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Item 1.01
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Entry Into a Material Definitive
Agreement
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Partnership Agreement
MobiVentures Inc. (the “Company”) entered into a partnership
agreement with Froggie S.L. (“Froggie”) and Move2Mobile Limited (“M2M”) on
October 31, 2007. The partnership agreement contemplates the creation of a
business to be operated in partnership between us and Froggie pursuant to which
the net income derived from the business will be split equally between us and
Froggie on a 50/50 basis. In addition, Froggie has agreed to provide “bridge
financing” to us to an agreed maximum of 120,000 Euros.
Letter of Intent
The execution of the partnership agreement follows the
execution of a letter of intent with Froggie, Norris Marketing S.L. (“Norris”)
and Tom Horsey dated July 17, 2007 and a further letter of intent between us and
M2M, Nigel Nicholas and Danny Wootton dated August 13, 2007.
Froggie is a provider of mobile telephony marketing systems
with operations in Argentina and Spain. Norris is a company incorporated in the
BVI which provides premium SMS and bulk SMS solutions into Spain. Tom Horsey is
the principal shareholder of Froggie and Norris. The letter of intent
contemplates the Company’s acquisition of up to 100% of the shares of Froggie
and Norris from Tom Horsey . To date, no definitive agreement has been executed
for the acquisition contemplated in the letter of intent. The parties have
entered into the partnership agreement pending the continuation of negotiations
on a definitive acquisition agreement. There is no assurance that any definitive
agreement for the acquisition by us of an interest in Froggie or Norris will be
executed.
M2M is a UK-based consulting business that specializes in
assisting businesses and entrepreneurs to develop wireless applications for
their existing or proposed business applications. Nigel Nicholas and Danny
Wootton are the principal shareholders of M2M. The letter of intent contemplates
our potential acquisition of up to 100% of the shares of M2M from Nigel
Nicholas, Danny Wootton and the other shareholders of M2M. To date, no
definitive agreement has been executed for the acquisition contemplated in the
letter of intent. The parties have entered into the partnership agreement
pending the continuation of negotiations on a definitive acquisition agreement.
There is no assurance that any definitive agreement for the acquisition by us of
an interest in M2M will be executed.
Planned Business
Under the partnership agreement, we, Froggie and M2M have agreed
to actively work together to grow our current mobile phone applications business
that provides content, applications and services to customers via their mobile
phones.
The objective of the parties is to generate revenues using content
and services through the live channels that each party has generated. We, Froggie
and M2M have agreed on a management team that will be devoted to the launching
of the business.
Bridge Financing
Froggie has agreed to provide to us the following maximum
bridging finance until January 31, 2008:
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30,000 Euros at November 1, 2007;
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30,000 Euros at December 1, 2007 provided deals have been signed by the
partnership between November 1, 2007 and December 1, 2007 with a cumulative
margin value equal or greater than 120,000 Euros on an annualized basis. For
every 10,000 Euros below this figure the bridging finance will be reduced
by 2,500 Euros;
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30,000 Euros at January 1, 2008 provided deals have been signed by the partnership
between 1
st
November 1, 2007 and January 1, 2008 with a cumulative
margin value equal or greater than 240,000 Euros on an annualized basis. For
every 10,000 Euros below this figure the bridging finance will be reduced
by 2,500 Euros; and
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30,000 Euros at February 1, 2008 provided deals have been signed by the
partnership between November 1, 2007 and February 1, 2008 with a cumulative
margin value equal or greater than 360,000 Euros on an annualized basis. For
every 10,000 Euros below this figure the bridging finance will be reduced
by 2,500 Euros.
In consideration for providing this financing, Froggie will be
issued shares of our common stock calculated based on a per share price equal to
the average of the 5 days preceding the date of the investment in each case. In
the event that we complete the acquisition of Froggie, as contemplated in the
letter of intent, the shares acquired by Froggie will be transferred to the
shareholder of Froggie and will be reflected in the share exchange agreement as
an additional “payment” in shares.
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2.
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Consultant Agreement – Gary Flint,
Director
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On November 1, 2007, the Company entered into a consultant
agreement (the “Consultant Agreement”) with Mr. Gary Flint, a director of the
Company, whereby Mr. Flint was appointed as an independent contractor of the
Company. The material terms of the Consultant Agreement include the
following:
1.
Mr. Flint shall perform the following services and undertake the following
responsibilities and duties for the Company (the "Consulting Services"):
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(a)
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providing services related to mergers and acquisitions,
especially the identification and approach of known value adding and
synergistic acquisition targets;
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(b)
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providing services related to investor relations and
communications;
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(c)
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reporting to the board of directors of the Company; and
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(d)
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performing such other duties and observing such
instructions as may be reasonably assigned from time to time by the board
of directors of the Company, provided such duties are within the scope of
the Company’s business and services to be provided by Mr.
Flint.
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2.
Mr. Flint shall devote approximately 4 days per month of his business time,
attention and energies to the business affairs of the Company as may be
reasonably necessary for the provision of the Consulting Services.
3.
The Company shall pay to Mr. Flint a consultant fee equal to $2,000 U.S. per
month during the term of the Consultant Agreement payable within 5 business
days of the end of each month for the prior months consulting work.
4.
The Company shall pay to Mr. Flint a success fee of 2.5%, to be paid 50% cash
and 50% equity, of the acquisition value of any target company acquired by the
Company, or any strategic investments into companies, through the efforts of
Mr. Flint after 3rd of September 2008, which efforts will include the
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identification and subsequent introduction of the target
company by Mr. Flint to the Company (the "Consultant Fee") such fee being
calculated based on the total valuation of the acquired company at the execution
date of the acquisition, excluding any valuations attributed to future earn out
valuations. Mr. Flint’s fee will be paid immediately upon the closing of each
and every agreed cash and stock payment instalment of the acquisition. the
equity portion of the fee will be paid in shares of the Company's common stock
determined by the amount of the fee divided by the average closing price of the
Company's common stock for the ten trading days prior to the completion of the
acquisition.
5.
The Company shall grant to Mr. Flint warrants to purchase a total of 300,000
shares in the Company’s common stock on the issue dates set forth below,
with an exercise price equal to US$ 0.05 per share, which warrants will be exercisable
for a term of 5 years. The full terms of the warrants are contained in a separate
agreement (“Warrant Certificate Agreement”). No warrants may be exercised
unless such warrants have vested in accordance with the terms of the Warrant
Certificate Agreement. Notwithstanding the five year term of the warrants, all
warrants will expire and cease to be exercisable on the date that is one year
following the date of termination of this Agreement for any reason:
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Number of Warrants
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Issue Date
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210,000
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on the 3
rd
of September 2008
(Issue Date)
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90,000
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on 12 month anniversary of Issue Date, or earlier,
based upon Mr. Flint meeting the performance criteria as set by the board
– see 5(d) of the Consultant Agreement
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The 90,000 bonus warrants will not vest or be exercisable by
Mr. Flint until such time as the performance criteria as set forth in Section
5.1(d) of the Consultant Agreement have been met.
6.
Mr. Flint shall receive a cash bonus of 100% of his then current annual
Consultant fee upon the achievement of the Company’s annual objectives, as set
by the board of directors. The Company may also consider Mr. Flint for a cash
bonus for each fiscal year, or part thereof that Mr. Flint is employed by the
Company, in an amount to be determined at the discretion of the board of
directors.
7.
The Company shall pay to Mr. Flint, in addition to Mr. Flint’s fee, reasonable
pre-approved travel and phone expenses.
8.
The Consultant Agreement may be terminated by both parties with or without cause
before the term is at its end by delivery of a notice of termination by either
party.
The foregoing summary of the Consultant Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Consultant Agreement, a copy of which is attached as
Exhibit 10.1
to this
Current Report on Form 8-K.
This Consultant Agreement supersede the previous consultant
agreement entered into between the Company and Mr. Flint on February 1, 2007 and
subsequently amended on September 3, 2007 (collectively, the “Original
Agreements”) pursuant to Mr. Flint’s resignation as the Company’s Director of
Business Development effective November 1, 2007. The Original Agreements were
reported in our Current Reports on Form 8-K filed with the Securities and
Exchange Commission on February 12, 2007 and September 7, 2007 respectively. Mr.
Flint’s resignation as the Company’s executive officer effective November 1,
2007 is reported under Section 5.02 herein.
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