EXHIBIT 10.7
CONTRACT OF ENGAGEMENT
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THIS IS AN ENGAGEMENT AGREEMENT (this "Agreement") by and between CARDINAL
CAPITAL MANAGEMENT, INC. (CCM), a Georgia corporation, and SOFTLINK, INC., and
its subsidiaries and affiliates, (the "Company"), a Nevada corporation, and by
which CCM and the Company, in consideration of the mutual agreements set forth
below (the mutuality, adequacy, and sufficiency of which are hereby
acknowledged), hereby agree as follows:
1. Retention of CCM as Advisor. The Company hereby engages CCM, and CCM
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hereby agrees to provide general financial advisory services to the Company
for the purpose of the financing referred to in Attachment A to this
Agreement (the "Financing Transaction"). Neither CCM nor the Company shall
make any commitment, representation, or warranty of any kind whatsoever on
behalf of the other, nor shall either party have any right or authority to
sign for, bind, or commit the other to any obligation or undertaking in
connection with any transaction contemplated herein, or otherwise, without
the written consent of the other.
2. Non-Contravention.
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(a) The Company agrees not to engage in, or enter into a contract to
engage in, any financing transaction with a party to whom it was first
introduced by CCM ("CCM Investor(s)"), for a period of Two (2) years from
the date hereof. For clarity purposes, CCM will provide a written listing
of such parties which shall become a part of this Agreement upon the sooner
of thirty (30) days of its execution or the Closing Date of a financial
transaction, hereof. In the event of circumvention of this prohibition by
the Company, the Company shall be required to pay to CCM the same
compensation with respect to such other financing transaction as is set
forth in Section 3 of this Agreement. The terms of this paragraph shall
remain in effect regardless of whether this contract is terminated under
Section 7 below.
(b) The terms of this Contract of Engagement do not prohibit the
Company from raising or attempting to raise additional capital through its
normal and customary bankers and investment bankers to the extent that such
capital raise or attempted capital raise is with investors other than the
CCM Investor(s).
(c) The Company agrees that CCM or its representative shall
participate, when practicable, in any and all communications concerning the
Financing between the Company and the CCM Investor(s), other than such
communications that are made to shareholders or investors generally.
3. Services and Compensation. During the term of this Agreement, CCM will
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provide the services for the compensation set forth on Attachment A hereto
(the "Services").
4. Additional Provisions. None
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5. Acknowledgements of the Company. The Company Acknowledges and agrees
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that CCM may be called upon by other parties or entities from time to time
to provide services similar to the Services provided to the Company to such
other parties or entities and in such
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event the Company hereby consents to CCM providing any such services to
such other party or entity, to the extent such services do not interfere or
conflict with the services to be provided by CCM under this Agreement.
6. Trade Secrets: Confidential Information. The parties agree that:
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(a) all of the trade secrets of each party (which include, but are
not limited to, technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, or a list of
actual or potential customers or services), whether currently existing or
otherwise developed during the term of this Agreement, that derives
economic value, actual or potential, from not being readily ascertainable
by proper means by other persons who can obtain economic value from its
disclosure or use and is the subject of efforts which are reasonable under
the circumstances to maintain its secrecy and any other information or
materials that is a trade secret; and
(b) all of the confidential or proprietary information of each party,
which includes any data or information of either party other than trade
secrets, whether currently existing or otherwise developed or acquired by
either party during the term of this Agreement, which is not generally
known to the public;
(c) all of the information contained herein, the terms of the
transaction, and the structure of the transaction, except as required by
the rules and regulations of the Securities and Exchange Commission;
that either has been provided, or will be provided, to the other or that
has been obtained, or will be obtained, by either party in connection with
this Agreement (such trade secrets and confidential, proprietary
Information being referred to collectively as the "Information") is
proprietary Information of the disclosing party and is the sole, exclusive
and valuable property of the disclosing party (and the recipient party
acknowledges and agrees that he has, and will acquire no right, title or
interest in such party). Thus, the recipient party agrees:
(1) that it will not use the Information to the detriment of
the disclosing party and
(ii) that it will hold the information in strict confidence, use
the Information only in connection with the matters covered by
this Agreement, and not disclose the Information to any person or
entity (other than an employee of the recipient party who
requires such Information in connection with this Agreement)
unless the disclosing party directs otherwise
indefinitely in the case of trade secrets (so long as they remain trade
secrets) and until Sixty (60) months after the termination of this
Agreement in the case of confidential information; provided, however, that
the agreements in clause (ii) shall not apply to the Information to the
extent the recipient party demonstrates that:
(iii) it was in the public domain at the time of its
communication to the recipient party; or
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(iv) it entered the public domain through no action of the
recipient party subsequent to the time of communication to the
recipient party; or
(v) it was rightfully received by the recipient party from a
third party without a similar restriction and without breach of
this Agreement or any other agreement with the disclosing party;
or
(vi) it was independently developed by the recipient party
without breach of this Agreement; or
(vii) it was approved for release by written authorization of the
disclosing party.
Immediately after termination of this Agreement, the recipient party shall
deliver to the disclosing party all materials in its possession involving
the disclosing party's Information. Any trade secrets shall also be
entitled to all of the protections and benefits under the laws of the State
of New York and any other applicable law. If any information which the
parties deem to be a trade secret is found by a court of competent
jurisdiction not to be a trade secret for purposes of this Section 6, then
the Information shall be considered confidential information for purposes
of this Section 6. This Section 6 shall survive the termination of this
Agreement.
7. Term. The term of this Agreement shall be for a period of One Hundred
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Eighty (180) days from the date of execution, unless sooner terminated in
accordance with this Agreement. The Company or CCM may terminate this
Agreement at any time upon ten (10) days prior written notice to the other
party, and this Agreement shall automatically terminate upon the closing of
a financial transaction, provided, however, that sections 2, 3, 6, 8, and 9
shall survive the termination of this Agreement
8. Limitation on Liability. Notwithstanding anything to the contrary in
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this Agreement, CCM's liability to the Company for any loss or damage
arising out of CCM'S performance or nonperformance of the Services shall be
limited to loss or damage directly resulting from willful misconduct or
gross negligence of CCM or its agents. It is expressly agreed that in no
event shall CCM's liability to the Company ever exceed the fees paid to CCM
by the Company for the Services set forth on Attachments A hereto. NEITHER
CCM NOR ITS OFFICERS, DIRECTORS, SHAREHOLDERS OR AGENTS SHALL BE LIABLE FOR
INCIDENTAL, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOSS OF REVENUES
SUFFERED BY THE COMPANY OR FOR ANY CLAIM, DEMAND OR ACTION AGAINST THE
COMPANY OR ANY OF ITS REPRESENTATIVES BY ANY THIRD PARTY ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT.
9. Indemnification. The Company shall be solely responsible for, and hold
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harmless and indemnify CCM (including its successors, officers, directors,
shareholders, employees, agents and representatives) from and against, all
losses, claims, damages, liabilities, and expenses (including any and all
reasonable expenses and attorneys fees incurred in investigating, preparing
or defending against any litigation or proceeding, commenced or
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threatened, or any claim whatsoever whether or not resulting in any
liability) in connection with CCM's provision of the Services to the
Company, unless such loss, claim, damage, liability or expense results
from the willful misconduct or gross negligence of CCM or its employees or
agents. Notwithstanding the foregoing, the Company shall have no obligation
to reimburse CCM for cash and expenses (including due diligence and legal
fees and disbursements incurred by CCM in connection with the Financing to
the extent that such costs and expenses exceed Fifteen Thousand Dollars
(USD$15,000,00).
10. Miscellaneous.
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(a) Notices. Each notice under this Agreement shall be in writing and
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given either in person or by facsimile, overnight delivery service or first
class mail, postage and any other costs prepaid, to the address of the
party being given notice set forth below his or its signature or to such
other address as a party may furnish to the other as provided in this
sentence; and if such notice is given pursuant to the foregoing of a
permitted successor or assign, then notice shall thereafter be given
pursuant to the foregoing also to such permitted successor or assign.
(b) Assignment; Successors in Interest. No assignment, transfer or
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delegation of any rights or obligations under this Agreement by a party
shall be made without the prior written consent of the other party. This
Agreement is binding upon the parties and their respective successors and
assigns, and inures to the benefit of the parties and their respective
permitted successors and assigns. References to a party are also references
to any successor or assign of such party.
(e) Number; Gender; Captions; Certain Definitions. Whenever the
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context requires, the singular includes the plural, the plural includes the
singular, and the gender of any pronoun includes the other genders. Titles
and captions of or in this Agreement are inserted only as a matter of
convenience and for reference and in no way affect the scope of this
Agreement or the intent of its provisions. The parties agree: (i) that
"this Agreement" includes any amendments or other modifications and
supplements, and all exhibits, schedules and any other attachments, to it;
(ii) that "parties to this Agreement" and variations of that phrase
includes all persons who have executed and delivered this Agreement and, in
the event of a successor or assign to a person who has executed and
delivered this Agreement, such successor or assign; and (iii) that
"including" and other words or phrases of inclusion, if any, shall not be
construed as terms of limitation, so that references to "included" matters
shall be regarded as non-exclusive, non-characterizing illustrations.
(d) Severability. Any determination by any court of competent
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jurisdiction that any provision of this Agreement is invalid shall not
affect the validity of any other provision of this Agreement, which shall
remain in full force and effect and which shall be construed as to be valid
under applicable law.
(e) Integration; Amendment; Waiver. This Agreement (i) constitutes
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the entire agreement of the parties with respect to its subject matters,
(ii) supersedes all prior agreements, if any, of the parties with respect
to its subject matter, and (iii) may not be amended except in writing
signed by the party against whom the change is being asserted. The failure
of any party at any time or times to require the performance of any
provision of
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this Agreement shall in no manner affect the right to enforce the same; and
no waiver by any party of any provision (or of a breach of any provision)
of this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed or construed either as a further or continuing
waiver of any such provision or breach or as a waiver of any other
provision (or of a breach of any other provision) of this Agreement.
(f) Attachments. All schedules, attachments and exhibits to this
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Agreement are hereby incorporated into this Agreement and are hereby made a
part of this Agreement as if set out in full in the first place that
reference is made thereto.
(g) Controlling Law. This Agreement is governed by, and shall be
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construed and enforced in accordance with the laws of the State of New
York.
(h) Counterparts. This Agreement may be executed in two or more
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counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same agreement.
DULY EXECUTED and delivered by the parties hereto on May ____, 1999, and
effective as of May ____, 1999.
CARDINAL CAPITAL MANAGEMENT, INC.
/s/ Xxxxx X. Xxxx
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By: Xxxxx X. Xxxx
Its: Senior Managing Director
SOFTLINK, INC.
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
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Title: President
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Attachment A
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The Services to be provided by Cardinal Capital Management, Inc. (CCM) and the
compensation to be received by CCM from SoftLink, Inc. (the "Company") shall
include the following:
1. Introducing SoftLink, Inc. to institutional investors for a Private
Placement of up to Three Million Dollars (USD$3,000,000.00) on a Best
Efforts Basis. CCM to be compensated, in cash, in the amount of six percent
(6%) of the Face Amount of the Private Placement payable out of proceeds at
Closing. The Company shall also grant to CCM, Fifty Thousand (50,000) stock
purchase warrants (the "Warrants") for each One Million Dollars
(USD$1,000,000.00) raised. Such Warrants shall be registered on the CCM
Investor's Registration Statement, and shall be exercisable any time until
the fifth (5/th/) anniversary of the Closing Date hereof at one hundred
twenty percent (120%) of the Closing Price on such Closing Date. In
addition, the Company will pay accountable due diligence, legal fees, and
expenses related to the completion of this transaction to CCM in an amount
not in excess of Fifteen Thousand Dollars (USD$15,000.00)
2. The Closing Attorney shall act as the Escrow Agent for the Closing, and all
fees shall be paid to CCM directly from the Escrow Account.
AGREED TO AND ACCEPTED THIS ____ DAY OF MAY, 1999.
CARDINAL CAPITAL MANAGEMENT, INC. SOFTLINK, INC.
/s/ Xxxxx X. Xxxx /s/ Xxxxxxx Xxxx
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By: Xxxxx X. Xxxx By: Xxxxxxx Xxxx
Its: Senior Managing Director Its: Chief Executive Officer
