AMENDED AND RESTATED ADVISORY CONSULTING AGREEMENT Dated as of July 13, 2007
AMENDED
AND RESTATED
Dated
as of July 13, 2007
This
Amended and Restated Advisory Consulting Agreement (this “Agreement”)
amends
and restates the prior Advisory Consulting Agreement, dated as of September
18,
2006, by and between in its entirety RxElite (“RxElite”
or
the
“Company”)
and
International Capital Advisory Inc. (“ICA”).
| 1. |
Scope
of Agreement:
|
During
the term hereof, ICA will undertake certain Advisory Services on behalf of
the
Company, including:
| (a) |
Structuring
and negotiating a potential merger and acquisition transaction
involving
the Company and a target public entity to be identified by ICA,
in which
the Company would be merged with and into the public entity (the
“Merger
Transaction”),
with the surviving entity to continue the business of the Company.
Any
Merger Transaction shall be subject to the Company’s approval (at the
Company’s sole
discretion).
|
| (b) |
Advising
in connection with the placement of equity financing of up to
$15 million
US for the Company, with the express purpose of going public
(the
“Equity
Funding”).
Any financing shall be subject to the Company’s approval (at the Company’s
sole discretion).
|
| (c) |
ICA
shall aid RxElite in developing a capital market strategy and
introduce
RxElite to investment dealers, analysts, corporate finance
representatives, institutional investors and retail brokers throughout
North America, when appropriate. ICA shall work with the Company’s US
Investor Relations firm and RxElite’s internal investor relations
department on a regular basis to develop a long-term North American
program to enhance RxElite’s presence in the capital markets. This will
include setting up road shows and dealer presentations throughout
North
America and Europe.
|
| (d) |
ICA
shall aid RxElite in identifying potential acquisition targets
in Canada,
the US and Europe. As part of a potential M&A transaction, ICA may
introduce RxElite to parties who can facilitate a possible M&A
financing. ICA will be required to seek RxElite’s approval before
approaching any companies or financing sources, and any companies
agreed
upon must be listed in Attachment A.
|
| (e) |
ICA
shall aid RxElite in sourcing, negotiating and/or facilitating
possible
joint-ventures with pharmaceutical companies and medical device
companies
to enhance its distribution capabilities, product pipeline or
licensing
initiatives. ICA will be required to seek RxElite’s approval before
approaching any companies, and any companies agreed upon must
be listed in
Attachment A.
|
In
performing such Advisory Services, ICA will exercise reasonable care in
accordance with the standards of the investment banking profession.
| 2. |
Fees
Structure:
|
The
following outlines the fees structure:
| (a) |
In
connection with the $15 million Equity Funding and the Merger
Transaction,
ICA shall be paid
|
| (i) |
a
cash consulting fee in the amount of $1,500,000 (“Cash Consulting Fee”),
and
|
| (ii) |
ICA
will also be issued two
Warrants:
|
| (x) |
a
Warrant to acquire 226,515 shares (2,500,000 shares following
the
11.036789 for 1 forward stock split) of Common Stock of Southridge
Technology Group, Inc. (“STG”),
exercisable at $6.62 per share ($0.60 per share following the
11.036789
for 1 forward stock split);
and
|
| (y) |
a
Warrant to acquire 113,257 shares (1,250,000 shares following
the
11.036789 for 1 forward stock split) of Common Stock of STG,
exercisable
at $9.38 per share ($0.85 per share following the 11.036789 for
1 forward
stock split).
|
The
exact
amount of the Cash Consulting Fee and the exact number of Warrants shall be
subject to final adjustment, as agreed to by the Company and ICA, in good faith,
and shall be based on the time and efforts expended by ICA and the success
of
the $15 million Equity Funding and the Merger Transaction.
The
payment of the Cash Consulting Fee will occur at such times as may be mutually
agreed by the Company and ICA.
To
the
extent permitted by law and to the extent that the Company’s legal advisors
advise the Company that the Company may register the Warrants without reducing
the number of securities that may be registered by cash purchasers in the $15
million Equity Funding, the Company shall include the Warrant in the
registration statement relating to the securities of cash purchasers in the
$15
million Equity Funding.
ICA
hereby acknowledges and agrees that the tender of the Warrants to ICA shall
occur only after (and is in all respects subject to and conditioned upon) the
completion of the acquisition by STG of the Company’s issued and outstanding
capital stock and succession by STG of the Company’s business as its sole line
of business as provided in the Securities Purchase Agreement of even date
herewith.
ICA
acknowledges and agrees that the Warrant will be in the form of the Warrants
delivered to purchasers in the Equity Financing, provided, however, that the
exercise price of some of the Warrants will be $6.62
(in lieu
of $9.38),
as
described above.
| (b) |
The
Company will pay ICA a monthly consulting fee of $10,000 for
12 months
with the first payment due upon full execution of this
Agreement. Additionally,
once the first 12 month period described herein is completed,
RxElite will
pay ICA a monthly retainer of US $12,500 for the subsequent twelve
month
period. All payments are due and payable on the first day of
each
month.
|
| (c) |
if
a merger or acquisition is completed or a funding related to
a merger or
acquisition is completed with any company or entity introduced
directly by
ICA (not including the Reverse Take-Over Merger), then RxElite
pays a work
fee to ICA in an amount equal to the greater of 6% of the total
value of
the transaction or US $150,000. ICA will be required to seek
RxElite’s
approval before approaching any companies, and any merger or
acquisition
candidate companies agreed upon must be listed in Attachment
A.
|
| (d) |
if
a strategic or partnership agreement, including without limitation,
a
distribution, marketing, licensing, product or manufacturing agreement,
is
entered into or from an ICA Prospect, the transaction fee to be paid
to
ICA shall be an upfront payment and commission equal to the following
percentage of "gross revenues", as defined below, of all products or
services sold to, or through, RxElite or the ICA Prospect, in any
market
addressed by the business
relationship:
|
●
up-front
one-time payment equal to US $35,000.00 per product;
●
Year
1: 1% of gross revenues ●
Year
2: 2% of gross revenues
●
Year
3: 3% of gross revenues Year 4: 3% of gross revenues
Year
5: 3% of gross revenues
For
the
purpose of this provision, a "year" shall commence on the date of the first
sale
of a product/service under the distribution, marketing, manufacturing or
licensing agreement and each anniversary date thereafter. ICA
will
be required to seek RxElite’s approval before approaching any strategic or
partnership agreement, including without limitation, a distribution, marketing,
licensing, product or manufacturing agreement or related companies, and any
ICA
Prospect companies agreed upon must be listed in Attachment A.
| (e) |
All
air, hotel, meal, gas, and parking expenses and all other reasonable
expenses relating to RxElite activities, submitted on a monthly basis.
Any
trip must be pre-approved by RxElite. Office and office expenses
shall be
paid as a flat fee of $300 monthly during the term of the
agreement.
|
| 3. |
Confidentiality:
|
The
Company and ICA agree to hold confidential the terms and conditions of this
Agreement except as required by applicable law including, without limitation,
the rules and regulations of the Securities and Exchange Commission. Each party
hereby consents to the granting of an injunction against it by any court of
competent jurisdiction to enjoin it from violating the foregoing confidentiality
provisions. Each party hereby agrees that the other will not have an adequate
remedy at law in the event of a breach of the confidentiality provisions
contained herein, and such party will suffer irreparable damage and injury
as a
result of any such breach. Resort to such equitable relief shall not, however,
be construed to be a waiver of any other rights or remedies which such party
may
have
| 4. |
Term:
|
| (a) |
This
Agreement shall be for a minimum period of 24 months commencing
on the
effective date of this Agreement, and renewable in writing thereafter
on a
month to month basis or such other time period as mutually agreed
to by
the parties. This agreement may be terminated by either party
in writing
with 30 days notice, but no sooner than the 24th
month of the agreement.
|
| (b) |
In
the event that a funding has not occurred by December 31, 2007,
this
agreement is automatically
terminated.
|
| (c) |
Notwithstanding
the termination of this Agreement, the provisions of Section
2(c) and 2(d)
shall survive for twelve months following termination, and in
the case of
2(d), the Company shall make all payments due to ICA for the
time periods
and amounts as outlined in
2(d).
|
This
agreement constitutes the entire agreement by the parties. Any previous written
acknowledgement, statement or prior understanding whether in writing or
discussed orally between the parties related to the agreement or the
relationship between the parties (including, without limitation, the letter
agreement dated as of September 18, 2006) is
superseded by this agreement.
Unless
otherwise stated, all figures in this Agreement are stated in US dollars. Please
confirm your agreement with the foregoing terms by signing this Agreement in
the
place provided below and returning two executed copies to the offices of ICA
to
the attention of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇.
Yours
very truly,
On
behalf
of
INTERNATIONAL
CAPITAL ADVISORY INC.
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇
Vice-President
Acknowledged
and agreed.
On
behalf
of
RxElite
Holdings Inc.
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇
Mr. ▇▇▇▇▇▇ ▇▇▇▇, CEO
Date: