[ELCO BANK AND TRUST LETTERHEAD]
May 19, 1999
Service Systems International Ltd.
0000 Xxxxxxxx Xxx.,
Xxxxxxx X.X. V5C 6G7
Attention: Xx. Xxx Xxxxxxxx, President
Mr. J.R. Xxxxx, Vice President
Reference: Collingham Investments, SA
Carmel International, S.A.
Korrington Corporation (collectively "the Debtor")
LETTER OF AGREEMENT
-------------------
Gentlemen:
We refer to discussion on the following matters which were subject of our
various meetings held during your visit to Nassau during the week of May 3,
1999. For purposes of clarification we provide the following background.
As pointed out to you, the above referenced Debtor companies are clients of
Elco Bank and Trust Company. Based on the commitment of undertaking of Xx.
Xxxxxxxx and Xx. Xxxxx and our reliance on this commitment and undertaking,
our clients have advanced funds to Service Systems International Ltd. (the
"Company"). In addition, our clients have provided and will on your
instructions continue to provide to other parties, in lieu of cash, common
stock of the Company to secure loans from these parties to the Company or to
repay debt (Share Advances).
We wish first to generally recap the terms and conditions on which cash
advances have been made to the Company over the past four years. These terms
were, 1), 10% interest, 2), 10% discount, 3), convertible into common stock
at 20% less then market on the day of the cash advance, at our option, and
4), repayment on demand. Stock advances were made on the undertaking that
cash value (based on market offer) at time of issuance would be repaid to our
clients. We have your confirmation of these terms and conditions as provided
during your visit.
In the past these loans have been repaid by conversion into stock and
warrants and in those conversions, all terms and conditions have been
summarized into the purchase price which satisfied all those condition
without being specific as to the value of each condition.
With regard to the current debt owing to Debtor now demanded, we have again
agreed to convert our debt into shares by exercising our outstanding Class E
Warrants. To satisfy all conditions of the debt at the face value of the loans,
you offered to reduce the exercise price of the Class E Warrants from $0.40
to $0.20 so that for each Class E Warrant tendered and cash (debt reduction)
of $0.20, one share of Common Stock of Service Systems International Ltd.
would be issued. In addition, for each Common share purchased, an additional
3 year Warrant, exercisable at $0.40 would be issued.
At the time of our meeting and writing of this Letter of Agreement, the debt
amount was not available. Mr. J.R. Xxxxx and Xx. X. Xxxxxxxx agreed to
provide funds for a period of up to one year to cover any shortfall between
the total purchase cost of the common shares due upon exercise of Warrants
and the amount of debt payable.
The number of Class E Warrants held, which are to be converted is as follows:
Collingham Investments SA 455,000
Carmel International SA 899,281
Kerrington Corporation Certificate #103 92,000
We request your confirmation of the above, by signing below where indicated.
Signed on behalf of;
Collingham Investment SA
Carmel International SA /s/ Xxxxx Xxxxxx
Xxxxxxxxxx Corporation -------------------------
Signed on behalf of;
Services Systems International Ltd.
-------------------------
Xxxxxxx Xxxxxxxx
Signed on behalf of; /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx -------------------------
Xxxx X. Xxxxx
/s/ Xxxx X. Xxxxx
-------------------------
Signed on behalf of;
Xxxxxxx Xxxxxxxx -------------------------
