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Exhibit 10.7
CAPITAL MARKETS CONSULTING AGREEMENT
THIS CAPITAL MARKETS CONSULTING AGREEMENT ("Agreement") is made
and
entered into effective as of the 5th day of July 2005
("Effective Date") by and
between FORTUNET, INC., a Nevada corporation ("FortuNet"), and
SPIEGEL PARTNERS,
LLC, a Delaware limited liability company ("Spiegel").
RECITALS
A. Spiegel is in the business of providing financial
consulting,
capital advisory and strategic consulting services.
B. FortuNet desires to execute an initial public offering (the
"IPO")
of its common stock.
C. Spiegel and FortuNet have entered into that certain
Memorandum of
Understanding ("MOU") dated July 5, 2005.
D. Spiegel desires to provide certain advisory and consulting
services
as provided herein.
E. FortuNet and Spiegel hereby enter into this Agreement in
order to
set forth the terms and conditions of the agreements and
covenants of the
parties and to supersede the MOU in its entirety.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual agreements and
covenants
set forth herein, FortuNet and Spiegel hereby amend and restate
the MOU in its
entirety and hereby agree as follows:
1. Services in General. During the term of this Agreement,
Spiegel will
provide the Services as defined below. Spiegel is solely
responsible for
determining the manner and method in which the Services are to
be provided;
provided, however, that Spiegel will provide the Services in
accordance with
standards reasonably acceptable to FortuNet.
2. Scope of Services. Spiegel shall provide the following
strategic
advisory services ("Services") to FortuNet:
(a) Review and discuss with FortuNet management its business
plans,
models and strategies related to its IPO;
(b) Assist FortuNet in evaluating business development
opportunities
related to its IPO, and other business development opportunities
for six months
thereafter;
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(c) Assist FortuNet in evaluating financing alternatives,
including a
private placement of debt or equity securities, a public
offering or a strategic
transaction such as a merger, acquisition or joint venture;
and
(d) Assist FortuNet in its selection and engagement of a
lead
underwriter for the IPO, potential co-managers of the IPO and
potential board
members;
Unless otherwise expressly requested by FortuNet, Spiegel shall
limit its
provision of Services to consulting directly with FortuNet's
management and will
have no independent interaction with third parties by or on
behalf of FortuNet
unless specifically authorized by FortuNet.
3. Limitation on Services. Spiegel represents and warrants,
and
FortuNet acknowledges, that Spiegel is not a licensed securities
broker or
dealer or a licensed investment advisor. Accordingly, Spiegel
shall not, and
shall have no authority, express or implied, to:
(a) Sell any securities of FortuNet, offer to sell any
securities of
FortuNet, or solicit offers to purchase any securities of
FortuNet;
(b) Negotiate with any prospective purchaser of securities or
potential
acquiror of FortuNet on behalf of or as a representative of
FortuNet; without
limiting the generality of the foregoing, Spiegel shall not
conduct any due
diligence regarding FortuNet or any potential investor or
acquiror;
(c) Make any representations or warranties on behalf of FortuNet
or with
respect to FortuNet or any of FortuNet's securities;
(d) Prepare or disseminate any documentation regarding FortuNet
or any
potential investment in or acquisition of FortuNet unless
specifically
authorized by FortuNet; without limiting the generality of the
foregoing,
Spiegel shall not engage in any general advertising or
solicitation with respect
to FortuNet;
(e) Advise any potential investor or potential acquiror
regarding any
potential investment in or acquisition of FortuNet; without
limiting the
generality of the foregoing, Spiegel shall not make any
recommendations to any
potential investor or potential acquiror regarding the value of
any securities
or terms of any proposed transaction;
(f) Act for or bind FortuNet in any way;
(g) Disseminate term sheets, offering documents, business plans
or any
other FortuNet information unless specifically authorized by
FortuNet;
(h) Receive or transmit funds to or from potential investors in
or
acquirors of FortuNet;
4. No Authority to Bind FortuNet. Spiegel shall not have any
right,
power or authority to create any obligation, express or implied,
or make any
representation on behalf of
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FortuNet, except as expressly authorized in advance in writing
from time to time
by FortuNet and then only to the extent of such
authorization.
5. Term.
(a) The term of this Agreement will commence as of the Effective
Date
first written above and will continue until the earlier of (i)
the successful
completion of the IPO, (ii) FortuNet or any selected underwriter
agreeing to
abandon the IPO (unless a replacement underwriter is identified
by Spiegel and
approved by FortuNet, which approval shall not be unreasonably
withheld, and
such underwriter has agreed to proceed with an underwriting),
(iii) December 31,
2005 or (iv) termination of this Agreement for "cause" as
defined in Section 7
below. Notwithstanding the foregoing, if a registration
statement with respect
to the IPO has been filed with the Securities and Exchange
Commission on or
before December 31, 2005 and the IPO has not been completed by
December 31,
2005, this Agreement will continue after December 31, 2005 until
the successful
completion or abandonment of the IPO subject to the registration
statement as
filed on or before December 31, 2005.
(b) Upon successful completion of the IPO, the term of this
Agreement
shall be extended through the period that additional Services
are to be provided
as specified in Section 7 below.
(c) Sections 11 and 14 relating to confidentiality and governing
law and
venue of this Agreement will survive termination of this
Agreement for any
reason.
6. Compensation.
(a) Upon the Effective Date of this Agreement, FortuNet will pay
to
Spiegel a signing bonus in the amount of $10,000. This amount
will be considered
a portion of the Contingent Fees as defined in subsection (d)
below and shall be
treated as all Contingent Fees under this Agreement.
(b) FortuNet will pay expenses incurred by Spiegel during this
Agreement
that have been preauthorized by FortuNet.
(c) Upon the Effective Date of this Agreement and on the fifth
day of
each month thereafter during the term of this Agreement or the
earlier
successful completion of the IPO, FortuNet will pay to Spiegel a
fee in the
amount of $10,000.
(d) Commencing on September 5, 2005 and on the fifth day of each
month
thereafter during the term of this Agreement or the earlier
successful
completion of the IPO, FortuNet will advance to Spiegel a
monthly contingent fee
in the amount of $20,000 ("Contingent Fees"). The parties agree
that while paid
currently, these fees are contingent upon the successful
completion of the IPO
within the term of this Agreement as provided in Section 5(a)
above. In the
event the IPO is abandoned or not completed within the term of
this Agreement,
and except as provided in subsection (f) below, Spiegel agrees
to immediately
pay FortuNet cash in the amount equal to all Contingent Fees
advanced to Spiegel
by FortuNet or in the alternative Spiegel agrees to
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immediately deliver a promissory note in the face amount of all
Contingent Fees
previously paid and Spiegel covenants to repay, by December 31,
2006, all
principal plus 10% interest on the total amount due under the
promissory note.
(e) Upon successful completion of the IPO by an Identified
Underwriter
as defined in Section 8 below, FortuNet will pay to Spiegel a
success fee of
$350,000, less all amounts previously paid pursuant to
subsections (a), (c) and
(d) above.
(f) If FortuNet has selected an Identified Underwriter to
proceed with
the IPO, but then elects not to proceed with the IPO, and the
selected
underwriter has advised FortuNet that the IPO is viable, then
the cumulative
monthly Contingent Fees previously paid will be deemed earned by
Spiegel.
(g) If FortuNet has selected an Identified Underwriter to
proceed with
the IPO, but then the selected Identified Unde
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