigation, if any, shall have the
right to be reimbursed its legal fees and expenses. This Agreement may not be
assigned by either party without the prior written consent of the other party,
except to a successor in interest by merger or otherwise.
9. Amendments This Agreement may only be varied by written agreement
between the Advisor and the Company. All such variations shall only be effective
when in writing, signed by the duly authorized representatives of both parties.
10. Termination Subject to Paragraph 7, the provision of services
hereunder may be terminated prior to the Termination Date by the Company and/or
the Advisor by giving written notice to the other party in the following events:
- force majeure, defined as a situation which, in the
opinion of either party, creates any change or
development in existing laws and regulations or in
local or international financial, political,
military, economic or market conditions or currency
exchange rate which is likely to render impossible
the Offering;
- breach of any commitments hereunder by either party
(which is not remedied within 14 days after written
notification to such effect);
In the event that the Agreement is terminated prior to the
Termination Date because of a breach by the Company, the Company will forthwith
pay the Advisor those of its expenses and fees incurred or owing up to the
Termination Date.
11. Tail. Within 20 business days of the Termination Date, the Advisor
shall deliver to the Company a list identifying all Investors approached by
Advisor. In the event the Company thereafter receives funding from any such
Investor or an affiliate thereof, within 18 months of the Termination Date (the
"Tail Period"), then the Company shall pay the Advisor the fee as described in
paragraph 4 (the "Tail Fee") The Tail Fee shall apply to any identified
Investors, including their affiliates, and to any third party investor
introduced to the Company by an identified Investor or affiliates thereof
assuming such third party investor was not previously in discussions with the
Company before such introduction.
12. Notices. Notices shall be served to the address/fax number of each
party set out in this letter (or such other address as any of the parties may
notify to the other in writing from time to time). Such notice shall be deemed
to be duly given or made when it shall have been delivered by registered mail,
courier or fax, which shall be confirmed by registered mail or courier, to the
party to which it is required to be given or made.
CONTACT ADDRESSES:
ADVANCED GLOBAL INDUSTRIES CORP.:
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Advanced Global Industries Corp.
President
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Tel: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
OCEANA PARTNERS LLC:
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Oceana Partners LLC
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Tel: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York and the Parties hereto submit to the
non-exclusive jurisdiction of the Courts of New York over any disputes, which
may arise out of or in accordance with it.
14. Arbitration. Any dispute between the Company and Oceana shall be
subject to binding arbitration before a three-arbitrator panel in accordance
with the rules of the American Arbitration Association. Prior to the selection
of the arbitrators of the binding arbitration, the parties shall first attempt
non-binding mediation before a mediator selected by said Association. In the
event the mediator makes a determination and only one of the parties refuses to
accept said determination, then the refusing party shall be responsible for all
arbitration and attorney's fees of the other party should the refusing party
receive a less favorable result from the binding arbitration, subject however to
the discretion of the arbitrators to reallocate these costs if cause is so found
by the arbitrators.
15. Miscellaneous. This Agreement sets forth the understanding of the
parties relating to the subject matter hereof, and supersedes and cancels any
prior communications, understandings and agreements between the parties with
respect to the subject matter hereof. This Agreement cannot be modified or
changed, nor can any of its provisions be waived, except in writing when signed
by both parties.
If the foregoing meets with your understanding, kindly acknowledge your
acceptance at the place indicated on this letter and on the enclosed copy of
this letter. Please return one of the executed letters to me and keep one for
your files.
Sincerely,
OCEANA PARTNERS LLC
/s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Managing Director
ACCEPTED AND AGREED TO BY:
ADVANCED GLOBAL INDUSTRIES CORP.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
President