0000 Xxxxxxxx Xxxx xx Xxxxxx Bldg.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
SEDUN Telephone: (000) 000-0000
DE XXXX Facsimile: (000) 000-0000
CAPITAL CORP.
July 9, 1999
High Tech Venture Capital Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: Xxxx Xxxxx, President
Dear Xxxx:
Re: Worldwide Broadcast Network ("WWBC")
The purpose of this letter agreement (the "Letter Agreement") is to set out the
terms and conditions upon which Predator Ventures Ltd. ("Predator") will acquire
and High Tech Venture Capital Inc., a private British Columbia company 100%
owned and controlled by Xxxx Xxxxx, ("High Tech") will assign and sell those
domain names (the "Domain Names") as detailed in the business plan attached
hereto as Schedule "A" (the "Plan") together with all right, title and interest
in and to the concept of creating vertically branded channels under the name
"Worldwide broadcast network" ("WWBC") and utilizing the Domain Names for the
purpose of positioning WWBC as a leading aggregator, and ultimately broadcaster
of streaming media programming on the Inter
3+net as detailed in the Plan (the
"WWBC Business").
The transaction will be structured in a tax-efficient manner and with a view to
minimizing transaction costs. The parties agree that upon the execution of this
Letter Agreement they will proceed to prepare a definitive agreement (the
"Definitive Agreement") which will contain the terms and conditions of this
Letter Agreement as well as such other representations and warranties,
covenants, indemnification and other provisions which are acceptable to both
parties and which are customarily found in agreements of this nature and entered
into by parties dealing at arm's length.
Purchase and Sale of the Business
FOR VALUABLE CONSIDERATION Predator agrees to acquire and High Tech agrees to
sell all right, title, and interest in and to the Domain Names and the WWBC
Business. Upon the completion of the acquisition (the "Closing") Predator will
pay High Tech the sum of $70,000 (all figures in Cdn. dollars) and issue
3,000,000 post-consolidated common shares of Predator, which shares will be
trading shares (the "Vend Shares") with the issuance of the Vend Shares being
supported by a valuation of the Domain Names and the WWBC Business (the
"Valuation"). The parties agree that the Valuation will be prepared by a
mutually acceptable independent third party and that the cost of the Valuation
will be borne by Predator.
1) The purchase and sale of the Domain Names and the C Business is
conditional upon Predator obtaining all required regulatory approval and
approval from the shareholders of Predator, if required.
2) In addition the parties agree that on or prior to the Closing:
a) Xxxx Xxxxx ("Xxxxx") will enter into an employment agreement for a term
of no less than 12 months with Predator, which employment agreement shall
provide for the payment by Predator to Xxxxx of a monthly salary of $7,000 per
month in his capacity as the President of Predator and shall detail the
functions which Xxxxx will perform for Predator in his capacity as President and
will also include such other reasonable terms as the parties may negotiate such
as confidentiality and non-competition;
b) Predator shall: (i) redomicile its corporate charter to the State of
Wyoming, USA; (ii) consolidate its share capital on a 2 old for 1 new basis such
that after completion of the consolidation there is approximately 8,000,000
common shares issued and outstanding (not including the Vend Shares to be issued
to High Tech as provided herein); (iii) change its name to "xxxxxxxxxxx.xxx
inc." or such similar name as may be acceptable to regulatory authorities and
the parties hereto; and (iv) obtain approval of the regulatory authorities to
have the trading of the shares of Predator quoted in US.$;
c) an incentive stock option plan (the "Option Plan") will be approved and
in place, which Option Plan shall provide for the reservation for issuance of up
to 20% of the issued and outstanding share capital of Predator (on a
post-consolidated basis) and will be structured in accordance with generally
accepted industry standards and applicable regulatory policy, and will be
formulated and adopted by Predator for the issuance of incentive stock options
to directors, employees and consultants at an exercise price to be determined in
accordance with applicable regulatory policies;
d) Predator will have entered into a corporate advisory agreement with Sedun
De Xxxx Capital Corp. ("SDW providing for the payment of fees to SDW in the
amount of $10,000 a month, for a term of 12 months, in consideration for which
SDW will provide Predator with advisory services relating to general corporate
development, financial matters, raising of additional capital, strategic
planning and other matters relating to the financial affairs of Predator;
e) the existing officers and employees of Predator shall resign and the
board of directors of Predator (the "Directors") will be comprised of Xxxxx,
Xxxxx Xx Xxxx and Xxxxx Xxxxx. In addition, the Directors (as then comprised)
will appoint the officers of Predator and the parties agree that Xxxxx will be
appointed as the President, and a mutually acceptable person will be appointed
as the Corporate Secretary; and
f) Predator will have in its treasury, clear of all liabilities, that sum
which is reflected in its June 30, 1999 month end statement, less expenses and
advances associated with the completion of the matters herein described less
reasonable expenses incurred by Predator in the normal course of its operations.
3) Upon execution of this Letter Agreement Xxxxx will be appointed to the
board of directors of Predator and simultaneously will be allocated a stock
option at a price and in an amount mutually agreed to between Predator and Xxxxx
and accepted by the regulatory authorities (the "Xxxxx Options").
4) Predator currently has approximately 15,918,107 shares outstanding and
except for the stock options currently outstanding as detailed in Schedule "B"
attached hereto and the proposed Vend Shares to be issued to High Tech as part
of the acquisition and any shares which may be allocated pursuant to the Option
Plan and the Xxxxx Options, Predator will not issue any further share capital
until after the Closing without the consent of High Tech.
5) High Tech has advised Predator that High Tech has negotiated a draft
"Website Development Agreement" (the "WDA") with SunCommerce Corporation, a web
development company ("Sun") which WDA will require that expenditures in the
approximate amount of $100,000 be incurred over the next 80 to 100 days,
following the execution of this Letter Agreement, which expenditures are
detailed in Schedule "C" attached hereto (the "SunCommerce Development
Agreement"). High Tech has advised Predator that the execution and
implementation of the WDA is fundamental to the timely commencement of the WWBC
Business in accordance with the Plan and the parties agree that it is imperative
that Sun commences web development activities as soon as possible. In
furtherance of this matter Predator has agreed to advance to High Tech the funds
necessary to implement the activities under the WDA in accordance with the
details of the SunCommerce Development Agreement. High Tech acknowledges and
agrees that the terms and conditions of the WDA will not be finalized without
the consent of Predator
6) In addition to agreeing to fund the SunCommerce Development Agreement as
detailed herein, Predator will fund those administrative costs of High Tech as
detailed in Schedule "D" attached hereto (the "Administrative Budget") which
costs will be incurred in furtherance of developing the WWBC Business and
ensuring that the Plan is implemented in as timely a manner as possible. In
consideration of Predator agreeing to fund the SunCommerce Development Agreement
and the Administrative Budget (collectively called the "Interim Obligations"),
High Tech will ensure that the WWBC Business will be the sole undertaking of
High Tech, that no other activities or business will be transacted by or on
behalf of High Tech without the prior consent of Predator, and High Tech will
not sell, assign, hypothecate, joint venture, alienate (in whole or in part) or
encumber in any manner whatsoever the Domain Names and the WWBC Business without
the prior consent of Predator so long as this Letter Agreement is in effect.
7) Predator will advance the funds required to meet the Interim Obligations
(the "Advances") to High Tech on an as and when needed basis PROVIDED HOWEVER if
the Closing does not occur on or before September 30, 1999 then, subject to
section 8 herein, this Letter Agreement may be terminated by High Tech and the
Advances will be convertible into an equity interest of High Tech on the basis
that for each $50,000 advanced to High Tech, Predator will receive a 7.5% equity
interest in the common shares of High Tech.
8) Predator may, at its option, extend the date by which the Closing must
occur by advancing additional funds in the amount of $50,000 per month (the
"Additional Advance") to High Tech to be utilized by High Tech in furtherance of
the development of the WWBC Business in accordance with the Plan. If Predator
exercises its option as provided herein but the Closing has not occurred on or
before October 31, 1999, then this Letter Agreement will terminate and the
Advances will be converted into equity of High Tech in accordance with the
provisions of section 7 herein and the Additional Advance will be converted into
a further 5% equity interest in the common shares of High Tech for each $50,000
received by High Tech from Predator
9) If the Closing does not occur on or before October 31, 1999 and this
Letter Agreement is terminated, then in lieu of having the Advances and the
Additional Advance (collectively called the "Total Advances") converted into
equity of High Tech, High Tech may, at its option (the "Repayment Option"),
repay the Total Advances to Predator, plus accrued interest calculated and
compounded at the rate of prime plus 2% per annum, PROVIDED HOWEVER that High
Tech gives Predator notice of its intention to exercise the Repayment Option on
or before November 30, 1999 and the Total Advances, together with accrued
interest thereon, are repaid to Predator in full on or before April 30, 2000.
Access to Information and Confidentiality
Forthwith upon your acceptance of this Letter Agreement, we each agree with the
other to make available to each other, and to our representatives, such
financial, business and other information, in written printed, graphic,
electronic and other tangible form and in oral form, concerning the WWBC
Business and the rights of High Tech to the Domain Names, the business of
Predator, and such other information as each of us may request (the
"Confidential Information") for the purpose of enabling us to evaluate each
others affairs, and to confirm that the financial terms set out in this Letter
Agreement arc appropriate.
In consideration of each of us making the Confidential Information available to
the other, we agree that we will treat all Confidential Information as
confidential and will not disclose the Confidential Information to any of our
directors, officers, employees or agents except to such of them to whom
disclosure is necessary in connection with the proceeding to complete the
matters as contemplated by this Letter Agreement. In addition, neither or us
will directly or indirectly use to our own advantage any Confidential
Information.
If for any reason the acquisition does not proceed, we each agree that any
Confidential Information provided to the other and all copies thereof (excluding
Confidential Information in oral form that has not been put into tangible form)
will be immediately either delivered to the other or destroyed upon request.
No Negotiations with Third Parties
High Tech acknowledges that Predator will be incurring costs, directly and
indirectly, in evaluating and investigating the WWBC Business and the rights of
High Tech to the Domain Names and, in consideration of our doing so and our
execution of this Letter Agreement, High Tech agrees that from the date hereof
until this Letter Agreement is terminated, High Tech will not enter into, or
continue, any negotiations or discussions with any third party in respect of the
sale of the C Business and the Domain Names or any part thereof in any manner
whatsoever to any person or in respect of the amalgamation, merger or
combination of the C Business and the Domain Names and the business of any
person or in any manner which would be inconsistent with the matters
contemplated by this Letter Agreement. In addition, High Tech agrees so long as
this Letter Agreement is in effect that High Tech will not give any third party
access to any of its premises, to any of its Confidential Information or to any
other information relating to the WWBC Business, the Domain Names, or the Plan
for the purpose of enabling that third party to determine whether to make an
offer to acquire the WWBC Business and the Domain Names.
Predator agrees that it will not negotiate with any other parties concerning any
other acquisition opportunities so long as this Letter Agreement is in effect.
General Matters
While this Letter Agreement refers to the settlement of a Definitive Agreement,
each of us understands and agrees that, immediately upon execution, this Letter
Agreement itself constitutes a legally binding agreement and creates mutual
obligations including, without limitation, our respective obligations set out
under the headings "Access to Information and Confidentiality" and "No
Negotiations with Third Parties".
Any controversy or dispute concerning the interpretation or implementation of
this Letter Agreement that is not resolved by the parties within 10 days shall
be referred to and finally resolved by arbitration under the Rules of the
British Columbia Intentional Commercial Arbitration Centre. The appointing
authorities shall be the British Columbia Intentional Commercial Arbitration
Centre who shall administer the case, in Vancouver, British Columbia, in
accordance with its "Procedures for Cases Under the BCICAC Rules".
This Letter Agreement represents the entire agreement between the parties and
supersedes and replaces any representations, warranties or other statements or
promises made by either party in connection with this Letter Agreement.
If you agree to all of the foregoing, please sign both originals of this Letter
Agreement where indicated below and return one fully signed original to us.
SEDUN DE XXXX CAPITAL CORP. PREDATOR VENTURES LTD.
per: per:
/s/ signed /s/ signed
----------- -----------
Authorized Signatory Authorized Signatory
Accepted this 9th day of July, 1999 Accepted this 9th day of July, 1999
HIGH TECH VENTURE CAPITAL INC
per:
/s/ signed
-----------
Authorized Signatory
Accepted this 9th day of July, 1999
/s/ Xxxx Xxxxx
----------------
XXXX XXXXX
Accepted this 9th day of July, 1999
