SC CAPITAL PARTNERS, LLC
Exhibit
10.5
SC
CAPITAL PARTNERS, LLC
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Arizona
Office
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California
Office
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Tucson,
AZ 85715
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Irvine,
CA 92612
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January
11, 2010
MedPro,
Inc.
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Lexington,
KY 40505
Dear
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This
letter will confirm the understanding and agreement ("Financial Advisory Agreement"
or "Agreement") between
SC Capital Partners, LLC, ("SCCP") an Arizona 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 an 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.
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1.
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Scope
of Services.
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The
Services ("Services") to
be provided by SCCP (See Appendix A for Statement of Work) will include: (i)
business and financial consulting services ("Consulting Services"); (ii)
acting as a finder ("Finder") to assist the Company
in identifying prospective purchasers of debt or equity securities; (iii)
advising on Merger of Acquisition transactions ("M&A Transaction"); (iv)
and/or advising and structuring Strategic Alliance ("Strategic Alliance" or "Strategic
Investment"),
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(a.)
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Consulting
Services, SCCP will provide advisory and assistance in connection
with strategic planning, additional equity and debt financing, and
liquidity building efforts.
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(b.)
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Finder
Services. SCCP will assist with future equity or debt financing
transactions undertaken by the
Company.
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Page
1
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(c.)
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Merger and Acquisition
Services. SCCP will provide the Company with merger and acquisition
advice to include: (i) the identification of businesses, assets or
technologies; (ii) financial modeling; (iii) the form and structure of the
Transaction; (iv) conducting discussions and negotiations; and (v) provide
other related advice and assistance as the Company may reasonably request
in connection with a Transaction.
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Strategic Alliance
Services, SCCP shall provide the Company with potential strategic
alliances. These services may include: (i) The identification of
businesses, assets or technologies; (ii) The evaluation of third parties;
(iii) the structure of the Strategic Alliance; (iv) conduct discussions
and negotiations with a Strategic Alliance; and (v) providing other
related advice and assistance to the
Company.
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2.
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Term.
SCCP's engagement herein shall commence upon signing and is expected to be
completed twenty four (24) 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.
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3.
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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
after 24 months from the date of signing. 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.
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4.
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Compensation.
The Company agrees to pay SCCP as compensation for its services under this
Engagement the following fees:
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(a.)
Advisory
Fees:
i. A
Consulting fee of $15,000 per month for the length of the term.
ii. Equity Financing. The
Company will provide the following compensation.
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(a.)
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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.
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(b.)
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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 have a standard list
of restrictions which will be agreed upon by the Company and SCCP which
may be publicly or privately offered by the Company and exercisable on the
same terms.
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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
introduced by SCCP. In the case of a committed Debt facility the placement
fee will be calculated on the gross available amount committed to the
Company.
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2
(b.)
Merger and Acquisition
Services Fees:
In
connection with any Merger and Acquisition Transaction during the term of this
Agreement, SCCP shall be paid a Merger and Acquisition Transaction fee equal to
3.5% on the first $25 million and 2.0% for any amount over $25 million based
upon the total Transaction Consideration as defined below, with a minimum
Transaction fee of $200,000 or an amount mutually agreed to by both
Parties.
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.
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(c.)
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Strategic
Alliances. A consulting fee equal to 6% 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 as otherwise negotiated.
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(d.)
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Total
Compensation. The fees described above represent total compensation
to be paid to SCCP and any other financial advisors for the
transaction.
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5.
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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
pre-approved 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. Approval does not imply the successful merger, acquisition, or
joint venture or other successful conclusion of a business
relationship.
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6.
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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.
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7.
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SCCP Representations.
SCCP represents and warrants that it is not registered as a broker-dealer
pursuant to the Exchange Act; and is not a member of the FINRA, 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.
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8.
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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.
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3
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9.
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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.
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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.
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.
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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.
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10.
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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.
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11.
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Miscellaneous.
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| 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.
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b)
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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.
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c)
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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)
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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
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e)
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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.
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f)
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The
laws of the State of Kentucky shall govern this Agreement, without
application of the principles of conflicts of
laws.
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g)
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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 Pima County, Arizona, 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 Pima County, Arizona or the U.S. District Court
for Arizona, whichever is applicable, for any such
proceeding.
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We are
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
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Accepted
and agreed to as of the signing date:
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/s/ ▇▇▇▇▇ ▇.
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By: |
/s/ ▇▇▇▇▇▇
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By: |
/s/ ▇▇▇▇▇
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| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Managing Partner | Managing Partner | Chief Executive Officer | |||
| SC Capital Partners | CS Capital Partners | MedPro, Inc. | |||
Address
for notices:
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SC
Capital Partners
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MedPro,
Inc.
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Tucson,
AZ 85715
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Lexington,
KY 40505
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