Exhibit 10.7
[LETTERHEAD OF GE PARTNERS PLC]
1 PARTIES TO THE AGREEMENT
1.1 GE Partners Plc ("GEP") domiciled in 306 Victoria House, Victoria, Mahe,
Republic of Seychelles and 1 Berkeley Street, London W1J 8DJ, United
Kingdom.
1.2 M1 Luxembourg AG ("the Company") domiciled at Chamerstrasse 44, 6331
Hunenberg, Switzerland.
2 APPOINTMENT
2.1 GEP is hereby engaged by the Company as its corporate finance adviser in
relation to the Acquisition and the Company accordingly agrees itself not
to appoint and not to instruct any other person on its behalf to appoint
any other person as arranger/ advisor for such purpose at any time during
the Engagement Period (as defined in paragraph 5) without GEP's specific
consent, such consent not to be unreasonably withheld. Further, during the
Engagement Period the Company itself shall ensure that no other person on
its behalf instructs any other agents, intermediaries or advisors in
relation to the Acquisition without GEP's prior written approval.
2.2 The Company shall promptly inform GEP of all information, inquiries and
proposals it has received before or receives at any time during the
Engagement Period with respect to the Acquisition.
2.3 GEP shall inform the Company on a regular basis of any information that may
come to its attention regarding the Acquisition during the Engagement
Period.
3 SERVICES TO BE PROVIDED BY GEP
3.1 GEP will act as corporate finance adviser to the Company in connection with
the transaction. As such, GEP will use all reasonable endeavours to provide
the following advice, assistance and services:
3.2 GEP shall advise the Company on structuring and arranging the Acquisition.
Additionally, as arranger, GEP shall assist in the preparation and
authorisation of documentation, as required.
3.3 GEP shall use reasonable efforts through its marketing and public relations
contacts to support and market the Acquisition including; (i) where
appropriate, arrange meetings and assist in presentations; (ii) assist the
Company, the Directors and their advisors in negotiating definitive
documentation and (iii) take such other actions as are reasonably necessary
to give effect to the foregoing. The Company will give GEP reasonable and
prompt co-operation and assistance to support GEP in the provision of its
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services hereunder and keep GEP informed of all developments relevant to
the Acquisition ("the Services").
3.4 The Company acknowledges that this engagement letter does not constitute
any understanding or commitment whatsoever by GEP, or any of its respective
affiliates, to participate financially in any way in the Acquisition.
3.5 At the Company's option, GEP agrees to introduce to the Company
professional advisers to include but not be limited to reporting
accountants, auditors, lawyers and registrars, it being understood that all
fees in connection with such professional advice will be borne by the
Company.
3.6 At the Company's option, GEP agrees to provide assistance in the marketing
of the Company's product, any such assistance to be governed by a separate
agreement.
3.7 GEP shall on a best efforts basis seek to provide or make relevant
introductions to provide:
* Any finance required for the listing and additional finance as agreed
with the company for
* Ongoing development pre listing. Post listing finance is by separate
negotiation.
4 FEES AND EXPENSES
4.1 In consideration of GEP providing the Services, the Company will pay GEP
the following fees, together with any applicable VAT thereon:
(a) 10% of the Target Company's issued share capital.
(b) $200,000 consultancy fee.
In addition M1 Luxembourg AG will pay the relevant fees due as they become
due to the accountants and auditors.
In addition, the Company shall reimburse GEP on demand for all
out-of-pocket expenses incurred by GEP in providing the Services, including
but not limited to travel, accommodation and professional advisors fees,
subject to the presentation of invoices to the Company, together with any
taxes thereon. All such expenses in excess of (euro)1,000 (One Thousand
Euros) will be subject to the prior written consent of the Company, such
consent not to be unreasonably withheld. A representative will travel to
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the USA no more than twice during the course of the contract on behalf of
M1 Luxembourg AG. Each trip is expected to cost $5000. That cost is to be
reimbursed by the company.
4.2 In the event that GEP provides the Services hereunder and such Acquisition
thereafter does not proceed owing to a material or adverse change in the
structure of the Company or to any failure on the part of the Company to
close on such Acquisition, the Company shall be required to pay to GEP a
cancellation fee of $50,000 (Fifty Thousand Dollars).
4.3 All fees as referred to in this paragraph 4 shall be paid in USD$ or an
alternative currency using the days prevailing interbank exchange rate. All
out of pocket expenses to be reimbursed to GEP shall be reimbursed in the
currency in which they were incurred.
5 ENGAGEMENT PERIOD AND TERMINATION
5.1 GEP's engagement hereunder shall become effective on the date the Company
executes and delivers this engagement letter to GEP and shall remain in
effect until termination in accordance with the following provisions of
this paragraph 5 ("the Engagement Period").
(a) Termination of this agreement shall occur on the following
events/circumstances:
on the date 90 (ninety) days following execution by the parties of the
present agreement, provided at least 30 (thirty) days prior to such
date, at least one of the parties has served notice in writing on the
other that it wishes the engagement to terminate on such date. Where
no such notice is served by either party as aforesaid, the engagement
shall remain in effect for another 90 days from such date, under the
same terms and conditions as set out in this engagement letter;
GEP shall be entitled to terminate:
i) In the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) Otherwise, subject to the minimum term established in clause 5.1
(a), above, at any time as GEP so wishes on giving 30 (thirty)
days written notice to the Company.
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The Company shall be entitled to terminate:
iii) in the event there has been a material breach of the terms of the
engagement letter by the Company;
iv) otherwise, subject to the minimum term established in clause 5.1
(a), above, and to giving 30 (thirty) days written notice to GEP,
in the event that the Company in its discretion no longer wishes
to proceed with the Acquisition, in which event the cancellation
fee specified in clause 4.3 hereof will become immediately
payable.
(b) At any time but without prejudice to the foregoing as specifically
agreed between the parties in writing.
5.2 Upon termination of this engagement letter, neither party shall have any
continuing liability or obligation to the other.
6 INFORMATION AND CO-OPERATION
6.1 In connection with GEP's engagement hereunder, the Company shall provide
GEP with such information and documents as GEP may consider necessary or
desirable in order to enable it to provide the Services and to carry out
its duties and responsibilities hereunder. In particular, and without
prejudice to the generality of the foregoing, the Company will promptly
furnish GEP with such information as GEP may request in order to permit GEP
to assist the Company in preparing any material required for the
Acquisition (collectively, the "Acquisition Documents").
6.2 The Company will be solely responsible for the contents of any Acquisition
Documents and the Company represents and warrants to GEP that the
Acquisition Documents will, as of the date of any marketing, distribution
of the Acquisition Documents or completion, or preparation of the
Acquisition, be true and accurate in all material respects, not omit any
material fact and not be misleading in any respect and, with respect to any
financial projections, the Company represents that they have been, or will
be, prepared in good faith on the basis of reasonable assumptions. The
Company agrees to advise GEP promptly of the occurrence of any event or any
other change known to the Company which results in any of the Acquisition
Documents containing any untrue statement of a material fact or omitting to
state a material fact the omission of which would render any statements
contained therein, in light of the circumstances under which they were
made, misleading and in such event the Company shall provide corrective
information to GEP suitable for inclusion in a supplemental information
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statement. For purposes of this paragraph notification by the Company must
be made directly to GEP and GEP shall not be deemed notified solely as a
result of action, notice or the constructive knowledge of any of its
Related Parties.
6.3 The Company acknowledges that GEP (i) will use and rely upon the
information provided by the Company or on its behalf which will comprise
the Acquisition Documents absolutely and without GEP itself independently
verifying any of the same, (ii) does not itself assume any responsibility
for the accuracy of completeness of the Acquisition Documents.
6.4 The Company hereby authorises GEP to provide the Acquisition Documents on
its behalf to those concerned with the Acquisition. GEP shall each have the
right to review and be required to approve all Acquisition Documents and
every form of letter, circular, notice, memorandum or other written
communication from the Company or any person acting on its behalf in
connection with the Acquisition and the persons to whom any of the
foregoing are to be directed, such approval not to be unreasonably
withheld.
6.5 The Company shall at all times use its efforts to assist GEP in providing
the Services and in carrying out its duties, functions and responsibilities
hereunder and shall co-operate and use all reasonable efforts to assist GEP
in complying with the applicable laws of any jurisdiction in which GEP
operating.
7 CONFIDENTIALITY
7.1 GEP acknowledges that, in performing its duties from time to time
hereunder, it shall receive from the Company certain information relating
to the Company, the Acquisition and otherwise to the transactions
contemplated by this engagement letter. For purposes of this paragraph, all
such information, except for information which (i) is comprised in
Acquisition Documents as approved by the Company (ii) GEP is otherwise
authorised by the Company to disclose to third parties otherwise than on a
confidential basis, (iii) is or becomes generally available to the public
other than as a result of a disclosure by GEP where such disclosure is not
permitted, or (iv) is or becomes available to GEP on a non-confidential
basis from a person or entity other than the Company, is hereinafter
referred to as "Confidential Information".
7.2 GEP shall keep the Confidential Information confidential and not without
the Company's prior consent, except as required by law, legal process, or
regulatory authority, (i) disclose or reveal any Confidential Information
to any person, firm or entity other than those employees, agents or
advisors of GEP who are actively and directly participating in the
transactions contemplated by this engagement letter or who otherwise need
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to know the Confidential Information for the purpose of evaluating,
structuring or reviewing any portion of the Acquisition or GEP's role with
respect thereto, or (ii) use Confidential Information for any purpose other
than in connection with the transactions contemplated by this engagement
letter.
7.3 If GEP's engagement is terminated at any time, GEP shall continue to
maintain the Confidential Information in confidence in accordance with the
terms of this engagement letter and, upon the written request of the
Company, such Confidential Information and all copies thereof as are held
by GEP, will be returned to the Company, or destroyed by GEP, provided,
however, that GEP may retain one copy of the Confidential Information in
the files of its general counsel for compliance purposes or for the purpose
of defending or maintaining any litigation relating to this engagement
letter.
7.4 If GEP should decide that any such Confidential Information should be
included in the Acquisition Documents, and the Company withholds its
consent to such disclosure or refrains from co-operating fully in such
disclosure, GEP may immediately terminate the Services and the Company
shall immediately reimburse all GEP's fees and expenses due under clause 4
herein., as provided in paragraph 4.3 together with all fees, if any, due
under paragraph 4.2.
7.5 The Company agrees that this engagement letter (including the fact of its
existence and its terms and conditions), and the services it describes,
together with any related information or documents, constitute confidential
and propriety information of GEP. The Company further agrees that its
written and verbal reports to the Company and all writings prepared by or
on behalf of GEP and furnished to the Company in connection with GEP's
engagement hereunder (collectively the "GEP Information") shall be kept
confidential and the Company shall not without GEP's prior written consent,
except as required by law, legal process or a regulatory authority, (i)
disclose or reveal any GEP Information to any person, firm or entity other
than those employees, agents or advisors of the Company who are actively
and directly participating in the transactions contemplated by this
engagement letter or otherwise needed to know the GEP Information for the
purpose of evaluating, structuring or reviewing any portion of the
Acquisition or the Company's participation with respect thereto, or (ii)
use the GEP Information for any purpose other than in connection with the
transactions contemplated by this engagement letter.
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8 RELATED PARTIES
GEP acknowledges that it will take all reasonable steps to ensure that,
pursuant to paragraph 7 above, any Confidential Information obtained from
the Company shall not be disclosed to the Related Parties, except as
permitted under paragraph 7.
9 INDEMNIFICATION
9.1 The Company agrees to indemnify and hold harmless GEP, each of its Related
Parties and each of its or their directors, officers, employees, agents and
affiliates (each an "Indemnitee") in respect of any and all actions, claims
losses, liabilities, damages, costs, charges and expenses whatsoever which
any Indemnitee may suffer or incur or which may be made against any
Indemnitee relating to or arising from GEP's engagement, the provision of
the Services, the Acquisition or otherwise from the arrangements
contemplated by this engagement letter or any acts or omissions of any
Indemnitee otherwise requested by the Company or any of the Company's
affiliates pursuant to or in connection therewith, provided that the
Company shall not be liable under this indemnity to the extent any such
action, claims, losses, liabilities, damages, costs, charges, or expenses
are attributable to the gross negligence or wilful misconduct of such
Indemnitee. The indemnity in this paragraph 9 is given to GEP in its own
right and as trustee for each other Indemnitee.
10 DUE DILIGENCE AND INFORMATION
The Company shall not be responsible for any due diligence in relation to
the transaction and the Company acknowledges that any advice given by GEP
on the structuring of the Acquisition shall be based on information
provided by the Company.
11 CONFLICTS
The Company acknowledges that, in addition to GEP acting as arranger under
this engagement letter, other members of the GEP group of companies may
have other roles in relation to the Acquisition or provide other services
to the Company or its affiliates or to other persons who may have a role or
participation in the Acquisition or otherwise, and the Company hereby on
its own behalf and on behalf of its affiliates waives any claim against GEP
in undertaking any such other roles.
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12 LIMITED GEP ROLE
It is expressly agreed and understood that GEP is not providing nor is the
Company relying on GEP for legal, accounting, tax or other advice and that
the Company will rely on the advice of its own professionals and advisors
as it considers appropriate for such matters and will make an independent
analysis and decision regarding the Acquisition in relation to such matters
based on such advice. The determination whether to accept any proposals,
presentation or recommendations arising out of GEP's services under this
engagement letter shall be made by the Company in its sole discretion, and
the Company shall have the option, at its sole discretion, to accept,
reject or modify any such proposals, presentations or recommendations
rendered to it by GEP. Nothing in this engagement letter shall give rise to
any liability or responsibility on the part of GEP for the success or
otherwise of the Acquisition.
13 GEP AFFILIATES
The Company hereby acknowledges and agrees that GEP may perform the
services, contemplated to be rendered by it, under this engagement letter
through selected affiliates within the host country of listing. In
connection therewith but at all times subject to the confidentiality
obligations set out herein, GEP may share any information on matters
relating to the Company with such affiliates.
14 MODIFICATION OF AGREEMENT
This engagement letter may be modified, amended or superseded only in
writing signed by both the parties hereto and expressly referring to this
engagement letter.
15 BROKERS
The Company represents and warrants that there have been no other brokers
or agents engaged by it or by any other person on its behalf in connection
with the transactions contemplated by this engagement letter, other than
those specifically advised. The Company shall indemnify and hold GEP for
itself and on trust for each of its Related Parties (each an "Indemnitee")
harmless against the claim of any broker or agent claiming to have acted on
behalf of the Company or any of its affiliates in connection with the
Acquisition, and against the claim of any other party (other than a party
expressly engaged by GEP) claiming to be entitled to any fees or expenses
in connection with the Acquisition and against all costs, charges and
expenses incurred by each Indemnitee in relation thereto.
16 AUTHORITY
The Company represents and warrants to GEP that its entry into and delivery
of this engagement letter has been duly authorized. GEP represents and
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warrants to the Company that GEP's entry into and delivery of this
engagement letter has been duly authorized.
17 NO AGENCY
Notwithstanding the identification of GEP as arranger for the Acquisition,
GEP will act under this engagement letter solely as an independent
contractor. The execution of this engagement letter shall not authorize any
party to act as or hold themselves to act as an agent or fiduciary, and GEP
shall not be or be deemed to be an agent or fiduciary of the Company.
18 TAXES: PAYMENTS FREE AND CLEAR
All payments by the Company under this engagement letter shall not be
subject to any counter-claim or set-off for, or be otherwise affected by,
any claim or dispute relating to any matter and will be made free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges over holdings, and all liabilities with
respect thereto (together "Taxes"). If the Company shall be required by law
to deduct any Taxes from or in respect of any sum payable to GEP hereunder,
the sum payable shall be increased as may be necessary so that after making
all required deductions, GEP receives an amount equal to the sum it would
have received had no such deductions been made. In addition, the Company
agrees to pay any present or future stamp or sales taxes or any other
excise taxes, charges or similar levies that arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise
with respect to this engagement letter at the same time as payment or
reimbursement of any fees, costs and expenses payable hereunder. The
Company shall pay for any VAT or other form of duty or sales tax which is
required to be levied thereon.
19 DISPUTES
Any disputes or complaints (with all relevant details) must be in writing
and should be referred in the first instance to the Compliance Officer of
GEP. Should the Company be dissatisfied with the handling of the dispute,
the Company has the right to refer the matter to the Directors of GEP. As
the Company is classified as either an Intermediate Customer or Private
Expert Client and thereby an Intermediate Customer the Company waives the
right to the services of any Financial Ombudsman Service (FOS) and
compensation under the any regulatory regime.
20 ASSIGNMENT
This engagement letter shall be binding upon and inure to the benefit of
the parties hereto and may not be assigned by either party, without the
prior written consent of the other party.
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21 ENTIRE AGREEMENT
This agreement supersedes any and all discussions, written or oral, between
the parties hereto and sets out the entire agreement of the parties
relating to the subject matter of this engagement letter.
22 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be
deemed an original and all of which counterparts shall constitute one and
the same document.
23 APPLICABLE LAW
The laws of the United Kingdom apply to this agreement
Please indicate the Company's acceptance of the provisions of this
engagement letter by signing as indicated and in accordance with the
provisions set out below:
This engagement letter is hereby executed and delivered by the parties as a
Deed on the date and year of acceptance of the terms of this letter by the
Company as indicated by the date of its signature below:
EXECUTED AND DELIVERED AS A DEED
By M1 Luxembourg AG
By: /s/ Gary Potter
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Gary Potter
Date 20 December 2009
EXECUTED AND DELIVERED AS A DEED
by Global Equity Partners Plc
By: /s/ Peter James Smith
-----------------------------------
Peter James Smith
Date 20 December 2009
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