[LOGO] WealthCraft
June 20, 2008
Via Email and Courier
EAB Systems (Australia) Limited
Room 0000-0, 0
XxX Xxxxx
0 00 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxxx Xxxx
Attn: Mr. Xxxxxxx Xxxx
Dear Xxxxxxx,
I am writing in reference to the Heads of Agreement dated February 15, 2008 by
and among EAB Systems (Australia) Limited (EAB), WealthCraft Systems Inc.
(WealthCraft) and me, and the related telephone conferences and email
communications that we have exchanged over the past few months.
At the outset, I want to make clear that we believe that the Agreement was only
binding in that it set forth the starting point for a more definitive
understanding of all of the various terms that were required in order for us to
proceed, each of which is dependent on aH other matters being agreed up. Looking
back at your emails of April 14, 2008, we believe that it is also your
understanding that we do not have a completed transaction. Further, you have
indicated to me a couple of times, including in your email of April 17, 2008,
that investment bankers seeking to aid in the financing of WealthCraft have
raised many questions about how the transaction was to be structured.
It is our view that in, in addition to the Master License Agreement, the Heads
of Agreement required that, in order for our transaction to be completed,
WealthCraft would need a capital raise of between $5 million and $20 million.
This fundraising was the minimum that we mutually agreed would be required to
make the rights granted by the Master License Agreement viable. To date, we do
not have commitments for any financing. Further, we believe that the spirit of
the Agreement was that the efforts of RAW and you would be essential in securing
the financing. However, to our great disappointment your recent demand for
compensation, which was not contemplated in the Agreement, means that we cannot
rely on the assistance of either you or RAW. Finally, even if we could find
potential sources of financing, any such financing must be at a price mutually
acceptable to both EAB and WealthCraft. and to date we have not reached any
mutually acceptable price in this regard.
Additionally, the Heads of Agreement provides that the Master License and the
fundraising are conditioned on WealthCraft executing employment agreements with
me and other members of senior management. I have always viewed this as an
essential element for me and WealthCraft to proceed with the transaction.
Certainly you will acknowledge that we have not gotten to the point of having
mutually acceptable employment terms for me or my senior management. Given the
acrimonious exchanges that we have had over the past few months, I do not
believe that we can reach an arrangement acceptable to me under any
circumstances.
[LOGO] WealthCraft
Accordingly, on behalf of WealthCraft and myself individually, this letter is
notice that the conditions for us to finalize the transactions contemplated by
the Heads of Agreement cannot be satisfied under any circumstances. Accordingly,
although we certainly appreciate EAB's interest in WealthCraft, I am notifying
you that WealthCraft and I are terminating the Heads of Agreement and, as such,
the Master License Agreement is terminated.
The foregoing is made without prejudice to any rights and remedies available to
Wealthcraft or me, all of which are expressly reserved. I would appreciate your
acknowledgement that the Heads of Agreement and Master License Agreement are
terminated.
Best Regards,
Xxxxx X. Xxxxxx
WealthCraft Systems Inc.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Chief Executive Officer
Acknowledged and Agreed to:
EAB Systems (Australia) Limited
By:
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Name:
Title:
