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El-Aref Int'l Law Office Newsletter Provided on January 2010 Dear Clients & Friends: Continuing and developing the activity of the firm over last several months, El-Aref International Law Office has recently successfully advised and acted as counsel in the following matters in the MENA Region.v El-Aref Intl Law Office advises Deutsche Bank Group in connection with creating private equity, hedge funds and discretionary portfolio management December 2010 - El-Aref Int’l Law Office advised Deutsche Bank Group Headquarters on creating private equity, hedge funds, discretionary portfolio management, securities, derivatives transactions including to FX trading, for obtaining credit facility at the Bank, granting security over its assets in favor of the Bank and on the steps to perfect security interests created in our favor of the Bank. El-Aref Int’l Law Office advised Deutsche Bank Group on the local Banking regulations in the Central Bank and Public Policy.
v El-Aref Int’l Law Office advised Energy Consortium for Power Project with Lebanon and Iraq Ministries of Electricity December 2010 – El-Aref Int’l Law Office advised Consortium of Energy Consultants, a consortium formed by American Suppliers of Power generators together with Lebanese Oil & Gas services providers, on the organization structuring and governance structuring for the concession and operations of the corporations in Lebanon and Iraq. The Firm has structure the organizational structure for the American strategic investors and the Lebanese corporations to form a fund for the Project at the amount of (50) Million US Dollars. Such project consists of building 100MW power plant to the existing thermal power plant facility. This will promote the development of Power and energy efficiency in Lebanon and Iraq by the government and the private sectors. This is a landmark transaction for Lebanon, the first of many projects as the country continues to move towards a more diversified energy objectives. This project demonstrates the commitment of the government and the sponsors to those objectives.
v El-Aref Intl Law Office in cooperation with Clifford Chance, LLP Successfully represented Master Franchisee in Kuwait against the Franchisor: December 2010 - El-Aref Int’l Law Office litigation team represented Kuwaiti Franchisee against Master Franchisee and Franchisor in Germany. This litigation in Germany was undertaken by Clifford Chance, LLP, it involved complex litigation one of which resulted in Bankruptcy of the Master Franchisee in Germany. El-Aref International Law Office successfully traced assets of the Master Franchisee in the United Kingdom in order to file injunction in the United Kingdom.
v El-Aref Intl Law Office successfully designed and advised client in Energy field to adopt Shareholders rights plan December 2010 – El-Aref Intl Law Office successfully designed shareholders’ rights plan which contains a feature that gives the board of directors the option, after the flip-in is triggered by an acquisition at the 20 % level (or such lower threshold down to 10% as shall have been set by the board) but before there has been a 50 % acquisition, to exchange one new share of common stock of the corporation for each then valid right (which would exclude rights held by the raider that have become void). This provision will have an economically dilutive effect on the acquiror, and provide a corresponding benefit to the remaining rightsholders, that is comparable to the flip-in without requiring rightsholders to go through the process and expense of exercising their rights. The basic objectives of the rights plan is to deter abusive takeover tactics by making them unacceptably expensive to the raider and to encourage prospective acquirors to negotiate with the board of directors of the target by making the rights issued pursuant to the plan redeemable for a nominal amount prior to a change of effective control through the acquisition of a large block of the target's shares.
v El-Aref Int’l Law Office successfully structured a triangular merger for its Client November 2010 –El-Aref Intl Law Office successfully advised and provided structuring for a triangular merger on behalf of its client, in this triangular merger, the acquiring corporation would acquire control of the target corporation, forms a new subsidiary into which the target corporation is merged. The stockholders of the acquiring corporation do not have the right to vote on the merger, only Board of Directors are entitled to vote. The outstanding shares of stock of the target are converted into shares of stock of the subsidiary all of which would be owned by the acquiring corporation. The shares of stock of the subsidiary are converted into securities of the acquiring corporation, Merge Operating into Holdings (subsidiary), all other shares become shares of holdings (conversion). Pursuant to this Merger Agreement, a direct wholly owned subsidiary of Holdings, will merge with and into the Parent Borrower, the Merger Consideration being paid, and the Parent Borrower surviving as a wholly-owned subsidiary of Holdings. The advantage of this triangular merger in comparison to the traditional structure is that it can use any consideration specifically nonvoting stock desired without losing the tax advantage, and the surviving corporation obtains 100 % control of acquired corporation, there is no problem with minority interest. This is the first triangular Merger in Lebanon and is a significant mandate for the firm. It also further demonstrates the firm's existing regional Mergers capability and expertise. v El-Aref Int’l Law Office advised Patient Education Institute, Inc. in Iowa State in the International Distribution Agreement
November 2010 – El-Aref Intl Law Office successfully advised Patient Education Institute, Inc. in Iowa State on the International Distribution Agreement with its distributors in Saudi Arabia, Jordan and UAE, which included spcecifically advise on Antitrust Law and International trade issues and whether Client may appoint exclusive or non-exclusive distributor as its exclusive outlet for a certain territory or particular customer based upon Sherman Act.
v El-Aref Int’l Law Office successfully represented GNC in settlement Negotiations
November 2010 – El-Aref Intl Law Office recently represented General Nutrition Center, Inc. American Franchisor in its claims against its Franchisees in Lebanon based on the grounds of unfair competition. El‐Aref Intl Law Office achieved a significant victory for the American Franchisors in First Instance Courts in Litigation brought in Lebanese Courts. In addition, El-Aref Intl Law Office successfully represented General Nutrition Center, Inc. (GNC), in settlement negotiations for its claims related to trademark disputes and cybersquatting pursuant to the Lantham Act and Anticybersquatting Consumer Protection Act (ACPA) which prohibits any person from registering a domain name that contains an established trademark, the defendants unauthorized use of a registered trademark constitutes an infringement of the trademark holder’s rights under the Lanham Act. El-Aref team worked diligently to protect GNC intellectual property, and we are pleased with the outcome in this hard-fought trial.
v El-Aref Int’l Law Office advises Organizations on Corporate Governance
November 2010 – The Firm advised Organizations and corporations clients on governance and risk management. The Firm frequently guides international clients in establishing Nominating and Governance Committees and following best practices for corporate governance across multi jurisdictions and advises companies and directors on committee functions, including having independent directors. Additionally, we have advised private companies and organizations on liability, conflict of interest and indemnification issues relating to officers and boards of directors.
v El-Aref Int’l Law Office advised UAE Investors on Portfolio Fund structuring and Tax structuring for the Private Placement Memorandum October 2010 – El-Aref Intl Law Office with its specialist and advisors team successfully advised hotel management group in the United Arab Emirates on the establishment of Portfolio Fund for Private Placement Memorandum and Tax free structures, the PPM offerings structured as minimum/maximum offerings, the minimum-offering amount must be subscribed for by investors prior to the company conducting a closing. The minimum is the amount of securities that the company will issue if the offering is fully subscribed or oversubscribed. A small amount of cash raised in a single subscription might be insufficient to permit the company to meet its milestone objective so that accepting money in less than a threshold amount would be unproductive for the company and defeat the investor's objective of making a return on the investment. The company conducting a minimum/maximum offering will provide investors with subscription documents that require investments to be sent to an escrow account. By establishing a maximum, the company ensures that the founders and the investors do not have their percentage ownership diluted at the price of the PPM offering. This is particularly of value as the company expects that it will conduct a future round of financing at a higher valuation, once the proceeds from the PPM offering have permitted it to achieve a business milestone. Investors would rely on their percentage ownership at the end of the offering not falling below the percentage created by a maximum offering amount.
While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ. For specific technical or legal advice on the information provided and related topics, please contact us at newsletter@elareflaw.com.
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