Document:

exv10w29

 

EXHIBIT 10.29

EXECUTION VERSION

J.P. MORGAN SECURITIES INC.

270 Park Avenue

New York, NY 10017

CONFIDENTIAL

January 8, 2008

Technitrol, Inc.

1210 Northbrook Drive, Suite 470

Trevose, Pennsylvania 19053

Attention of Drew Moyer

     Chief Financial Officer

Project Hummingbird

Engagement Letter

Ladies and Gentlemen:

     You have advised J.P. Morgan Securities Inc. (“JPMorgan”) that Technitrol, Inc., a
Pennsylvania corporation (“Technitrol” or “you”), intends to acquire (the
“Acquisition”) all the outstanding share capital of Sonion A/S, a company organized under
the laws of Denmark (the “Company”), pursuant to a Share Purchase Agreement among
Technitrol, one or more subsidiaries of Technitrol and each of the shareholders of the Company
(other than certain management shareholders). As a result of the Acquisition, the Company will be
an indirect wholly-owned subsidiary of Technitrol. You have further advised JPMorgan that, in
connection therewith, you desire to obtain $500,000,000 of syndicated five-year credit facilities
(the “Five-Year Facilities”) or, in the event the Five-Year Facilities cannot be arranged
by the date on which the Acquisition is consummated (the “Closing Date”), an Interim Senior
Term Loan Facility in a principal amount of $200,000,000 and an Interim Senior Revolving Credit
Facility in a principal amount of $300,000,000 (together, the “Interim Facilities”), the
proceeds of which may be utilized, among other things, to finance the Acquisition and the related
transactions.

     1. Engagement of JPMorgan. You hereby engage JPMorgan to be, in connection with
refinancing or replacement of any of the Interim Facilities, the sole bookrunner for, and the sole
underwriter of, or sole placement agent for, or sole initial purchaser of, any public or private
offering of equity securities by you or of debt securities by you or any of your subsidiaries
consummated as part of such refinancing or replacement (any such securities being referred to
herein as “Securities” and any such

 

 

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offering being referred to herein as an “Offering”). In acting in such capacities,
JPMorgan will perform the services and exercise the authority customarily performed or exercised by
it in connection therewith.

     You acknowledge and agree that JPMorgan’s engagement hereunder is not an agreement by JPMorgan
or any of its affiliates to underwrite, place or purchase any Securities or otherwise to provide
any financing. Any such agreement would be set forth in an underwriting agreement, purchase
agreement or placement agency agreement entered into by you or one of your subsidiaries, and
JPMorgan or one of its affiliates, which will be in JPMorgan’s or such affiliate’s customary form
and contain mutually acceptable terms and conditions.

     2. Exclusive Engagement. During the term hereof, you will not, and will cause your
subsidiaries not to, initiate, solicit or enter into any discussions or negotiations looking toward
the issuance, offering or sale of any Securities to any third parties, except through JPMorgan. In
the event that you or any of your subsidiaries shall receive any inquiry concerning any Securities,
you will, or will cause such subsidiary to, promptly inform JPMorgan of such inquiry. You agree
that you will not, and will not permit any of your subsidiaries to, appoint any third party as an
additional bookrunner, underwriter, placement agent or initial purchaser for any Offering without
obtaining JPMorgan’s prior written consent to such appointment and to the terms of such third
party’s participation in such Offering.

     3. Engagement Period, Termination and Survival. This letter agreement may be
terminated by JPMorgan at any time upon 10 days’ prior written notice to you. This letter
agreement may be terminated by you upon 10 days’ prior written notice to JPMorgan (a) if the
Closing Date shall not have occurred, after July 31, 2008, (b) if the Closing Date occurs and no
amounts are outstanding, or available for borrowing, under the Interim Facilities, the Closing Date
and (c) if the Closing Date occurs and any amounts are outstanding, or available for borrowing,
under the Interim Facilities, after the date on which all amounts outstanding or available for
borrowing under the Interim Facilities shall have been refinanced, repaid or replaced. This
paragraph and the provisions of this letter agreement relating to the payment of fees and expenses,
indemnification and contribution, confidentiality, references to JPMorgan and governing law,
submission to jurisdiction and waiver of jury trial will survive any termination or expiration of
this letter agreement.

     4. Indemnification. In consideration of the engagement hereunder, you (the
“Indemnifying Party”) agree to the indemnification and contribution provisions set forth in
Annex A hereto, the provisions of which are incorporated by reference herein and constitute a part
hereof.

     5. Fees and Expenses. (a) In any Offering that is consummated prior to termination of
this letter agreement and in which JPMorgan acts in the capacities contemplated hereby, you shall
pay, or cause to be paid, aggregate underwriters’ or initial purchasers’ discounts, placement
agency fees or arrangement fees, as applicable, that are customary for such transactions at the
time and reasonably satisfactory to JPMorgan, payable at the closing of such Offering. If you or
any of your subsidiaries, directly or

 

 

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indirectly, engage in any Offering in which JPMorgan did not act in the capacities
contemplated hereby, you shall pay, or cause to be paid, on the date on which each such Offering is
consummated, the fees that would have been payable to JPMorgan hereunder in connection with such
Offering had JPMorgan acted in such capacities.

     (b) If the “Interim Facilities Fee” shall have been paid by or on behalf of you to JPMorgan or
its affiliates in respect of the Interim Facilities pursuant to the Fee Letter dated the date
hereof among JPMorgan, JPMorgan Chase Bank, N.A. and you, then you will be entitled to a credit
therefor with respect to any fees payable by you pursuant to the immediately preceding paragraph in
connection with any Offering that is consummated prior to the date that is 180 days after the
Closing Date and for which JPMorgan acts in the capacities contemplated hereby, such credit to be
equal to the product of (i) 0.25% and (ii) the aggregate principal amount of loans under the
Interim Facilities permanently repaid (with, in the case of repayment of revolving loans,
termination of the corresponding commitments) with the proceeds of such Offering. It is understood
and agreed that any such credit applied to any such fees payable to JPMorgan in connection with any
Offering shall not exceed such fees.

     (c) In addition, whether or not the Acquisition is consummated, you shall reimburse JPMorgan
promptly upon request for all its reasonable out-of-pocket costs and expenses (including expenses
of JPMorgan’s due diligence investigation, syndication expenses, travel expenses and reasonable
fees, disbursements and other charges of counsel) incurred in connection with the preparation of
this letter agreement or any of the transactions contemplated hereby, whether or not any Offering
is consummated; provided, however, that, in connection with any Offering, no such
reimbursement of costs and expenses related thereto shall be required in the event that JPMorgan
is paid with respect to such Offering the compensation contemplated above; provided
further, that your obligation under this clause (c) in respect of fees, disbursements and
other charges of counsel incurred prior to December 13, 2007 will be limited to $50,000;
provided further, however, that you shall in any case be responsible for
all printing costs, filing fees and “blue-sky” fees and expenses, as well as all stamp, issuance,
transfer or other similar taxes or duties and all listing fees and expenses, incurred or applicable
in connection with any Offering.

     (d) All amounts payable to JPMorgan under the terms of this engagement are exclusive of value
added tax or any similar taxes (“VAT”). All amounts charged by JPMorgan or for which
JPMorgan is to be reimbursed will be invoiced together with VAT, where appropriate. You agree, on
behalf of yourself and your subsidiaries, that all amounts payable hereunder shall be paid in U.S.
dollars and free and clear of, and without any deduction or withholding for or on account of, any
current or future taxes, levies, imports, duties, charges or other deductions or withholdings
levied in any jurisdiction from or through which payment is made or where the payor is located
unless such deduction or withholding is required by applicable law, in which event you or your
applicable subsidiary shall pay additional amounts so that the persons entitled to such payments
will receive the amount that such persons would otherwise have received but for such deduction or
withholding.

 

 

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     6. Cooperation and Information. (a)  You agree to prepare and provide, and shall
cause your subsidiaries to prepare and provide all information with respect to you and your
subsidiaries and affiliates, the Acquisition and the related transactions and the other
transactions contemplated hereby, including all financial information and projections with respect
to you and your subsidiaries giving pro forma effect to the Acquisition and the related
transactions (such projections, the “Projections”), as JPMorgan may reasonably request in
connection with any Offering. If JPMorgan shall so request, you agree to use your commercially
reasonable efforts to obtain ratings of any Securities to be issued in any Offering from each of
Standard & Poor Rating’s Group and Moody’s Investors Services, Inc.

     (b) You hereby represent and warrant that (i) all information (the “Information”) that
has been or will be made available to JPMorgan by or on behalf of you, your subsidiaries or
affiliates or representatives of any of the foregoing, is or will be, when furnished and taken as a
whole, complete and correct in all material respects and does not or will not, when furnished and
taken as a whole, contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in light of the
circumstances under which such statements are made, (ii) all historical financial data provided to
JPMorgan will be prepared in accordance with U.S. GAAP (or with appropriate reconciliation to U.S.
GAAP if required by law or regulation or requested by JPMorgan) and will fairly present the
financial condition and operations of you and your subsidiaries, or the Company and its
subsidiaries, as applicable, and (iii) the Projections that have been or will be made available to
JPMorgan by or on behalf of you, your subsidiaries or affiliates or representatives of any of the
foregoing have been and will be prepared in good faith based upon assumptions that in your good
faith opinion are reasonable at the time such Projections are made available to JPMorgan, it being
understood that the Projections are as to future events and are not to be viewed as facts and that
actual results during the period or periods covered by any Projections may differ materially from
the projected results. You agree that you will notify JPMorgan promptly (A) of any material
adverse change, or any event or development that could reasonably be expected to result in any
material adverse change, in the business, assets, operations, financial condition, liabilities
(including contingent liabilities), material agreements and prospects of you and your subsidiaries
and (B) if any information furnished to JPMorgan by or on behalf of you, the Company, your or its
subsidiaries or affiliates or representatives of any of the foregoing during the period of
JPMorgan’s engagement hereunder is or becomes inaccurate, incomplete or misleading in any material
respect. You acknowledge that JPMorgan will be entitled to use and rely, without independent
verification, upon the accuracy and completeness of the Information and that JPMorgan does not
assume any responsibility therefor.

     7. Confidentiality. (a)  JPMorgan agrees to use all non-public information provided
to it by you or your representatives solely for the purpose of providing the services that are the
subject of this letter agreement and to treat confidentially all such information; provided
that nothing herein shall prevent JPMorgan from disclosing any such information (i) to purchasers
or prospective purchasers of any Securities in connection with any Offering thereof, (ii) to any
rating agency, (iii) pursuant to the order

 

 

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of any court or administrative agency or in any pending legal or administrative proceeding (in
which case JPMorgan shall, to the extent permitted by law, promptly notify you thereof in advance
of any disclosure so as to enable you to seek a protective order), (iv) upon the request or demand
of any bank or other regulatory authority having jurisdiction or oversight over JPMorgan or any of
its affiliates, (v) to the extent that such information (A) becomes publicly available other than
by reason of disclosure by JPMorgan in violation of this letter agreement, (B) becomes available to
JPMorgan from a source other than you or your representatives, which source is not known by
JPMorgan to be subject to a duty of confidentiality to you with respect to such information, or (C)
was available on a non-confidential basis to JPMorgan prior to the disclosure to it by you or your
representatives, (vi) to its affiliates and its and their respective directors, officers,
employees, attorneys, accountants, advisors, independent auditors and other experts or agents who
need to know such information in connection with any Offering or any other services provided by
JPMorgan or its affiliates to you or your subsidiaries or affiliates, provided that, prior
to any disclosure to the foregoing persons, JPMorgan will advise such persons of the
confidentiality obligations set forth in this paragraph, and (vii) in protecting and enforcing its
rights with respect to this letter agreement. JPMorgan accepts responsibility for compliance by
the persons referred to in clause (vi) above with the provisions of this paragraph. This
undertaking by JPMorgan shall automatically terminate 24 months following the termination of
JPMorgan’s engagement hereunder.

     (b) You agree that you will treat as confidential and will not disclose, directly or
indirectly, this letter agreement or the contents hereof, or any final arrangements, proposals or
advice rendered by JPMorgan pursuant hereto, to any person without the prior written approval of
JPMorgan. Notwithstanding the foregoing, nothing herein shall prevent you from disclosing such
information in a manner consistent with the exceptions set forth in clauses (ii) through (vii) in
the immediately preceding paragraph, substituting yourself for JPMorgan therein, as applicable.

     8. Matters Relating to Engagement. You acknowledge that JPMorgan has been engaged
solely as an independent contractor to provide the services set forth herein. In rendering such
services, JPMorgan will be acting solely pursuant to a contractual relationship on an arm’s length
basis with respect to any Offering (including in connection with determining the terms of any
Offering), and nothing in this letter agreement or otherwise will be deemed to create (and JPMorgan
will not be deemed on the basis of its communications or activities hereunder to have assumed) an
advisory, fiduciary or agency relationship or fiduciary or other implied duty between JPMorgan, on
the one hand, and you and your subsidiaries, affiliates or stockholders, on the other.
Additionally, you acknowledge that JPMorgan is not advising you or any other person as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction. You shall consult
with your own advisors concerning such matters and shall be responsible for making your own
independent investigation and appraisal of the transactions contemplated hereby, and JPMorgan shall
have no responsibility or liability to you with respect thereto. You agree that any review by
JPMorgan of you, any Offering, the terms of any Securities and other matters relating thereto will
be performed solely for the benefit of JPMorgan and its affiliates and shall not be on behalf of
you or any of your subsidiaries or affiliates. Finally, you agree that JPMorgan may perform the
services

 

 

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contemplated hereby in conjunction with its affiliates, and that any JPMorgan affiliates
performing services hereunder shall be entitled to the benefits and be subject to the terms of this
letter agreement.

     Following completion of any Offering, JPMorgan shall have the right to place advertisements in
financial and other newspapers and journals at its own expense describing its services in
connection therewith. JPMorgan may not, without its prior written consent, be quoted or referred
to in any document, release or communication prepared, issued or transmitted by you (including any
entity controlled by, or under common control with, you or any director, officer, employee or agent
thereof).

     You acknowledge that JPMorgan is a securities firm engaged in securities trading and brokerage
activities and providing investment banking and financial advisory services. In the ordinary
course of business, JPMorgan and its affiliates may at any time hold long or short positions, and
may trade or otherwise effect transactions, for their own account or the accounts of customers, in
debt or equity securities of you, the Company, your and its subsidiaries or affiliates or other
entities that may be involved in the transactions contemplated hereby.

     In addition, JPMorgan and its affiliates may from time to time perform various investment
banking, commercial banking and financial advisory services for other companies who may have
conflicting interests with respect to you, the Company, your or its subsidiaries or affiliates or
any Offering. JPMorgan and its affiliates will not use confidential information obtained from you
or your representatives pursuant to this engagement or their other relationships with you in
connection with the performance by JPMorgan and its affiliates of services for other companies, and
JPMorgan and its affiliates will not furnish any such information to other companies. You
acknowledge that JPMorgan and its affiliates have no obligation to use in connection with this
engagement, or to furnish to you or any of your affiliates, confidential information obtained from
other companies.

     Furthermore, you acknowledge that JPMorgan and its affiliates may have fiduciary or other
relationships whereby JPMorgan and its affiliates may exercise voting power over securities of
various persons, which securities may from time to time include securities of you, the Company,
potential purchasers of the Securities or others with interests in respect of the Acquisition or
any Offering. You acknowledge that JPMorgan and its affiliates may exercise such powers and
otherwise perform their functions in connection with such fiduciary or other relationships without
regard to JPMorgan’s relationship to you hereunder.

     9. Governing Law and Submission to Jurisdiction. This letter agreement, including
Annex A hereto, shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to the conflicts of laws principles thereof. You and we
irrevocably agree to waive trial by jury in any action, proceeding, claim or counterclaim brought
by or on behalf of either party related to or arising out of this letter agreement, the
Acquisition, any Offering or the performance of services hereunder.

 

 

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     Each of the parties hereto irrevocably agrees that, except as otherwise set forth in this
paragraph, any state or Federal court sitting in the City of New York shall have exclusive
jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute arising
out of or relating to this letter agreement, the Acquisition, any Offering or the performance of
services hereunder and, for such purposes, irrevocably submits to the jurisdiction of such courts.
You hereby irrevocably and unconditionally waive any objection to the laying of venue of any such
suit, action or proceeding brought in any such court and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. You and we agree that a final judgment (as
to which no appeal is pending) in any such suit, action or proceeding brought in any such court
shall be conclusive and binding upon you and us and may be enforced in any other court to whose
jurisdiction you or we are or may in the future be subject, by suit upon judgment. You further
agree that nothing herein shall affect JPMorgan’s right to effect service of process in any other
manner permitted by law or to bring a suit, action or proceeding (including a proceeding for
enforcement of a judgment) in any other court or jurisdiction in accordance with applicable law.

     10. Miscellaneous. This letter agreement contains the entire agreement between the
parties relating to the subject matter hereof and supersedes all oral statements and prior writings
with respect thereto. This letter agreement may not be amended or modified except by a writing
executed by each of the parties hereto. Section headings herein are for convenience only and are
not a part of this letter agreement. This letter agreement is solely for the benefit of you and
JPMorgan, and no other person (except for Indemnified Persons to the extent set forth in Annex A
hereto) shall acquire or have any rights under or by virtue of this letter agreement. This letter
agreement may not be assigned by you without JPMorgan’s prior written consent. You agree to cause
your subsidiaries to fulfill each of their obligations under this letter agreement.

     If any term, provision, covenant or restriction contained in this letter agreement is held by
a court of competent jurisdiction to be invalid, void or unenforceable or against public policy,
the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated. You and JPMorgan
shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to that of the
invalid, void or unenforceable provisions.

     This letter agreement may be executed in counterparts, each of which will be deemed an
original, and all of which taken together will constitute one agreement. Delivery of an executed
counterpart of a signature page of this letter agreement by facsimile or other electronic
transmission shall be as effective as delivery of a manually executed counterpart of this letter
agreement.

 

 

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     If the foregoing correctly sets forth our understanding, please indicate your acceptance of
the terms hereof by signing in the appropriate space below and returning to JPMorgan the enclosed
duplicate original hereof, whereupon this letter agreement shall become a binding agreement between
us.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	J.P. MORGAN SECURITIES INC.,	 	 
	 
	 

	 	by:
	 	/s/ Robert Anastasio	 	 
	 

	 	 	 	 

Name: Robert Anastasio
	 	 
	 

	 	 	 	Title: Vice President	 	 

Accepted and agreed to as of

the date first written above.

	 	 	 	 	 
	TECHNITROL, INC.	 	 
	 
	 	 	 	 
	by:

	 	/s/ Drew A. Moyer	 	 
	 

	 	 

Name: Drew A. Moyer
	 	 
	 

	 	Title: SVP & CFO	 	 

 

 

ANNEX A

     The Indemnifying Party agrees to indemnify and hold harmless JPMorgan, its affiliates and its
and their respective officers, directors, employees, agents and controlling persons (each an
“Indemnified Person”) from and against any and all losses, claims, demands, damages,
liabilities and expenses, joint or several, to which any such Indemnified Person may become subject
arising out of or in connection with the transactions contemplated by the letter agreement to which
this Annex A is attached (the “Agreement”), or any claim, litigation, investigation or
proceedings relating to the foregoing (the “Proceedings”) regardless of whether any such
Indemnified Person is a party thereto, and to reimburse such Indemnified Person for any legal or
other expenses as they are incurred in connection with investigating, responding to or defending
any of the foregoing, provided that the foregoing indemnification will not, as to any
Indemnified Person, apply to losses, claims, demands, damages, liabilities or expenses to the
extent that they are determined in a final nonappealable judgment of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnified
Person. The Indemnifying Party also agrees that no Indemnified Person shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to the Indemnifying Party for or in
connection with the Agreement, any transactions contemplated thereby or JPMorgan’s role or services
in connection therewith, except to the extent that any liability for losses, claims, demands,
damages, liabilities or expenses incurred by the Indemnifying Party are finally judicially
determined to have resulted from the gross negligence or willful misconduct of such Indemnified
Person.

     If for any reason the foregoing indemnification is unavailable to any Indemnified Person or
insufficient to hold it harmless, then the Indemnifying Party shall contribute to the amount paid
or payable by such Indemnified Person as a result of such loss, claim, demand, damage, liability or
expense in such proportion as is appropriate to reflect not only the relative benefits received by
the Indemnifying Party on the one hand and such Indemnified Person on the other hand but also the
relative fault of the Indemnifying Party and such Indemnified Person, as well as any relevant
equitable considerations. It is hereby agreed that the relative benefits to the Indemnifying Party
on the one hand and all Indemnified Persons on the other hand shall be deemed to be in the same
proportion as (a) the total value received or proposed to be received by the Indemnifying Party
pursuant to any sale of the Securities (whether or not consummated) bears to (b) the fee paid or
proposed to be paid to JPMorgan in connection with such sale or such incurrence. The indemnity,
reimbursement and contribution obligations of the Indemnifying Party under this Annex A shall be in
addition to any liability which the Indemnifying Party may otherwise have to an Indemnified Person
and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Indemnifying Party and any Indemnified Person.

     Promptly after receipt by an Indemnified Person of notice of the commencement of any
Proceedings, such Indemnified Person will, if a claim is to be made hereunder against the
Indemnifying Party in respect thereof, notify the Indemnifying Party in writing of the commencement
thereof; provided that (a) the omission so to notify the Indemnifying Party will not
relieve it from any liability which it

 

 

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may have hereunder except to the extent it has been
materially prejudiced by such omission and (b) the omission so to notify the Indemnifying Party
will not relieve it from any liability which it may have to an Indemnified Person otherwise than on
account of this indemnity agreement. In case any such Proceedings are brought against any
Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein, and to the extent that it may elect by
written notice delivered to the Indemnified Person, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Person; provided that if the defendants in any
such Proceedings include both the Indemnified Person and the Indemnifying Party and the Indemnified
Person shall have concluded that there may be legal defenses available to it which are different
from or additional to those available to the Indemnifying Party, the Indemnified Person shall have
the right to select separate counsel to assert such legal defenses and to otherwise participate in
the defense of such Proceedings on behalf of such Indemnified Person. Upon receipt of notice from
the Indemnifying Party to such Indemnified Person of its election so to assume the defense of such
Proceedings and approval by the Indemnified Person of counsel, the Indemnifying Party will not be
liable to such Indemnified Person for expenses incurred by the Indemnified Person in connection
with the defense thereof (other than reasonable costs of investigation) unless (i) the Indemnified
Person shall have employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood, however, that the
Indemnifying Party shall not be liable for the expenses of more than one separate counsel, approved
by JPMorgan, representing the Indemnified Persons who are parties to such Proceedings), (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person within a reasonable time after notice of commencement of
the Proceedings or (iii) the Indemnifying Party has authorized in writing the employment of counsel
for the Indemnified Person.

     The Indemnifying Party shall not be liable for any settlement of any Proceedings effected
without its written consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any such Proceedings, the
Indemnifying Party agrees to indemnify and hold harmless each Indemnified Person from and against
any and all losses, claims, damages, liabilities and expenses by reason of such settlement or
judgment in accordance with the provisions of this Annex A. Notwithstanding the immediately
preceding sentence, if at any time an Indemnified Person shall have requested the Indemnifying
Party to reimburse such Indemnified Person for legal or other expenses in connection with
investigating, responding to or defending any Proceedings as contemplated by this Annex A, the
Indemnifying Party shall be liable for any settlement of any Proceedings effected without its
written consent if (a) such settlement is entered into more than 30 days after receipt by the
Indemnifying Party of such request for
reimbursement and (b) the Indemnifying Party shall not have reimbursed such Indemnified Person
in accordance with such request prior to the date of such settlement. The Indemnifying Party shall
not, without the prior written consent of an Indemnified Person (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened Proceedings in respect
of which indemnity could have been sought

 

 

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hereunder by such Indemnified Person unless (i) such
settlement includes an unconditional release of such Indemnified Person in form and substance
satisfactory to such Indemnified Person from all liability on claims that are the subject matter of
such Proceedings and (ii) does not include any statement as to or any admission of fault,
culpability or a failure to act by or on behalf of any Indemnified Person.

     Capitalized terms used but not defined in this Annex A have the meanings assigned to such
terms in the letter agreement to which this Annex A is attached.exhb101.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      10.1

    

    ASSIGNMENT
      AGREEMENT FOR EXPLORATION BLOCKS

     IN
      ARAB REPUBLIC OF EGYPT

    

    THIS
      ASSIGNMENT AGREEMENT FOR EXPLORATION BLOCKS IN ARAB REPUBLIC OF EGYPT
      (hereinafter referred to as this “AssignmentAgreement”)
      made this 8th
      day of January, 2008 with an
      effective date of December 31,
      2007 (the “Effective
      Date”).

    

    BETWEEN:

    

    Gujarat
      State Petroleum Corporation
      Limited, a company organized and existing under the laws of India having
      its registered office at GSPC Bhavan, behind Udyog Bhavan, Sector-11,
      Gandhinagar, Gujarat 382011, India (hereinafter referred to as “GSPC”)

    

    OF
      THE
      FIRST PART;

    

    AND

    

    GeoGlobal
      Resources (Barbados)
      Inc., a company whose registered office is at Chamberlain Place, Broad
      Street, Bridgetown, Barbados, West Indies with its corporate head office at
      310,
      605 – 1st
      Street
      SW, Calgary, Alberta, T2P 3S9, Canada, (hereinafter referred to as “GGRB”)

    

    OF
      THE
      SECOND PART

    

    (GSPC
      and
      GGRB shall hereinafter collectively be referred to as “Parties” and individually as
      a
“Party”)

    

    WHEREAS:

    

    
      	
              (a)  

            	
              The
                Parties and Alkor Petroo Limited (“Alkor”) entered
                into a
                Joint Study & Bid Agreement dated July 13, 2006 (hereinafter referred
                to as “JSBA”) for
                participation in blocks offered under bid round by Arab Republic
                of
                Egypt.

            

    

    

    
      	
              (b)  

            	
              The
                consortium comprising of GSPC, GGRB and Alkor was successful in their
                bids
                for two exploration blocks namely the E-GAS Block 6 offshore (also
                referred to as “N.
                Hap’y”) and the GANOPE Block 8 onshore (also referred to as “South Diyur”)
                (N. Hap’y
                and South Diyur are hereinafter collectively referred to as the “Exploration
                Blocks”).

            

    

    

    
      	
              (c)  

            	
              GGRB
                irrevocably agrees to assign its 30% (thirty percent) participating
                interest in the Exploration Blocks (“GGRB Participating
                Interest”) in favour of GSPC, subject to the terms and conditions
                set out herein.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOW
      THEREFORE THIS ASSIGNMENT
      AGREEMENT WITNESSETH that in consideration of the mutual covenants and
      agreements herein contained, GSPC and GGRB hereto agree as follows:

    

    
      	
              1.  

            	
              Terms
                and Conditions of Assignment:

            

    

    

    
      	
              (a)  

            	
              GGRB
                hereby assigns all of the GGRB Participating Interest in the Exploration
                Blocks to GSPC effective as of the Effective
                Date.

            

    

    

    
      	
              (b)  

            	
              GGRB
                hereby waives any right to claim any amounts paid by it and/or any
                other
                benefits whatsoever in respect of any work done and/or expenditure
                incurred for the Exploration Blocks prior to the Effective Date of
                this
                Assignment Agreement.  For greater clarity those amounts
                are:

            

    

    

    
      	
               

            	
              (i)
                the amount of the retainer fees paid to Alkor for the account of
                Seaharvest FZ Environmental & Oil Services, Egypt (“Seaharvest”) being
                US$45,000 (United States dollars forty-five thousand) representing
                30%
                (thirty percent) of the retainer fee of US$150,000 (United States
                dollars
                one hundred and fifty thousand) to Seaharvest, for the support of
                the
                ongoing bids in the Exploration Blocks and to cover all of its costs
                during the tender evaluation and awarding process; and
                

            

    

    
      	
               

            	
              (ii)

            	
              the
                amount of the success fees paid to Alkor for the account of Seaharvest
                being US$375,000 (United States dollars three hundred and seventy-five
                thousand) which represents 30% (thirty percent) of the success fee
                of
                US$1,000,000 (United States dollars one million) for the contract
                in E-GAS
                Block 6 and 30% (thirty percent) of the success fee of US$250,000
                (United
                States dollars two hundred and fifty thousand) for the contract in
                GANOPE
                Block 8; and 

            

    

    
      	
               

            	
              (iii)

            	
              the
                amount of the administrative fees and signature bonus paid to GSPC
                for the
                account of E-GAS Block 6 being US$1,518,000 (United States dollars
                one
                million five hundred and eighteen thousand) which represents 30%
                (thirty
                percent) of the administrative fee of US$60,000 (United States dollars
                sixty thousand) and 30% (thirty percent) of the signature bonus of
                US$5,000,000 (United States dollars five million) for the contract
                in
                E-GAS Block 6; and 

            

    

    
      	
               

            	
              (iv)

            	
              the
                amount of the administrative fees and signature bonus paid to GSPC
                for the
                account of GANOPE Block 8 being US$468,000 (United States dollars
                four
                hundred and sixty-eight thousand) which represents 30% (thirty percent)
                of
                the administrative fee of US$60,000 (United States dollars sixty
                thousand)
                and 30% (thirty percent) of the signature bonus of US$1,500,000 (United
                States dollars one million five hundred thousand) for the contract
                in
                GANOPE Block 8; and 

            

    

    
      	
               

            	
              (v)

            	
              GGRB
                invoice dated August 1, 2006 in the amount of US$304,628.45 (United
                States
                dollars three hundred and four thousand six hundred and twenty-eight
                and
                forty-five cents) for costs and services provided by GGRB in connection
                with the study prepared for the joint bid.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (c)  

            	
              GSPC
                will release and direct that the funds it obtained by calling on
                GGRB’s
                bank guarantees dated July, 26, 2007 in the amount of US$ 270,000
                and US$
                900,000 be applied to new bank guarantees in the same amounts to
                be
                provided by GGRB in favour of GSPC. GGRB will give similar direction
                to
                the Bank. These new bank guarantees will remain in place in accordance
                with the Option Agreement. Should GGRB exercise the option defined
                under
                the Option Agreement, these new bank guarantees will be released
                to GGRB.
                Should GGRB however, fail to exercise the option by April 30, 2008
                or by
                such other date agreed to by GGRB and GSPC then these new bank guarantees
                will be forfeited and amount thereof will be credited in favour of
                GSPC.
                Further, GGRB shall waive any and all rights whatsoever in respect
                of
                them.

            

    

    

    
      	
              (d)  

            	
              GGRB
                shall have no obligation to GSPC concerning the GGRB Participating
                Interest for the period prior to Effective Date except for those
                set out
                in Clause 1(b) and (c).

            

    

    

    
      	
              (e)  

            	
              GSPC
                confirms that as of the Effective Date it has not incurred any exploration
                expenses concerning the Exploration
                Blocks.

            

    

    

    
      	
              (f)  

            	
              GSPC
                confirms that it has not and will not enter into any contractual
                or other
                obligations in reliance of the Powers of Attorney’s to be provided in
                accordance with Clause 2(a) save and except for signing the Concession
                Agreements for the Exploration Blocks for which GSPC is providing
                indemnification in accordance with Clause 1(j) and for recording
                the
                assignment of the GGRB Participating Interest in favour of
                GSPC.

            

    

    

    
      	
              (g)

            	
              Subject
                to the provisions of Clause 1(i), GSPC agrees that it shall be liable
                for
                all of the obligations arising out of and / or in connection with
                the GGRB
                Participating Interest with effect from and after the Effective Date.
                

            

    

    

    
      	
              (h)

            	
              Further,
                the Parties agree that GSPC shall be entitled to all the benefits
                and
                shall be entitled to exercise all the rights arising out of and in
                relation to the GGRB Participating Interest from the Effective Date.
                

            

    

    

    
      	
              (i)

            	
              GSPC
                shall be responsible for the payment of all of GGRB Participating
                Interest
                share of all costs and all liabilities with respect to the applicable
                Concession Agreements, executed or to be executed, with respect to
                the
                Exploration Blocks, provided in the event GGRB exercises its option
                to
                participate up to a 30% (thirty percent) participating interest
                ("Elected Participating Interest) in both the Exploration Blocks,
                and a
                corresponding participating interest in the Concession Agreements
                to the
                Exploration Blocks by paying their pro rata share (equal to their
                Elected Participating Interest) of all costs and expenses incurred
                from
                and after the "Effective Date" of the Option Agreement dated 8th
                January,
                2008 ("Option Agreement") with respect to the Exploration Blocks. 
                For avoidance of doubt, it is clarified that in the event GGRB exercises
                the option to participate in the Exploration Blocks in the manner
                provided
                in this Clause 1(i) and in accordance with the terms of the Option
                Agreement, GSPC shall have no further obligation under this Assignment
                Agreement and under the Option Agreement for the payment for any
                costs and
                expenses with respect to the Elected Participating Interest from
                and after
                the Effective Date of the Option
                Agreement.  

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (j)

            	
              Parties
                acknowledge that GSPC will be required to execute the Concession
                Agreement
                on behalf of GGRB despite this Assignment Agreement. Subject to the
                provisions of Clause 1(i), GSPC shall indemnify and hold harmless
                GGRB
                against all suits, proceedings, liabilities, obligations, expenses,
                responsibilities, losses, damages, claims, demands, actions, costs
                and
                expenses that GGRB may be subjected to, arising out of or in connection
                with GGRB Participating Interest with respect to the Concession Agreement
                up to the date of exercise of option or the end of the last date
                for the
                exercise of the option (as the case may be), by GGRB, under the Option
                Agreement. In the event, GGRB fails to exercise the option, this
                indemnity
                will continue up to the date on which assignment by GGRB in favour
                of GSPC
                (or any other person designated by GSPC) is approved by the Egyptian
                Government. 

            

    

    

    
      	
               

            	
               Further
                Assurance:

            

    

    

    
      	
              (a)

            	
              GGRB
                hereby agrees to provide GSPC the necessary documentary support such
                as a
                Power of Attorney (“POA”), authorization,
                affidavit, undertaking and such other document(s) and full co-operation,
                as may be required, to execute and/or amend the Concession Agreement
                and
                any other documentation as may be required to reflect that GSPC (or
                any
                other person designated by GSPC) has been transferred, and is entitled
                to,
                the GGRB Participating Interest in the Exploration Blocks.
                

            

    

    

    
      	
               

            	
              (b)
                GGRB and GSPC shall co-operate and undertake all necessary action
                (including liasioning with the Government of the Arab Republic of
                Egypt,
                GANOPE, E-GAS, contractors, etc) as may be required to give effect
                to the
                assignment of GGRB Participating Interest, in favour of GSPC (or
                any other
                person designated by GSPC). 

            

    

    

    
      	
               

            	
              (c)
                GGRB and GSPC agree to act in good faith and not to undertake any
                action
                which is prejudicial to interest of GGRB, GSPC or Alkor under the
                Concession Agreement, the JSBA, or any related agreements.
                

            

    

    

    
      	
               

            	
              (d)
                GGRB agrees to undertake all such actions as may be required to ensure
                that POA or the equivalent authorisation is duly notarised and legalised
                by the competent authorities including Egyptian Consulate in the
                country
                where GGRB is located. GGRB covenants and agrees to submit in trust
                such
                documentation to facilitate the signing of the Concession Agreement.
                

            

    

    

    
      	
              (e)

            	
              Upon
                execution of the Concession Agreement, the Parties hereby agree that
                GGRB
                or GSPC (acting as its valid Power of Attorney holder in terms of
                Clause
                2(a) above) shall take all further steps to record the assignment
                of the
                GGRB Participating Interest in favour of GSPC. Nothing herein shall
                preclude the Parties from any actions required to assign GGRB
                Participating Interest in favour of GSPC.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (f)

            	
              Each
                of the Parties represent that they have the necessary powers and
                authority
                to enter into this Assignment Agreement and perform the obligations
                envisaged herein. 

            

    

    

    3.       
      Amendment:

    

    No
      amendment to this Assignment Agreement shall be valid and binding unless set
      forth in writing and duly executed by the Parties.

    

    4.       
      Governing Law and Arbitration:

    

    
      	
              (a)

            	
              This
                Assignment Agreement shall be governed by laws of India.
                

            

    

    

    
      	
              (b)

            	
              Any
                dispute arising in connection with or with respect to validity of
                this
                Assignment Agreement shall be finally resolved through arbitration
                in
                accordance with the provisions of the Arbitration and Conciliation
                Act,
                1996. Proceedings of arbitration shall be held in Ahmedabad and shall
                be
                conducted in English. Each Party shall appoint one arbitrator and
                the two
                arbitrators so appointed shall appoint the third arbitrator.
                

            

    

    

    
      	
              5.

            	
              Counterpart
                Execution: 

            

    

    

    This
      Assignment Agreement may be executed in any number of counterparts, all of
      which
      taken together shall constitute one and the same understanding, and any Party
      may enter into this Assignment Agreement by executing a counterpart.

    

    

    EXECUTED
      in Gandhinagar,
      Gujarat

    

    

    

    by:
      /s/ M.Y. Farooqui

    GM
      (P&D)

    Signed
      for and on behalf
      of                                                                                                

    
      	
               

            	
              GUJARAT
                STATE PETROLEUM CORPORATION LIMITED

            

    

    

    

    by:
      /s/ Allan J. Kent,

    Executive
      Vice President and Chief Financial Officer

    
      	
               

            	
              Signed
                for and on behalf of 

            

    

    
      	
               

            	
              GEOGLOBAL
                RESOURCES (BARBADOS)
                INC.

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