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INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT DATED AND EFFECTIVE THIS 19TH DAY OF JANUARY, 1998.
BETWEEN:
XXXX XXXXXXXXXX XXXXX,
OF THE CITY OF VANCOUVER, IN THE PROVINCE OF BRITISH COLUMBIA
(HEREINAFTER REFERRED TO AS "XINOS")
OF THE FIRST PART
-AND-
CORE VENTURES INC.
A BODY CORPORATE WITH AND OFFICE IN THE CITY OF VANCOUVER,
IN THE PROVINCE OF BRITISH COLUMBIA
(HEREINAFTER REFERRED TO AS "CORE")
OF THE SECOND PART
WHEREAS CORE is currently involved in the acquisition of FutureLink
Distribution Corp., a body corporate of the City of Calgary, in the Province of
Alberta;
AND WHEREAS the consideration to be paid by Core Ventures to FutureLink
Distribution is shares in Core Ventures Inc.;
AND WHEREAS there has been a Statement of Claim issued against Core
Ventures Inc., Xxxxxxx Xxxxxxx, Abicorn Enterprises, Xxxxx Xxxxxxx, and Venture
Law Corporation by Midland Xxxxxx Capital Inc. in Court File #97-CV-134063;
AND WHEREAS the major shareholders in FutureLink Distribution Corp.
require that Core Ventures Inc. be indemnified of any liability Core may incur
as a result of it being involved in such litigation;
AND WHEREAS XXXX XXXXX is desirous of providing the following
indemnification on matters relating to, associated with and arising out of the
Statement of Claim;
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Indemnity Agreement
-Page 2-
NOW THEREFORE in consideration of the sum of TEN ($10.00) DOLLARS paid
by each party to the other, the receipt of which is hereby acknowledged, plus
all other good and valuable consideration, the parties covenant and agree as
follows:
1. XINOS agrees to indemnify and save CORE harmless from any and all
claims, damages, costs, expenses, or fees which may be expended or
incurred by CORE on all matters relating to or arising from the
Statement of Claim.
2. Without in any manner restricting the generality of the foregoing, it
is specifically acknowledged and agreed that the indemnification
provided by XINOS in favour of CORE shall specifically include any:
(a) legal fees and disbursements reasonably incurred by CORE in
defending and investigating such claims.
(b) Any judgment that may result from the Statement of Claim
whether the judgment may be a default judgment of a judgment
after trial.
3. This indemnification shall remain in full force and effect until such
time that CORE's liability under the Statement of Claim has been
extinguished.
4. XINOS further agrees to indemnify and save CORE harmless from any and
all claims, damages, costs, expenses, or fees which may be expended or
incurred by CORE on any judgment relating to or arising from the
Statement of Claim.
5. Prior to the commitment to pay or the actual payment of any funds by
XINOS to CORE in accordance with clauses 1 - 4 above, CORE shall
provide documentation in sufficient detail so as to allow XINOS, acting
reasonably, to satisfy and confirm itself that the indemnification is
required to be made.
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Indemnity Agreement
-Page 3-
6. It is acknowledged that XINOS shall be entitled to assume conduct of
the Defence of this action so long as XINOS acts reasonably and
prudently.
7. Concurrent with payment by XINOS of any funds relating to the
aforedescribed indemnification, CORE shall agree to assign and convey
to XINOS any rights they may have to claim reimbursement from any third
parties.
8. In the event that a dispute arises as to the amount, timing, or
obligation to provide the indemnity, the matter shall immediately be
referred to arbitration pursuant to the provisions of the Arbitration
Act of Alberta then in force to be decided by a single arbitrator
within 30 days of the requested arbitration and the decision of the
arbitrator shall be final and binding. All costs associated with the
arbitration shall be subject to the sole discretion of the arbitrator.
9. The parties agree to enter into and execute such further and other
documents as may be necessary to give full and complete effect to the
terms of this Agreement and the intentions hereinbefore set out.
10. This Agreement shall enure to and be binding upon the heirs, executors,
administrators, and assigns of the parties hereto.
IN WITNESS WHEREOF the parties have set their hands and seals on the
date first above written.
__________________________________ ___________________________________
Witness XXXX XXXXXXXXXX XXXXX
CORE VENTURES INC.
__________________________________ Per ___________________________________
Witness XXXXXXX XXXXX, PRESIDENT
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L E T T E R O F A G R E E M E N T
THIS AGREEMENT, dated for reference December 19, 1997, is made
BETWEEN:
FUTURELINK DISTRIBUTION CORP., a company incorporated under the law of
Alberta, having its head office at 000-000-0 Xxxxxx X.X., Xxxxxxx.
Xxxxxxx X0X 0X0
(the "COMPANY")
AND
FUNDCORP FINANCIAL INC., a company incorporated under the laws of British
Columbia, having an office at 00xx Xxxxx, Xxxx Xxxxx, 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 318
("FUNDCORP")
The basic business of COMPANY is to provide to its customers a computer based
network system including software, hardware, electronic programming content and
maintenance. This system is rented to customers on a 36 month term contract
base. COMPANY desires to form a financing arm of its operations to manage over
the procurement of financial underwriting of the rental agreements and to
interface with the customers in regards to contract finance. This finance
department will be developed such that it will become a profit centre to
COMPANY.
COMPANY has declared to FUNDCORP that it has intentions to, (in the early part
of 1998) merge its shares with those of a NASDAQ public trading company in
order to facilitate needed equity financing for its operations. Accordingly,
the share warrants referred to in this agreement will become a condition of
closing the merger with the public company.
COMPANY has elected to appoint FUNDCORP to manage over the establishment and
ongoing operations of this aforementioned financing division of COMPANY and the
two parties therefore agree as follows:
WHEREAS:
A. FUNDCORP has agreed to assist the COMPANY over the next 60 months in
obtaining, structuring, negotiating, managing and settling a combination of
debt, and other credit financing arrangements including a line of credit,
with certain financial institutions or persons, throughout North America.
(Collectively, the "Financing Arrangements and Management"); and
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B. In consideration for its services in connection with the Financing
Arrangements and Management and its continuing assistance in removing the
conditions precedent to and facilitating the closing of the Financing
Arrangements, the COMPANY has agreed to pay to FUNDCORP as a finder's fee
(the "Finder's Fee"). 1% of the amounts provided to the COMPANY from time
to time pursuant to the Financing Arrangements. FUNDCORP will also be
entitled to share prorata, one third (1/3) of the net income after tax
earned by the Finance Department(1).
C. FUNDCORP will be reimbursed all out of pocket costs related to COMPANY and
will be entitled to draw an advancement of $6,000 per month against finder
fee earnings during the six month period following the signing of this
agreement.
THEREFORE, the parties agree.
1. FUNDCORP will use its best efforts to assist the COMPANY over the next 60
months in obtaining, structuring, negotiating and settling the terms of
the Financing Arrangements and in removing the conditions precedent there
to and facilitating the closing of the transactions contemplated in the
Financing Arrangements. FUNDCORP will manage over the development of
COMPANY finance division and its documentation and related structure.
2. FUNDCORP will also provide advice to the COMPANY over the next 60 months
with respect to various finance possibilities, including without
limitation, debt/equity swaps, barter arrangements and similar financial
arrangements with certain financial institutions (unless FUNDCORP's
engagement is otherwise terminated in accordance with the provisions of
this Agreement). FUNDCORP will also provide management counsel to
COMPANY'S President and assist in the strategic planning of COMPANY'S
business.
3. The COMPANY will pay to FUNDCORP as follows:
a) Cash payment of 1% of amounts provided to COMPANY from time to time
pursuant to Financing Arrangements paid to FUNDCORP net of any
advances paid to FUNDCORP, and
b) Cash payment equal to one third (1/3) of the operating profit of
COMPANY finance department of COMPANY as described earlier in this
agreement. This payment is to be paid to FUNDCORP within 30 days of
each annual date of the signing of this agreement.
c) Cash payment to reimburse all receipted and authorized out of pocket
expenses incurred by FUNDCORP while fulfilling the duties called for
under this agreement with COMPANY.
-----------------
(1) "Net Income" to be determined by an independent audit
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d) Issuance of 250,000 Warrants upon signing of this agreement each
warrant entitling FUNDCORP to acquire one freely tradable common
share of COMPANY for each Warrant redeemed. FUNDCORP agrees with
COMPANY not to exercise these Warrants for a twelve month period from
date of this agreement unless otherwise requested by COMPANY.
Provided this agreement has not been cancelled:
e) Issuance of additional 250,000 Warrant upon signing of this agreement
each Warrant entitling FUNDCORP to acquire one common share of
COMPANY for each Warrant redeemed not freely tradable for a one year
period from the signing of this agreement.
4. Each Warrant will entitle FUNDCORP to acquire one common share of the
COMPANY for a period of two years from the date of issuance of the
Warrants at a price of CDN $0.75 each.
5. The right to receive the Warrants under this Agreement may not be assigned
or transferred in any way without the prior written approval of the
COMPANY or applicable Exchange; if the common shares of the COMPANY are
listed on an Exchange, and where necessary, any other stock exchange or
quotation system upon which the Company's securities may be listed or
quoted.
6. The COMPANY will issue the Warrants to FUNDCORP under the applicable
exemptions Rules of the Securities Act of the applicable exchange.
7. The obligations of the COMPANY to provide Warrants to FUNDCORP under this
Agreement are subject to the acceptance by the applicable Exchange. The
Company will file this Agreement for acceptance with the Exchange, will
diligently seek the acceptance of the Exchange to this Agreement, and will
take all other steps and file such other documents as may be necessary in
connection with the transactions contemplated by this Agreement, including
without limitation, filing, from time to time, Forms under the Securities
Act with the Securities Commission in connection with the issuance of
Warrants to FUNDCORP.
8. FUNDCORP represents and warrants to the COMPANY that:
a) It is a valid and subsisting corporation under the law of the
jurisdiction in which it was incorporated, continued or amalgamated;
and
b) It will fully comply with the requirements of all applicable
securities laws, including without limitation, the Securities Act and
its rules and regulations and with the Regulatory Authorities, in all
matters relating to the performance of this Agreement.
9. FUNDCORP acknowledges and agrees that:
No Finder's Fee is payable by the COMPANY in connection with
financing provided to the COMPANY from time to time pursuant to its
normal operating lines of credit with its bankers.
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10. FUNDCORP will keep all information provided to it by the COMPANY and all
notes, analysis, compilations or other documents containing or derived
from the Financing Arrangements strictly confidential and will not use
such information for any purpose other than performing the services under
this Agreement and will not, without the prior written consent of the
COMPANY, disclose any of the information.
11. FUNDCORP will act as an agent of the COMPANY only, but will not have the
authority to bind or commit the COMPANY to any Financing Arrangement
unless specifically authorized by a signing officer of COMPANY or where
required by resolution of the board of directors of the COMPANY.
12. Time is of the essence of this Agreement.
13. This Agreement constitutes the entire agreement between the parties with
respect to Financing Arrangements and supersedes and replaces any prior
understanding and agreements between parties with respect to Financing
Arrangements.
IN WITNESS of this Agreement, the parties have executed and delivered this
Agreement as of the date given above.
THE COMMON SEAL of FUTURELINK DISTRIBUTION CORP.
was hereunto affixed in the presence of:
[SIG]
--------------------------------------
Authorized Signatory
--------------------------------------
Authorized Signatory
THE COMMON SEAL of FUNDCORP FINANCIAL INC.
was hereunto affixed in the presence of
[SIG]
--------------------------------------
Authorized Signatory
[SIG]
--------------------------------------
Authorized Signatory
