xxxxxxxx 2015 The Directors Dear Sirs Letter of Engagement The purpose of this Letter of Engagement is to set out the basis on which Langcliffe Merger Connect Limited (“Merger Connect”) will assist [Company Name] and/or any associated company, organisation or individual (together, the “Client”), in the identification of potential acquisition targets (the “Targets”) which the Client may, directly or indirectly and by any means, acquire (via asset or share purchase), merge with, invest in , obtain a profit sharing interest in or enter into a joint venture agreement with (the “Service”). Any work already performed in connection with this Service before the date of this letter will also be governed by the terms of this Letter of Engagement. Either party can terminate our relationship, as governed by this Letter of Engagement, on giving one week’s written notice. However, any opportunities identified, information provided or introductions made at any time up to the expiry of the notice period will be governed by the terms of this Letter of Engagement even if the deal completes after the termination date. Our Responsibilities In order to assist us in introducing you to appropriate Targets, we will, if required: a. confirm your acquisition criteria, based upon the information provided by you; b. introduce potential opportunities based on the acquisition criteria provided (for the complete avoidance of doubt, we will not proactively approach Targets unless requested to do so ) ; c. contact the prospective Target and/or their parent companies/vendors and/or their advisors as applicable together (the “Target Contacts”) and arrange letters of confidentiality; and d. work with you to arrange meetings with prospective Target Contacts. We undertake that we will exercise reasonable professional skill and care in the performance of the Service in accordance with applicable professional standards. For the purposes of our engagement set out in this Letter of Engagement we are not providing investment advice or advice as to whether a particular acquisition or other transaction is suitable for you having regard to your financial circumstances. We make no warranty or representation as to the accuracy of any information provided to the Client in relation to a Target. The Client must satisfy itself as to the accuracy of any such information. Our responsibilities specifically exclude expressing an opinion on legal documentation (a service which should be provided by your legal representatives) and due diligence (either financial, legal or commercial) in relation to the Target or in any way being involved in negotiating the terms of any offer or subsequent detail which remains the sole responsibility of yourself and your professional advisers. Any additional services you may wish us to carry out for you outside the specific scope of this Letter of Engagement, including corporate finance advisory work, due diligence and taxation advice will be agreed in advance and charged separately under separate letters of engagement. Your obligations Any information provided to the Client following an introduction by Merger Connect (including but not limited to the identity of a Target, the names and contact details of Target Contacts, and financial information contained in information packs) is confidential and is provided solely for the purpose of the Client (including his advisor) assessing the opportunity to acquire the Target. By agreeing to the terms of this Letter of Engagement, you undertake not to disclose the opportunity or any of the information to any other person without our prior written consent, which will not be unreasonably withheld (for example in connection with the arrangement of funding). We reserve the right to require any such third parties to enter into a Letter of Engagement and/or confidentiality agreement with us. You also agree to pay our fees, as set out below. Fees Our fee structure is calculated on the basis of a success fee payable upon completion of 2.5 per cent of gross consideration (as defined in Appendix A) up to £1,000,000 plus 1 per cent of any excess above that amount, subject to a minimum fee of £20,000 exclusive of VAT (the “Success Fee”). You agree to pay our Success Fee, plus VAT, in the event of an acquisition of, or investment, in a Target (by whatever means) by the Client or any person to whom you have passed on information provided by us without our written consent arising, directly or indirectly, out of an opportunity we have identified or introduced to you or the Client. Our Success Fee, plus VAT, will fall due for payment on completion of the transaction. You agree that our fee will be retained by your/the Client’s solicitor (as appropriate) at completion and paid over to us immediately following completion. You will on request provide us with and allow us reasonable access to any information which we require in order to enable us to calculate and confirm our fees. No Success Fee will be payable in the event that you notify us in writing [as soon as reasonably practicable thereafter] that, at the time of the introduction to the Target, you were already in discussions with the Target Contacts, and this is subsequently confirmed with the Target Contacts. All other professional costs such as legal fees, consultancy fees and surveyor’s fees will be borne separately by you. Confirmation This Letter of Engagement is governed by and shall be construed in accordance with the laws of England. Any dispute arising out of or in connection with our relationship or this Letter of Engagement shall be subject to the exclusive jurisdiction of the Courts of England. If you are in agreement with the terms of our appointment, as set out in this Letter of Engagement, we should be grateful if you would sign the enclosed copy letter and return it to us. If you fail to sign and return this Letter of Engagement, we will treat the fact that you request information or sign a non-disclosure agreement or contact the Target Contacts as deemed acceptance of the terms of this Letter of Engagement. Yours faithfully Mark Eardley Managing Director Mobile: 07887 677417 [email protected] I have read and understood the terms and conditions of this Letter of Engagement letter and I agree to and accept them. Signed…………………………………………………….. Date……………………….. Print Name ………………………………………………. Director / Authorised signatory for and on behalf of [Company Name] [and its associated companies] Appendix A “Gross consideration” is defined as: (i) in the case of a share purchase, the aggregate of the price paid for the shares; (ii) in the case of an asset purchase, the aggregate of the price paid for the assets; (iii) in the case of any other investment opportunity, the aggregate value of the investment, whether in cash or otherwise. Such an amount will include any special payment, for example by the way of dividend prior to completion for tax planning purposes, consultancy fees, directors loan account and any loans or new equity introduced to the business as an integral part of the transaction. Where the purchase price of the shares or assets includes an element of consideration dependent upon the future profits of the Target, this element of our fee will become payable at the same time as the contingent consideration falls due for payment.