DELIVERED BY COURIER CONFIDENTIAL
March 25, 1999
ILINK TELECOM, INC.
Xxxxx 000, 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Attention: Xx. Xxxx Xxxxxxxxxxxxx, President
Dear Sirs:
Re: iLink Telecom, Inc.
This letter agreement (the "Agreement") sets forth the terms and conditions
under which iLink Telecom, Inc. (the "Company") has retained Century Capital
Management Ltd. ("Century"): (i) to act as its financial consultant in
connection with financing alternatives (a "Financing") of debt or equity or
equity-related securities (the "Securities") on a best efforts basis and in
compliance with all applicable securities laws; and (ii) to act as its financial
consultant with respect to the Company's various merger and acquisition
activities (herein defined either individually or collectively as an
"Acquisition").
1. Century will assist the Company in effecting a Financing on terms
acceptable to you. In this regard, we propose to undertake certain
activities on your behalf, including, if appropriate, the following:
(a) assisting the Company in initiating discussions with prospective
Acquisition targets ("Targets");
(b) reviewing the financial condition and prospects of Targets including
assisting the Company in its due diligence efforts;
(c) assisting the Company in developing alternative structures and financial
models;
(d) consulting with the Company as to strategy and tactics for successfully
completing the Acquisition;
(e) assisting the Company in negotiating the terms and conditions of the
Acquisition;
(f) assisting in the execution of definitive documentation for the Acquisition;
(g) advising the Company as to the form and structure of the Financing;
(h) assisting in the preparation of a Private Offering Memorandum (the
"Memorandum") describing the Company and the specific Financing
contemplated therein. Responsibility for the contents of such Memorandum
and its conformity with the requirements of all applicable securities laws
shall be solely that of the Company, and the Memorandum shall not be made
available to or used in discussions with prospective investors until both
the Memorandum and its use for that purpose have been approved by the
Company;
(i) identifying, introducing to, and consulting as to strategy for initiating
discussions with, potential investors;
(j) negotiating the structure and terms of the Securities; and
(k) assisting in the execution of definitive documentation for the Financing.
2. It is acknowledged by the Company that neither Century nor any of its
representatives are registered with or licensed by any securities
commission or like authority as an underwriter, broker, dealer or financial
advisor and that the services to be provided by Century to the Company
hereunder shall expressly not include trading in the Securities (either as
principal or agent), participating in a distribution of the Securities
which is not exempted from the requirements of applicable securities laws,
or engaging in or professing to engage in the business of advising others
with respect to a purchase or sale of the Securities.
3. It is understood that the Company hereby engages Century to act as
financial consultant in connection with the Financing for a period (the
"Term") of twelve months commencing on the execution date of this
Agreement, provided, however, that such Term shall be automatically renewed
for successive six-month periods unless either party gives notice to the
other within thirty (30) days of the expiration of the Term of its desire
that this engagement expire. Notwithstanding the foregoing, Century may at
its sole option, terminate its obligation hereunder if, in the opinion of
Century, a change has occurred in the Company's business or prospects, or
the composition of the Company's management or Board of Directors, which
has adversely affected the marketability of the Securities. It is expressly
understood that the provisions relating to the payment of fees and expenses
and indemnification will survive any such termination or completion of
Century's services.
4. Century's compensation for its role as financial consultant will be as
follows:
(a) 300,000 shares of Common Stock of the Company at a deemed price of US$0.001
per share (the "Shares").
(b) an initial payment of USD$12,500 payable upon execution of this Agreement;
and
(c) a monthly consulting fee of USD$5,000 payable on the first day of each
month commencing April 1, 1999 during the Term of this Agreement.
5. In addition to the foregoing fees the Company agrees, upon request from
time to time, to promptly reimburse Century for all out-of-pocket expenses,
including, but not limited to, such costs as printing, telephone, fax,
courier service, copying, accommodations and travel and direct computer
expenses, secretarial overtime and fees and disbursements of legal counsel.
6. Century acknowledges that the certificates representing the Shares shall be
subject to the resale restrictions imposed by Rule 144 as promulgated under
the Securities Act of 1933 and shall bear the following legend:
NO SALE, OFFER TO SALE, OR TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT
UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT
OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE
TO SAID SHARES.
7. In connection with Century's engagement, the Company and its directors,
officers, employees, representatives and agents will furnish Century with
all data, material, and information concerning the Company (the
"Information") which Century reasonably requests, all of which will be
accurate and complete in all material respects at the time furnished. The
Company recognizes and confirms that in undertaking the engagement
contemplated hereby, Century will be using and relying exclusively on the
Information provided by the Company without independent verification and
without performing any appraisal of the assets or businesses of the
Company. Century is hereby authorized to use and deliver the Information,
and any other data obtained by Century from reliable published sources, in
accordance with this Agreement and without limitation. In connection with
the engagement of Century hereunder, the Company has entered into a
separate letter agreement (the "Indemnification Agreement"), dated as of
the date hereof, providing for the indemnification of Century and certain
related parties by the Company.
8. In the performance of its obligations hereunder Century shall be an
independent contractor of the Company. Century shall perform the services
enumerated herein according to its own means and methods of work and shall
not be subject to the control or supervision of the Company. The Company
acknowledges that nothing in this Agreement shall be construed to require
Century to provide services to the Company at any specific time or in any
specific place or manner.
9. This Agreement and the Indemnification Agreement constitute the entire
agreement between us and supersede and take precedence over all prior
agreements or understandings, whether oral or written, between Century and
the Company with respect to the Financing and Acquisitions and may only be
modified by written agreement which is signed by both parties. This
Agreement and Indemnification Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada and the parties hereto
irrevocably attorn to the exclusive jurisdiction of the Courts thereof and
the Courts of Appeal therefrom. Should suit be brought to enforce this
Agreement or the Indemnification Agreement, the prevailing party shall be
entitled to recover from the other reimbursement for reasonable attorneys'
fees.
10. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof and no waiver shall
constitute a continuing waiver. No waiver shall be binding unless written
notice thereof is delivered by the party making the waiver to the other
party.
11. The offer contained herein will expire and be of no further force or effect
unless accepted in writing prior to the close of business on March 31,
1999.
12. Century has obtained legal advice concerning this Agreement and hereby
requests that the Company obtain independent legal advice with respect to
same before executing this Agreement. The Company, in executing this
Agreement, represents and warrants to Century that it has been so advised
to obtain independent legal advice, and that prior to the execution of this
Agreement it has so obtained independent legal advice or has, in its
discretion, knowingly and willingly elected not to do so.
13. The Company acknowledges that Century has not and will not be providing any
legal or accounting advice or services to the Company in respect of any
Financing or Acquisition or any other matter whatsoever and the Company
further acknowledges that the obtaining of all such advice and services are
the sole responsibility of the Company.
Please confirm that the foregoing correctly sets forth our agreement by signing
and returning to us the enclosed duplicate copy of this Agreement together with
the retainer check and Indemnification Agreement. We look forward to working
with you and to the successful conclusion of this engagement.
Yours very truly,
CENTURY CAPITAL MANAGEMENT LTD.
Xxxxxx Xxxxxx
President
Accepted and Agreed to as of
the day of , 1999.
ILINK TELECOM, INC.
Xxxx Xxxxxxxxxxxxx
President
DELIVERED BY COURIER CONFIDENTIAL
CENTURY CAPITAL MANAGEMENT LTD.
Suite 1910, 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Gentlemen:
In consideration of the agreement of Century Capital Management Ltd. ("Century")
to act on behalf of iLink Telecom, Inc. (the "Company"), in connection with the
Financing and the Acquisition (as those terms are defined in the letter
agreement of even date herewith (the Agreement")), and pursuant to the
Agreement, we hereby agree to indemnify and hold harmless Century, its
affiliates, the respective directors, officers, agents and employees of Century
and its affiliates and each person, if any, controlling Century or any of its
affiliates within the meaning of either Section 15 of the Securities Act of 1933
or Section 20 of the Securities Exchange Act of 1934, (Century and each such
other person are hereinafter referred to as an "Indemnified Person"), from and
against any such losses, claims, damages, expenses and liabilities (or actions
in respect thereof), joint or several, as they may be incurred (including all
legal fees and other expenses incurred in connection with investigating,
preparing, defending, paying, settling or compromising any claim, action, suit,
proceeding, loss, damage, expense or liability, whether or not in connection
with an action in which any Indemnified Person is a named party) to which any of
them may become subject (including in settlement of any action, suit or
proceeding, if such settlement is effected with the Company's consent, which
consent shall not be unreasonably withheld), and which are related to or arise
out of Century's engagement, the transaction contemplated by such engagement or
any Indemnified Person's role in connection therewith, including, but not
limited to, any losses, claims, damages, expenses and liabilities (or actions in
respect thereof) arising out of, based upon or caused by any untrue statement or
alleged untrue statement of a material fact contained in the Private Offering
Memorandum (as that term is defined in the Agreement), or any amendment or
supplement thereto, or in any other document of the Company, or arising out of,
based upon or caused by any omission or alleged omission to state in any of them
a material fact required to be stated therein or necessary to make the
statements in any of them not misleading. The Company will not, however, be
responsible under the foregoing provisions with respect to any loss, claim,
damage, expense or liability to the extent that a court having jurisdiction
shall have determined by a final judgment (not subject to further appeal) that
such loss, claim, damage, expense or liability resulted from actions taken or
omitted to be taken by Century due to its gross negligence or willful
misconduct.
If the indemnity referred to above should be, for any reason whatsoever,
unenforceable, unavailable to or otherwise insufficient to hold harmless Century
and each Indemnified Person in connection with the transaction, each Indemnified
Person shall be entitled to receive from the Company, and the Company shall pay,
contributions for such losses, claims, damages, liabilities and expenses (or
actions in respect thereof) so that each Indemnified Person ultimately bears
only a portion of such losses, claims, damages, liabilities, expenses and
actions as is appropriate: (i) to reflect the relative benefits received by
Century on the one hand and the Company on the other hand in connection with the
transaction; or (ii) if the allocation on that basis is not permitted by
applicable law, to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of Century and the Company in connection
with the actions or omissions to act which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations; provided, however, that in no event shall the aggregate
contribution of all Indemnified Persons to all losses, claims, damages,
liabilities, expenses and actions exceed the amount of the fee actually received
by Century pursuant to the Agreement. The respective relative benefits received
by Century and the Company in connection with the Agreement shall be deemed to
be in the same proportion as the aggregate fee paid to Century in connection
with the Agreement bears to the total consideration received by the Company in
connection with or arising from the Agreement. The relative fault of Century and
the Company shall be determined by reference to, among other things, whether the
actions or omissions to act were by Century or the Company and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action or omission to act.
The indemnity, contribution and expense payment obligations of the Company
referred to above shall be in addition to any liability which the Company may
otherwise have and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of any Indemnified
Person and the Company. The Company also agrees that the Indemnified Persons
shall have no liability to the Company or any person asserting claims on behalf
of or in right of the Company for or in connection with any matter referred to
in this letter except to the extent that any such liability results from the
gross negligence or willful misconduct of Century in performing the services
that are the subject of the Agreement and in no event shall such liability
exceed the amount of fees actually received by Century hereunder.
Yours very truly,
ILINK TELECOM, INC
Xxxx Xxxxxxxxxxxxx
President
Accepted and Agreed to as of
the day of , 1999.
CENTURY CAPITAL MANAGEMENT LTD.
Xxxxxx Xxxxxx
President
