EXHIBIT 10.3
FEE AGREEMENT FOR INTRODUCTION SERVICES
This FEE AGREEMENT FOR INTRODUCTION SERVICES (the "Agreement") is entered
into this day of March 1999 by and between Phileo Management Company Inc., a
Nevada corporation (the "Company") and Dragon King Investment Services Ltd., a
British Virgin Island corporation ("Dragon").
WHEREAS, the Company acknowledges that the services of Dragon are of a
special, unique, unusual and extraordinary character and are of particular and
peculiar benefit and importance to the Company; and,
WHEREAS, Dragon has agreed to provide financial, merger and acquisition
services to the Company with respect to the Company's desire to identify
corporate acquisitions, possible equity investments and other business
opportunities ("Opportunity" or "Opportunities"); and
WHEREAS, this Agreement is made to set out the compensation, conditions
and guidelines that will govern the relationship between the parties.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which is expressly acknowledged
by the parties hereto, the parties agree as follows:
1. The Services
For the term of this Agreement, retroactive to the Effective Date (as
described below), Dragon will use its best efforts to search for, identify
and make known to the Company, Opportunities consisting of the purchase of
an equity interest in a qualified internet or telecommunications business
("Services").
2. Term of Agreement
Unless otherwise terminated as provided hereunder, the Services shall be
provided to the Company for approximately one (1) year, beginning March 1,
1999 (the "Effective Date") through February 28, 2000. The Effective Date
is the approximate date Dragon first disclosed to the Company the
identities of the first Opportunity that Dragon has evaluated and which
Dragon believes is a qualified telecommunications industry investment or
equity participation Opportunity consistent with the Company's guidelines.
3. Costs and Expenses
The Company understands that, in the course of Dragon's efforts to
identify Opportunities, it may be necessary for Dragon to incur certain
costs or expenses. The Company will reimburse or advance funds to Dragon
for the costs or expenses of introduced personnel, including but not
limited to travel expenses, lodging, rental cars, copy and filing fees,
and retrieval costs incurred in researching prospective Opportunities;
provided however that such cost reimbursement shall require the Company's
prior written approval of an annual budget, to be mutually agreed upon by
Dragon and the Company within five (5) business days following execution
of this Agreement.
4. Payment for Services
In addition to the payment of Dragon's expenses and costs as set forth in
paragraph 3 above, the Company agrees to pay Dragon a fee for the Services
provided in the event the Company acquires, participates in, or otherwise
provides or causes financing for an Opportunity introduced or arranged by
Dragon. Such fee (the "Introduction Fee") to Dragon shall be equal to ten
percent (10%) of the Company's total investment in or financing arranged
or provided to each Opportunity, payable in cash. The Company agrees to
pay Dragon the greater of (a) Four Hundred Seventy-Five Thousand Dollars
(USD 475,000), or (b) ten percent (10%) of the Introduction Fee upon
execution of a definitive agreement between the Company, or its Affiliate,
and the parties representing each Opportunity, with the balance of the
Introduction Fee to be paid to Dragon at the closing of each financing,
investment or Opportunity financed, invested or acquired by the Company or
its Affiliate. The Company acknowledges and agrees that Dragon has not
been engaged to perform, nor will Dragon perform any services in
connection with capital raising transactions. It is mutually understood
and agreed that services provided by Dragon hereunder which results in
some benefit for the Company or its Affiliates in connection with a
capital raising transaction are separate from the Services and shall be
negotiated separately from this Agreement.
5. Place of Services
The Services provided by Dragon hereunder will be performed primarily from
Dragon's offices, except as otherwise mutually agreed by Dragon and the
Company. It is understood and expected that Dragon may make contact with
persons and entities related to the Company or its Affiliate as deemed
appropriate or directed by the Company to effect the transaction(s)
contemplated by this Agreement.
6. Independent Contractor
Dragon will act as an independent contractor in the performance of duties
under this Agreement. Accordingly, Dragon will be responsible for payment
of all federal, state, and local taxes on fees received by Dragon under
this Agreement, including income and social security taxes, unemployment
insurance, and any other taxes as may be required.
7. No Agency Express or Implied: Services Not Exclusive
This Agreement neither expressly nor impliedly creates a relationship of
principal and agent between Dragon and the Company, nor is Dragon bound by
this Agreement or the relationship created hereunder to act exclusively
for or to provide the Company with any priority or exclusive right to the
Opportunities developed by Dragon.
Dragon is not authorized to enter into any agreements on behalf of the
Company except for those agreements executed by Dragon if authorized by an
officer of the Company. The Company expressly retains the right to make
all final decisions with respect to activities undertaken by Dragon
related to this Agreement.
8. Confidentiality and Non-Circumvention
The Company agrees that all non-public information concerning the identity
of the Opportunities, the financial condition or requirements related to
the Opportunities together with plans, strategies and overall business
operations names and addresses of the equityholders of such Opportunities,
customer lists, call lists, and other non-public customer data of Dragon,
memoranda, notes, records, sketches, plans, drawings, and any media used
to store, communicate, transmit, record, or embody such information
related to the Opportunities collected or developed by Dragon, is highly
confidential and proprietary to Dragon ("Confidential Information").
The Company acknowledges that such Confidential Information represents a
legitimate, valuable, and protectable interest of Dragon, which Dragon has
invested considerable time, expense and other valuable resources of its
own, and gives Dragon a competitive advantage and significant investment,
which would otherwise be lost if the Confidential Information was
improperly disclosed or used by the Company, or if the Company circumvents
Dragon to effect a transaction with an Opportunity without compensation to
Dragon as required hereunder.
The Company further agrees not to take any action or make any statement
the effect of which would be, directly or indirectly, to impair the
goodwill of Dragon or the business reputation or good name of Dragon or,
be otherwise detrimental to Dragon, including any action, disclosure of
the Confidential Information or statement intended, directly or
indirectly, to benefit a competitor of Dragon or an Opportunity. The
Company therefore agrees that, for a period of two (2) years following the
Termination Date (as defined below), or for as long as the Confidential
Information remains confidential, it will not attempt to circumvent Dragon
or disclose or threaten to disclose the Confidential Information to any
person, partnership, company, corporation, or to any other business or
governmental organization or agency without the express written consent of
Dragon. The Company further agrees not to use or threaten to use the
Confidential Information in any way that is not specifically authorized
by, or otherwise contrary to the intent of this Agreement. The Company
agrees that unauthorized disclosure or use of Confidential Information
constitutes misappropriation of trade secrets and confidential
information. The Company further agrees that all ownership rights to the
Confidential Information are held or retained by Dragon, as the case may
be, and that no right of ownership of such Confidential Information shall
pass to the Company by virtue of this Agreement or the Services provided
hereunder.
Because the remedy at law for any breach of the foregoing provisions of
this paragraph would be inadequate, each of the parties hereby consents,
in case of any such breach, to the granting by any court of competent
jurisdiction of specific enforcement, including, but not limited to
pre-judgement injunctive relief.
Each of the parties agrees that if, in any proceeding, the court shall
refuse to enforce the covenants herein set forth because such covenants
are unenforceable or cover too long a period of time, any such covenant
shall be deemed appropriately amended and modified in keeping with the
intention of the parties to the maximum extent permitted by law.
The Company agrees to return to Dragon the Confidential Information
provided by Dragon promptly upon its request, including information, if
any, delivered to the Company and subsequently disseminated to the
Company's agents, investors, employees, etc. except for that portion of
the Confidential Information found in documents prepared by the Company or
obtained by it or its agents or employees independently of the information
provided by Dragon. In the event that the Company is required, by
applicable law to disclose any Confidential Information or any information
which it develops from Confidential Information, the Company agrees to
provide Dragon with prompt notice of any such requirement so that it may
seek an appropriate protective order, if it deems necessary in its sole
discretion, or other reliable assurance to avoid such disclosure.
9. Termination
Either party may terminate this Agreement upon thirty (30) days notice by
registered or certified mail, return receipt requested, addressed to the
other party. Following the Termination Date the parties hereto shall not
have any further obligation or liability to the other except (a) the
Company shall continue to be obligated to pay Dragon as set forth herein
for un-reimbursed costs and expenses incurred by Dragon pursuant to this
Agreement and for the Introduction Fee(s), if any, related to
Opportunities introduced to the Company prior to the Termination Date, and
the confidentiality and non-circumvention agreements and covenants by the
Company shall service such termination for a period two (2) years. The
notice of termination and termination shall be effective on the thirtieth
(30th) day following the first business day following the date the notice
is transmitted using certified mail or overnight courier service (the
"Termination Date").
10. Assignment
Notwithstanding anything contained herein to the contrary, the rights to
the Introduction Fee(s), and the obligation to provide the Services set
forth in this Agreement, may be assigned or transferred by Dragon to an
Affiliate or subsidiary; otherwise, this Agreement and the rights and
obligations hereunder shall not be assigned by either party hereto. For
the purpose of this Agreement the term "Affiliate" for the purpose of this
Agreement, shall be defined as a natural person, or an enterprise that
directly, or indirectly, through one or more intermediaries, is employed
or controlled by, or is under control by Dragon or the Company, or for
whom Dragon or the Company have a contractual relationship which allows
such party to join or assume the position of Dragon or the Company in the
business affairs contemplated by this Agreement.
11. Counterparts
A facsimile, telecopy or other reproduction of this instrument may be
executed by one or more parties hereto and such executed copy may be
delivered by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can
be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party
hereto, all parties agree to execute an original of this instrument as
well as any facsimile, telecopy or other reproduction hereof.
12. Further Documentation
Each party hereto agrees to execute such additional instruments and take
such action as may be reasonably requested by the other party to effect
the transaction, or otherwise to carry out the intent and purposes of this
Agreement.
13. Notices
All notices and other communications hereunder shall be in writing and
shall be sent by prepaid first class mail to the parties at the following
addresses, as amended by the parties with written notice to the other:
To Dragon: Dragon King Investment Services Ltd.
0xx Xxxxx, Xxxxxxxxx Xxxxx
00 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx
With copy to: Xx. Xxxxx Xxxxxxx
Koo and Partners
22/F Bank of China Tower
0 Xxxxxx Xxxx Xxxx Xxxx
To the Company: Phileo Management Company Inc.
000 Xxxxxxx Xxxxxx Xxxxx 000
Xxxxxxxxx, XX Xxxxxx X0X0X0
14. Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
15. Governing Law
This Agreement has been negotiated, is being contracted and shall be
construed according to the laws of the United States, County of Xxxxx,
State of Nevada, which shall have exclusive jurisdiction with respect to
any disputes between the parties hereto, notwithstanding any
conflict-of-law provision to the contrary.
16. Entire Agreement
This Agreement sets forth the entire understanding between the parties
hereto and no other prior written or oral statement or agreement shall be
recognized or enforced.
17. Severability
If a court of competent jurisdiction determines that any clause or
provision of this Agreement is invalid, illegal or unenforceable, the
other clauses and provisions of the Agreement shall remain in full force
and effect and the clauses and provision which are determined to be void,
illegal or unenforceable shall be limited so that they shall remain in
effect to the extent permissible by law.
18. Attorneys Fees
If any legal action or other preceding (non-exclusively including
arbitration) is brought for the enforcement of or to declare any right or
obligation under this Agreement or as a result of a breach, default or
misrepresentation in connection with any of the provisions of this
Agreement, or otherwise because of a dispute among the parties hereto, the
prevailing party will be entitled to recover actual attorney's fees
(including for appeals and collection) and other expenses incurred in such
action or proceeding, in addition to any other relief which may be awarded
by the court.
19. Amendment or Waiver
Every right and remedy provided herein shall be cumulative with every
other right and remedy, whether conferred herein, at law, or in equity,
and may be enforced concurrently herewith, and no waiver by any party of
the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to a closing of a transaction
involving an Opportunity, this Agreement may be amended by a writing
signed by all parties hereto.
20. Headings
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the latter of
the dates written above.
The "Company"
Phileo Management Company Inc.
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President
"Dragon"
Dragon King Investment Services Ltd.
By: /s/ Haldane Secretaries Limited
Althorne Services Limited
Authorized Signature
