CORPORATE ADVISORY AGREEMENT
EXHIBIT
10.1
This
Corporate Advisory Agreement (this “Agreement”) is entered into this 4th day of
February 2008 by and between M1 Capital Group, Ltd (“M1” or the “Consultant”)
and SEQUIAM (“SEQUIAM” or the “Company’).
I. ENGAGEMENT. SEQUIAM
hereby engages and retains M1 as a Corporate Advisor to perform the Services (as
that term is hereinafter defined) and M1 hereby accepts such appointment on the
terms and subject to the conditions hereinafter set forth and agrees to use its
best efforts in providing such Services.
II. INDEPENDENT
CONTRACTOR. M1 shall be, and in all respects shall be deemed to be,
an independent contractor in the performance of its duties hereunder, any law of
any jurisdiction to the contrary notwithstanding. M1 shall be solely
responsible for making all payments to and on behalf of its employees and
subcontractors, including those required by law, and SEQUIAM shall in no event
be liable for any debts or other liabilities of M1. M1 shall not, by
reason of this Agreement or the performance of the Services, be or be deemed to
be, an employee, agent, partner, co-venturer or controlling person of SEQUIAM,
and M1 shall have no power to enter into any agreement on behalf of, or
otherwise bind SEQUIAM. Subject to the following sentence, M1 shall
not have or be deemed to have, fiduciary obligations or duties to SEQUIAM and
shall be free to pursue, conduct and carry on for its own account (or for the
account of others) such activities, employments, ventures, businesses, and other
pursuits as M1 in its sole, absolute and unfettered discretion, may
elect. Notwithstanding the above, no activity, employment, venture,
business or other pursuit of M1 during the term of this Agreement shall conflict
with M1’s obligations under this Agreement or be adverse to SEQUIAM’s interests
during the term of this Agreement.
III. SERVICES.
1. Services. M1
agrees to provide Corporate Advisory services to SEQUIAM, which shall include,
but not be limited to, the following services (hereafter collectively referred
to as the “Services”):
Advise
and assist SEQUIAM in identifying one or more individuals, firms or entities
(the “Candidate(s)”) who may have an interest in providing debt or investment
capital in the form of bridge Financing, private placement Financing, public
equity Financing, any other sale of Securities or in pursuing a Business
Transaction with SEQUIAM. As used in this Agreement, the term
“Business Transaction” shall be deemed to mean any form of merger, acquisition,
joint venture, licensing agreement, product sales and/or marketing agreement,
distribution agreement, combination and/or consolidation, involving SEQUIAM
and/or any of its affiliates and any other entity. For the purposes
of this Agreement, "Security" shall mean: (i) any stock or other
security or ownership interest of the Company (or entity succeeding or surviving
the Company in the case of an M&A Transaction) of the class, series and with
the same terms as is issued in connection with a Financing or M&A
Transaction (as defined below), as the case may be, or (ii) if no such stock,
security or ownership interest is issued in connection with a Financing or
M&A Transaction, the existing common stock or unit of ownership interest of
the Company (or entity succeeding or surviving the Company in the case of an
M&A Transaction).
Advise
SEQUIAM on obtaining introductions to merchant bankers, investment bankers, or
potential institutional investors and other institutions or entities that may
have an interest in participating in a Business Transaction with
SEQUIAM.
Assist
SEQUIAM in preparing presentations to potential institutional investors,
merchant bankers, investment bankers, or other entities that may have an
interest in participating in a Business Transaction with
SEQUIAM. Such assistance shall include assisting SEQUIAM in
assembling all internal financial and operational information that a third party
would expect to review in connection with its due diligence review of SEQUIAM,
preparing an analysis of SEQUIAM’s industry; preparing an executive summary of
SEQUIAM’s business plan and financial forecasts. It is understood
that SEQUIAM shall be the author of all such materials, but that M1 will assist
management of SEQUIAM in preparing this information.
Assist
SEQUIAM in the selection and retention of one or more investor relations firms
which may be retained by SEQUIAM to provide information concerning SEQUIAM to a
variety of third parties through various media.
Assist
the Company in its corporate strategies and operations.
Assist
the Company in the implementation of its business plan and capital market
strategies.
M1 shall
not perform any services that would require it to hold a securities
broker-dealer license or to register in any capacity with the U.S. Securities
and Exchange Commission, the California Department of Corporations, or any other
regulatory agency or SRO.
2. Best
Efforts. M1 shall devote such time and effort, as both parties
deems commercially reasonable and adequate under the circumstances, to the
affairs of SEQUIAM, to render the Services contemplated by this
Agreement. M1 is not responsible for the performance of any Services
that may be rendered hereunder without SEQUIAM providing the necessary
information in writing prior thereto, nor shall M1 provide any services that
constitute the rendering of any legal opinions or performance of work that is in
the ordinary purview of a certified public accountant. M1 cannot
guarantee results on behalf of SEQUIAM, but shall pursue all reasonable avenues
available through its network of contacts. At such time as an
interest is expressed by a third party, M1 shall notify SEQUIAM and advise it as
to the source of such interest and any terms and conditions of such
interest. The acceptance and consummation of any transaction is
subject to acceptance of the terms and conditions by SEQUIAM in its sole
discretion. It is understood that a portion of the compensation paid
hereunder is being paid by SEQUIAM to have M1 remain available to advise it on
transactions on an as-needed basis.
3. Availability
of M1. In conjunction with the Services, M1 agrees to:
Make
itself available to the officers of SEQUIAM at a mutually agreed upon place
during normal business hours for reasonable periods of time, subject to
reasonable advance notice and mutually convenient scheduling, for the purpose of
advising SEQUIAM in the preparation of such reports, summaries, corporate and/or
transaction profiles, due diligence packages and/or other material and
documentation (“Documentation”) as shall be necessary, in the opinion of M1, to
properly present SEQUIAM to other entities and individuals that could be of
benefit to SEQUIAM.
Make it
self available for telephone conferences with the principal operating officer(s)
of SEQUIAM during normal business hours.
4. Authority
to Engage Other Service Providers. M1 shall have the authority to
engage other third parties to assist it in providing services to SEQUIAM, and to
pay compensation to such third parties, including but not limited to portions of
its compensation to be received under this Agreement. SEQUIAM shall
not be responsible for the fees or other charges of such third parties unless
and to the extent that SEQUIAM otherwise agrees with M1 or such third
party.
IV. EXPENSES.
1. General
Expenses. It is expressly agreed and understood that each party shall
be responsible for its own normal and reasonable out-of-pocket expenses which
shall include, but shall not be limited to, accounting, long distance
communication, and the printing and mailing of materials between the parties
hereto; provided, however, that this shall not include expenses incurred by M1
in connection with the reproduction, printing or special delivery of Business
Plans, Corporate Profiles, or other similar documents required by third
parties.
2. Travel
Expenses. Any travel expenses incurred by M1 in the rendering of its
Services hereunder shall be reimbursed by SEQUIAM on a monthly
basis. This shall only apply to travel that is requested by or
approved in advance by SEQUIAM.
V. COMPENSATION. In
consideration for the Services rendered pursuant to this Agreement, SEQUIAM
agrees that M1 shall be entitled to the following compensation:
1. Equity
Compensation. M1 (or its designee) shall receive minimum equity
compensation in the amount of two and half percent (2.5%) of the COMPANY’s fully
diluted and outstanding shares post next financing for providing its Services.
M1 will receive the shares directly from the COMPANY at a price equal to par
value upon the closing of the next equity financing.
3. Warrant
Compensation. 2.5% warrant coverage at a price equal to par value
upon the closing of the next equity financing. Should the Company not
consummate a financing, then M1 (or its designee) shall receive no equity or
warrant compensation.
VII. REPRESENTATIONS,
WARRANTIES AND COVENANTS.
1. Disclosure
of Information. SEQUIAM covenants that it will provide M1 with
complete, accurate and truthful information and with all material facts that
will enable M1 to assist SEQUIAM in the preparation of due diligence materials
and reports that accurately describe SEQUIAM, its financial condition and
business operations, and do not contain any misleading information or omissions
to state information that would make such materials or reports
misleading. M1 covenants that it will disclose information concerning
SEQUIAM only as required to perform its services hereunder or as approved by
SEQUIAM.
2. Cooperation
and Delivery of Corporate Information. SEQUIAM will cooperate with
M1, and will promptly provide M1 with all pertinent materials and requested
information in order for M1 to perform its Services pursuant to this
Agreement.
3. Timely
Information and Updates. SEQUIAM shall use its commercially
reasonable efforts to keep M1 up to date and apprised of all business, market
and legal developments related to SEQUIAM and its operations and management,
including the following:
copies of
all amendments, revisions and changes to its business and marketing plans,
banking agreements, debt facilities or equity financings, bylaws, articles of
incorporation, private placement memorandums, key contracts, employment and
consulting agreements and other operational agreements;
copies of
all communications, forms, reports and registration statements filed with any
state or federal securities administrator, including without limitation, the
Securities and Exchange Commission (the “SEC”), and the National Association of
Securities Dealers, Inc. (“NASD”);
monthly,
quarterly and annual financial statements, including balance sheets, income
statements, cash flows and all other documents provided or generated by SEQUIAM
in the normal course of its business and requested by M1 or investors introduced
by M1, from time to time.
4. Corporate
Authority. Both SEQUIAM and M1 have full legal authority to enter
into this Agreement and to perform their respective obligations as provided for
in this Agreement. The individuals whose signatures appear below are
authorized to sign this Agreement on behalf of their respective
corporations.
5. M1
Ability. M1 represents and warrants to SEQUIAM that (a) it has the
experience and ability as may be necessary to perform all the required Services
with a high standard of quality, (b) all Services will be performed in a
professional manner, and (c) all individuals it provides to perform the Services
will be appropriately qualified and subject to appropriate agreements concerning
the protection of trade secrets and confidential information of SEQUIAM which
such persons may have access to over the term of this Agreement.
6. Non-solicitation. Pursuant
to this Agreement, it is contemplated that M1 shall supply to the Company and
its officers and directors certain information concerning investors, debt
providers, interested parties, and service providers. Neither the
Company, nor any of its majority owned or controlled entities, or any of their
officers and directors, or any affiliates, associates, employees, consultants,
or other related parties, shall, without the prior written consent of M1,
contact any of such parties and other entities introduced directly or indirectly
by M1 to SEQUIAM for the purpose of an investment or benefit to the Company or
an investment in any other entity or enterprise controlled by or affiliated with
the Company or its directors, officers or employees. SEQUIAM,
its controlled entities, officers, directors, affiliates, employees or other
related parties shall not, either directly or indirectly, whether with or
through any person, firm, partnership, corporation or other entity or venture
now existing or hereafter created, solicit or employ, or attempt to solicit or
employ, any person who is or has been within the preceding twelve (12) months an
officer, director, partner, manager, agent, employee, subcontractor or
consultant of M1.
IX. TERM
AND TERMINATION.
1. From
the date this Agreement is fully executed, the “Term” of this Agreement shall be
twelve (12) months as long at M1 and XxxxxXxxx have successfully completed a $5
million dollar minimum capital raise for SEQUIAM by March 31, 2008. The term
ends on 3/31/08 if the raise is not completed unless the Company chooses to
extend the term. With a successful $5 million dollar raise,after the first 12
months, the term may be extended for a period of twelve months, by mutual
written consent of the parties, the termination or expiration of this Agreement
shall not in any way limit, modify, or otherwise affect the rights of M1 to: (i)
receive its entire compensation pursuant to the terms of this Agreement in
connection with a Financing (debt or equity) or M&A Transaction involving
the Company during the Term of this Agreement or subsequent to the termination
or expiration of this Agreement as provided below, (ii) receive retainers due
and reimbursement of expenses incurred by M1 up to the date of termination or
expiration of this Agreement pursuant to the terms of Section V hereof, and
(iii) be protected by the indemnification rights, waivers and other provisions
of this Agreement. The Company hereby covenants and agrees that it
shall not enter into any M&A Transaction unless the entity succeeding or
surviving such M&A Transaction agrees in writing to be bound by all terms
and conditions of this Agreement applicable to the Company, including, without
limitation, the payment of all fees and expenses as provided
herein.
2. In
the event of early termination for any reason other than a breach of this
Agreement by M1, SEQUIAM shall pay any compensation earned under the terms of
this Agreement which has not yet been paid by SEQUIAM to M1, including payment
for all merger and acquisition activity as forth in Article VI, and reimburse M1
for all reasonable expenses incurred by M1 until the date of
termination.
X. CONFIDENTIAL
DATA.
1. M1
shall not divulge to others, any trade secret or confidential information,
knowledge, or data concerning or pertaining to the business and affairs of
SEQUIAM, obtained by M1 as a result of its engagement hereunder, except to the
extent necessary for M1 to perform its services or as otherwise authorized in
writing by SEQUIAM. M1 represents and warrants that it has
established appropriate internal procedures for protecting the trade secrets and
confidential information of SEQUIAM, including, without limitation, restrictions
on disclosure of such information to employees and other persons who may be
engaged in rendering services to any person, firm or entity which may be a
competitor of SEQUIAM.
2. SEQUIAM
shall not divulge to others, any trade secret or confidential information,
knowledge, or data concerning or pertaining to the business and affairs of M1,
obtained as a result of its engagement hereunder, unless authorized, in writing
by M1.
3. M1
shall not be required in the performance of its duties to divulge to SEQUIAM, or
any officer, director, agent or employee of SEQUIAM, any secret or confidential
information, knowledge, or data concerning any other person, firm or entity,
which M1 may have or be able to obtain other than as a result of the
relationship established by this Agreement. M1 shall notify SEQUIAM
of any arrangement(s) that is or could be considered competitive.
4. SEQUIAM
agrees that all work product and materials generated by M1 are based on
methodologies, processes and systems which are proprietary to M1 and constitute
trade secrets of M1. As a result, SEQUIAM shall not use and return
all M1 work product and other M1 materials to M1 upon termination of this
Agreement.
5. The
Company acknowledges that all advice (written or oral) given by M1 to the
Company in connection with M1 's engagement hereunder is intended solely for the
benefit and use of the Company and its Board of Directors in considering a
Financing or M&A Transaction to which the advice relates, and the Company
agrees that no person or entity, including without limitation, the Company after
the termination of this Agreement, shall be entitled to make use of or rely upon
the advice of M1, and no such opinion or advice shall be used for any other
purpose or reproduced, disseminated, quoted or referred to at any time, in any
manner or for any purpose, nor may the Company make any public references to M1,
or use M1 's name in any annual reports or any other reports or releases of the
Company without M1 's prior written consent and unless M1 remains engaged as a
consultant by the Company.
XI. OTHER
MATERIAL TERMS AND CONDITIONS.
1. Indemnity.
Indemnification
by SEQUIAM. SEQUIAM agrees to indemnify and hold harmless M1, its
affiliates and their respective officers, directors, managers, partners,
shareholders and agents, from any claims, lawsuits or litigation arising from
disputes between SEQUIAM and any third parties other than those arising from the
gross negligence or willful misconduct of M1.
Indemnification
by M1. M1 agrees to indemnify and hold harmless SEQUIAM from any
claims, lawsuits or litigation arising from disputes between M1 and any third
parties other than those arising from the gross negligence or willful misconduct
of SEQUIAM.
2. Arbitration. The
Parties hereto agree and acknowledge that this agreement is subject to the
provisions of the Federal Arbitration Act. Except to the extent
described in the last sentence of this paragraph, any controversy or claim
arising out of or relating to this engagement agreement, or the breach thereof,
shall be settled by arbitration administered by the American Arbitration
Association under its Commercial Arbitration Rules, and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Any arbitration proceedings will be conducted in Los Angeles
or Orange County, California. The arbitrator shall have no authority
to award punitive damages or any other damages not measured by the prevailing
party’s actual damages, and may not make any ruling, finding or award that does
not conform to the terms and conditions of this engagement
agreement. Notwithstanding the foregoing, nothing contained in this
engagement agreement shall be construed to restrict in any way the right of any
party hereto to seek injunctive or similar equitable relief in any court of
competent jurisdiction with respect to any threatened breach of the provisions
of this agreement or any of the respective parties’ obligations
hereunder.
3. Attorneys
Fees. In the event any of the parties hereto are required to commence any action
or proceeding in order to enforce the obligations of the other parties hereto,
then the prevailing party shall be entitled to reasonable attorney fees and
costs incurred in any such action.
4. Provisions. Neither
termination nor completion of the assignment shall affect the provisions of this
Agreement, which shall remain operative and in full force and
effect.
5. Additional
Instruments. Each of the parties shall from time to time, at the
request of others, execute, acknowledge and deliver to the other party any and
all further instruments that may be reasonably required to give full effect and
force to the provisions of this Agreement.
6. Entire
Agreement. Each of the parties hereby covenants that this Agreement,
together with the exhibits attached hereto as earlier referenced, is intended to
and does contain and embody herein all of the understandings and agreements,
both written or oral, of the parties hereby with respect to the subject matter
of this Agreement, and that there exists no oral agreement or understanding or
expressed or implied liability, whereby the absolute, final and unconditional
character and nature of this Agreement shall be in any way invalidated,
empowered or affected. There are no representations, warranties or
covenants other than those set forth herein.
7. Laws
of the State of California. This Agreement shall be deemed to be made
in, governed by and interpreted under and construed in all respects in
accordance with the laws of the State of California, irrespective of the country
or place of domicile or residence of either party.
8. Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns; provided, however, that M1 may not
assign any or all of M1’s rights or duties hereunder without the prior written
consent SEQUIAM, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, M1 may assign any portion of
its Compensation as outlined herein to its employees, affiliates,
sub-contractors or subsidiaries in its sole discretion. SEQUIAM
agrees that it shall require, as a condition of closing any Business Transaction
in which SEQUIAM is not the surviving entity but the shareholders of SEQUIAM
receive a majority of the voting interests of the surviving entity, that the
surviving entity agree to assume the obligations of SEQUIAM under this
Agreement.
9. Originals. This
Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed an original and constitute one and the same
agreement. Facsimile copies with signatures shall be given the same
legal effect as an original.
10. Notices. Each
party shall at all times keep the other informed of its principal place of
business if different from that stated herein, and shall promptly notify the
other of any change, giving the address of the new place of business or
residence. Notices provided under this Agreement shall be provided in
writing and delivered by hand, by facsimile transmission or by overnight
courier. Notices shall be deemed received upon personal receipt if
personally delivered, upon completion of facsimile transmission with electronic
evidence of receipt, or upon delivery with evidence of
delivery. Notices shall be delivered to the information set forth
below the signatures of each party hereto, or to such other address, as a party
shall have provided in writing to the other party.
11. Modification
and Waiver. A modification or waiver of any of the provisions of this
Agreement shall be effective only if made in writing and executed with the same
formality as this Agreement. The failure of any party to insist upon
strict performance of any of the provisions of this Agreement shall not be
construed as a waiver of any subsequent default of the same or similar nature or
of any other nature.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
M1 Capital Group,
Ltd. SEQUIAM
__________________________ ____________________________
By:
Xxxxxxx
Xxxxxxxx By:
Its:
Managing
Director Its:
