EXHIBIT 10.5
LETTER OF INTENT
This letter of intent between:
IA Global Inc (IAO) (a company registered in the State of Delaware,
organised under the laws of the United States) and which has its
registered address at 000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX
00000 Xxxxxx Xxxxxx of America;
London Wall Investments Pty Ltd (LWI) (a company organised under the
laws of the Australia and designated the Australian Company number 064
591 484) (or its nominee(s)) and which has its registered address at
0/00 Xxxxxxxx Xxxxxx Xxxxxxxx XX 0000 Xxxxxxxxx; and
(together THE PARTIES)
sets out the intention of the Parties relating to an investment in I-Accele
Australia Pty Ltd ("I-ACCELE AUSTRALIA PTY LTD") (a company to be formed under
the laws of Australia), the relationship of the Parties and how they will manage
the business of I-Accele Australia.
I-ACCELE AUSTRALIA
1) IAO and LWI will invest in I-Accele Australia as follows:
a) IAO and LWI will each subscribe cash for AUD$100.00 in ordinary equity
in I-Accele Australia in return for a 50% stake. The issue price of each
fully paid share shall be AUD$0.01; AND at the same time
b) IAO will subscribe cash for a AUD$50,000.00 redeemable note on the terms
and conditions set out herein to fund the initial operating costs; AND
at the same time
c) IAO will supply I-Accele Australia with a server computer as required;
and
d) IAO has an option to purchase sufficient ordinary shares in I-Accele
Australia from LWI to achieve equity ownership of up to 60% of the total
issued share capital of I-Accele Australia in the future, at a formula
to be agreed between the parties.
2) Rights of IAO and LWI in relation to I-Accele Australia are as follows:
i) Each shareholder will have the right to appoint 1 Director, with a
maximum of 2 Directors appointed;
ii) Normal minority protection and US/Australian standard corporate
governance issues to be addressed in the I-Accele Australia Constitution
by agreement between IAO and LWI;
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iii) I-Accele Australia's Directors will be required to declare a dividend
at the end of each fiscal year or, at the election of the Directors,
more frequently, of 100% of distributable profits. The Directors may
reduce this level of dividend only to the extent to which there is a
reasonable business case supported by all Directors to retain a
proportion of profits; and
iv) At any reasonable time, IAO will have the physical right to access the
company records of I-Accele Australia for the purposes of a review. All
costs of any such review will be borne by IAO.
v) An auditor may be required to be appointed for I-Accele Australia. Costs
of such to be borne by I-Accele Australia.
3) Terms of the IAO redeemable note investment:
a) Cash subscription by IAO for a redeemable note in I-Accele Australia
issued on the terms set out below:
i) Subscription price is AUD$50,000.00 cash;
ii) Unsecured but with priority to any payment by way of distributions
of dividends to I-Accele Australia shareholders;
iii) Redeemable by I-Accele Australia at any time but only from retained
profits and in any case only repayable out of retained profits of
I-Accele Australia; and
iv) Redeemable by IAO at any time with written notice of 3 months, after
initial non-redeemable period of 1 year, but redeemable only to the
extent that I-Accele Australia has sufficient surplus assets to
affect redemption.
v) 3% per annum interest rate, with such interest accruing once
I-Accele Australia's profit on a monthly basis exceeds AUD$10,000
for 3 consecutive months.
b) Subscription by IAO to be at the same time as subscription by IAO in
ordinary equity as set out in this letter of intent.
CONFIDENTIALITY
4) The Parties agree that this letter of intent is confidential and that the
terms will not be disclosed to any third party without the express written
consent of all Parties (such consent not to be unreasonably withheld).
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GENERAL
5) The Parties agree to use their best endeavours and do all such acts as may
be necessary to achieve the investment in I-Accele Australia by IAO, and
other matters contemplated by this letter of intent.
6) Time shall be of the essence.
7) This letter of intent shall constitute the sole understanding of the Parties
with respect to the subject matter and replaces all other agreements with
respect thereto.
8) Notwithstanding other clauses in this letter of intent, the Parties agree
that their intentions are set out in this letter of intent and that they
will do all things necessary to complete and fulfil their collective and
individual obligations. To the extent to which a Party believes that this
letter of intent, on subsequent legal review within 6 months of the
execution date, does not reflect the intentions, the other Parties agree to
act in good faith to have that situation resolved and this agreement will,
other than the disputed clause(s) will otherwise survive. The Parties
further agree to immediately convert this letter of intent into an
agreement.
9) This letter of intent may be executed in any number of counterparts
(including by way of facsimile) and all such counterparts when taken
together shall be deemed to constitute one and the same instrument.
Executed by the Parties on this 31 day of July 2003
Duly authorise representative Duly authorise representative
for IA Global Inc for London Wall Investments Pty Ltd
/s/AlanMargerison /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxxxxx, CEO Xxxx Xxxxxxx, Director
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