INVESTMENT BANKING AGREEMENT
M Power Entertainment ("MPWE") hereby retains the services of Northern Hills,
Inc. dba Santa Fe Capital Group ("SANTA FE") on a non-exclusive basis to raise
up to approximately $12,500,000 in the form of two fundings: (a) up to a
$2,500,000 mezzanine capital funding round to be used for working capital
purposes and (b) a $10,000,000 convertible debenture or private equity line or
standby equity distribution agreement ("SEDA"); both fundings to be known
hereafter as the "Equity Fundings".
MPWE is seeking the experience of SANTA FE and MPWE does not hold SANTA FE
responsible in any manner for raising $12,500,000 Equity Fundings.
SANTA FE has experience in raising angel capital and quite a few of its angel
group (of approximately 50 former entrepreneurs) come from the media and
entertainment industries, and are still active as the Internet and the mobile
marketplace become more content and advertising driven. SANTA FE believes
that some of its angel investors may want to become advisors to MPWE and use
their rolodexes to open doors for MPWE into their world of entertainment and
communications.
The convertible debenture funding would take the form of a five to seven year
term loan bearing interest at an estimated prime plus 2% fully convertible
into MPWE's stock at any time or from time to time with a small warrant
kicker, estimated at no more than twenty (20%) percent coverage. The SEDA
would take the form of a two year equity line with draw-down rights every two
weeks of $250,000 per draw-down.
SANTA FE shall receive its fees from MPWE only on investors that SANTA FE
introduces to MPWE and who actually invest. MPWE has the right to refuse an
investment from any investor brought to MPWE by SANTA FE.
SANTA FE shall not act as MPWE's agent and SANTA FE will not represent to
others that it is MPWE's agent, and any material that SANTA FE prepares for
MPWE shall remain MPWE's property. MPWE is under no obligation to accept any
offer for investment brought to MPWE by SANTA FE. SANTA FE cannot and will
not control any decisions made by MPWE management, including the acceptance of
investors or lenders brought to MPWE by SANTA FE. The parties agree that SANTA
FE shall proceed with its efforts to raise capital for MPWE
MPWE agrees to pay or cause to be paid to SANTA FE a fee equal six and
one-half (6.5%) percent of the Equity Fundings raised for MPWE and MPWE agrees
to issue to SANTA FE six and one-half (6.5%) percent of the shares of MPWE
common stock and warrants purchased by investors in the Equity Fundings. Fee
payments shall be made by over-nighted checks or wire transfer within two (2)
days of MPWE receiving the investors' or lenders' checks or wire transfers.
SANTA FE agrees to hold its equity interests issue-able hereby under the same
terms and conditions that the investors hold theirs
The term of this Agreement shall be for a period of five (5) ) months,
although it can be extended by either party by giving ten (10) days notice in
writing; or it can be terminated at any time for cause, such as malfeasance,
misfeasance or the perception of lack of best efforts being applied. The
Agreement can be terminated by either party for any reason by giving ten (10)
days notice to the other party. In the event after termination in writing,
MPWE continues to utilize SANTA FE's finder services or agrees to meet with
new investors introduced by SANTA FE and not previously known to MPWE, then
this Agreement shall continue to apply to such new investors should they
provide Funding during the one year period following the term of this
Agreement. Once terminated, neither party will have an obligation to the other
party.
MPWE agrees to pay SANTA FE a monthly retainer for four (4) months of $2,500 a
month, or $10,000 in the aggregate. The first payment of $2,500 shall be made
upon the signing of this Agreement. Further, MPWE agrees to reimburse SANTA
FE's out-of-pocket expenses going forward, including, but not limited to,
postage, courier, telephone, production of the Funding Memorandum and faxes,
not to exceed U.S. three hundred dollars ($300) per month, of which travel
expenses may not be incurred without prior written approval by MPWE. SANTA FE
will itemize all of its expenses in a monthly invoice and MPWE agrees to
reimburse SANTA FE within ten (10) days of receipt by MPWE.
By signing this Agreement, SANTA FE and MPWE each agree to hold in confidence
information provided to the other party that is not publicly-available. The
agreement to hold information confidential will be maintained for two years
from the date below. This Agreement is a document that will be maintained in
confidence under the terms herein. MPWE recognizes the need on the part of
SANTA FE to show information about MPWE to prospective investors, and so long
as MPWE has approved the information to be shown, SANTA FE has permission to
do so.
In the event of any dispute between MPWE and SANTA FE, MPWE and SANTA FE agree
that it shall be resolved through arbitration in Houston, TX under the
regulations of the American Arbitration Association, within ninety (90) days
following termination of this Agreement. Any award rendered shall be final
and conclusive upon the parties. This Agreement shall be construed under the
laws of the State of Texas.
AGREED TO AND ACCEPTED BY:
/s/ Xxxxx Xxxxxx
______________________________
Northern Hills, Inc.
Dba Santa Fe Capital Group
By: Xxxxx Xxxxxx
President
000 X. Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
000-000-0000
xxx.xxxxxxxxx.xxx
/s/ Xxxx X. Xxxxxxx August 19, 2005
______________________________ ______________________
Date
Xxxx X. Xxxxxxx
CEO
M Power Entertainment, Inc.
