As filed with the Commission on August 9, 1999 File No. 333-____
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FINAL
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
iLINK TELECOM, INC.
(Name of small business issuer in its charter)
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Nevada 3661 98-0207906
- ------------------------------------ ------------------------------------ ------------------------------------
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code) Identification No.)
- ------------------------------------ ------------------------------------ ------------------------------------
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1177 West Hastings Street, Suite 1910, Vancouver, British Columbia V6E 2K3
(Address and telephone number of principal executive offices)
1177 West Hastings Street, Suite 1910, Vancouver, British Columbia V6E 2K3
(Address of principal place of business or intended principal place of business)
Amar Bahadoorsingh, President and CEO
iLink Telecom, Inc.
1177 West Hastings Street
Suite 1910
Vancouver, British Columbia V6E 2K3
604-717-1110
(Name, address and telephone number of agent for service)
Copy to:
Daniel B. Eng, Esq.
Roger D. Linn, Esq.
Bartel Eng Linn & Schroder
300 Capitol Mall, Suite 1100
Sacramento, California 95814
Telephone: 916-442-0400
Approximate date of proposed sale to the public: As soon as practicable after
the registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following blocks and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
<PAGE>i
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE ]
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Proposed Proposed
maximum maximum Amount of
Title of each class of Amount to offering price aggregate registration
securities to be registered be registered per share offering price fee
- ------------------------------------- -----------------------------------------------------------
Common Stock to be offered for resale
by Selling Stockholder upon conversion
of Series A Preferred Stock 58,000 $ 5.00 (1) $290,000 $ 81.00
- ------------------------------------- -----------------------------------------------------------
Total 58,000 ---- $290,000 $81.00
- ------------------------------------- -----------------------------------------------------------
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(1) Fee calculated in accordance with Rule 457(c) of the Securities Act of
1933, as amended ("Securities Act"). Estimated for the sole purpose of
calculating the registration fee and based upon the average quotation of
the high and low price per share of iLink's Common Stock on July 31, 1999,
as reported on the OTC Bulletin Board.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>ii
iLink Telecom, Inc.
CROSS-REFERENCE SHEET
Pursuant to Item 501 of Regulation S-B
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Registration Statement
Item Number and Caption Prospectus Caption
- ----------------------------------------------------------------------------------------------
1. Front of Registration Statement and Outside
Front Cover Page of Prospectus..............................Outside Front Cover
2. Inside Front and Outside Back Cover Pages of
Prospectus..................................................Inside Front and Outside Back Cover Pages
3. Summary Information and Risk Factors........................Prospectus Summary; Risk Factors
4. Use of Proceeds.............................................Use of Proceeds
5. Determination of Offering Price.............................Plan of Distribution; Selling Stockholder
6. Dilution....................................................Not Applicable
7. Selling Security Holders...................................Selling Stockholder
8. Plan of Distribution.......................................Plan of Distribution; Selling Stockholder
9. Legal Proceedings..........................................Legal Proceedings
Management; Security Ownership of Certain Beneficial
10. Directors, Executive Officers, Promoters and Owners and Management; Certain Relationships and
Control Persons............................................Related Transactions
11. Security Ownership of Certain Beneficial
Owners and Management......................................Principal Stockholders
12. Description of Securities..................................Description of Capital Stock
13. Interest of Named Experts and Counsel......................Experts; Legal Matters
14. Disclosure of Commission Position on
Indemnification for Securities Act Liabi...................Management
15. Organization Within Last Five Years........................Business
16. Description of Business....................................Prospectus Summary; Business
17. Management's Discussion and Management's Discussion and Analysis and
Analysis or Plan of Operation.............................Plan of Operation
18. Description of Property...................................Property
<PAGE>iii
Registration Statement
Item Number and Caption Prospectus Caption
- --------------------------------------------------------------------------------------------------------------
19. Certain Relationships and Related Transactions...............Certain Relationships and Related Transactions
20. Market for Common Equity and Related
Stockholder Matters..........................................Price Range of Common Stock
21. Executive Compensation.......................................Executive Compensation
22. Financial Statements.........................................Financial Statements
23. Change In and Disagreements With Accountants
or Accounting and Financial Disclosure.......................Not Applicable
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation, or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
<PAGE>1
PROSPECTUS Subject to Completion
August __, 1999
iLINK TELECOM, INC.
COMMON STOCK
----------------
A stockholder of iLink Telecom, Inc. ("iLink" or "we") is offering up to
58,000 shares of iLink Common Stock for resale. The Selling Stockholder may be
reselling shares of Common Stock which it will acquire upon the conversion of
outstanding shares of iLink Series A Convertible Preferred Stock. For more
information, please refer to the sections entitled "The Offering," "Plan of
Distribution" and "Selling Stockholder."
We will not receive any proceeds from the resale of shares of Common
Stock by the Selling Stockholder. We will pay for expenses of this offering.
iLink's Common Stock is quoted on the OTC Bulletin Board under the
symbol "ILTEE." On August 5, 1999, the closing bid quotation for one share of
Common Stock was $4.12. Our Series A Convertible Preferred Stock is not quoted
or traded on any exchange or quotation system.
All dollar amounts refer to US dollars unless otherwise indicated.
--------------------------------
Our business is subject to many risks and an investment in our Common
Stock will also involve significant risks. You should carefully consider the
various Risk Factors described beginning on page 5 before investing in the
Common Stock.
Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
--------------------------------
The date of this Prospectus is August __, 1999.
<PAGE>2
TABLE OF CONTENTS
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Page
PROSPECTUS SUMMARY...........................................................................3
RISK FACTORS.................................................................................5
THE OFFERING................................................................................10
USE OF PROCEEDS.............................................................................10
PRICE RANGE OF COMMON STOCK.................................................................11
DIVIDEND POLICY.............................................................................11
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS.................................12
BUSINESS....................................................................................14
PROPERTY....................................................................................21
MANAGEMENT..................................................................................22
EXECUTIVE COMPENSATION......................................................................23
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.......................................................................26
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............................................27
PLAN OF DISTRIBUTION........................................................................28
SELLING STOCKHOLDER.........................................................................29
DESCRIPTION OF CAPITAL STOCK................................................................30
LEGAL PROCEEDINGS...........................................................................31
LEGAL MATTERS...............................................................................31
EXPERTS.....................................................................................31
AVAILABLE INFORMATION.......................................................................31
FINANCIAL STATEMENTS AND SCHEDULES..........................................................32
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<PAGE>3
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
Prospectus. This summary is not complete and does not contain all of the
information that you should consider before investing in our Common Stock. You
should carefully read the entire Prospectus, including the documents and
information incorporated by reference into it. This Prospectus contains
forward-looking statements that are subject to risks and uncertainties,
including those risk factors discussed elsewhere in this Prospectus.
Our Business
We are engaged in the business of providing customized
telecommunications switching solutions. We are developing prepaid calling card
products for retail and wholesale markets through voice over the Internet and we
are also in the process of applying for a personal communications system ("PCS")
license which, if granted, will give us the right to provide wireless
communications in Trinidad and Tobago. At present we are a development stage
company in the process of establishing our business. We began to realize
revenues in March 1999 as a result of services provided at our switching
facility.
We have an agreement with BCT.Telus Communications Inc., Canada's third
largest telephone utility, where they are routing their long-distance calling
card traffic through our switching platform in Calgary, Alberta (the "iLink
Network"). Our switching platform provides interactive voice response ("IVR") to
the user so that calls may be handled without incurring labor costs. We are in
the process of manufacturing, distributing and marketing our own pre-paid
calling cards in Canada and the United States. These cards will allow purchasers
to place long distance telephone calls on the iLink Network through our
switching platforms located in Calgary, Alberta and our future facilities
planned in Vancouver, British Columbia, and New York, New York. Our first
pre-paid calling cards are expected to go on sale in September, 1999. Our
Calgary switching platform has a current capacity of 69,032 minutes per day and
we intend to expand this capacity concurrent with increased demand.
We plan to expand our business to include voice-over-Internet-protocol
communications ("VoIP") which would allow for long distance communication via
the Internet. By dividing the raw data derived from conversations into discrete
packets of information (i.e. a syllable) having a unique identifier and
destination address this data would be routed through the Internet to the
destination address where it would be converted into real audio. Because most
Internet calls are local, there would be no long distance charges so the user of
VoIP would be able to realize significant cost savings. The VoIP system would be
integrated with our pre-paid call processing system to present the user with a
seamless end product.
We have applied for a digital wireless phone license in Trinidad and
Tobago and have retained the services of Industar Digital PCS of Milwaukee,
Wisconsin to aid in the preparation of the application to the governments of
Trinidad and Tobago. At present the application has been filed and we are
awaiting the government's response to the application. There is no assurance
that the application will be approved.
iLink is a Nevada corporation with its business offices located at 1177
West Hastings Street, Suite 1910, Vancouver, British Columbia V6E 2K3. Its
telephone number is (604) 717-1110. We also have offices located at #304, 320
23rd Avenue, Calgary Alberta T2S 0J2 and One Sansome Street, Suite 2000, San
Francisco, California 94104. iLink has one wholly-owned subsidiary, iLink
Telecom (B.C.), Inc. which maintains its business offices at our corporate
offices in Vancouver.
<PAGE>4
Summary Of Risk Factors
An investment in iLink's Common Stock involves a number of risks which
should be carefully considered and evaluated. These risks would include:
o The fact that iLink is a development stage company and has
generated no significant operating revenues; that such operating
revenues are dependent on one customer; and to date such revenues
have not been sufficient to cover expenses; and
o The technological challenges involved in developing new
communication systems using IVR technology, VoIP technology and
PCS technology; and
o The need to raise a significant amount of capital to expand our
IVR switching systems (estimated at over $1.5 million) and to
design and implement a VoIP system (estimated at over $2 million)
and a PCS system in Trinidad and Tobago (estimated at over $48
million).
For a more complete discussion of risk factors relevant to an investment
in our Common Stock see the "Risk Factors" section.
The Offering
The Selling Stockholder is registering for resale shares of Common Stock
which it will acquire upon the conversion of shares of Series A Convertible
Preferred Stock. The Selling Stockholder acquired the shares of Series A
Convertible Preferred Stock in connection with the acquisition of iLink Telecom
(B.C.), Inc. by us. We will receive no proceeds from the resale of Common Stock
by the Selling Stockholder.
<PAGE>5
Summary Consolidated Financial Data
The summarized consolidated financial data presented below should be
read in conjunction with the more detailed financial statements of iLink and
notes thereto which are included elsewhere in this Prospectus along with the
section entitled "Management's Discussion and Analysis and Plan of Operations."
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For the period from
December 10, 1997
For the For the quarter For the year (date of Incorporation)
quarter ended ended ended to
May 31, 1999 May 31, 1998 February 28, 1999 May 31, 1999
- --------------------------- --------------- ---------------- ------------------- -----------------------
Revenue $ 2,878 _ $ - $ 2,878
- --------------------------- --------------- ---------------- ------------------- -----------------------
Loss from operations (372,453) _ (18,314) (396,167)
- --------------------------- --------------- ---------------- ------------------- -----------------------
Net Income (Loss) (372,453) _ (18,314) (396,167)
- --------------------------- --------------- ---------------- ------------------- -----------------------
Income (Loss) per Share (0.14) _ (0.01) (0.25)
- --------------------------- --------------- --------------- ------------------- -----------------------
Working Capital (Deficit) 40,733 274 (27,139) 40,733
- --------------------------- --------------- ---------------- ------------------- -----------------------
Total Assets 282,291 274 154,000 282,291
- --------------------------- --------------- ---------------- ------------------- -----------------------
Stockholders' Equity (Deficit) 231,121 274 126,861 231,121
- --------------------------- --------------- ---------------- ------------------- -----------------------
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RISK FACTORS
An investment in iLink's Common Stock involves a number of very
significant risks. You should carefully consider the following risks and
uncertainties in evaluating iLink and its proposed business before purchasing
shares.
Development Stage Company
We are a development stage company which is primarily involved in the
development of our IVR, VoIP and PCS Systems. As such, we have just begun
offering our telecommunications services and, as a result, as of February 28,
1999, we had no revenues and during the interim period to May 31, 1999 we had
revenues of $2,878.
Our ability to provide commercial telecommunications service and to
eventually generate operating revenue will depend on our ability to, among other
things: (i) successfully expand our pre-paid calling card and IVR platform
agreements to increase the number of minutes utilized; (ii) develop, implement
and successfully market an operative VoIP system; and (iii) obtain a PCS license
as well as the necessary financing to implement a PCS system in Trinidad and
Tobago. Given our limited operating history and lack of revenues, there can be
no assurance that we will be able to achieve any of these goals and develop a
sufficiently large customer base to be profitable.
<PAGE>6
Lack of Revenues and Anticipated Operating Losses
As of May 31, 1999 iLink has earned $2,878 in revenues from IVR services
provided by iLink at the Calgary switching facility. iLink had an operating loss
of $372,453 during the quarter ending May 31, 1999. We do not anticipate any
significant revenues until the latter part of the current fiscal year. As of
February 28, 1999, iLink had not earned any revenues since formation. iLink had
an operating loss of $18, 314 for the year ended February 28, 1999. We expect to
incur substantial and increasing operating losses and negative net cash flow
until our businesses are developed, deployed and operating in a profitable
manner.
Need for Future Capital and Shareholder Dilutive Effect on Ownership
We estimate that we will incur in excess of $51.5 million in capital
expenditures relating to the development and operating costs in expanding our
IVR system and building and deploying VoIP and PCS systems. Given the risks in
undertakings of this nature, there can be no assurance that actual cash
requirements will not exceed our estimates. In particular, additional capital
will be required in the event that: (i) we incur unexpected costs in completing
the system design or encounter any unexpected technical or regulatory
difficulties, (ii) we incur delays and additional expenses as the result of
technology failure, (iii) we are unable to enter into marketing agreements with
third parties, or (iv) we incur any significant unanticipated expenses. The
occurrence of any such events could adversely affect our ability to meet our
business plans.
We will depend almost exclusively on outside capital to pay for the IVR,
VoIP and PCS system expansion and development, including the sale of additional
stock and commercial borrowing. There can be no assurance that capital will be
available to us to meet these development costs or, if such capital is
available, it will be on terms acceptable to us. The issuance of additional
equity securities by us would result in a significant dilution in the equity
interests of our current stockholders. Obtaining commercial loans, assuming such
loans would be available, will increase our liabilities and future cash
commitments.
If we are unable to obtain financing in the amounts and at the terms
necessary, our business and future success will be adversely affected.
Technological Risks
The design, construction and operation of the IVR, VoIP and PCS systems
are exposed to risks associated in developing a sophisticated communications
systems. Although we believe that our existing and proposed systems are based on
established technology, certain aspects of our technology have not been used in
commercial applications. Although we will engage contractors who are experienced
in the communications industry, we have little experience in developing,
constructing, and operating communications systems. The failure of our systems
to function as designed, or the failure of system components to function with
other components or to specification could result in delays, unanticipated
costs, and loss of system performance, thereby rendering our systems unable to
perform at the quality and capacity levels anticipated.
In addition, future advances in the telecommunications industry could
lead to new technologies, products or services competitive with the products or
services to be provided by us. Such technological advances could also lower the
costs of other products or services that may compete with our systems, resulting
<PAGE>7
in pricing pressures on our products and services, which could adversely affect
our results of operations.
Unscheduled Delays
Delays and related increases in costs in the expansion of the IVR system
or the construction and implementation of the VoIP and PCS systems could result
from a variety of causes, including: (i) delays encountered in the construction,
integration and testing of these systems; (ii) delays caused by design reviews
or other events beyond our control; (iii) further modification of the design of
all or a portion of these systems as a result of, among other things, technical
difficulties or changes in regulatory requirements; (iv) the failure of iLink to
obtain a PCS license in Trinidad and Tobago or to enter into agreements with
technology providers and with marketing providers at the times or on the terms
expected; and (v) the failure to develop or acquire effective applications for
use with the IVR, VoIP and PCS systems. There can be no assurance that these
systems will be available on a timely basis, or at all, or that implementation
of these systems will occur. A significant delay in the completion of these
systems could erode our competitive position, could result in cancellation of
iLink's PCS license (in the event that such a license is obtained), and could
have a material adverse effect on our financial condition and results of
operations.
Reliance on Vendors and Consultants
We have relied on and will continue to rely on vendors and consultants
that are not employees of iLink or our affiliates to expand our IVR system and
to design, construct and implement the VoIP and PCS systems, to market our
services and for representation on regulatory issues. Other than as disclosed
herein, we have no long-term contractual relationship with these vendors and
consultants. While we believe that vendors and consultants will continue to
provide the expertise necessary to complete the design and construction of our
proposed systems, there can be no assurance that such vendors and consultants
will be available in the future, and if available, will be available on terms
deemed acceptable to us.
In addition, we rely and will continue to rely on outside parties to
manufacture parts and equipment for the IVR, VoIP and PCS systems such as
Telephony Experts, Dialogic, Hughes Networks, Nortel, and Cisco Systems. No
assurances can be given that these manufacturers will be able to meet our needs
in a satisfactory and timely manner or that we will be able to obtain additional
manufacturers when and if necessary. A significant price increase, a quality
control problem, an interruption in supply or other difficulties with third
party manufacturers could have a material adverse effect on our plan of
business. Further, the failure of third parties to deliver the requisite
products, components, necessary parts or equipment on schedule, or the failure
of third parties to perform at expected levels, could delay our deployment of
the IVR, VoIP and PCS systems. Any such delay or increased costs could have a
material adverse effect on our business.
Development of Business and Management Growth; Key Personnel
We expect to experience significant and rapid growth in the scope and
complexity of our business as we proceed with the development of the IVR, VoIP
and PCS systems. We do not have sufficient staff to manage operations, control
the operations of the proposed systems, handle sales and marketing efforts or
perform finance and accounting functions. See "Risk Factors - Reliance on
Vendors and Consultants." We will be required to hire a broad range of
additional personnel as we begin commercial operations. This growth is likely to
<PAGE>8
place a strain on our management and operational resources. The failure to
develop and implement effective systems, or to hire and train sufficient
personnel for the performance of all of the functions necessary to effectively
develop, service and manage our subscriber base and business, or the failure to
manage growth effectively, would have a material adverse effect.
Our performance is substantially dependent on the performance of our
executive officers and key personnel and on our ability to retain and motivate
high-quality personnel. The loss of any of iLink's key personnel, particularly
Amar Bahadoorsingh, our President and Chief Executive Officer, could have a
material adverse effect on iLink's business, financial condition, and operating
results. We do not maintain "key person" life insurance on Mr. Bahadoorsingh.
Competition
We will encounter competition from other IVR and VoIP systems and from
other applicants for the PCS license in Trinidad and Tobago, as well as from an
increasingly competitive communications industry in general. The growing market
for communication services has attracted new market participants as well as
expansion by established participants resulting in substantial and increasing
competition. Many of our present and future competitors using IVR, VoIP and PCS
systems have substantially greater: (i) financial, marketing, technical and
manufacturing resources, (ii) name recognition, and (iii) experience than we do.
Such competitors may be able to respond more quickly to new or emerging
advancements in the industry and to devote greater resources to the development,
promotion and sale of their products and services. While we believe that our
technology is competitive and that our systems have been designed to provide
communications services at a cost lower than our competitors, no assurances can
be given that such competitors, in the future, will not succeed in developing
better or more cost effective communications systems.
In addition, current and potential competitors may make strategic
acquisitions or establish cooperative relationships among themselves or with
third parties that could increase their ability to reach commercial customers or
subscribers of communications services. Such existing and future competition
could affect our ability to form and maintain agreements with our customers. No
assurances can be given that we will be able to compete successfully against
current and future competitors, and any failure to do so would have a material
adverse effect on our business.
Penny Stock Regulations
The Securities and Exchange Commission (the "SEC") has adopted
regulations which generally define "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. iLink's securities
may be covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and accredited investors (generally, institutions with assets in
excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 jointly with their spouse). For
transactions covered by this rule, the broker-dealers must make a special
suitability determination of the purchaser and receive the purchaser's written
agreement of the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to trade iLink's securities and affect the
ability of existing stockholders to sell their shares in the secondary market.
<PAGE>9
Bulletin Board Eligibility Rule
The OTC Bulletin Board upon which our Common Stock is quoted has required that
all companies whose securities are quoted on the OTC Bulletin Board must become
reporting issuers with the SEC pursuant to a phase-in schedule beginning on
August 1, 1999. We are required to become a reporting issuer on or before
September 1, 1999, in order to maintain the quotation of our Common Stock. We do
not expect to meet this deadline and, as a result, we do not expect to be able
to maintain our listing on the OTC Bulletin Board. After September 1, 1999, our
Common Stock will be quoted only in the "pink sheets" which is expected to have
a negative impact upon our investor's ability to buy or sell our Common Stock.
We intend to reapply for OTC Bulletin Board listing when and if we become a
reporting company with the SEC. Until our Common Stock is readmitted to the OTC
Bulletin Board, trading will be accomplished through the much more limited "pink
sheet" listing.
Substantial Control by our Officers and Directors
Our officers and directors control 34% of the outstanding shares of Common
Stock. As a result of this ownership, these shareholders will have substantial
control over iLink regarding the election of directors and approving major
transactions. All of the shares owned by our officers and directors are subject
to a Vesting Agreement. See "Executive Compensation."
Furthermore, our Articles of Incorporation authorize our Board of Directors to
issue up to 5,000,000 shares of preferred stock. These provisions allow our
directors to issue preferred stock with multiple votes per share and dividend
rights which would have priority over any dividends paid with respect to the
shares of Common Stock. The issuance of preferred stock with such rights may
make the removal of management more difficult even if such removal could be
considered beneficial to shareholders generally, and will have the effect of
limiting shareholder participation in certain transactions such as mergers or
tender offers if such transactions are not favored by incumbent management.
No Dividends
We have not declared or paid any dividends on our Common Stock since our
inception, and we do not anticipate paying any such dividends for the
foreseeable future.
Dependence on One Customer
It is anticipated that initial revenue will come from long-distance calling card
traffic through our switching platform. At this time we have a contract with
BCT.Telus Communications, Inc. to provide these services. This contract expires
on June 1, 2000. In the event that this contract is not renewed or is
terminated, this will have an adverse financial impact on our operations and
anticipated revenues. The concentration on one customer poses a credit risk for
us should the customer become unable to honor its debts.
Compliance with Year 2000
We believe our current call processing facility is Year 2000 compliant.
We also anticipate upgrading parts of our call processing facility with new
equipment by the end of 1999 which equipment should also be Year 2000 compliant.
The estimated cost to upgrade the call processing facility is $50,000. In the
event that our call processing facility or that of BCT. Telus Communications is
not Y2K compliant significant disruption in the call network could result
<PAGE>10
which would have a material adverse effect on our operations. (See "Impact of
the Year 2000 Issue" below).
No Assurance of PCS Authorization in Trinidad or Tobago
We are seeking a PCS license for Trinidad and Tobago. We will require
foreign assistance in the application for and operation under the PCS license in
this foreign country. There can be no assurance that the required regulatory
authorizations will be obtained in this country or that a license will be
obtained in a timely manner. The failure to obtain a PCS license in Trinidad or
Tobago would have a materially adverse affect on our business plan.
THE OFFERING
The Selling Stockholder is offering for resale the Common Stock which it
will receive upon the conversion of 145 shares of Series A Convertible Preferred
Stock. Each share of Series A Convertible Preferred Stock shall convert into
Common Stock in the amount equal to $1,000 (being the stated value) divided by
75% of the average closing bid price of our Common Stock on the OTC Bulletin
Board for the five trading days immediately preceding the conversion of the
Series A Convertible Preferred Stock. For example, if the conversion date had
been July 31, 1999, the Series A Convertible Preferred Stock would have
converted into 58,000 shares of iLink's common stock.
The shares of Series A Convertible Preferred Stock shall automatically
convert into Common Stock on the later of (i) August 26, 1999, or (ii) the date
which is five business days after the effective date of this registration
statement.
The 145 shares of Series A Convertible Preferred Stock were issued in
connection with the acquisition of all of the issued and outstanding common
shares of iLink Telecom (B.C.) Inc. iLink Telecom (B.C.) is now our subsidiary.
See "Business of the Company." Under the terms of the acquisition of iLink
Telecom (B.C.) Ltd., we are contractually required to register the shares of
Common Stock to be issued upon the conversion of the shares of Series A
Convertible Preferred Stock.
The shares of Common Stock offered for resale may be sold in a secondary
offering by the Selling Stockholder by means of this Prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the resale of the Common Stock by
the Selling Stockholder. We are registering this Common Stock under a
contractual agreement to register the shares of Common Stock to be issued upon
the conversion of the Series A Convertible Preferred Stock.
<PAGE>11
PRICE RANGE OF COMMON STOCK
The following table sets forth the high and low bids for our Common
Stock, as quoted on the OTC Bulletin Board. Our trading symbol is "ILTEE." The
OTC Bulletin Board began quotations on our Common Stock on March 31, 1998.
Common Stock
Quarter Ended High Low
June 30, 1999 6.00 3.87
March 31, 1999(1) 5.63 0.95
December 31, 1998 5.63 0.95
September 30, 1998 10.63 5.00
June 30, 1998 2.50 1.13
March 31, 1998 1.25 1.25
(1) Effective February 14, 1999, we consolidated our share capital by way of
reverse stock split on the basis of one new share of Common Stock for
each five old shares of Common Stock. The prices listed have been
adjusted to reflect the effect of the one-for-five reverse stock split.
Our management is of the view that our market capitalization, being the
number of shares of our Common Stock outstanding multiplied by the trading price
of those shares, may not reflect the true value of iLink. The actual daily
trading volume of our Common Stock over the past three months has averaged less
than 10,000 shares which indicates that the ability of our shareholders to
realize the current trading price of the shares they hold is unlikely if any
substantial number of shares were to be offered for sale. In addition, due to
the extremely limited nature of the market for our Common Stock, any significant
trading may have a dramatic effect on the price of our Common Stock.
The above quotations reflect inter-dealer prices, without retail markup,
mark-down or commission, and may not represent actual transactions.
As of June 30, 1999, we had 5,412,963 shares of Common Stock outstanding
and approximately 288 stockholders of record. This number does not include
stockholders who hold our securities in street name.
DIVIDEND POLICY
We have not declared or paid any cash dividends since inception. We
intend to retain future earnings, if any, for use in the operation and expansion
of our business and do not intend to pay any cash dividends in the foreseeable
future.
<PAGE>12
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATIONS
This discussion, other than the historical financial information, may
consist of forward-looking statements that involve risks and uncertainties,
including quarterly and yearly fluctuations in results, the timely availability
of new communication products, the impact of competitive products and services,
and the other risks described in this Prospectus. These forward-looking
statements speak only as of the date hereof and should not be given undue
reliance. Actual results may vary significantly from those projected.
iLink undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Plan of Operations
In order to expand our operations we will need additional capital. We do
not have any commitments from any source to provide additional capital. We
expect that over the next twelve months we will require a total of $1,500,000 in
financing. Of this amount, we will require approximately $600,000 over the next
two quarters to finance the initial expansion of our existing IVR system and to
fund general operating and administrative expenses. The balance of $900,000 will
be required over the next twelve months to finance the expansion of our IVR
switching systems in new locations.
An essential element of the Company's business is the submission of an
application for a PCS license in Trinidad and Tobago. If the license is
obtained, we estimate that an additional $50,000,000 will be required to finance
this project. We will seek approximately $2 million to design and implement a
VoIP system in North America, and approximately $48 million to establish PCS
systems in Trinidad and Tobago.
Since inception, we have relied on equity financings to fund our
operations. Funds required to finance our future site expansions and ongoing
business are expected to come primarily from debt and equity financing with the
remainder provided from operating revenues which began in March 1999. Operating
revenues to date have been substantially less than the cost of operations for
the switching facility in Calgary, Alberta. Our management will be seeking
additional capital to finance our operations over the next 12 months.
Results of Operations
Interim period up to May 31, 1999
Revenues totaled $2,878 during this period compared to no revenues
during the quarter ended May 31, 1998. Cost and operating expenses for the
quarter ending May 31, 1999 were $375,331 compared to $18,314 for the year
ending February 28, 1999. General and administrative expenses increased to
$246,873 during the first quarter 1999. This increase in general and
administrative expenses was due primarily to travel expenses and business
development by management and the establishing of corporate relations programs
by consultants. Research and development expenditures were approximately $9,000
during this period compared to none for the year ending February 28, 1999.
<PAGE>13
For the interim period ending May 31, 1999, we incurred a loss of
$372,453. Expenses included $110,342 for consulting fees, $2,691 in professional
fees, and $246,873 in general and administrative expenses. Operating capital was
provided by $430,055 of proceeds from the private sale of iLink's common stock.
We issued 145 shares of Series A Convertible Preferred Stock in payment for
various assets and services related to our IVR services.
Year Ended February 28, 1999
We had no revenues during the year ended February 28, 1999. Subsequent
to the fiscal year end, operating capital was provided by $430,055 of proceeds
from the private sale of iLink Common Stock.
For the year ended February 28, 1999, the Company incurred a loss of
$18,314. Expenses included $8,139 in consulting fees and $10,000 in professional
fees related to our year-end audit.
Period from December 10, 1997 (date of incorporation), to February 28, 1998
We had no revenues during the period from December 10, 1997 (date of
incorporation), to February 28, 1998.
We recognized a loss of $5,400 for the period ended February 28, 1998
due primarily to start-up expenses.
Liquidity and Capital Resources
We have been in the development stage since our inception and have not
recognized any significant revenues or generated any significant cash flows from
operations. For the interim period ending May 31, 1999 we had a working capital
of $40,733 compared to a negative working capital of $27,139 for the year ended
February 28, 1999. We expect expenses to continue to increase during fiscal year
2000 with the demands of developing new switching facilities and additional
capital will be necessary to expand operations as well as continue current
operations.
From inception, we have relied on equity financings to fund our
operations. This financing has been supplemented by the issuance of preferred
stock to acquire various business assets. We will need substantial additional
capital, an estimated $600,000, over the next six months to carry out our
current business plans.
As indicated in the section "Plan of Operations" above, we anticipate
raising necessary operating capital through a combination of debt and equity
financing augmented by anticipated operating revenues. There is no assurance
that we will be able to obtain capital from these sources or that such amounts
will be sufficient to fund its operations.
Impact of the Year 2000 Issue
The Year 2000 Issue ("Y2K") is the result of computer programs being
written using two digits rather than four to define the applicable year. Any of
iLink's, or its suppliers' and customers' computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failure or miscalculations
causing disruptions of operations including, among other things, a temporary
inability to process transactions, send invoices, or engage in similar normal
<PAGE>14
business activities. In our assessment, the Year 2000 Issue is a significant
issue which could have a material impact on our business operations.
In iLink's assessment, the switching facility in Calgary, Alberta is Y2K
compliant as required. Management bases this assessment on the results of a
National Software Testing Lab ("NSTL") test on the hardware which confirmed the
site as Y2K compliant as per the NSTL tests. Management has also upgraded all
software applications as required by the customer of the switching facility to
comply with Y2K standards. The new hardware and software intended to be
purchased after May 31, 1999 will be assessed for Y2K compliancy.
The costs incurred to ensure Y2K compliancy are reflected in the
consulting expenses. As of May 31, 1999 no additional software or hardware costs
were associated with this compliance program.
iLink is reliant on third parties' compliance with the Year 2000 issue.
In particular, the one customer of the switching facility provides trunking and
connectivity and network services to iLink. Due to the interdependence of the
services provided, iLink risks business interruption if the Customer's system
does not function in Year 2000. The Customer has implemented a Year 2000
Readiness Program and has stated that related products and services are "service
ready". Service ready means that, to the best of their knowledge, the products
or services, if required, will be able to accurately process data, provided that
all products and services which interconnect with, or which are used in
combination with, that product and service, properly exchange data with it, and
in the case of a product, provided that no unauthorized modifications or
additions are made to the product.
In addition, we will be relying on our vendors to, among other things,
manufacture telecommunications systems and equipment which are Y2K compliant. We
have entered into contracts with several vendors to develop the IVR and PCS
systems, and an assessment has been made as to their Year 2000 compliance. As
part of ongoing contract negotiations, we will request and determine its
vendors' and customer's Year 2000 readiness. In the event that it is determined
that a key vendor or customer will not be Year 2000 compliant, this may have an
adverse effect on our business plans.
The risks posed by the Year 2000 issue are uncertain and the potential
negative impact is not fully known. In the worst case scenario, the switching
facility system or the customer's or vendors' products relied upon could disable
iLink's operations. In the event the worst case occurs, iLink would have to wait
for the Customer or Vendors to reactivate their systems, thereby delaying
iLink's operations for an unknown period of time. iLink does not anticipate any
interruptions in business, however, it remains an unknown risk.
iLink intends on creating a contingency plan to reduce the risk of
business interruption and loss of revenues in the event the switching facility
cannot operate in Year 2000. The contingency plan will be created by September
1999 and will include the estimated expense to restore operations in the event
the Year 2000 has an adverse effect on iLink's business.
BUSINESS
This discussion, other than the historical financial information, may consist of
forward-looking statements that involve risks and uncertainties, including
fluctuations in results, the timely availability of new communication products,
the impact of competitive products and services, and other risks described
<PAGE>15
herein. Any forward-looking statements speak only as of the date hereof and
should not be given undue reliance. Actual results may vary significantly from
those projected.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise.
General
We are a developer of computer telephony integrated technologies and
applications, and we provide Interactive Voice Response ("IVR") services in both
Calgary and Vancouver. Current operations consist of the provision of custom
manufactured switching solutions for a Canadian telephone company and the
development of brand name prepaid phone card solutions for retail and wholesale
markets through Voice over Internet Protocol ("VoIP") solutions. We are also in
the process of applying for a personal communications systems ("PCS") license to
provide wireless communications in Trinidad and Tobago. We are a development
stage company and have no substantial revenue. Revenue to date has not been
sufficient to cover operating expenses.
Corporate History
Aquasol Technologies, Inc.
We were originally incorporated in Colorado on December 10, 1997, under
the name Aquasol, Inc. On December 11, 1997, we sold 1,500,000 shares of our
Common Stock for $5,000 in cash. On December 26, 1997, we issued 175,456 shares
of our Common Stock in a share-for-share exchange with the Series "I"
shareholders of STB Corp. On January 9, 1998, we changed our corporate domicile
to Delaware and changed our name to Aquasol Technologies, Inc. On January 12,
1998, we issued 4,000,000 shares of Common Stock for $400 in cash.
On January 15, 1998, we issued 992,000 shares of our Common Stock to
acquire Noralta Technologies Corp. (an Alberta corporation) ("Noralta") in a
share-for-share exchange. The name of Noralta was subsequently changed to
Aquasol Technologies Inc. This company was engaged in the business of designing,
engineering, manufacturing and installing wastewater treatment systems for
government, industrial, commercial and agricultural customers.
Merger with AFD Capital Group, Inc.
On March 24, 1997, AFD Capital Group, Inc. was incorporated in Nevada.
On March 27, 1997, AFD Capital Group, Inc. issued 1,000,000 shares of its common
stock for $10,000 in cash. On April 1, 1997, AFD Capital Group, Inc. issued an
additional 1,000,000 shares of its common stock for $10,000 in cash. On March
31, 1998 AFD Capital Gro up, Inc. issued an additional 80,000 shares of its
common stock for $4,000 in cash.
On June 18, 1998, AFD Capital Group, Inc. changed its name to
Aquasol Technologies, Inc. On July 14, 1998, Aquasol Technologies, Inc. (the
Nevada corporation) merged with Aquasol Technologies, Inc. (the Alberta
corporation) in a one-for-one stock exchange and the surviving entity continued
under the laws of the state of Nevada.
<PAGE>16
2,080,000 shares of the Alberta corporation's common stock were issued
in exchange for the 2,080,000 shares of common stock of the Nevada corporate
entity then outstanding. On September 3, 1998 1,020,000 shares of the Alberta
corporation's common stock were cancelled as part of a recapitalization.
Disposition of Aquasol Technologies Inc.
On February 3, 1999, we disposed of Aquasol Technologies Inc. (the
Alberta corporation) by returning the shares of common stock of that corporation
to the former holders thereof in exchange for the return of the 992,000 shares
of Common Stock originally issued in the Noralta acquisition on January 15,
1998. We have no further interest in the business of Aquasol Technologies Inc.
(the Alberta corporation).
Name Change and Share Consolidation
On February 14, 1999, we consolidated our share capital by way of
reverse stock split on the basis of one new share of our Common Stock for each
five old shares of our Common Stock and changed our name to iLink Telecom, Inc.
Acquisition of iLink BC
Pursuant to a share purchase agreement dated February 26, 1999 with
ABDE Holdings Ltd. ("ABDE"), a British Columbia company, we acquired all of the
issued and outstanding common shares of 579782 B.C. Ltd. in exchange for the 145
shares of Series A Convertible Preferred Stock of iLink. On March 11, 1999,
579782 B.C. Ltd. changed its name to iLink Telecom (B.C.), Inc. ("iLink BC") and
is a subsidiary of iLink Telecom, Inc. The shares of Common Stock underlying
this Preferred Stock are the subject of this registration statement.
Following the acquisition of iLink BC, Mr. Amar Bahadoorsingh, the
principal of iLink BC, was appointed as our President and Chief Executive
Officer as well as a director, Mr. Peter M. Schriber was appointed a director
and our prior director resigned.
The assets of iLink BC consisted of the IVR Agreement with BCT.Telus as
well as miscellaneous telecommunications and computer equipment and office
furniture. These assets were in turn acquired by ABDE from Revere Communications
Inc., an Alberta corporation.
Principal Products or Services
As discussed above under the heading "General" we currently provide IVR
services to BCT.Telus under the terms of an IVR Platform Services Agreement
dated June 16, 1998 (the "IVR Agreement"). Subject to obtaining adequate
financing, we plan on providing VoIP services and, in the event that we obtain a
license to provide PCS services in Trinidad and Tobago and also obtain adequate
financing, we plan on offering PCS services as well.
Switching Solutions
Currently, IVR services are provided through our custom manufactured
switching facility located in Calgary, Alberta. Pursuant to the IVR Agreement,
we provide services to one customer at the Calgary site, namely BCT.Telus
<PAGE>17
Communications Inc., Canada's third largest telco ("BCT.Telus"). We provide
BCT.Telus with IVR services which include account processing, customer service
and time billing for their brand name phone cards distributed in Alberta and
British Columbia. Revenues are generated through the charge of a transaction fee
to BCT.Telus based upon the number of minutes passed through the Calgary
switching facility each month. Revenues from this facility have increased an
average of 180% each month since we commenced business in March 1999. Our
management estimates revenues from this site will total $83,000 in fiscal year
2000. Our revenue from this facility is based upon the number of minutes passed
through our system by BCT.Telus phone card customers. The assets and contracts
for this facility were acquired pursuant to a share purchase agreement dated
February 26, 1999 with ABDE Holdings Ltd., a company controlled by our
President. The agreed value of this facility including goodwill was $145,000.
At the Calgary site, all inbound lines to the call processing facility
are digital T1 as well as on the outbound side. This high quality, digital link
provides for high data transmission rates and zero line noise for voice
transmissions. The Calgary facility hosts a basic 48 Port IVPS Node which
supports, at maximum capacity, 69,032 minutes/day. Each 24 port upgrade will
cost approximately $50,000. We anticipate capacity upgrades will be required
when the local area IVPS reaches 75% use threshold on existing capacity. As
indicated previously, all software and hardware upgrades will be assessed for
Y2K compliancy.
In order to expand operations and revenue flows, we plan on establishing
two additional custom manufactured switching facilities to service customers
throughout North America which will enable us to create brand name prepaid phone
cards with a variety of retail customers. Our management has identified two
cities for the implementation of these additional sites: Vancouver and New York.
These sites were selected based on the large populations in each city and the
geographical location of these sites to transmit VoIP traffic between each
other. The Vancouver facility will be located in our present office to save
costs and permit efficient monitoring of the system. Our management is also
negotiating with an existing internet service provider ("ISP") site in New York
to co-locate our other proposed switching system. By developing a relationship
with the New York co-location partner, we can utilize the existing ISP network
and customer base, as well as save the costs of building an entire facility. In
effect, our site will share the resources of the existing ISP and exchange
services thereby expanding both our business and that of our proposed partner.
Our management estimates that approximately $200,000 will be required to finance
the creation of the custom manufactured switches in Vancouver and New York which
includes the costs of hardware, installation and any wire upgrades to the
office. Our expansion plan will require technical staff and administrative costs
which are estimated to be $384,000 in total per year for both facilities.
In addition, one of our employees is working together with Telephony
Experts Inc. of Los Angeles, California to distribute and develop IVR software.
This employee works closely with Telephony Experts to create new applications
and turnkey solutions for retail and wholesale customers. Telephony Experts has
offered to provide IVR software to us at reduced rates in exchange for
promotional considerations which will reduce the capital requirements for
building any new custom manufactured switching facilities.
VoIP
We have the in-house technical expertise to provide long-distance voice
services across the internet via VoIP technology. With this technology we are
able to convert voice information into data which can then be transmitted
<PAGE>18
anywhere in the world. Telephone calls are routed to a local switch facility and
then transmitted via the internet, without the same toll restrictions as voice
transmission via the Public Switched Network. We will implement this service
through the use of our Calgary switching facility and the two proposed
facilities in Vancouver and New York. Each switching platform can host multiple
phone carriers and route calls to specific phone carriers world wide based on
the time of day and/or destination. This will give us flexibility in routing
calls to the most cost effective carrier and diversifies carrier sources in case
of network failure and/or outages. In addition, it will allow us to obtain
contracts with local exchange carriers who, while they do not have the technical
ability to provide VoIP, have an existing client base to service.
We plan on creating brand name retail lines of phone cards for
distribution in the marketplace which utilizes VoIP technology. The manufacture
of the cards will take place in Canada with an estimated unit cost of Cdn$0.41
per card. The cards will then be distributed in our specific target markets. We
have identified two card manufacturers who may be contracted to print and cello
wrap all phone cards. Our management intends on identifying and entering into
agreements with distribution companies for our phone cards in specific target
markets within the next 6 months. We plan on approaching retail chains to offer
brand name phone cards at a retail discount of 25-30% depending on the number of
units purchased. Wholesalers who resell cards exclusively to retailers and
utilize iLink's switching platforms will receive a 40-50% discount.
Wireless Communications
We have submitted a proposal which, if accepted, would allow us to offer
a digital mobile phone service and wireless infrastructure to the people of
Trinidad & Tobago. The Government of Trinidad & Tobago plans on deregulating the
telecommunications industry that is currently comprised of a sole national
wireless phone provider, the Telephone Service of Trinidad and Tobago. The
Trinidad Government will select these providers for their new services based on
submissions provided by June 30, 1999. By way of an agreement dated April 1,
1999 we have teamed with Trinidad based Thor Communications Limited ("Thor") as
a joint-venture partner to compete for the service contracts. Thor is comprised
of a team of local Trinidad telecommunications experts and businesspeople who
offer local and regional expertise in the telecom industry. Our management
estimates that the cost to implement a wireless digital phone infrastructure
over five years will be $48 million. If successful in the application process,
our management believes that obtaining sufficient financing for the entire
project will be possible on terms acceptable to us, though there is no guarantee
that this will be the case. We are in the process of forming a subsidiary to be
named iLink Trinidad and Tobago Telecom Inc. ("iLink Trinidad") through which we
are making application for the PCS license in Trinidad and Tobago. iLink
Trinidad is a wholly owned subsidiary of iLink Telecom (BVI) Inc.
We have contracted the services of Industar Digital PCS ("Industar") of
Milwaukee to provide assistance in completing the application for the PCS
license in Trinidad and Tobago. The contract with Industar, made in May 1999, is
for $50,000. As of June 30, 1999 iLink had paid $35,000 in fees and owed a
balance of $15,000. The Company has agreed that Industar will provide ongoing
management services in the operation of iLink BVI if the PCS license is awarded
to us. The cost of the Industar agreement and the application process for the
PCS license is estimated at $70,000.
Distribution Methods
At present our Calgary site is processing call minutes through pre-paid
calling cards manufactured and distributed by BCT.Telus. As discussed above, we
<PAGE>19
intend on engaging a card manufacturer to produce pre-paid calling cards under
the brand name "iLink" and we intend on marketing and distributing these cards
concurrent with the establishment of switching facilities in Vancouver and New
York.
New Products
We have developed the technological capacity to implement VoIP
technology and have contracted the required technical expertise to complete the
PCS license proposal for Trinidad and Tobago. Particulars of these developments
are discussed above.
Competition
Our competitors are both the incumbent providers of long distance
services as well as other providers of internet telephony services and PCS
services. Incumbent providers of long distance services have been forced to
accept considerable price discounting in recent years due to increased
competition and government deregulation, and telephone companies have begun
offering discounts to large business and government customers with high calling
volumes. Our management expects this trend in price discounting to continue.
Our competitors all have better financial resources than we do. Our
competitors include CardCaller, DataMark/Phoneline International, CanQuest, CTN,
the members of the former Stentor Group, GTS, and Fonorola.
CardCaller and DataMark/Phoneline International have focused on the
retail market while CanQuest is a service bureau that has established
arrangement with small marketing companies to focus on retail, and to a lesser
extent promotional markets.
CTN as well as the Stentor Group have focused on both the retail and
promotional market. GTS, through strategic alliances, has been developing
targeted retail applications. Fonorola has been expanding their network and
targeting major accounts and developing custom card programs in key industry
sectors.
While price discounting makes the market for long distance
communications more competitive, it requires all providers of these services to
develop and deliver cost competitive services. An example of the drive for price
reductions is our IVR Agreement with BCT.Telus, a member of the former Stentor
Group, which has chosen to utilize our technology rather than incur the costs of
developing and operating an IVR system in-house.
We anticipate that we will encounter significantly more competition from
other potential entrants into the long distance market as well as from the
traditional providers of long distance services. Determining the degree,
intensity and duration of competition or the impact of competition on our
financial and operating results is uncertain. Sustained or extensive competition
on the basis of price or discounts, amongst other things, would have a material
adverse effect on our revenues, earnings potential and operational
effectiveness.
Suppliers
We have four main equipment suppliers. McKinnon Micro Distributors
Ltd. of Richmond, British Columbia supplies us with various computer hardware
<PAGE>20
including central processing units, printers and disk drives. We lease our 48
Port IVPS Node Switching Server from Newcourt Financial Ltd. under a lease
expiring June 1, 2000. Pro-Data Inc. of Richmond, British Columbia supplies us
with assorted computer hardware and printing systems. Telephony Experts Inc. of
Los Angeles, California has offered to provide IVR software to us at reduced
rates in exchange for promotional consideration which will reduce the capital
requirements for building any new custom manufactured switching facilities.
We believe equipment used by us would be available from other suppliers
if alternative sources should become necessary.
Customers
At present, we have only one customer, BCT.Telus upon whom we are
entirely dependent for our revenue at this stage of our development. The IVR
services are provided pursuant to the IVR Agreement which has a term of one year
(through June 2000) and up to two automatic renewals of one year each. The IVR
Agreement provides for termination for various reasons and can be terminated by
either party at any time, without cause, upon sixty (60) days' notice. Although,
we consider our relationship with BCT.Telus to be good and we expect that this
relationship will continue to expand, the loss of our IVR Agreement with
BCT.Telus would have a material adverse effect upon iLink BC and our business as
a whole. At this time, we have no other arrangements for providing our services
to any other customers. Upon the successful production, distribution and
marketing of our pre-paid calling cards we expect to broaden our customer base
at the retail level. Management has begun preliminary planning of this business
and anticipates producing the first line of brand name cards in September 1999.
Intellectual Property, Government Approvals and Regulation
Our IVR platforms and our VoIP technology are not protected by any
patents or copyrights. We are not subject to government regulation nor do we
require any government approvals in either Canada or the United States to
provide IVR services to incumbent long-distance providers or to manufacture,
distribute and market pre-paid calling cards. The provision of VoIP
communications is also not subject to government regulation nor does it require
government approvals in either Canada or the United States. As the internet is
rapidly changing, regulations may be imposed in future with which we will have
to comply. In the event that we are successful in obtaining a PCS license in
Trinidad and Tobago we expect that numerous subsequent government approvals will
have to be obtained.
Research And Development
We are presently conducting research and development to keep our IVR and
VoIP switching technologies current. We are also developing technology which
will allow persons selling our switching services to remotely process credit
card transactions without the requirement for local credit card clearing
equipment by using e-commerce services and a secured web site. At present we
devote substantially all of our technical resources to developing and updating
our technology and devoting substantially all of our other resources to
establishing our business. Management has contracted the services of an
individual to perform research and development and other duties as required for
a one year period ending March 2000 at an expense of Cdn$5,000 per month.
<PAGE>21
Employees
We currently employ five people on a full-time basis. We consider our
relationship with our employees to be good. Contingent upon raising sufficient
capital, we plan to hire additional employees as may be required by the level of
our operations. Our management has identified the need to hire the following
members to fulfil our operational plans: a chief financial officer; one
technical staff member for each proposed switch facility in Vancouver and New
York; four marketing and sales staff members; and two additional technical web
designers.
Retaining our current employees and attracting new employees is critical
to our success. The market for experienced technical people is very competitive
and there is no assurance that we will be successful in retaining and recruiting
qualified personnel.
Consultants
We rely on and will continue to rely on consultants that are not
employees of iLink or our affiliates to expand our IVR system and to design,
construct and implement the VoIP and PCS systems, to market our services and for
representation on regulatory issues. In addition to the consultants who are
identified under the heading "Management," we have entered into a one year
agreement dated March 25, 1999, pursuant to which we retained the services of
Century Capital Management Ltd. ("Century"), a company controlled by one of our
former directors, to assist us in the development and implementation of our
financing and acquisition strategies. Pursuant to the terms of this agreement we
have paid to Century the sum of $12,500 and issued to Century 300,000 shares of
our Common Stock which are subject to a Vesting Agreement. Under this Agreement,
Century would forfeit all or part of these shares if certain milestones are not
achieved by March 25, 2000. We are also required to pay a monthly consulting fee
of $5,000 to Century.
We have also entered into two agreements dated March 22, 1999, under
which we have engaged the services of Corporate Relations Group,. Inc. and Gulf
Atlantic Publishing, Inc. for a period of one year. These two companies are in
the business of planning, developing and implementing advertising, marketing and
promotional campaigns. Pursuant to the terms of these agreements we have paid
Corporate Relations Group the sum of $40,000 and Gulf Atlantic Publishing the
sum of $110,000.
PROPERTY
We have leased 2,239 square feet at a monthly rate of Cdn$4,637.54 which
includes both operating expenses and base amount for our principal offices at
1177 West Hastings Street, Suite 1910 under a lease agreement which expires on
August 1, 2002. We have also leased approximately 200 square feet located at
#304, 320 23rd Avenue, Calgary Alberta T2S 0J2 at a monthly rate of Cdn$625.00
pursuant to a sublease which expires on March 30, 2000. This space houses our
switching platform. We have entered into an office access agreement with
Advantis Business Centres pursuant to which they provide us with office space
and services on an 'as needed' basis until March 31, 2000, at One Sansome
Street, Suite 2000, San Francisco, CA 94104 at a cost of $299.00 per month.
<PAGE>22
MANAGEMENT
Directors and Executive Officers of iLink
The present directors, executive officers, key employees and consultants
of iLink, their ages, positions held in iLink, and duration as such, are as
follows:
<TABLE>
<S> <C> <C> <C>
Name Position Age Period
- ------------------------------ ------------------------------- ---- --------------------------
Amar Bahadoorsingh Chairman of the Board, 29 February 1999 - present
President, Secretary and Chief
Financial Officer
Peter Schriber Director 31 February 1999 - present
Joseph R. Q. (Rick) Villaneuva Key Employee 35 March 1999 - present
Randall Owen Walrond Key Consultant 33 March 1999 - present
</TABLE>
Business Experience
The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer, and key employee, indicating the principal occupation and employment
during that period, and the name and principal business of the organization in
which such occupation and employment were carried out.
Amar Bahadoorsingh has been an officer and director of iLink since
February 26, 1999. Mr. Bahadoorsingh has been integral in solidifying the
opportunities that now comprise iLink. Starting in 1992, Mr. Bahadoorsingh ran a
private venture capital organization which assisted in the development, funding
and strategic marketing of concepts and businesses. Mr. Bahadoorsingh holds a
master's degree in business administration from Queen's University, in Ontario,
Canada, with a focus on management and marketing strategy and a bachelor's
degree from the University of Western Ontario. He is a partner in several
businesses including the brokerage firm Insync Securities Limited, a real-estate
development company, and a travel management company.
Peter M. Schriber has been a director of iLink since February 26, 1999.
Mr. Schriber holds a bachelor's degree in economics from the University of
Western Ontario. Since December of 1996 Mr. Schriber has been the president of
Insync Securities Limited and a director and vice-president of Matisse
Investment Management, two companies engaged in the business of the designing
and marketing financial products. Prior to December 1996, Mr. Schriber was
employed by a European investment bank.
Joseph R. Q. (Rick) Villaneuva has been involved in the
telecommunications industry since 1988. Previously, he specialized in the
maintenance and manufacturing of radio/wireless technologies and equipment. In
1994, Mr. Villanueva developed his expertise in IVR based technologies and
products, working in both technical and marketing/sales support capacities. Mr.
Villanueva oversees iLink's Calgary operations.
Randall Owen Walrond is the founding President of IVR interACTIVE
which developed and marketed voice mail products. Mr. Walrond guides iLink's
implementation of new products as well as its research and development. Mr.
<PAGE>23
Walrond has over 15 years programming experience and holds a bachelors Degree in
Economics focusing on computer based macro-economic regressionary analysis. Mr.
Walrond's work in computer integrated telephony encompasses voice processing,
call management, interactive voice response, voice recognition, faxes
processing, web development, scripting languages as well as telephony networking
based on Internet protocols.
Family Relationships
Other than the employment by iLink of the sister of its President and
Chief Executive Officer as a Corporate Development Trainee, there are no family
relationships between any director, executive officer or employee.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation of iLink's Chief Executive Officer. No executive officer of iLink
or of any subsidiaries earned in excess of $100,000 for the fiscal year ended
February 28, 1999.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
--------------------------------------- -------------------
Name and Principal Other Annual Securities All Other
Position Year Salary Bonus Compensation Underlying Options Compensation
- ---------------------- --------- -------------- -------------- ----------------- ------------------- ----------------
Amar Bahadoorsingh(1) 1999 -0- -0- -0- -0- -0-
President and Chief
Executive Officer
- ---------------------- --------- -------------- -------------- ----------------- ------------------- ----------------
</TABLE>
(1) Mr. Bahadoorsingh has served as iLink's Director, President and Chief
Executive Officer since February 26, 1999.
Subsequent to the fiscal year end of February 28, 1999: (i) iLink
commenced paying $5,000 per month for consulting services to Devmar Holdings
Ltd., a company controlled by Mr. Bahadoorsingh; and (ii) iLink issued 1,500,000
shares of its common stock to Mr. Bahadoorsingh as executive compensation.
On March 25, 1999, certain officers and directors of iLink were issued a
total of 1,590,000 shares of iLink Common Stock. All of these shares are subject
to a Vesting Agreement dated May 25, 1999 which provides for iLink to hold such
shares until certain milestones are reached. These milestones include achieving
certain levels of gross revenues (through internal growth or outside
acquisitions) or obtaining a PCS license in the Republic of Trinidad and Tobago.
The shares vest automatically upon a takeover bid. Any shares not vested by May
25, 2000 will be automatically canceled.
Employment Agreements
iLink has entered into a five year consulting agreement dated
February 27, 1999, with Devmar Holdings Ltd., a company controlled by Mr. Amar
Bahadoorsingh. Pursuant to this consulting agreement iLink has agreed to pay
<PAGE>24
Devmar Holdings Ltd. $5,000 per month for management consulting services
provided by Mr. Bahadoorsingh.
iLink has also entered into a one year consulting agreement dated
February 27, 1999, with Mr. Randall Owen Walrond. Pursuant to this consulting
agreement iLink has agreed to pay Mr. Walrond Cdn$5,000 per month in exchange
for technology consulting services which includes research and development.
iLink has also entered into employment agreements with each of its
employees which contain confidentiality and non-circumvention clauses.
Stock Option Plan
iLink has adopted a Non-Qualified Stock Option Plan (the "Option Plan").
The Option Plan authorizes the issuance of options to purchase up to 500,000
shares of its Common Stock. The Option Plan became effective on June 1, 1999.
iLink employees, directors, officers, consultants and advisors are eligible to
be granted options pursuant to the Option Plan. The option exercise price is
determined by the Board of Directors.
Options granted pursuant to the Option Plan terminate on the date
established by the Board of Directors when the option was granted.
The Option Plan is administered by iLink's Board of Directors. The Board
of Directors has the authority to interpret the provisions of the Option Plan
and supervise the administration of the Option Plan. In addition, the Board of
Directors is empowered to select those persons to whom options are to be
granted, to determine the number of shares subject to each grant of an option
and to determine when, and upon what conditions or options granted under the
Option Plan will vest or otherwise be subject to forfeiture and cancellation.
In the discretion of the Board of Directors, any option granted pursuant
to the Option Plan may include installment exercise terms such that the option
becomes fully exercisable in a series of cumulating portions. The Board of
Directors may also accelerate the date upon which any option (or any part of any
options) is first exercisable. Any options granted pursuant to the Option Plan
will be forfeited if the "vesting" schedule established by the Board of
Directors at the time of the grant is not met. For this purpose, vesting means
the period during which the employee must remain an employee or the period of
time a non-employee must provide services to us. At the time an employee ceases
working for us (or at the time a non-employee ceases to perform services for
us), any options not fully vested will be forfeited and canceled. In the
discretion of the Board of Directors payment for shares of Common Stock
underlying options may be paid through the delivery of shares of our Common
Stock having an aggregate fair market value equal to the option price, provided
such shares have been owned by the option holder for at least one year prior to
such exercise. A combination of cash and shares of Common Stock may also be
permitted at the discretion of the Board of Directors. Options are generally
non-transferable except upon death of the option holder.
iLink's Board of Directors may at any time, and from time to time,
amend, terminate, or suspend the Option Plan in any manner it deems appropriate,
provided that such amendment, termination or suspension cannot adversely affect
rights or obligations with respect to shares or options previously granted.
<PAGE>25
The Option Plan is not qualified under Section 401(a) of the Internal
Revenue Code, and is not subject to any provisions of the Employee Retirement
Income Security Act of 1974.
The following sets forth certain information as of June 30, 1999,
concerning the stock options granted by iLink. Each option represents the right
to purchase one share of iLink Common Stock.
<TABLE>
<S> <C> <C> <C>
Total Shares Reserved Shares Reserved for Remaining Options
Name of Plan Under Plan Outstanding Options Under Plan
- -------------------- ------------------------ --------------------- -----------------
Non-Qualified Stock 500,000 23,000 477,000
Option Plan
</TABLE>
On June 8, 1999, the Board granted options to purchase a total of 23,000
shares of iLink Common Stock at a price of $5.25 per share to three of its
employees. The options are exercisable for a term of one year. No directors or
officers have been granted any incentive stock options.
Directors Compensation
iLink reimburses its directors for expenses incurred in connection with
attending Board meetings but it does not pay director's fees or other cash
compensation for services rendered as a director.
Limitation of Liability and Indemnification Matters
Section 78.7502 of the Nevada Revised Statutes provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any litigation by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the action if he
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Any indemnification made under section 78.7502 must be determined
to be proper, on a case-by-case basis, by either iLink stockholders, a quorum of
its Board of Directors (excluding any directors named in such action) or by the
written opinion of its legal counsel. iLink's Articles of Incorporation and its
Bylaws provide for indemnification of its directors, officers, employees or
agents against expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement if they acted in good faith and reasonably believed their
conduct or action to be in iLink's best interest.
iLink has entered into indemnification agreements with both of its
directors pursuant to which it has agreed to indemnify them from and against any
and all costs, charges and expenses, however arising or incurred by them by
reason of their being a director of iLink, subject to the determination referred
to above.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, or persons controlling
iLink pursuant to the foregoing provisions, iLink has been informed that in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Act and is therefore unenforceable.
<PAGE>26
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Principal Stockholders
The following table set forth certain information as of June 30, 1999,
with respect to the beneficial ownership of iLink Common Stock for (i) each
director, (ii) all directors and officers of iLink as a group, and (iii) each
person known to iLink to own beneficially five percent (5%) or more of the
outstanding shares of our Common Stock.
<TABLE>
<S> <C> <C>
Name of Address of Number of Shares
Beneficial Owner Beneficially Owned(1) Percent of Class
- ------------------------------------------ ----------------------- ------------------
Amar Bahadoorsingh 1,558,000(2)(4) 28%
2360 Larch Street
Vancouver, BC V6K 3P8
Peter M. Schriber 275,000(3)(4) 5%
#3 - 2636 Yukon Street
Vancouver, BC V5Y 3P8
Century Capital Management Ltd. 322,259(4) 5%
Suite 1650, 200 Burrard Street
Vancouver, BC V6E 2K3(5)
Bona Vista West Ltd. 500,000 9%
2001 Leeward Highway,
P. O. Box 62
The McLean Building, Providenciales
Turks & Caicos Islands(6)
P.T.N. Ltd 500,000 9%
PO Box N-1612
Nassau, Bahamas(7)
All Directors and Officers as a Group 1,833,000 33%
</TABLE>
(1) The persons named in the table have sole voting or investment power with
respect to all of the Common Stock shown as beneficially owned by them,
subject to community property laws where applicable or as otherwise
indicated.
(2) Includes 58,000 shares of Common Stock which can be acquired through the
conversion of 145 shares of Series A Convertible Preferred Stock owned
by ABDE Holdings Ltd. Conversion rate calculated as of July 31, 1999.
(3) Includes 250,000 shares held by Marketsource Direct Holdings Ltd., which
is an entity controlled by Mr. Schriber.
(4) These shares are subject to a Vesting Agreement pursuant to which a
portion of such shares may be forfeited unless and until fully vested.
See description of Vesting Agreement under the heading "Certain
Relationships and Related Transactions."
(5) The sole officer, director and shareholder of Century Capital Management
Ltd. is Andrew Hromyk, a former director of iLink.
<PAGE>27
(6) The sole officer, director and shareholder of Bona Vista West Ltd. is
Andrew Meade.
(7) The sole officer, director and shareholder of P.T.N. Ltd. is
Robert Montgomery.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as otherwise indicated below, we have not been a party to any
transaction, proposed transaction, or series of transactions in which the amount
involved exceeds $60,000, and in which, to our knowledge, any of our directors,
officers, five percent beneficial security holder, or any member of the
immediate family of the foregoing persons has had or will have a direct or
indirect material interest.
In February 1999, we agreed to purchase all of the shares of iLink BC
from ABDE Holdings Ltd., a company controlled by Mr. Bahadoorsingh, our
President and Chief Executive Officer, in exchange for 145 shares of our Series
A Convertible Preferred Stock. At the time of this agreement Mr. Bahadoorsingh
was not a director or officer of iLink. Subsequent to this agreement Mr.
Bahadoorsingh and Mr. Schriber were appointed as directors and the prior
director resigned. Each share of Series A Convertible Preferred Stock entitles
ABDE to convert into $1,000 worth of our common stock at a 25% discount to the
average market price of our common stock for the five trading days immediately
preceding the conversion. The shares of Series A Convertible Preferred Stock
will be deemed to convert into shares of our Common Stock on the date which is
five days from the date of this Prospectus. The value of the acquisition of
iLink BC was deemed to be $145,000, which represents the approximate cost of the
assets of iLink BC to ABDE Holdings Ltd., without significant mark-up. We also
agreed with ABDE Holdings Ltd. to file a registration statement with the SEC in
respect of the shares of Common Stock to be issued upon the conversion of the
shares of Series A Convertible Preferred Stock on or before May 31, 1999 and to
use our best efforts to make same effective as soon as practicable thereafter.
ABDE Holdings Ltd. has subsequently agreed to postpone this deadline
indefinitely.
We have entered into a five-year consulting agreement dated February 27,
1999 with Devmar Holdings, Ltd. which is controlled by Mr. Bahadoorsingh. The
agreement provides for monthly payments of $5,000 per month for the consulting
services of Mr. Bahadoorsingh. Although the agreement provides for semi-annual
reviews by iLink, and either party may terminate the agreement upon four weeks
notice.
In May 1999, we issued 250,000 shares of iLink Common Stock to
Marketsource Direct Holdings, Ltd., a company controlled by Mr. Schriber, a
director of iLink, as compensation for services rendered to iLink. These shares
are subject to the terms of a Vesting Agreement. Under this Agreement,
Marketsource Direct Holdings would forfeit all or part of these shares if
certain milestones are not achieved by March 25, 2000.
In March 1999 we issued 300,000 of iLink Common Stock to Century Capital
Management Ltd. ("Century Capital"), a company controlled by Andrew Hromyk, a
former director of iLink, as compensation for services rendered to iLink. These
shares are subject to the terms of a Vesting Agreement which, among other
things, requires forfeiture of all or part of these shares if certain milestones
are not achieved by March 25, 2000. The agreement with Century Capital also
provides for monthly consulting fees of $5,000 for the term of agreement which
is for 12 months. Such term is automatically renewed for successive 6-month
periods until either party gives notice to terminate the agreement.
<PAGE>28
In May, 1999 Century Capital assigned its interest in a lease covering
certain office space to iLink. The lease was assigned to iLink on the same terms
and conditions that existed for Century Capital except that iLink has agreed to
indemnify Century Capital for any liabilities which may arise under the lease
after the assignment and Century Capital was issued 22,259 shares of iLink
Common Stock as consideration for certain leasehold improvements, furniture and
telephone equipment.
In March 1999, we entered into indemnification agreements with our
directors pursuant to which we agreed to indemnify them from and against any and
all costs, charges and expenses, however arising or incurred by either of them
in relation to our affairs by reason of them being a director. As required by
Nevada corporate law, such indemnification must be determined to be proper, on a
case-by-case basis, by either our stockholders, a quorum of our Board of
Directors (excluding any directors named in such action) or by the written
opinion of our legal counsel.
PLAN OF DISTRIBUTION
The Selling Stockholder may, from time to time, upon converting all or
part of the Series A Convertible Preferred Stock, sell all or a portion of the
shares of Common Stock on any market upon which the Common Stock may be quoted,
in privately negotiated transactions or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
such market prices or at negotiated prices. The shares of Common Stock may be
sold by the Selling Stockholder by one or more of the following methods, without
limitation, (a) block trades in which the broker or dealer so engaged will
attempt to sell the shares of Common Stock as agent but may position and resell
a portion of the block as principal to facilitate the transaction, (b) purchases
by broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus, (c) an exchange distribution in accordance
with the rules of such exchange, (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers, (e) privately negotiated
transactions, (f) market sales (both long and short to the extent permitted
under the federal securities laws), and (g) a combination of any such methods of
sale. In effecting sales, brokers and dealers engaged by the Selling Stockholder
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from the Selling Stockholder (or, if any such
broker-dealer acts as agent for the purchaser of such shares, from such
purchaser) in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with
the Selling Stockholder to sell a specified number of such shares of Common
Stock at a stipulated price per share, and, to the extent such broker-dealer is
unable to do so acting as agent for the Selling Stockholder, to purchase as
principal any unsold shares of Common Stock at the price required to fulfill the
broker-dealer commitment to the Selling Stockholder. Broker-dealers who acquire
shares of Common Stock as principal may thereafter resell such shares of Common
Stock from time to time in transactions (which may involve block transactions
and sales to and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market or otherwise at prices
and on terms then prevailing at the time of sale, at prices then related to the
then-current market price or in negotiated transactions and, in connection with
such resales, may pay to or receive from the purchasers of such shares of Common
Stock commissions as described above. The Selling Stockholder may also sell the
shares of Common Stock in accordance with Rule 144 under the Securities Act,
rather than pursuant to this Prospectus.
The Selling Stockholder and any broker-dealers or agents that
participate with the Selling Stockholder in sales of the shares of Common Stock
may be deemed to be "underwriters" within the meaning of the Securities Act in
<PAGE>29
connection with such sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares of Common
Stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
From time to time, the Selling Stockholder may pledge its shares of
Common Stock pursuant to the margin provisions of its customer agreements with
its brokers. Upon default by the Selling Stockholder, the broker may offer and
sell such pledged shares of Common Stock from time to time. Upon a sale of the
shares of Common Stock, the Selling Stockholder intends to comply with the
Prospectus delivery requirements, under the Securities Act, by delivering a
Prospectus to each purchaser in the transaction. We intend to file any
amendments or other necessary documents in compliance with the Securities Act
which may be required in the event the Selling Stockholder defaults under any
customer agreement with brokers.
All expenses of the registration statement including, but not limited
to, legal, accounting, printing and mailing fees are and will be borne by us.
SELLING STOCKHOLDER
ABDE Holdings Ltd. is the sole Selling Stockholder of the shares of our
common stock to be issued upon the conversion of the shares of Series A
Convertible Preferred Stock. The sole voting shareholder of ABDE Holdings Ltd.
is Devmar Holdings Ltd., a company owned by Mr. Amar Bahadoorsingh, our
President and Chief Executive Officer.
<TABLE>
<S> <C> <C> <C> <C> <C>
Number of Common
Number of Common Number of Shares Beneficially
Shares Beneficially Common Shares Owned Following
Name of Shareholder Owned Prior to the Offering Offered Hereby the Offering
- ---------------------- ---------------------------- -------------- ---------------------
# Of % Of # Of # Of % Of
Shares(1) Class Shares Shares(1) Class
--------- -------- -------- --------- ---------
ABDE Holdings, Ltd. 58,000 (2) (3) 58,000 -0- -0-
</TABLE>
(1) Excludes shares owned by Mr. Bahadoorsingh who is the
controlling owner of ABDE Holdings, Ltd.
(2) Assumes full conversion of the Series A Convertible
Preferred Stock on the later of (a) August 26, 1999 or (b)
the date which is five business days after the effective
date of this registration statement. The conversion rate
is calculated as of July 31, 1999. The exact number of
shares may vary due to the conversion formula which is
based on the bid price of iLink's common stock at the time
of conversion.
(3) Less than 1%.
<PAGE>30
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 25,000,000 shares of Common
Stock, $.001 par value, and 5,000,000 shares of preferred stock, $.001 par value
("Preferred Stock"). As of June 30, 1999, there were 5,412,963 shares of Common
Stock outstanding and 145 shares of Series A Convertible Preferred Stock
outstanding.
Common Stock
Each stockholder is entitled to one vote for each share of Common Stock
held on all matters submitted to a vote of stockholders. Cumulative voting for
the election of directors is not provided for in our certificate of
incorporation.
Holders of Common Stock are entitled to receive such dividends as may be
declared by our Board of Directors out of funds legally available for dividends
and, in the event of liquidation, to share pro rata in any distribution of our
assets after payment of liabilities. Our Board of Directors is not obligated to
declare a dividend. It is not anticipated that dividends will be paid in the
foreseeable future.
Holders of Common Stock do not have preemptive rights to subscribe to
additional shares if issued by us. There are no conversion, redemption, sinking
fund or similar provisions regarding the Common Stock. All of the outstanding
shares of Common Stock are fully paid and nonassessable and all of the shares of
Common Stock issued upon the conversion of the Series A Preferred Stock will be,
upon issuance, fully paid and non-assessable.
Preferred Stock
iLink is authorized to issue up to 5,000,000 shares of Preferred Stock.
Our Articles of Incorporation provide that the Board of Directors has the
authority to issue the Preferred Stock into series and, within the limitations
provided by Nevada statute, to fix by resolution the powers, rights,
preferences, qualifications, limitations and restrictions of the shares of any
series so established. As our Board of Directors has authority to establish the
terms of, and to issue, the preferred stock without shareholder approval, the
preferred stock could be issued to defend against any attempted takeover of
iLink.
In March 1999, our Board of Directors established a Series A Convertible
Preferred Stock and authorized the issuance of up to 145 shares of Series A
Convertible Preferred Stock as part of that series. Upon any liquidation or
dissolution of iLink, each outstanding share of Series A Convertible Preferred
Stock is entitled to distribution of $1,000 per share prior to any distribution
to the holders of our Common Stock. The shares of Series A Convertible Preferred
Stock are not entitled to any dividends or voting rights. On March 31, 1999, we
issued 145 shares of our Series A Convertible Preferred Stock to ABDE Holdings
Ltd. at a deemed price of $1,000 per share in exchange for all of the shares of
iLink BC. Five days after the date of this Registration Statement is declared
effective each share of Series A Convertible Preferred Stock will automatically
convert into shares of our Common Stock in an amount equal to the Series A
Preferred Stock stated value of $1,000 divided by 75% of the average closing bid
price of our Common Stock for the five trading days preceding the conversion
date. The shares issuable upon the conversion of the Series A Preferred Shares
are being offered for resale to the public by means of this Prospectus. See
"Selling Shareholder." At this time, the Board of Directors has authorized no
other shares of Preferred Stock.
<PAGE>31
LEGAL PROCEEDINGS
We are not a party to any legal proceedings.
LEGAL MATTERS
The validity of the shares of Common Stock offered by the Selling
Stockholder will be passed upon by the law firm of Bartel Eng Linn & Schroder,
Sacramento, California.
EXPERTS
The consolidated balance sheets as of February 28, 1999 and 1998, and
the related consolidated statements of operations, stockholders' equity and cash
flows for the year ended February 28, 1999 and for each of the periods from
December 10, 1997 (date of inception) to February 28, 1999 and February 28,
1998, included in this Prospectus have been audited by Ernst & Young LLP,
independent chartered accountants, as set forth in their report thereon included
elsewhere herein and are included in reliance upon such report, given on the
authority of such firm, as experts in accounting and auditing.
AVAILABLE INFORMATION
We have filed a registration statement on Form SB-2, together with all
amendments and exhibits, with the SEC. This Prospectus, which forms a part of
that registration statement, does not contain all information included in the
registration statement. Certain information is omitted and you should refer to
the registration statement and its exhibits. With respect to references made in
this Prospectus to any contract or other document of iLink, such references are
not necessarily complete and you should refer to the exhibits attached to the
registration statement for copies of the actual contract or document. You may
review a copy of the registration statement at the SEC's public reference room,
and at the SEC's regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and Seven World Trade Center, 13th Floor, New
York, New York 10048. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. Our filings and the
registration statement can also be reviewed by accessing the SEC's website at
http://www.sec.gov.
<PAGE>32
FINANCIAL STATEMENTS AND SCHEDULES
Financial Statements
The following Financial Statements pertaining to iLink are filed as part of this
Prospectus:
<TABLE>
<S> <C>
Interim Consolidated Financial Statements for the Three Months Ended May 31, 1999..........F-1 to F-10
Report of Independent Accountants......................................................... F-11
Year-end Consolidated Balance Sheets.......................................................F-12
Year-end Consolidated Statements of Operations.............................................F-13
Year-end Consolidated Statements of Stockholders' Equity...................................F-14
Year-end Consolidated Statements of Cash Flows.............................................F-14
Notes to Consolidated Financial Statements.................................................F-16 to F-20
</TABLE>
<PAGE>II-1
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Section 78.7502 of the Nevada Revised Statutes provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any litigation by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the action if he
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Any indemnification made under section 78.7502 must be determined
to be proper, on a case-by-case basis, by either our stockholders, a quorum of
our Board of Directors (excluding any directors named in such action) or by the
written opinion of our legal counsel. Our Articles of Incorporation and our
Bylaws provide for indemnification of our directors, officers, employees or
agents against expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement if they acted in good faith and reasoned their conduct or
action to be in our best interest.
We have entered into indemnification agreements with both of our
directors pursuant to which we have agreed to indemnify them from and against
any and all costs, charges and expenses, however arising or incurred by them by
reason of their being a director, subject to the determination referred to
above.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, or persons controlling
iLink pursuant to the foregoing provisions, we has been informed that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Act and is therefore unenforceable.
Item 25. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by us in
connection with the issuance and distribution of the securities being registered
hereunder. No expenses shall be borne by the Selling Stockholder. All of the
amounts shown are estimates, except for the SEC Registration Fees.
SEC registration fee $ 81
Printing and engraving expenses $ 2,500
Accounting fees and expenses $ 7,500
Legal fees and expenses $ 15,000
Transfer agent and registrar fees $ 500
Fees and expenses for qualification under
state securities laws $ -0-
Miscellaneous $ 1,000
Total $ 26,581
<PAGE>
Item 26. Recent Sales of Unregistered Securities
On May 25, 1999, iLink issued 250,000 shares of its Common Stock to
Marketsource Direct Holdings Ltd., a company controlled by Mr. Peter Schriber, a
director of iLink, as compensation for services rendered to iLink. The deemed
price at which this Common Stock was issued was $0.001 per share. This
transaction was exempt from registration by Section 4(2) of the Securities Act.
These shares are subject to a Vesting Agreement.
On May 20, 1999, iLink issued 22,259 shares of its Common Stock to
Century Capital Management Ltd. as consideration for the acquisition of certain
leasehold improvements, furniture and telephone equipment valued at $44, 518.
The price at which this Common Stock was issued was $2.00 per share. This
transaction was exempt from registration by Section 4(2) of the Securities Act.
On April 6, 1999, iLink issued 353,500 shares of its Common Stock to 22
different investors at a price of $1.00 per share for gross cash proceeds to
iLink of $353,500. This transaction was exempt from registration by Rule 504 of
Regulation D.
On April 2, 1999, iLink issued 1,300,000 shares of its Common Stock to 4
different investors at a price of $0.05 per share for gross cash proceeds to
iLink of $65,000. This transaction was exempt from registration by Rule 504 of
Regulation D.
On March 31, 1999, iLink issued 145 shares of Series A Convertible
Preferred Stock to ABDE Holdings Ltd. in consideration for the acquisition of
all of the shares of iLink BC. The deemed price at which this preferred stock
was issued was $1,000 per share. This transaction was exempt from registration
by Section 4(2) of the Securities Act.
On March 25, 1999, iLink issued 1,590,000 shares of its Common Stock to
certain of its directors and employees as compensation for services rendered to
iLink and to induce them to remain in iLink's employ and to perform their duties
and responsibilities to the best of their abilities. The deemed price at which
this Common Stock was issued was $0.001 per share. This transaction was exempt
from registration by Section 4(2) of the Securities Act. 1,590,000 of these
shares are subject to a Vesting Agreement.
On March 25, 1999, iLink issued 300,000 shares of its Common Stock to
Century Capital Management Ltd. pursuant to the terms of an engagement letter
dated March 25, 1999, between iLink and Century Capital Management Ltd. pursuant
to which Century Capital Management Ltd. provides iLink with financial
consulting services. The deemed price at which this Common Stock was issued was
$0.001 per share. This transaction was exempt from registration by Section 4(2)
of the Securities Act. These shares are subject to a Vesting Agreement.
On March 16, 1999, iLink issued 250,000 shares of its Common Stock to
two different investors at a price of $0.05 per share for gross cash proceeds to
iLink of $12,500. This transaction was exempt from registration by Rule 504 of
Regulation D.
On June 26, 1998, iLink merged with Aquasol Technologies, Inc. (formerly
AFD Capital Group, Inc.), a Nevada corporation, on the basis of one share of
iLink Common Stock for each share of common stock of Aquasol Technologies Inc.
then outstanding. As a result of this merger iLink issued 2,080,000* shares of
its Common Stock to the stockholders of Aquasol Technologies, Inc., the Nevada
corporation.
<PAGE>II-3
The merger was exempt from registration by Rule 504 of Regulation D. Subsequent
to the merger 1,020,000 shares of iLink Common Stock issued to the stockholders
of Aquasol Technologies, Inc. were surrendered to iLink's treasury for
cancellation. Prior to the date of the merger Aquasol Technologies, Inc. had
issued the following securities:
(i) On March 31, 1998, Aquasol Technologies, Inc. issued
80,000* shares of common stock to one investor at a price
of $0.05 per share for gross proceeds to iLink of $4,000.
This transaction was exempt from registration by Rule 504
of Regulation D.
(ii) On April 1, 1997, Aquasol Technologies, Inc. issued
1,000,000* shares of common stock to five investors at a
price of $0.01 per share for gross proceeds to iLink of
$10,000. This transaction was exempt from registration by
Rule 504 of Regulation D.
(iii) On March 27, 1997, Aquasol Technologies, Inc. issued
1,000,000* shares of common stock to two investors at a
price of $0.01 per share for gross proceeds to iLink of
$10,000. This transaction was exempt from registration by
Section 4(2) of the Securities Act.
On January 15, 1998, iLink issued 992,000* shares of its Common Stock to
the seven shareholders of Aquasol Technologies Inc (an Alberta corporation)
formerly named Noralta Technologies Corp. in exchange for all of the shares of
Aquasol Technologies Corp. (the Alberta corporation). This transaction was
exempt from registration by Rule 504 of Regulation D. On January 15,1999, this
transaction was unwound and iLink returned all of the shares of Aquasol
Technologies Corp. (the Alberta corporation) to the seven former shareholders of
that corporation and iLink canceled the 992,000* shares of its Common Stock
which were issued to them.
On January 12, 1998, iLink issued 4,000,000* shares of its Common Stock
to one investor at a price of $0.0001 per share for gross proceeds to iLink of
$400. This transaction was exempt from registration by Rule 504 of Regulation D.
On January 9, 1998, iLink merged with Aquasol Technologies Inc. (a
Delaware corporation) on the basis of one share of iLink Common Stock for each
share of common stock of Aquasol Technologies Inc. then outstanding. As a result
of this merger iLink issued 100* shares of its common stock to the sole
stockholder of Aquasol Technologies, Inc., the Delaware corporation. The merger
was exempt from registration by Rule 504 of Regulation D. The 100 shares of
common stock outstanding in Aquasol Technologies, Inc., the Delaware
corporation, immediately prior to the merger had been issued on December 18,
1997, at a price of $0.10 per share. This transaction was exempt from
registration by Rule 504 of Regulation D.
On December 26, 1997, iLink effected a plan of share exchange with the
holders of shares of Series I common stock issued by STB Corp. on the basis of
one share of iLink Common Stock for each one share of Series I common stock
outstanding in STB Corp. Pursuant to this transaction iLink issued 175,456*
shares of its Common Stock to 293 different holders of Series I common stock of
STB Corp. This transaction was exempt from registration by Rule 504 of
Regulation D.
<PAGE>II-4
On December 11, 1997, iLink sold 1,500,000* shares of its Common Stock to
one investor for gross proceeds to iLink of $5,000. This transaction was exempt
from registration by Section 4(2) of the Securities Act.
*These share amounts have not been adjusted to reflect the 1-for-5 reverse stock
split which was effective on February 14, 1999.
Item 27. Exhibits
The following Exhibits are filed with this Prospectus:
Name
----------------------------------------------------------------------
3.1 Certificate of Incorporation and Amendments
a. Certificate of Incorporation
b. Certificate of Amendment, dated
c. Certificate of Amendment of Articles of Incorporation, dated
February 3, 1999
d. Certificate of Amendment of Articles of Incorporation, dated
February 3, 1999
e. Certificate of Amendment of Articles of Incorporation, dated
March 17, 1999
3.2 Bylaws
4.1 Certificate of Designation
4.2 Vesting Agreements
a. Vesting Agreement
b. Vesting Agreement
5.0 Opinion of Bartel Eng Linn & Schroder regarding the legality of
the securities being registered
10.1 Share Purchase Agreement dated February 26, 1999 between iLink
and ABDE Holdings Ltd.
10.2 Assignment Agreements dated February 25, 1999 between 57982
B.C. Ltd. and ABDE Holdings Ltd.
a. Assignment Agreement dated February 25, 1999 between 57982
B.C. Ltd. and ABDE Holdings Ltd.
b. Assignment Agreement dated February 25, 1999 between 57982 B.C.
Ltd. and ABDE Holdings Ltd.
<PAGE>II-5
10.3 Assignment of Lease by Tenant with Landlord's Consent dated as
of June 1, 1999 between Golden Capital Properties Ltd. Century
Capital Management Ltd. and iLink
10.4 Agreement with Thor Communications dated April 1, 1999
10.5 Consulting Agreement with Industar Digital PCS dated May 14, 1999
10.6 Consulting Agreement with Randall Walrond dated February 27, 1999
10.7 Management Contract with Devmar Holdings Ltd. dated
February 27, 1999
10.8 Agreement with Gulf Atlantic Publishing, Inc. dated March 22,1999
10.9 Agreement with Corporate Relations Group, Inc. dated March 22,
1999
10.10 Agreement with Century Capital Management Ltd. dated March 25,
1999
10.11 Office Access Agreement with Alliance Business Centers dated
April 27, 1999 for the San Francisco office
10.12 Sublease Agreement with HyPower Fuel Inc. dated February 1, 1999
for the Calgary office
10.13 IVR Platform Service Agreement between Telus Communications Inc.
and Revere Communications Inc. dated June 16, 1998
(to be submitted by amendment)
10.14 Letter of amendment to IVR Platform agreement dated January 6,
1999 (to be submitted by amendment)
10.15 Assignment and Amending Agreement between Revere
Communications Inc. and ABDE Holdings Ltd. and Telus
Communications Inc. dated January 12, 1999(to be submitted by
amendment)
10.16 Agreement for Purchase and Sale between Revere Communications
Inc., ABDE Holdings Ltd. dated January 13,1999
10.17 Letter Agreement with Telephony Experts dated May 24, 1999
23.1 Consent of Bartel Eng Linn & Schroder contained in
Exhibit 5
23.2 Consent of Ernst & Young LLP
<PAGE>II-6
Item 28. Undertakings
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
iLink pursuant to the foregoing provisions, or otherwise, iLink has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by iLink of expenses incurred or paid by a director, officer or
controlling person of iLink in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, iLink will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
<PAGE>II-7
SIGNATURE
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, Province of British Columbia, on August 6, 1999.
ILINK TELECOM, INC.,
a Nevada Corporation
/s/ AMAR BAHADOORSINGH
--------------------------
Amar Bahadoorsingh,
President
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
Signatures Date
August 6, 1999
/s/ AMAR BAHADOORSINGH
----------------------
Amar Bahadoorsingh,
President, Director, Chief Executive
Officer, Chief Financial Officer
(Principal Executive Officer; Principal Financial
and Accounting Officer)
/s/ PETER M. SCHRIBER August 6, 1999
----------------------
Peter M. Schriber,
Director
<PAGE>F-1
iLINK TELECOM, INC.
(A development stage enterprise)
Nevada
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in U.S. dollars)
For the Three Months Ended May 31, 1999
<PAGE>F-2
iLINK TELECOM, INC.
(A development stage enterprise)
Interim Consolidated Balance Sheet
(unaudited)
As at May 31, 1999
(in U.S. dollars)
<TABLE>
<S> <C> <C>
May 31, February 28,
Assets 1999 1999
----------- ------------
Current:
Cash and cash equivalents $ 65,971 $ -
Accounts receivable 2,192 -
Prepaid expenses and deposits 10,575 -
Due from related parties 13,165 -
---------- ------------
Total current assets 91,903 -
Equipment (Note 3) 63,135 15,254
Goodwill 127,253 138,746
---------- ------------
$ 282,291 $154,000
========== ============
Liabilities and Stockholders' Equity
Current:
Accrued liabilities $ 51,170 $ 27,139
---------- --------
Total current liabilities 51,170 27,139
---------- --------
Stockholders' Equity:
Share Capital (Note 4)
Common stock - $0.001 par value
25,000,000 authorized, 5,412,963
(February 28, 1999 - 1,347,204) issued and outstanding 5,413 1,347
Preferred stock -
5,000,000 authorized, 145 Series A Convertible issued and outstanding 145,000
Additional paid in capital 476,875 4,228
Preferred stock to be issued -
145,000
Deficit accumulated in the development stage (396,167) (23,714)
--------- --------
Total stockholders' equity 231,121 126,861
Commitments (Note 5)
Subsequent Events (Note 6)
-------- --------
$ 282,291 $154,000
======== ========
</TABLE>
On Behalf of the Board:
Director
- ---------------------------
Director
<PAGE>F-3
iLINK TELECOM, INC.
(A development stage enterprise)
Interim Consolidated Statement of Stockholders' Equity
(unaudited)
For the Three Months Ended May 31, 1999
(in U.S. dollars)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Common Stock
Additional Deficit
Number of Paid in Preferred Accumulated in
Shares Amount Capital Shares the Development Total
# $ $ $ Stage $ $
- ----------------------------------------------------------------------------------------------------------------------------
Issuance of common stock
(Note 4(b)) 1,347,204 $1,347 $ 4,228 $145,000 $ - $150,575
Net Loss - - - - (23,714) (23,714)
- -----------------------------------------------------------------------------------------------------------------------------
Balance, February 28, 1999 1,347,204 1,347 4,228 145,000 (23,714) 126,861
Issuance of common stock 4,065,759 4,066 472,647 - - 476,713
Net Loss - - - - (372,453) (372,453)
- -----------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 1999 5,412,963 $5,413 $476,875 $145,000 $(396,167) $231,121
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>F-4
iLINK TELECOM, INC.
(A development stage enterprise)
Interim Consolidated Statement of Operations
(unaudited)
For the Three Months Ended May 31, 1999
(in U.S. dollars)
<TABLE>
<S> <C> <C> <C>
Period
from
For the Period December 10, 1997
March 1, 1999 to For the Year Ended (Date of
May 31, 1999 February 28, 1999 Incorporation)
to May 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Revenue:
Sales$ 2,878 $ - $ - $ 2,878
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Amortization 15,425 - 15,425
Consulting fees 110,342 8,139 118,481
General and administrative 246,873 - 252,273
Professional fees 2,691 10,000 12,691
Writedown of investment - 175 175
- ----------------------------------------------------------------------------------------------------------------------------------
375,331 18,314 399,045
- -----------------------------------------------------------------------------------------------------------------------------------
Net Loss (372,453) (18,314) (396,167)
Deficit accumulated in the development stage, beginning (23,714) (5,400) -
- ------------------------------------------------------------------------------------------------------------------------------------
Deficit accumulated in the development stage, ending $ (396,167) $ (23,714) $ (396,167)
- ------------------------------------------------------------------------------------------------------------------------------------
Basic and diluted loss per share $ (.14) $ (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted average number of shares 2,629,286 1,484,299
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>F-5
iLINK TELECOM, INC.
iLINK TELECOM, INC.
(A development stage enterprise)
Statement of Cash Flows
(unaudited)
For the Three Months Ended May 31, 1999
(in U.S. Dollars)
<TABLE>
<S> <C> <C> <C>
For the For the Period Ended
Three Year December 10, 1997
Months Ended Ended (Date of Incorporation)
May 31, 1999 February 28, 1999 to May 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Operating Activities:
Net Loss $(372,453) $(18,314) $(396,167)
Adjustments to reconcile net loss to net cash used in operating
activities -
Amortization 15,425 - 15,425
Write-down of investment - 175 175
Shares issued for Services Rendered 2,140 - 2,140
Changes in operating assets and liabilities -
(Increase) Decrease in accounts receivable (2,192) - ( 2,192)
(Increase) Decrease in prepaid expenses and deposits (10,575) - (10,575)
(Increase) Decrease in due from related parties (13,165) - (13,165)
Increase (Decrease) accrued liabilities 24,031 18,139 42,170
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows used in operating activities (356,789) - (362,189)
Investing Activity:
Acquisition of capital assets (7,295) - (7,295)
Financing Activity:
Proceeds from capital contributions 430,055 - 435,455
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents $ 65,971 $ - $ 65,971
===================================================================================================================================
</TABLE>
<PAGE>F-6
iLINK TELECOM, INC.
iLINK TELECOM, INC.
(A development stage enterprise)
Notes to Financial Statements
(unaudited)
For the Three Months Ended May 31, 1999
1. Formation and Business of the Company:
iLink Telecom Inc. was incorporated on December 10, 1997 under the name of
Aquasol Inc. pursuant to the laws of Colorado and on January 9, 1998
changed its domicile to Delaware. On July 14, 1998, the company merged with
Aquasol Technologies Inc., a Nevada corporation with nominal net assets,
resulting in a change in its domicile to Nevada. On February 26, 1999, the
company acquired all of the issued and outstanding common stock of iLink
Telecom (B.C.) Inc.
The company is engaged in the development of the business of providing
automated call-processing services including prepaid call processing,
audiotex and passive inbound automated tele-surveys. The company is a
development stage enterprise and anticipates obtaining working capital to
fund the continuing development of its business through equity financings.
2. Significant Accounting Policies:
In the opinion of management, the unaudited financial statements reflect
all adjustments, which consist only of normal and recurring adjustments,
necessary to present fairly the financial position at May 31, 1999 and the
results of operations and the changes in financial position for the
respective three month period ended May 31, 1999, in accordance with
accounting principles generally accepted in the United States.
These financial statements should be read in conjunction with the financial
statements and notes thereto contained in the Company's audited
consolidated financial statements for the year ended February 28, 1999.
a) Principles of Consolidation -
The interim consolidated financial statements include the accounts of
the company and its wholly-owned subsidiary, iLink Telecom (B.C.) Inc.
(British Columbia, Canada). All significant intercompany accounts and
transactions have been eliminated.
b) Use of Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
these estimates.
c) Equipment -
Is stated at cost and are amortized on a straight-line basis over the
estimated useful lives of the related assets as follows:
Computer equipment 3 years
Furniture and office equipment 5 years
Telecom equipment 2 years
<PAGE>F-7
iLINK TELECOM, INC.
(A development stage enterprise)
Notes to Financial Statements
(unaudited)
For the Three Months Ended May 31, 1999
d) Income Taxes
The company uses the liability method of accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined
based on the difference between financial statement and tax bases of
assets and liabilities and are measured using the enacted tax rates
and laws that are expected to be in effect when the differences are
expected to reverse. Deferred tax assets are reduced by a valuation
allowance in respect of amounts considered by management to be less
likely than not of realization in future periods.
e) Goodwill -
Goodwill is being amortized on a straight-line basis over 3 years.
f) Computation of Loss per share -
Basic loss per share is computed by dividing the loss attributable to
common stockholders by the weighted average number of common shares
outstanding for that period excluding shares issued for nominal
consideration and subject to performance criteria. Diluted loss per
share is computed giving effect to all dilutive potential common
shares that were outstanding during the period. Dilutive potential
common shares consist of incremental common shares issuable upon
exercise of convertible securities. As at May 31, 1999, there were no
dilutive potential common shares and therefore the dilutive loss per
share is equivalent to the basic loss per share.
g) Foreign Currency Translation -
Assets and liabilities of integrated foreign subsidiary operations and
foreign currency denominated assets and liabilities of Canadian
operations are translated into United States dollars at exchange rates
prevailing at the balance sheet date for monetary items and at
exchange rates prevailing at the transaction date for non-monetary
items. Revenues and expenses, except amortization, are translated at
the average exchange rates for the year. Amortization is translated at
the same rate as the related assets.
Foreign exchange gains or losses on monetary assets and liabilities
are included in operations.
<PAGE>F-8
iLINK TELECOM, INC.
(A development stage enterprise)
Notes to Financial Statements
(unaudited)
For the Three Months Ended May 31, 1999
<TABLE>
<S> <C> <C> <C>
3. Equipment:
Accumulated Net Book
Cost Amortization Value
- ------------------------------------------------------------------------------------------------------------------
Computer equipment $ 15,036 $1,262 $13,774
Furniture and office equipment 51,003 2,539 48,464
Telecom equipment 1,028 131 897
- -------------------------------------------------------------------------------------------------------------------
$67,067 $3,932 $63,135
===================================================================================================================
4. Share Stock:
a) Issued - Number
of Shares $
- -----------------------------------------------------------------------------------------------------------------
Shares issued for cash on incorporation 300,113 $ 5,000
Shares issued for cash 800,000 400
Other 35,091 175
Shares issued for investment subsequently returned 198,400 99
- -----------------------------------------------------------------------------------------------------------------
Balance, February 28, 1999 1,333,604 5,674
Shares issued to acquire the capital stock of
Aquasol Technologies Inc. 416,000 -
Shares returned to treasury (204,000) -
Cancellation of shares related to investment (198,400) (99)
- -----------------------------------------------------------------------------------------------------------------
Balance, February 28, 1999 1,347,204 5,575
Shares issued for cash, net of issue costs of $945 1,903,500 430,055
Shares issued for services rendered 2,162,259 46,658
- -----------------------------------------------------------------------------------------------------------------
Balance, May 31, 1999 5,412,963 $482,288
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
b) On February 26, 1999 the company entered into an agreement to purchase
all the issued and outstanding shares of iLink Telecom, (B.C.) Inc.
The consideration comprised 145 preferred shares which were issued
March 31, 1999. The 145 preferred shares are designated as Series A
Convertible Preferred Stock with the following rights and
restrictions:
The shares are entitled to $1,000 per share upon
liquidation, dissolution or winding up of the Company. In addition,
the shares will be converted into common stock on the later of August
26, 1999 or five days after the effective date of a registration
statement covering the common stock of the Company to be issued upon
the conversion of the Series A Convertible Preferred Stock. The
conversion rate for each preferred share is $1,000 divided by 75% of
the average market price of the common stock for the five trading days
immediately preceding the conversion date.
<PAGE>F-9
iLINK TELECOM, INC.
(A development stage enterprise)
Notes to Financial Statements
(unaudited)
For the Three Months Ended May 31, 1999
c) During the three month period ended May 31, 1999, the Company issued
2,140,000 common shares to certain officers and employees and
consultants for services to be rendered. These shares are subject to
vesting agreements which provide that the shares be held by the
Company undelivered and released upon the achievement of milestones as
set out in the vesting agreements. In the event the milestones are not
met within a specified period or that the individual ceases to be an
employee of the Company, any shares not released at such time will be
forfeited to the Company. As a result of the vesting provisions, the
Company has recorded the issuance of the shares at nominal value equal
to their par value. In the event that it becomes probable that these
shares will be earned the Company will record compensation expense at
each financial statement date over the period services are performed
based on the difference between the nominal consideration received and
quoted market price of the Company's stock.
d) During the three month period ended May 31, 1999 the Company issued
22,259 common shares in exchange for fixed assets. The fair market
value of the assets acquired has been determined to be $44,518.
5. Commitments:
a) The company entered into an agreement for consulting services, dated
May 14, 1999 for a term of six weeks beginning May 15, 1999 to June
30, 1999 and agreed to make the following payments:
June 15, 1999 $10,000
June 30, 1999 10,000
July 15, 1999 15,000
b) The company took assignment and assumed all right and obligations of
a lease for office premises effective June 1, 1999 with the minimum
lease payments and share of operating costs as follows:
2000 $ 80,434
2001 107,246
2002 107,246
2003 35,748
The company also took assignment and assumed all rights and
obligations of other leases for office premises effective February 1,
1999 and April 30, 1999 with minimum lease payments as follows:
2000 $10,191
2001 924
c) Entered into an agreement for consulting services pursuant to which
the Company agreed to pay $5,000 CDN per month for the initial twelve
month term of the agreement, commencing March 1, 1999.
<PAGE>F-10
iLINK TELECOM, INC.
(A development stage enterprise)
Notes to Financial Statements
(unaudited)
For the Three Months Ended May 31, 1999
d) Entered into an agreement with a company controlled by a Director for
consulting services pursuant to which the Company agreed to pay $5,000
per month for the five year term of the agreement, commencing April 1,
1999.
6. Major Customers and Suppliers
a) The Company earns its revenue from one customer. As at May 31, 1999,
the aggregate accounts receivable balance relating to this customer
was $nil [1998 - $nil].
b) The Company currently has four main equipment suppliers. However, the
company believes that other suppliers could provide the required
components on comparable terms. A change in supplier, however, could
cause a delay in the ability of the company to provide its service and
could result in possible lost revenue.
7. Subsequent Events:
Subsequent to the first quarter-end, the company:
a) established a stock option plan pursuant to which options to acquire a
maximum of 500,000 common shares may be granted; and,
b) granted options to employees to acquire 23,000 common shares at an
exercise price of $5.25 on June 9, 1999, exercisable up to and
including June 9, 2000.
8. Uncertainty Due to the Year 2000 Issue:
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect iLink
Telecom Inc.'s ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue affecting
iLink Telecom Inc., including those related to the efforts of customers,
suppliers, or other third parties, will be fully resolved.
<PAGE>F-11
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
iLink Telecom Inc.
We have audited the accompanying consolidated balance sheets of iLink Telecom
Inc. (a development stage enterprise) as of February 28, 1999 and 1998, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the year ended February 28, 1999, and for each of the periods from
December 10, 1997 (date of incorporation) to February 28, 1999 and February 28,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of iLink Telecom Inc.
at February 28, 1999 and 1998 and the results of its operations and its cash
flows for the year ended February 28, 1999 and for each of the periods from
December 10, 1997 (date of incorporation) to February 28, 1999 and February 28,
1998, in conformity with accounting principles generally accepted in the United
States.
Vancouver, Canada, /s/ ERNST & YOUNG
April 16, 1999. ---------------------
Chartered Accountants
<PAGE>F-12
iLink Telecom Inc.
(A development stage enterprise)
CONSOLIDATED BALANCE SHEETS
As at February 28
<TABLE>
<S> <C> <C>
1999 1998
$ $
- --------------------------------------------------------------------------------------------------
ASSETS
Current
Other assets -- 274
- --------------------------------------------------------------------------------------------------
Total current assets -- 274
- --------------------------------------------------------------------------------------------------
Equipment [note 4] 15,254 --
Goodwill [note 3] 138,746 --
- --------------------------------------------------------------------------------------------------
154,000 274
- --------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accrued liabilities 27,139 --
- --------------------------------------------------------------------------------------------------
Total current liabilities 27,139 --
- --------------------------------------------------------------------------------------------------
Stockholders' equity Share capital - [note 5] Common
stock - $0.001 par value 25,000,000 authorized, 1,347,204
issued and outstanding 1,347 1,333
Additional paid in capital 4,228 4,341
Preferred stock to be issued [notes 3 and 6] 145,000 --
Deficit accumulated in the development stage (23,714) (5,400)
- --------------------------------------------------------------------------------------------------
Total stockholders' equity 126,861 274
- --------------------------------------------------------------------------------------------------
154,000 274
- --------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes
On behalf of the Board:
----------- ----------
Director Director
<PAGE>F-13
iLink Telecom Inc.
(A development stage enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<S> <C> <C> <C>
Period from Period from
December 10, December 10, 1997
Year 1997 (date of (date of
ended incorporation) incorporation) to
February 28, to February 28, February 28,
1999 1998 1999
$ $ $
- ------------------------------------------------------------------------------------------------------------
EXPENSES
General and administrative -- 5,400 5,400
Writedown of investment [note 3] 175 -- 175
Consulting fees 8,139 -- 8,139
Professional fees 10,000 -- 10,000
- ------------------------------------------------------------------------------------------------------------
Loss for period (18,314) (5,400) (23,714)
Deficit beginning of period (5,400) -- --
- ------------------------------------------------------------------------------------------------------------
Deficit end of period (23,714) (5,400) (23,714)
- ------------------------------------------------------------------------------------------------------------
Basic and fully diluted loss per share [note 5[c]] (0.01) (0.01)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes
<PAGE>F-14
iLink Telecom Inc.
(A development stage enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Common stock Deficit
------------ Additional accumulated
Number paid in Shares to in the development
of shares Amount capital be issued stage Total
# $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Issuance of common stock [note 5[b]] 1,333,604 1,333 4,341 -- -- 5,674
Loss -- -- -- -- (5,400) (5,400)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, February 28, 1998 1,333,604 1,333 4,341 (5,400) 274
Issuance of common stock [notes 1and 3] 416,000 416 (416) --
Shares returned to treasury [note 5(b)] (204,000) (204) 204 --
Cancellation of shares [note 3] (198,400) (198) 99 (99)
Preferred stock to be issued 145,000 145,000
Loss (18,314) (18,314)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, February 28, 1999 1,347,204 1,347 4,228 145,000 (23,714) 126,861
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>F-15
iLink Telecom Inc.
(A development stage enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
Period from Period from
December 10, December 10, 1997
Year 1997 (date of (date of
ended incorporation) incorporation) to
February 28, to February 28, February 28,
1999 1998 1999
$ $ $
- ------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Loss (18,314) (5,400) (23,714)
Adjustments to reconcile net loss to net cash used
in operating activities:
Writedown of investment 175 -- 175
Changes in operating assets and liabilities:
Accrued liabilities 18,139 -- 18,139
- ------------------------------------------------------------------------------------------------------------
Net cash used in operating activities -- (5,400) (5,400)
- ------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from capital contributions -- 5,400 5,400
- ------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities -- 5,400 5,400
- ------------------------------------------------------------------------------------------------------------
Net change in cash during the period and cash,
end of period -- -- --
- ------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes
<PAGE>F-16
iLink Telecom Inc.
(A development stage enterprise)
NOTES TO FINANCIAL STATEMENTS
February 28, 1999 and 1998
1. FORMATION AND BUSINESS OF THE COMPANY
iLink Telecom Inc. ("Company") was incorporated on December 10, 1997 under the
name of Aquasol Inc. pursuant to the laws of Colorado and on January 9, 1998
changed its domicile to Delaware. On July 14, 1998 the Company merged with
Aquasol Technologies Inc., a Nevada corporation with nominal net assets,
resulting in a change in its domicile to Nevada. On February 26, 1999, the
Company acquired all of the issued and outstanding common stock of iLink Telecom
(B.C.) Inc.
The Company is engaged in the development of the business of providing automated
call-processing services including pre-paid call processing, auditotex and
passive inbound automated tele-surveys. The Company is a development stage
enterprise and anticipates obtaining working capital to fund the continuing
development of its business through equity financings.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary, iLink Telecom (B.C.) Inc. (British Columbia,
Canada). All significant intercompany accounts and transactions have been
eliminated.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from these estimates.
Equipment
Equipment is stated at cost and is being depreciated on a straight-line basis
over the estimated useful lives of the related assets as follows:
Telecom equipment 2 years
Computer equipment 3 years
Furniture and office equipment 5 years
Depreciation will commence on March 1, 1999.
<PAGE>F-17
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Income taxes
The Company uses the liability method of accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on the
difference between financial statement and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that are expected to be in
effect when the differences are expected to reverse. Deferred tax assets are
reduced by a valuation allowance in respect of amounts considered by management
to be less likely than not of realization in future periods.
Goodwill
Goodwill is being amortized on a straight-line basis over 3 years commencing
March 1, 1999.
Computation of loss
Basic loss per share is computed by dividing the loss attributable to common
stockholders by the weighted average number of common shares outstanding for
that period. Diluted loss per share is computed giving effect to all dilutive
potential common shares that were outstanding during the period. Dilutive
potential common shares consist of incremental common shares issuable upon
exercise of convertible securities. As at February 28, 1999, there were no
dilutive potential common shares and therefore the dilutive loss per share is
equivalent to the basic loss per share.
3. ACQUISITIONS
i) Pursuant to the terms of a share purchase agreement dated February 26,
1999 between the Company and ABDE Holdings Ltd., a British Columbia
company, the Company acquired all of the issued and outstanding share
capital of iLink Telecom (B.C.) Inc., formerly 579782 B.C. Ltd., for the
following consideration:
-----------------------------------------------------------------------
Purchase price $ 145,000
----------------------------------------------------------------------
Consideration to be given:
Preferred Stock 145,000
-----------------------------------------------------------------------
145,000
-----------------------------------------------------------------------
The Preferred Stock was issued subsequent to the year end [see note 6].
<PAGE>F-18
3. BUSINESS ACQUISITIONS (cont'd)
The acquisition has been accounted for using the purchase method of accounting
and the purchase price has been allocated according to the estimated fair values
of the assets and liabilities of 579782 B.C. Ltd. as follows:
$
- -----------------------------------------------------------------------------
Working capital deficiency (9,000)
Equipment 15,254
Goodwill 138,746
- -----------------------------------------------------------------------------
145,000
- -----------------------------------------------------------------------------
ii) On July 14, 1998, the Company merged with Aquasol Technologies Inc. a
Nevada corporation with nominal net assets. Pursuant to the merger, the
shareholders of each of the merging companies received one common share
of the merged company for each common share previously held. Accordingly,
the shareholders of the Company received 1,333,491 common shares and the
shareholders of Aquasol Technologies Inc. received 416,000 common shares.
As Aquasol Technologies Inc. had nominal net assets, the merger had no
impact on the assets or liabilities of the Company.
iii) During the year ended February 28, 1998, the Company issued 35,091 shares
of its common stock in exchange for 175,456 Series I common shares of STB
Corp., a corporation with nominal net assets. In December 1998, STB Corp.
was dissolved and accordingly the nominal value assigned to the
acquisition of $175 was written off.
iv) On January 15, 1998, the Company acquired 100% of the outstanding shares
of Noralta Technologies Corp. ("Noralta") for 198,400 common shares from
treasury. On February 3, 1999, the Company and the former Noralta
shareholders agreed to rescind the transaction.
4. EQUIPMENT
1999 1998
Cost Cost
$ $
- -------------------------------------------------------------------------------
Telecom equipment 1,028 --
Computer equipment 8,191 --
Furniture and office equipment 6,035 --
- -------------------------------------------------------------------------------
15,254 --
- -------------------------------------------------------------------------------
<PAGE>F-19
5. SHARE STOCK
[a] Authorized
Holders of the Common Stock are entitled to one vote per share and to share
equally in any dividends declared and distributions in liquidation.
[b] Issued
<TABLE>
<S> <C> <C>
# of Shares $
- --------------------------------------------------------------------------------------------------
Shares issued for cash on incorporation 300,113 5,000
Shares issued for cash 800,000 400
Other 35,091 175
Shares issued for investment subsequently returned [note 3] 198,400 99
- --------------------------------------------------------------------------------------------------
Balance, February 28, 1998 1,333,604 5,674
- --------------------------------------------------------------------------------------------------
Shares issued to acquire the capital stock of Aquasol
Technologies Inc. [notes 1 and 3] 416,000 --
Shares returned to treasury (204,000) --
Cancellation of shares related to investment [note 3] (198,400) (99)
- --------------------------------------------------------------------------------------------------
Balance, February 28, 1999 1,347,204 5,575
- --------------------------------------------------------------------------------------------------
</TABLE>
On February 3, 1999, the Company consolidated its share capital by way of a
reverse stock split on the basis of one new common share for each five old
common shares. In addition concurrent with the merger referred to in note 1, the
Company changed the par value of its common shares from $0.0001 to $0.001.
All outstanding shares in these financial statements have been retroactively
adjusted to reflect this share consolidation and change in par value.
[c] The basic and diluted loss per share for the periods is based on the
following:
<TABLE>
<S> <C> <C>
December 10, 1997
(date of
March 1, 1998 to incorporation)
February 28, 1999 to February 28,
1998
$ $
- ----------------------------------------------------------------------------------------------------
Net loss for the period (18,314) (5,400)
Weighted average number of common shares used in computation
adjusted for the reverse consolidation of stock 5:1) 1,480,870 911,634
Basic and fully diluted loss per share (0.01) (0.01)
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>F-20
6. SUBSEQUENT EVENTS
Subsequent to the year end, the Company:
i) issued, pursuant to three private placements, 250,000 common shares for
gross proceeds of $12,500, 1,300,000 common shares for gross proceeds of
$65,000 and 353,500 common shares for gross proceeds of $353,500.
ii) entered into an agreement for financial consulting services pursuant to
which the Company agreed to pay $12,500 upon execution of the agreement,
$5,000 per month for the initial twelve month term of the agreement and
issue 300,000 common shares.
iii) amended the authorized capital to include 5,000,000 preferred shares,
non-voting with a par value of $.001 per share, issuable in series. 145
preferred shares were designated as Series A Convertible Preferred Stock
with the following rights and restrictions:
The shares are entitled to $1,000 per share upon liquidation, dissolution
or winding up of the Company. In addition, the shares will be converted
into common stock on the later of August 26, 1999 or five days after the
effective date of a registration statement covering the common stock of
the Company to be issued upon the conversion of the Series A Convertible
Preferred Stock. The conversion rate for each preferred share is $1,000
divided by 75% of the average market price of the common stock for the
five trading days immediately preceding the conversion date.
The 145 Series A Convertible Preferred Stock was issued pursuant to the
acquisition referred to in note 3.
iv) issued 1,590,000 common shares to certain principals and employees for
nominal consideration.
ARTICLES OF INCORPORATION
OF
AFD CAPITAL GROUP, INC
Know all men by these presents;
That we the undersigned, have this day voluntarily associated ourselves together
for the purpose of forming a corporation under and pursuant to the provisions of
Nevada Revised Statutes 78.010 To Nevada Revised Statutes 78.090 inclusive, as
amended, and certify that;
ARTICLE I
The name of this corporation is AFD Capital Group, Inc.
The name and post office address of the incorporator signing the Articles of
Incorporation is: Richard D. Fritzier, 1800 E. Sahara Avenue, Suite 107, Las
Vegas, Nevada 89104. The name and address of the first member of the First Board
of Directors is: Richard D. Fritzier 1800 E. Sahara Avenue, Suite 107, Las
Vegas, Nevada 89104.
ARTICLE II
The Resident Agent of this corporation in Nevada shall be Nevada Corporate
Services located at 1800 E. Sahara Avenue, Suite 107, Las Vegas, Clark County,
Nevada, 89104. Offices for the transaction of any business of the Corporation,
and where meetings of the Board of Directors and of Stockholders may be held,
may be established and maintained in any other part of the State of Nevada, or
in any other state, territory or possession of the United States of America, or
in any foreign country as the Board of Directors may, from time to time
determine.
ARTICLE III
The nature of the business and the objects and purpose proposed to be
transacted, promoted or carried on by the Corporation is to conduct any lawful
activity in accordance with the Laws of the State of Nevada and the United
States of America, including but not limited to the following:
1. Shall have the rights, privileges and powers as may be conferred upon
a corporation by any existing law.
2. May at any time exercise such rights, privileges and powers, when not
inconsistent with the purposes and objects for which this corporation
is organized.
3. This corporation shall have perpetual existence.
4. To sue or be sued in any Court of Law.
<PAGE>
5. To make contracts.
6. To hold, purchase and convey real and personal estate and to mortgage
or lease any such real and personal estate with its franchises. The
power to hold real and personal estate shall include the power to take
the same by device or bequest in this state, or in any other state,
territory or country.
7. To appoint such officers and agents as the affairs of the Corporation
shall require, and to allow them suitable compensation.
8. To make By-Laws not inconsistent with the Constitution or Laws of the
United States, or of the State of Nevada, for the management,
regulation and government of its affairs and property, the transfer of
its stock, the transaction of its business, and the calling and
holding of meetings of its Stockholders.
9. To wind up and dissolve itself, or be wound up and dissolved,
according to existing law.
10. To adopt or use a common seal or stamp, and alter the same at
pleasure. The use of a seal or stamp by the Corporation on any
corporate document is not necessary. The Corporation may use a seal or
stamp if it desires, but such use or nonuse shall not in any way
affect the legality of the document.
11. To borrow money and contract debts when necessary for the transaction
of its business, or for the exercise of its corporate rights,
privileges or franchises, or for any other lawful purpose of its
incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness,
payable at a specific time or times, or payable upon the happening of
a specified event or events, whether secured by mortgage, pledge or
other security, or unsecured, for money borrowed, or in payment for
property purchased, or acquired, or for any other lawful object.
12. To guarantee, purchase, hold, take, obtain, receive, subscribe for,
own, use, dispose of, sell, exchange, lease, lend, assign, mortgage,
pledge, or otherwise acquire, transfer or deal in or with bonds or
obligations of, or shares, securities or interests in or issued by,
any person, government, governmental agency or political subdivision
of government, and to exercise all the rights, powers and privileges
of ownership of such an interest, including the right to vote, if any.
13. To purchase, hold, sell and transfer shares of its own capital stock,
and use therefor its capital, capital surplus, surplus, or other
property or funds.
14. To conduct business, have one or more offices, and hold, purchase,
mortgage and convey real and personal property in this state, and in
any of the several states, territories, possessions and dependencies
of the United States, the District of Columbia, and any foreign
countries.
<PAGE>
15. To do everything necessary and proper for the accomplishment of the
objects enumerated in its Articles of Incorporation, or in any
amendment thereof or necessary or incidental to the protection and
benefit of the Corporation, and, in general, to carry on any lawful
business necessary or incidental to the attainment of the objects of
the Corporation, whether or not the business is similar in nature to
the objects set forth in the Articles of Incorporation, or in any
amendment thereof.
16. To make donations for public welfare or for charitable, scientific or
educational purposes.
17. To enter into partnerships, general or limited, or joint ventures, in
connection with any lawful activities.
ARTICLE IV
The capital stock of this corporation shall consist of twenty-five thousand
shares of common stock (25,000), without nominal or par value, all of which
stock shall be entitled to voting power. The Corporation may issue the shares of
stock for such consideration as may be fixed by the Board of Directors.
ARTICLE V
The members of the governing board of this corporation shall be styled
directors. The Board of Directors shall consist of at least one (1) person. The
number of directors of this corporation may, from time to time, be increased or
decreased by an amendment to the By-Laws in that regard and without the
necessity of amending the Articles of Incorporation. A majority of the Directors
in office, present at any meeting of the Board of Directors, duly called,
whether regular or special, shall always constitute a quorum for the transaction
of business, unless the By-Laws otherwise provide.
ARTICLE VI
This corporation shall have a president, a secretary, a treasurer, and a
resident agent, to be chosen by the Board of Directors, any person may hold two
or more offices.
ARTICLE VII
The capital stock of the Corporation, after the fixed consideration thereof has
been paid or performed, shall not be subject to assessment, and the individual
Stockholders of this corporation shall not be individually liable for the debts
and liabilities of the Corporation, and the Articles of Incorporation shall
never be amended as to the aforesaid provisions.
<PAGE>
ARTICLE VIII
The Board of Directors is expressly authorized: (subject to the By-Laws, if any,
adopted by the Stockholders)
1. To make, alter or amend the By-Laws of the Corporation.
2. To fix the amount in cash or otherwise, to be reserved as working
capital.
3. To authorize and cause to be executed mortgages and liens upon the
property and franchises of the Corporation.
4. To by resolution or resolutions passed by a majority of the whole
board, designate one or more committees, each committee to consist of
one or more of the Directors of the Corporation, which, to the extent
provided in the resolution or resolutions or in the By-Laws of the
Corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers on which the Corporation
desires to place a seal. Such committee or committees shall have such
name or names as may be stated in the By-Laws of the Corporation or as
may be determined from time to time by resolution adopted by the Board
of Directors.
5. To sell, lease or exchange all of its property and assets, including
its goodwill and its corporate franchises, upon such terms and
conditions as the board deems expedient and for the best interests of
the Corporation, when and as authorized by the affirmative vote of the
Stockholders holding stock in the Corporation entitling them to
exercise at least a majority of the voting power given at a
Stockholders meeting called for that purpose.
ARTICLE IX
The Directors of this corporation need not be Stockholders.
ARTICLE X
In the absence of fraud, no contract or other transaction of the Corporation
shall be affected by the fact that any of the Directors are in any way
interested in, or connected with, any other party to such contract or
transaction, or are themselves, parties to such contract or transaction,
provided that this interest in any such contract or transaction of any such
director shall at any time be fully disclosed or otherwise known to the Board of
Directors, and each and every person who may become a director of the
Corporation is hereby relieved of any liability that might otherwise exist from
contracting with the Corporation for the benefit of himself or any firm,
association or corporation in which he may be in any way interested.
<PAGE>
ARTICLE XI
No director or officer of the Corporation shall be personally liable to the
Corporation or any of its Stockholders for damages for breach of fiduciary duty
as a director or officer involving any act or omission of any such director or
officer provided, however, that the foregoing provision shall not eliminate or
limit the liability of a director or officer for acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law, or the payment of
dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any
repeal or modification of this Article by the Stockholders of the Corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director or officer of the Corporation for acts or
omissions prior to such repeal or modification.
ARTICLE XII
Except to the extent limited or denied by Nevada Revised Statutes 78.265
Shareholders shall have no preemptive right to acquire unissued shares, treasury
shares or securities convertible into such shares, of this corporation.
I, the undersigned, being the incorporator hereinbefore named for the purpose of
forming a corporation pursuant to the general corporation law of the State of
Nevada, do make and file these Articles of Incorporation, hereby declaring and
certifying that the facts herein stated are true, and accordingly have hereunto
set my hand.
State of Nevada )
)ss
Clark County )
On March 24, 1997 personally appeared before me, the undersigned, a Notary
Public, Richard Fritzler, known to me the person whose name is subscribed to the
foregoing document and acknowledged to me that he executed the same.
Notary Public-State Of Nevada
COUNTY OF CLARK
ALAN HERBERT RUSSELL
My Commission Expires October 5,1998
----------------------------------
Notary Public
AFD CAPITAL GROUP, INC.
AMENDMENT
to the
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Nevada Revised Statues, AFD Capital
Group, Inc. adopts the following Amendment to its Articles of Incorporation:
The following amendment was adopted to be effective June 18, 1998, pursuant
to Section 78.390 of the Nevada Revised Statues. Such amendment was adopted by a
vote of the shareholders as set forth below:
<TABLE>
<S> <C> <C> <C>
Designation of Share Number of Number of Shares Shares Voted For or
Class Entitled to Vote Outstanding Shares Entitled to Vote Against Amendment
------------------------ ------------------- ----------------- -------------------
For Against
Common Stock 2,080,000 2,080,000 1,637,100 --
</TABLE>
The number of shares voted in favor of the amendment was sufficient for
approval.
Text of Amendment
Article I is amended to read as follows:
The name of the corporation is Aquasol Technologies, Inc.
AFD Capital Group, Inc.
By ______________________________
President and Secretary
PROVINCE OF British Columbia
On the 19th day of June, 1998, before me personally came Andrew Hromyk to
me known, who, being by me duly sworn, did depose and say that he is the
President and Secretary of AFD Capital Group, Inc., the corporation described in
and which executed the foregoing instrument by the order of the Board of
Directors of said corporation, and that he signed his name thereto by like
order.
Witness my hand and official seal.
------------------------------
Notary Public
My commission expires:
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
AQUASOL TECHNOLOGIES, INC.
(Name of Corporation)
I the undersigned President and Secretary of Aquasol Technologies, Inc. do
hereby certify that the Board of Directors of the said corporation at a meeting
duly convened, held February 3, 1999 adopted a resolution to amend the original
Articles of Incorporation:
Article I
The name of this corporation is iLink Telecom, Inc.
The name and post office address of the incorporator signing the Articles
of Incorporation is: Richard D. Fritzler, 1800 E. Sahara Avenue, #107, Las
Vegas, Nevada 89104. The name and address of the first member of the First
Board of Directors is Richard D. Fritzler, 1800 E. Sahara Avenue, #107, Las
Vegas, Nevada 89104.
The number of shares outstanding and entitled to vote on an amendment of the
Articles of Incorporation is 6,827,456: that the said change(s) and amendment
have been consented to and approved by a majority of the stockholders holding at
least a majority of each class of stock outstanding and entitled to vote
thereon.
-----------------------
President and Secretary
ACKNOWLEDGMENT;
PROVINCE OF BRITISH COLUMBIA
CITY OF VANCOUVER
On February 3, 1999 personally appeared before me, a Notary Public, Valerie
Moschetti, who acknowledged she executed the above instrument on behalf of said
Corporation.
--------------
NOTARY PUBLIC
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
ILINK TELECOM, INC.
(Name of Corporation)
I the undersigned President and Secretary of iLink Telecom, Inc. do hereby
certify that the Board of Directors of the said corporation at a meeting duly
convened, held February 3, 1999 adopted a resolution to amend the original
Articles of Incorporation:
BE IT RESOLVED THAT, effective February 14, 1999 each issued and
outstanding share of this Corporation's Common stock shall automatically convert
into 0.20 shares of this Corporation's Common stock. Notwithstanding the above,
no fractional shares will be issued. Any shareholder of this Corporation who on
February 14, 1999 owned less than 5 shares, and who would therefor otherwise
receive less than one share of this Corporation's Common stock shall be entitled
to receive $.001 for each share of this Corporation's Common stock owned by such
shareholder immediately prior to the effective date of this amendment, provided
such shareholder sends a written request for payment to this Corporation. Any
fractional share, which as a result of the foregoing would otherwise be issued
to a shareholder of this Corporation, shall be rounded up to the nearest whole
share.
---------------------------
President and Secretary
ACKNOWLEDGMENT;
PROVINCE OF BRITISH COLUMBIA
CITY OF VANCOUVER
On May , 1999 personally appeared before me, a Notary Public, Amar
Bahadoorsingh, who acknowledged he executed the above instrument on behalf of
said Corporation.
----------------
NOTARY PUBLIC
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
iLink Telecom, Inc.
(Name of Corporation)
I the undersigned President and Secretary of iLink Telecom, Inc. do hereby
certify that the Board of Directors of the said corporation at a meeting duly
convened, held March 17, 1999 adopted a resolution to amend the original
Articles of Incorporation:
Article IV
The capital stock of this Corporation shall consist of twenty five
million (25,000,000) shares of common stock, with a par value of $0.001
per share, all of which stock shall be entitled to voting power, and
5,000,000 shares of preferred stock, with a par value of $0.001 per
share. The Corporation may issue the shares of stock for such
consideration as may be fixed by the Board of Directors.
Article IV A
Preferences, Limitations and Relative Rights of Capital Stock
(a) No share of the common stock shall have any preference over or
limitation in respect to any other share of such common stock. All
shares of common stock shall have equal rights and privileges,
including the following:
1. All shares of common stock shall share equally in dividends.
Subject to the applicable provisions of the laws of this State,
the Board of Directors of the Corporation may, from time to time,
declare and the corporation may pay dividends in cash, property,
or its own shares, except when the Corporation is insolvent or
when the payment thereof would render the Corporation insolvent
or when the declaration or payment thereof would be contrary to
any restrictions contained in these Articles of Incorporation.
When any dividend is paid or any other distribution is made, in
whole or in part, from sources other than unreserved and
unrestricted earned surplus, such dividend or distribution shall
be identified as such, and the source and amount per share paid
from each source shall be disclosed to the stockholder receiving
the same concurrently with the distribution thereof and to all
other stockholders not later than six months after the end of the
Corporation's fiscal year during which such distribution was
made.
2. All shares of common stock shall share equally in
distributions in partial liquidation. Subject to the applicable
provisions of the laws of this State, the Board of Directors of
the Corporation may distribute, from time to time, to its
stockholders in partial liquidation, out of stated capital or
capital surplus of the Corporation, a portion of its assets in
cash or property, except when the Corporation is insolvent or
when such distribution would render the Corporation insolvent.
Each such distribution, when made, shall be identified as a
distribution in partial liquidation, out of stated capital or
capital surplus, and the source and amount per share paid from
each source shall be disclosed to all stockholders of the
<PAGE>
Corporation concurrently with the distribution thereof. Any such
distribution may be made by the Board of Directors from stated
capital without the affirmative vote of any stockholders of the
Corporation.
3. Each outstanding share of common stock shall be entitled to
one vote at stockholders' meetings, either in person or by proxy.
(b) The designations, powers, rights, preferences, qualifications,
restrictions and limitations of the preferred stock shall be
established from time to time by the Corporation's Board of
Directors, in accordance with the Nevada Corporation Law.
(c) 1. Cumulative voting shall not be allowed in elections of directors
or for any purpose.
2. No holders of shares of capital stock of the Corporation shall
be entitled, as such, to any preemptive or preferential right to
subscribe to any unissued stock or any other securities which the
Corporation may now or hereafter be authorized to issue. The
Board of Directors of the Corporation, however, in its discretion
by resolution, may determine that any unissued securities of the
Corporation shall be offered for subscription solely to the
holders of common stock of the Corporation, or solely to the
holders of any class or classes of such stock, which the
Corporation may now or hereafter be authorized to issue, in such
proportions based on stock ownership as said Board in its
discretion may determine.
3. The Board of Directors may restrict the transfer of any of the
Corporation's stock issued by giving the Corporation or any
stockholder "first right of refusal to purchase" the stock, by
making the stock redeemable, or by restricting the transfer of
the stock under such terms and in such manner as the directors
may deem necessary and as are not inconsistent with the laws of
this State. Any stock so restricted must carry a conspicuous
legend noting the restriction and the place where such
restriction may be found in the records of the Corporation.
4. The judgment of the Board of Directors as to the adequacy of
any consideration received or to be received for any shares,
options, or any other securities which the Corporation at any
time may be authorized to issue or sell or otherwise dispose of
shall be conclusive in the absence of fraud, subject to the
provisions of these Articles of Incorporation and any applicable
law.
<PAGE>
The number of shares outstanding and entitled to vote on an amendment of the
Articles of Incorporation is 1,597,204: that the said change(s) and amendment
have been consented to and approved by a majority of the stockholders holding at
least a majority of each class of stock outstanding and entitled to vote
thereon.
------------------------
President and Secretary
ACKNOWLEDGMENT;
PROVINCE OF BRITISH COLUMBIA
CITY OF VANCOUVER
On , 1999 personally appeared before me, a Notary Public, Amar Bahadoorsingh,
who acknowledged he executed the above instrument on behalf of said Corporation.
---------------
NOTARY PUBLIC
BYLAWS OF
AFD CAPITAL GROUP, INC
A NEVADA CORPORATION
ARTICLE I
STOCKHOLDER'S MEETINGS
A) ANNUAL MEETINGS shall be held on or before the end of March of each
year, or at such other time as may be determined by the board of directors or
the president, for the purposes of electing directors, and transacting such
other business as may properly come before the meeting.
B) SPECIAL MEETINGS may be called at any time by the Board of Directors
or by the President, and shall be called by the President or the Secretary at
the written request of the holders of a majority of the shares then outstanding
and entitled to vote.
C) WRITTEN NOTICE stating the time and place of the meeting, signed by
the President or the Secretary, shall be served either personally or by mail,
not less than ten (10) nor more than sixty (60) days before the meeting upon
each Stockholder entitled to vote. Said notice shall state the purpose for which
the meeting is called, no other business may be transacted at said meeting,
unless by unanimous consent of all Stockholders present, either in person or by
proxy.
D) PLACE of all meetings shall be at the principal office of the
Corporation, or at such other place as the Board of Directors or the President
may designate.
E) A QUORUM necessary for the transaction of business at a Stockholder's
meeting shall be a majority of the stock issued and outstanding, either in
person or by proxy. If a quorum is not present, the Stockholders present may
adjourn to a future time, and notice of the future time must be served as
provided in Article I, C), if a quorum is present they may adjourn from day to
day, without notice.
F) VOTING: Each stockholder shall have one vote for each share of stock
registered in his name on the books of the Corporation, a majority vote shall
authorize any Corporate action, except the election of the Directors, who shall
be elected by a plurality of the votes cast.
G) PROXY: At any meeting of the stockholders any stockholder may be
represented and vote by a proxy, appointed in writing and signed. No proxy shall
be valid after the expiration of six (6) months from date of its execution,
unless the person executing it specifies the length of time it is to continue in
force, which in no case shall exceed seven (7) years from its execution.
<PAGE>
H) CONSENT: Any action, except election of Directors, which may be taken
by a vote of stockholders at a meeting, may be taken without a meeting if
authorized by a written consent of shareholders holding at least a majority of
the voting power.
ARTICLE II
BOARD OF DIRECTORS
A) OFFICE: At least one person chosen annually by the stockholders shall
constitute the Board of Directors. Additional Directors may be appointed by the
Board of Directors. The Director's term shall be for one year, and Directors may
be re-elected for successive annual terms.
B) DUTIES: The Board of Directors shall be responsible for the control
and management of the affairs, property and interests of the Corporation and may
exercise all powers of the Corporation, except as are in the Articles of
Incorporation or by statute expressly conferred upon or reserved to the
stockholders.
C) MEETINGS: Regular meetings of the Board of Directors shall be held
immediately following the annual meeting of the stockholders, at the place of
the annual meeting of the stockholders, or at such other time and place as the
Board of Directors shall by resolution establish. Notice of any regular meeting
shall not be required, unless the Board of Directors shall change the time or
place of the regular meeting, notice must be given to each Director who was not
present at the meeting at which change was made. Special meetings may be called
by the President or by one of the Directors at such time and place specified in
the notice or waiver of notice thereof. The notice of special meeting shall be
mailed to each Director at least five (5) days before the meeting day, or if the
notice is delivered personally, by telegram or telephone then the notice must be
delivered the day before the meeting. Special meetings may be called without
notice, provided a written waiver of notice is executed by a majority of the
Board of Directors.
D) CHAIRMAN: At all meetings of the Board of Directors, the Chairman
shall preside. If there is no Chairman one shall be chosen by the Directors.
E) QUORUM: A majority of the Board of Directors shall constitute a
quorum.
F) VACANCIES: Any vacancy in the Board of Directors, unless the vacancy
was caused by stockholder removal of a Director, shall be filled for the
unexpired term by a majority vote of the remaining Directors, though less than a
quorum, at any regular or special meeting of the Board of Directors called for
that purpose.
G) A RESOLUTION in writing signed by a majority of the Board of
Directors, shall constitute action by the Board, with the same force and effect
as though such resolution had been passed at a duly convened meeting. The
Secretary shall record each resolution in the minute book.
<PAGE>
H) COMMITTEES may be appointed by a majority of the Board of Directors
from its number, by resolution, with such powers and authority to manage the
business as granted by the resolution.
I) SALARIES of the Corporate Officers shall be determined by the Board
of Directors.
ARTICLE III
OFFICERS
A) TITLE: This Corporation shall have a president, secretary, treasurer,
and such other officers as may be necessary. Any two or more offices may be held
by the same person. The officers shall be appointed by the Board of Directors at
the regular annual meeting of the Board.
B) DUTIES:
THE PRESIDENT SHALL:
Be the chief executive officer of the Corporation.
Preside at all meetings of the Directors and the Stockholders.
Sign or countersign all certificates, contracts and other instruments
of the Corporation as authorized by the Board of Directors and shall
perform all such other incidental duties.
THE SECRETARY SHALL:
have charge of the corporate books, responsible to make the necessary
reports to the Stockholders and the Board of Directors.
prepare and disseminate notices, waivers, consents, proxies and other
material necessary for all meetings.
file the sixty (60) day list of officers, directors, name of the
resident agent and the filing fee to the Secretary of State.
file the designation of resident agent in the office of the County
Clerk in which the principal office of the Corporation in Nevada is
located.
file the annual list of officers, directors and designation of
resident agent along with the filing fee.
be the custodian of the certified articles of incorporation, bylaws
and amendments thereto.
<PAGE>
supply to the Resident Agent or Principal Corporate Nevada Office the
name of the custodian of the stock ledger or duplicate stock ledger,
along with the complete Post Office address of the custodian, where
such stock ledger or duplicate stock ledger is kept.
THE TREASURER SHALL:
Have the custody of all monies and securities of the Corporation and
shall keep regular books of account.
Perform all duties incidental to his office as directed of him by the
Board of Directors and the President.
ARTICLE IV
STOCK
A) The certificates representing shares of the Corporation's stock shall
be in such form as shall be adopted by the Board of Directors, numbered and
registered in the order issued. The certificates shall bear the following; the
holders name, the number of shares of stock, the signature either of the
Chairman of the Board of Directors or the President, and either the Secretary or
Treasurer.
B) No certificate shall be issued until the full amount of consideration
has been paid, except as otherwise provided by law.
C) Each share of stock shall entitle the holder to one vote.
ARTICLE V
DIVIDENDS
DIVIDENDS may be declared and paid out of any funds available therefor, as
often, in such amounts as the Board of Directors may determine, except as
limited by law.
ARTICLE VI
FISCAL YEAR
THE FISCAL YEAR of the Corporation shall be determined by the Board of
Directors.
<PAGE>
ARTICLE VII
INDEMNIFICATION
PURSUANT TO NRS 78.751 any person who is a Director, Officer, Employee, or Agent
of this Corporation, who becomes a party to an action is entitled to
indemnification against expenses including attorney fees, judgments, fines and
amounts paid in settlement, if he acted in good faith and he reasoned his
conduct or action to be in the best interest of the Corporation.
ARTICLE VIII
AMENDMENTS
A) STOCKHOLDERS shall have the authority to amend or repeal all the
bylaws of the Corporation and enact new bylaws, by affirmative vote of the
majority of the outstanding shares of stock entitled to vote.
B) THE BOARD OF DIRECTORS shall have the authority to amend, repeal, or
adopt new bylaws of the Corporation, but shall not alter or repeal any bylaws
adopted by the stockholders of the Corporation.
CERTIFICATE OF DESIGNATION
Amar Bahadoorsingh certifies that he is the President and Secretary, of iLink
Telecom, Inc., a Nevada corporation (hereinafter referred to as the
"Corporation") and that, pursuant to the Corporation's Certificate of
Incorporation, as amended, and Section 78.1955 of the Nevada Revised Statutes,
the Board of Directors of the Corporation adopted the following resolutions on
March 17, 1999; and that none of the Series A Convertible Preferred Stock
referred to in this Certificate of Designation have been issued.
1. Creation of Series A Convertible Preferred Stock. There is hereby created a
series of preferred stock consisting of 145 shares and designated as the Series
A Convertible Preferred Stock, having the voting powers, preferences, relative,
participating, limitations, qualifications optional and other special rights and
the qualifications, limitations and restrictions thereof that are set forth
below.
2. Liquidation Provisions. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, holders of
Series A Convertible Preferred Stock shall be entitled to receive an amount
equal to $1,000.00 per share. After the full preferential liquidation amount has
been paid to, or determined and set apart for the Series A Convertible Preferred
Stock and all other series of Preferred Stock hereafter authorized and issued,
if any, the remaining assets of the Corporation available for distribution to
shareholders shall be distributed ratably to the holders of the common stock. In
the event the assets of the Corporation available for distribution to its
shareholders are insufficient to pay the full preferential liquidation amount
per share required to be paid to the holders of Corporation's Preferred Stock,
the entire amount of assets of the Corporation available for distribution to
shareholders shall be paid up to their respective full liquidation amounts first
to the holders of Series A Convertible Preferred Stock, then to any other series
of Preferred Stock hereafter authorized and issued, all of which amounts shall
be distributed ratably among holders of each such series of Preferred Stock, and
the holders of common stock shall receive nothing. A reorganization or any other
consolidation or merger of the Corporation with or into any other corporation,
or any other sale of all or substantially all of the assets of the Corporation,
shall not be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 3, and the Series A Convertible
Preferred Stock shall be entitled only to: (i) the rights provided in any
agreement or plan governing the reorganization or other consolidation, merger or
sale of assets transaction; (ii) the rights contained in the Delaware General
Corporation Law; and (iii) the rights contained in other Sections hereof.
3. Conversion Provisions. The shares of Series A Convertible Preferred Stock
shall be subject to the following conversion provisions:
(a) Conversion
(1) The shares of Series A Convertible Preferred Stock shall be
deemed to convert into shares of Common Stock of the Corporation on
the later of:
(i) the date which is six (6) calendar months from
the date of this Agreement; or
(ii) the date which is five business days after the
effective date of a registration statement covering
the shares of Common Stock of the Corporation to be
issued upon conversion of the shares of Series A
<PAGE>
Convertible Preferred Stock (such later date as
defined in this clause 4(a)(1) being referred to as
the "Conversion Date").
The Conversion Rate, subject to the adjustments described below,
shall be that number of Common Shares equal to $1,000.00 divided by
seventy-five per cent (75%) of the average Market Price of the Common
Stock for the five trading days immediately prior to the Conversion
Date (defined below). For purposes of this Section 3(a)(1), Market
Price for a particular date shall be the closing bid price of the
Common Stock on such date, as reported by the National Association of
Securities Dealers Automated Quotation System (`NASDAQ"), or the
closing bid price in the over-the-counter market if other than
NASDAQ.
(2) No fractional shares of Common Stock shall be issued upon
conversion of the shares of Series A Convertible Preferred Stock, and
in lieu thereof the number of shares of Common Stock issuable for
each Preferred Share converted shall be rounded down to the nearest
whole number of shares of Common Stock. Such number of whole shares
of Common Stock issuable upon the conversion of one Preferred Share
shall be multiplied by the number of shares of Series A Convertible
Preferred Stock submitted for conversion pursuant to the Notice of
Conversion (defined below) to determine the total number of shares of
Common Stock issuable in connection with any one particular
conversion.
(3) On the Conversion Date the Corporation shall cancel all of the
shares of Series A Convertible Preferred Stock then outstanding and
shall issue such number of shares of Common Stock at the Conversion
Rate in the names of the registered holders of the shares of Series A
Convertible Preferred Stock so converted and shall hold same as bare
trustee for each such holder until such time as such holder has
delivered the certificate or certificates representing such shares of
Series A Convertible Preferred Stock to the Corporation. The person
or persons entitled to receive the shares of Common Stock issuable
upon conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock as of the date of
such conversion.
(b) Adjustments to Conversion Rate
(1) Reclassification, Exchange and Substitution. If the Common Stock
issuable on conversion of the Series A Convertible Preferred Stock
shall be changed into the same or a different number of shares or
into any other class or classes of stock, whether by capital
reorganization, reclassification, reverse stock split or forward
stock split or stock dividend or otherwise (other than a subdivision
or combination of shares provided for above), the holders of the
Series A Convertible Preferred Stock shall, upon its conversion, be
entitled to receive, in lieu of the Common Stock which the holders
would have become entitled to receive but for such change, a number
of shares of such other class or classes of stock that would have
been subject to receipt by the holders if they had exercised their
rights of conversion of the Series A Convertible Preferred Stock
immediately before that change.
(2) Reorganizations, Mergers, Consolidations or Sale of Assets. If at
any time there shall be a capital reorganization of the Corporation's
common stock (other than a subdivision, combination, reclassification
or exchange of shares provided for elsewhere in this Section (4)) or
merger of the Corporation into another corporation, or the sale of
the Corporation's properties and assets as, or substantially as, an
entirety to any other person, then, as a part of such reorganization,
<PAGE>
merger or sale, lawful provision shall be made so that the holders of
the Series A Convertible Preferred Stock, shall be entitled to
receive the number of shares of stock or other securities or property
of the Corporation, or of the successor corporation resulting from
such merger, to which holders of the Common Stock deliverable upon
conversion of the Series A Convertible Preferred Stock would have
been entitled on such capital reorganization, merger or sale if the
Series A Convertible Preferred Stock had been converted immediately
before that capital reorganization, merger or sale to the end that
the provisions of this paragraph (b)(2) (including adjustment of the
Conversion Rate then in effect and the number of shares purchasable
upon conversion of the Series A Convertible Preferred Stock) shall be
applicable after that event as nearly equivalently as may be
practicable.
(c) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, merger, dissolution, or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder
by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order
to protect the Conversion Rights of the holders of the Series A
Convertible Preferred Stock against impairment.
(d) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Conversion Rate for any shares of Series A
Convertible Preferred Stock, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with
the terms hereof and prepare and furnish to each holder of Series A
Convertible Preferred Stock effected thereby a certificate setting
forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any holder of Series A
Convertible Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Conversion Rate at the time in effect; and
(iii) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the
conversion of such holder's shares of Series A Convertible Preferred
Stock.
(e) Reservation of Stock Issuable upon Conversion. The Corporation shall
at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting
the conversion of the shares of the Series A Convertible Preferred
Stock such number of its shares of Common Stock as shall from time to
time be sufficient, based on the Conversion Rate then in effect, to
effect the conversion of all then outstanding shares of the Series A
Preferred Stock. If at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Preferred Stock,
then, in addition to all rights, claims and damages to which the
holders of the Series A Convertible Preferred Stock shall be entitled
to receive at law or in equity as a result of such failure by the
Corporation to fulfill its obligations to the holders hereunder, the
Corporation will take any and all corporate or other action as may,
in the opinion of its counsel, be helpful, appropriate or necessary
to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
<PAGE>
(f) Notices. Any notices required by the provisions hereof to be given to
the holders of shares of Series A Convertible Preferred Stock shall
be deemed given if deposited in the United States mail, postage
prepaid and return receipt requested, and addressed to each holder of
record at its address appearing on the books of the Corporation or to
such other address of such holder or its representative as such
holder may direct.
4. Voting Provisions. Except as otherwise expressly provided or required by law,
the Series A Convertible Preferred Stock shall have no voting rights.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation
of Series A Convertible Preferred Stock to be duly executed by its President and
attested to by its Secretary this _______ day of March, 1999 who, by signing
their names hereto, acknowledge that this Certificate of Designation is the act
of the Corporation and state to the best of their knowledge, information and
belief, under the penalties of perjury, that the above matters and facts are
true in all material respects.
ILINK TELECOM, INC.
Amar Bahadoorsingh, President
Amar Bahadoorsingh, Secretary
ACKNOWLEDGMENT;
PROVINCE OF BRITISH COLUMBIA
CITY OF VANCOUVER
On , 1999 personally appeared before me, a Notary Public, Amar Bahadoorsingh,
who acknowledged he executed the above instrument on behalf of said Corporation.
NOTARY PUBLIC
VESTING AGREEMENT
THIS VESTING AGREEMENT is made effective the 25th day of March, 1999
BETWEEN:
THE UNDERSIGNED REGISTERED HOLDER of shares of iLink Telecom,
Inc.
(the "Holder")
AND:
ILINK TELECOM, INC., a body corporate with an office for
business located at Suite 1910, 1177 West Hastings Street,
Vancouver, British Columbia, Canada V6E 2K3
(the "Company")
WHEREAS:
A. The Holder has been issued a total of 300,000 shares of the Company's
Common Stock (the "Shares");
B. The certificates representing the Shares bear the legend required by Rule
144 under the Securities Act of 1933;
C. The Company holds the certificates representing the Shares; and
D. The Holder has agreed that the Shares shall be held by the Company,
undelivered, until such time as ownership of the Shares vests in the Holder
in accordance with the terms of this Agreement.
THIS AGREEMENT WITNESSES THAT for $10 now paid be each party hereto to the other
and in consideration of the premises and covenants and agreements herein
contained, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto covenant and agree each with the others as follows:
1. The Company shall hold the certificates representing the shares (the "Share
Certificates") undelivered, and upon the Company achieving the following
milestones a portion of the Shares shall be delivered to the Holder as
follows:
Milestone Shares to be Delivered
The Company is listed in the Standard &
Poor's Corporation Records Service 50,000
A registration statement for the
Company is filed with the United
States Securities and Exchange
Commission and becomes effective 150,000
The Holder has acted as the Company's
financial consultant for a period of
twelve months 100,000
<PAGE>
2. In the event that the milestones enumerated in section 1 hereof are not
achieved by March 25, 2000 then the Shares shall be forfeited to the
Company and returned to treasury and the Holder shall have no further
interest in the Shares registered in its name.
3. The Company shall not accept or acknowledge any transfer, assignment,
declaration of trust or any other document evidencing a change in legal or
beneficial ownership or of interest in the Shares, except as may be
required by reason of the bankruptcy of the Holder, subject to this
Agreement for whatsoever person or persons, or corporations who may thus
become legally entitled thereto.
4. The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by
negotiation in good faith. If such good negotiation fails to resolve such
dispute, controversy, difference or claim within fifteen (15) days after
any party delivers to any other party a notice of its intent to submit such
matter to arbitration, then any party to such dispute, controversy,
difference or claim may submit such matter to arbitration in the City of
Vancouver, British Columbia. All results of the arbitration proceedings
shall be final, conclusive and binding on all parties to this Agreement,
and shall not be subject to judicial review. Judgement upon the award
rendered by the arbitrator may be entered in Province of British Columbia,
the State of Nevada or any other court having competent jurisdiction.
5. This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia.
6. This Agreement may be executed by facsimile and in counterparts and such
counterparts shall be construed together and deemed to constitute one and
the same instrument.
7. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
8. The Holder has obtained legal advice concerning this matter and has
requested that the Company obtain independent legal advice with respect to
this matter before executing this Agreement. The Company hereby represents
and warrants to the Holder that it has been so advised to obtain
independent legal advice, and that prior to the execution of this Agreement
it has so obtained independent legal advice or has, in its discretion,
knowingly and willingly elected not to do so.
IN WITNESS WHEREOF the parties hereto have duly caused this Agreement to be
executed effective as of the day and year first above written.
CENTURY CAPITAL MANAGEMENT LTD.
Per: ---------------------------
Authorized Signatory
ILINK TELECOM, INC.
Per: ---------------------------
Authorized Signatory
VESTING AGREEMENT
THIS VESTING AGREEMENT is made effective the 25th day of May, 1999
BETWEEN:
THE UNDERSIGNED REGISTERED HOLDERS of shares of iLink Telecom,
Inc.
(the "Holders")
AND:
ILINK TELECOM, INC., a body corporate with an office for
business located at Suite 1910, 1177 West Hastings Street,
Vancouver, British Columbia, Canada V6E 2K3
(the "Company")
WHEREAS:
A. The Holders have been issued a total of 1,840,000 shares of the Company's
Common Stock (the "Shares");
B. The certificates representing the Shares bear the legend required by Rule
144 under the Securities Act of 1933;
C. The Company holds the certificates representing the Shares; and
D. The Holders have agreed that the Shares shall be held by the Company,
undelivered, until such time as ownership of the Shares vests in the
Holders in accordance with the terms of this Agreement. All the other
indicia of ownership belongs to the Holder.
THIS AGREEMENT WITNESSES THAT for $10 now paid be each party hereto to the other
and in consideration of the premises and covenants and agreements herein
contained, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto covenant and agree each with the others as follows:
1. The Company shall hold the certificates representing the shares as set
forth in Schedule "A" attached hereto (the "Share Certificates")
undelivered, and upon the Company achieving the following milestones a
portion of the Shares shall be delivered to the Holders, pro rata, as
follows:
Milestone Percentage to be Delivered
The Company's gross revenues for
a single fiscal year increase
above US$1,000,000; or 25%
Each additional increase of the Company's
gross revenues for a single fiscal year of
US$1,000,000; or 25%
The Company closes an acquisition of a business
or businesses with annual gross revenue in excess
of US$2,000,000; or 25%
<PAGE>
Each additional closing of an acquisition of a
business or businesses with annual gross revenue
in excess of US$2,000,000; or 25%
Each capital investment of US$1,000,000 in the
Company; or 25%
The Company acquires a PCS Licence in the Republic
of Trinidad and Tobago; or 100%
The Company becomes the subject of a takeover bid. 100%
2. As long as any Share Certificates remain deposited with the Company, then,
in the event that a particular Holder ceases to be an officer, director or
employee of the Company, any Shares registered in the name of that
particular Holder which have not been delivered to that particular Holder
pursuant to section 1 hereof within one hundred and eighty days following
the date upon which that particular Holder ceases to be an officer,
director or employee of the Company shall be forfeited to the Company and
returned to treasury and that particular Holder shall have no further
interest in the Shares registered in his name.
3. In the event that no Shares have been delivered to the Holders pursuant to
section 1 hereof on or before May 25, 2000 then the Shares shall be
forfeited to the Company and returned to treasury and the Holders shall
have no further interest in the Shares registered in their names.
4. The Company shall not accept or acknowledge any transfer, assignment,
declaration of trust or any other document evidencing a change in legal or
beneficial ownership or of interest in the Shares, except as may be
required by reason of the death or bankruptcy of any of the Holders,
subject to this Agreement for whatsoever person or persons, or corporations
who may thus become legally entitled thereto.
5. The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by
negotiation in good faith. If such good negotiation fails to resolve such
dispute, controversy, difference or claim within fifteen (15) days after
any party delivers to any other party a notice of its intent to submit such
matter to arbitration, then any party to such dispute, controversy,
difference or claim may submit such matter to arbitration in the City of
Vancouver, British Columbia. All results of the arbitration proceedings
shall be final, conclusive and binding on all parties to this Agreement,
and shall not be subject to judicial review. Judgement upon the award
rendered by the arbitrator may be entered in Province of British Columbia,
the State of Nevada or any other court having competent jurisdiction.
6. This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia.
7. This Agreement and may be executed by facsimile and in counterparts and
such counterparts shall be construed together and deemed to constitute one
and the same instrument.
8. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
9. The parties hereto acknowledge that they have each received independent
legal advice with respect to the terms of this Agreement and the
transactions contemplated herein or have knowingly and willingly elected
not to do so. The parties hereto further acknowledge that this Agreement
has been prepared by Century Capital Management Ltd. as a convenience to
the parties only, and that Century Capital Management Ltd. has not provided
any of the parties hereto with any professional advice with respect to this
Agreement.
<PAGE>
IN WITNESS WHEREOF the parties hereto have duly caused this Agreement to be
executed effective as of the day and year first above written.
- ---------------------------------
AMAR BAHADOORSINGH
- ---------------------------------
PETER M. SCHRIBER
- ---------------------------------
RANDALL WALROND
- ---------------------------------
RICK VILLANEUVA
- ---------------------------------
ANDREA DALEY
- ---------------------------------
MARKETSOURCE DIRECT HOLDINGS LTD.
Per:
Authorized Signatory
- ---------------------------------
ILINK TELECOM, INC.
Per: -------------------------
Authorized Signatory
<PAGE>
SCHEDULE "A"
Holder Number Of Shares
Amar Bahadoorsingh 1,500,000
Peter M. Schriber 25,000
Marketsource Direct Holdings Ltd.
(Peter M. Schriber) 250,000
Randall Walrond 50,000
Rick Villaneuva 10,000
Andrea Daley 5,000
---------
TOTAL 1,840,000
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 26th day of February, 1999
BETWEEN:
ABDE HOLDINGS LTD., a company duly incorporated pursuant to
the laws of the Province of British Columbia and having its
registered office located at #1107 - 11871 Horseshoe Way
Richmond, British Columbia V7A 5H5
(the "Vendor")
AND:
ILINK TELECOM, INC., a body corporate with an office for
business located at Suite 1910, 1177 West Hastings Street,
Vancouver, British Columbia, Canada V6E 2K3
(the "Purchaser")
WHEREAS:
A. the Vendor is the registered and beneficial owner of all of the issued and
outstanding common shares (the "Common Shares") of 579782 B.C. Ltd. (the
"Company");
B. the Company is indebted to the Vendor for the sum of CDN$183,723.96 (the
"Debt"); and
C. the Vendor wishes to sell, and the Purchaser wishes to purchase, the Common
Shares and the Vendor wishes to assign, and the Purchaser wishes to take an
assignment of, the Debt, both on and subject to the terms and conditions of
this agreement.
<PAGE>
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, the parties hereto hereby agree as follows:
Purchase and Sale of Common Shares
1. The Vendor hereby agrees to sell and the Purchaser hereby agrees to
purchase the Common Shares effective the date hereof .
Assignment of Debt
2. The Vendor hereby agrees to assign, and the Purchaser hereby agrees to
take an assignment of, the Debt effective the date hereof.
Consideration
3. In consideration for the sale of the Common Shares by the Vendor to the
Purchaser and the assignment of the Debt from the Vendor to the
Purchaser the Purchaser agrees to issue to the Vendors 145 shares of
non-transferable Convertible Preferred Stock in the capital of the
Purchaser at a deemed price of $1,000 per share on or before March 31,
1999. The shares of Convertible Preferred Stock shall be deemed to
convert into shares of Common Stock of the Purchaser on the later of:
(a) the date which is six months from the date of this Agreement; or
(b) the date which is five business days from the effective date of a
registration statement filed with the United States Securities
and Exchange Commission in respect of the shares of Common Stock
of the Purchaser to be issued upon the deemed conversion of the
shares of Convertible Preferred Stock.
4. Each share of Convertible Preferred Stock shall convert in one share of
Common Stock of the basis of the deemed purchase price for each such
share of Convertible Preferred Stock divided by 75% of the closing bid
price of the Company's shares of Common Stock for the five trading days
immediately preceding the deemed exercise of the shares of Convertible
Preferred Stock. The Purchaser shall file a registration statement with
the United States Securities and Exchange Commission on or before May
31, 1999 and shall use its best efforts to make same effective as soon
as practicable thereafter.
Representations and Warranties
5. The Vendor represents and warrants to and in favour of the Purchaser,
with the intent that the Purchaser will rely thereon in entering into
this agreement and in completing the transactions contemplated hereby,
that:
(a) Ownership of Shares. The issued and outstanding Common Shares in
the capital stock of the Company consist of 100 Common Shares,
which Common Shares shall be validly issued and outstanding as
fully paid and non-assessable Common Shares. The Vendor is the
registered and beneficial owner the Common Shares;
<PAGE>
(b) No Encumbrances. The Vendor owns the Common Shares free and clear
of any and all liens, charges, pledges, encumbrances,
restrictions on transfer and adverse claims whatsoever including
pooling and voting trust agreements;
(c) No Option. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement or option
for the acquisition of the Common Shares or for the purchase,
subscription or issuance of any of the unissued Common Shares in
the capital of the Company;
(d) Capacity. The Vendor has the full right, power and authority to
enter into this agreement on the terms and conditions contained
herein and to transfer and cause the transfer of full legal,
registered and beneficial title and ownership of their portion of
the Common Shares to the Purchaser as contemplated by item 1
hereof;
(e) No Restrictions. There are no restrictions on the transfer, sale
or other disposition of the Common Shares;
(f) Books and Records. The books and records of the Company fairly
and correctly set out and disclose in all material respects the
financial position of the Company, and all material financial and
other transactions of the Company relating to its business have
been accurately recorded or filed in such books and records;
(g) No Assets or Liabilities. Other than as acquired pursuant to the
terms of certain Assignment Agreements dated February 26, 1999
between the Company and the Vendor the Company has no assets or
liabilities.
Indemnification
6. The Vendor agrees to indemnify and save harmless the Purchaser from and
against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including
any payment made in good faith in settlement of any claim resulting
from the breach by it of any representation or warranty under this
agreement or from any material misrepresentation in or omission from
any certificate or other instrument furnished or to be furnished by the
Vendor to the Purchaser hereunder.
<PAGE>
Counterparts
7. This Agreement may be signed in any number or counterparts or facsimile
counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same document.
Independent Legal Advice
8. The parties hereto acknowledge that they have each received independent
legal advice with respect to the terms of this agreement and the
transactions contemplated herein or have knowingly and willingly
elected not to do so. The parties hereto further acknowledge that this
agreement has been prepared by Century Capital Management Ltd. as a
convenience to the parties only, and that Century Capital Management
Ltd. has not provided any of the parties hereto with any professional
advice with respect to this agreement.
IN WITNESS WHEREOF the parties have executed this agreement effective as of the
day and year first above written.
ABDE HOLDINGS LTD.
By: ---------------------
Witness Authorized Signatory
Name
Address
ILINK TELECOM INC.
By:------------------------
Witness Authorized Signatory
Name
Address
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT is made effective the 25th day of February, 1999
BETWEEN:
ABDE HOLDINGS LTD., a company duly incorporated
pursuant to the laws of the Province of British
Columbia and having its registered office located at
#1107 - 11871 Horseshoe Way Richmond, British
Columbia V7A 5H5
(the "Assignor")
AND:
579782 B.C. LTD., a company duly incorporated
pursuant to the laws of the Province of British
Columbia and having its registered office located at
#201 - 1190 Hornby Street, Vancouver, British
Columbia V6Z 2K5
(the "Assignee")
WHEREAS:
A. The Assignee is a wholly owned subsidiary of the Assignor;
B. Pursuant to the terms of an Agreement for Purchase and Sale (the "Asset
Agreement") dated January 13, 1999 between Revere Communications Inc.
("Revere") and the Assignor, a copy of which is attached hereto as
Schedule "A", the Assignor has acquired certain assets of Revere (the
"Assets");
C. The Assignor now wishes to assign to the Assignee all of its right,
title and interest in and to the Agreement and the Assets to the
Assignee and the Assignee is willing to accept the assignment on and
subject to there terms and conditions hereof
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the sum of
$1.00 now paid by the Assignee to the Assignor, the receipt and sufficiency
whereof is hereby acknowledged by the Assignor, the parties hereto agree as
follows:
1. The Assignor does hereby assign to the Assignee all of its right, title and
interest in and to the Asset Agreement and the Assets and all benefits to be
derived therefrom subject to the covenants, provisions and conditions on the
part of the Assignor therein contained.
2. The Assignee agrees to perform the obligations of the Assignor in accordance
with the terms of the Asset Agreement and be bound to Revere in accordance with
the terms and conditions of the Asset Agreement.
3. The Assignor represents and warrants to the Assignee that:
(a) the Assignor is entitled to assign the Asset Agreement and has
obtained all necessary consents to such assignment;
(b) the Assignee may enjoy the rights and benefits derived under the
Asset Agreement without interruption by the Assignor or any
party claiming through the Assignor;
(c) there are no contra accounts, set-offs or counterclaims
whatsoever against the Assignor with respect to the assignment
contemplated hereby; and
(d) the Assignor has not previously assigned, postponed or
encumbered in any manner the Assets or any portion thereof.
4. The Asset Agreement and all covenants, provisios, powers and matters
and things whatsoever therein contained shall continue to be in full force
and effect except only as amended herein.
5. The parties hereto acknowledge that they have each received independent
legal advice with respect to the terms of this Agreement and the
transactions contemplated herein or have knowingly and willingly elected
not to do so. The parties hereto further acknowledge that this Agreement
has been prepared by Century Capital Management Ltd. as a convenience to
the parties only, and that Century Capital Management Ltd. has not
provided any of the parties hereto with any professional advice with
respect to this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement effective as
of the day and year first above written.
ABDE HOLDINGS LTD.
By:
Authorized Signatory
579782 B.C. LTD.
By:
Authorized Signatory
THE HEREIN ASSIGNMENT IS CONSENTED TO
pursuant to section 7.3 of the Asset Agreement
this day of February, 1999
REVERE COMMUNICATIONS INC.
By:
Authorized Signatory
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT is made effective the 25th day of February, 1999
BETWEEN:
ABDE HOLDINGS LTD., a company duly incorporated
pursuant to the laws of the Province of British
Columbia and having its registered office located at
#1107 - 11871 Horseshoe Way Richmond, British
Columbia V7A 5H5
(the "Assignor")
AND:
579782 B.C. LTD., a company duly incorporated
pursuant to the laws of the Province of British
Columbia and having its registered office located at
#201 - 1190 Hornby Street, Vancouver, British
Columbia V6Z 2K5
(the "Assignee")
WHEREAS:
A. The Assignee is a wholly owned subsidiary of the Assignor;
B. Pursuant to the terms of an IVR Platform Service Agreement between
Telus Communications Inc. ("Telus") and Revere Communications Inc.
("Revere") dated June 16, 1998 (the "IVR Agreement") Revere agreed to
provide certain services to Telus;
C. Pursuant to the terms of an Assignment and Amending Agreement made
January 12, 1999 between Revere, the Assignor and Telus Revere assigned
all of its right, title and interest in and to the IVR Agreement to the
Assignor; and
D. The Assignor now wishes to assign to the Assignee, all of its right,
title and interest in and to the IVR Agreement, and the Assignee is
willing to accept the assignment on and subject to there terms and
conditions hereof.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the sum of
$1.00 now paid by the Assignee to the Assignor, the receipt and sufficiency
whereof is hereby acknowledged by the Assignor, the parties hereto agree as
follows:
1. The Assignor does hereby assign to the Assignee all of its right, title and
interest in and to the IVR Agreement and all benefits to be derived therefrom
subject to the covenants, provisions and conditions on the part of the Assignor
therein contained.
2. The Assignee agrees to perform the obligations of the Assignor in accordance
with the terms of the IVR Agreement and be bound to Telus in accordance with the
terms and conditions of the IVR Agreement.
3. The Assignor represents and warrants to the Assignee that:
(a) the Assignor is entitled to assign the IVR Agreement and
has obtained all necessary consents to such assignment;
(b) the Assignee may enjoy the rights and benefits derived under the
IVR Agreement without interruption by the Assignor or any party
claiming through the Assignor;
(c) there are no contra accounts, set-offs or counterclaims
whatsoever against the Assignor with respect to the assignment
contemplated hereby;
(d) the Assignor is not in receipt of any deposits or prepayments of
any sums payable under the IVR Agreement; and
(e) the Assignor has not previously assigned, postponed or
encumbered in any manner its right, title and interest in and to
the IVR Agreement or any portion thereof.
4. The IVR Agreement and all covenants, provisios, powers and matters and
things whatsoever therein contained shall continue to be in full force and
effect except only as amended herein.
5. This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective successors and assigns.
6. This Agreement shall be governed by the laws of the Province of
Alberta.
7. The parties hereto acknowledge that they have each received independent
legal advice with respect to the terms of this Agreement and the
transactions contemplated herein or have knowingly and willingly elected
not to do so. The parties hereto further acknowledge that this Agreement
has been prepared by Century Capital Management Ltd. as a convenience to
the parties only, and that Century Capital Management Ltd. has not
provided any of the parties hereto with any professional advice with
respect to this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement effective as
of the day and year first above written.
ABDE HOLDINGS LTD.
By:
Authorized Signatory
579782 B.C. LTD.
By:
Authorized Signatory
THE HEREIN ASSIGNMENT IS CONSENTED TO
pursuant to section 14.1 of the IVR Agreement
this day of February, 1999
TELUS COMMUNICATIONS INC.
By:
Authorized Signatory
ASSIGNMENT OF LEASE BY TENANT WITH LANDLORD'S CONSENT
THIS AGREEMENT dated for reference and made as of June 1, 1999.
BETWEEN:
GOLDEN PROPERTIES LTD.,
(the "Landlord")
AND:
CENTURY CAPITAL MANAGEMENT LTD., a company duly
incorporated under the laws of British Columbia,
(the "Tenant")
AND:
ILINK TELECOM INC., a company duly, incorporated under the
laws of British Columbia,
(the "Assignee")
WITNESSES THAT WHEREAS:
A. By a lease made August 1, 1997(collectively herein called "the lease") both
between the Landlord, as landlord, the Tenant, as tenant, the Landlord did
demise and lease to the Tenant those certain premises (the "Premises")
being a portion of the 19h floor of the office building known and described
as 1177 West Hastings Street, Vancouver, British Columbia, as more
particularly described in the Lease, for the term (the "term") of five (5)
years commencing August 1, 1997;
B. The Lease contains a prohibition against assignment by the Tenant without
first obtaining the written consent of the Landlord thereto;
C. The Tenant wishes to assign its interest under the Lease to the Assignee
and the Assignee has agreed to accept such assignment;
D. The Tenant and the Assignee have requested that the Landlord give its
consent to such assignment pursuant to the Lease;
E. The Landlord has agreed to give its consent to such assignment on the terms
and conditions hereinafter set forth; and
<PAGE>
F. The Parties have agreed that the assignment shall take effect as of June 1,
1999 (the "Effective Date").
NOW THEREFORE in consideration of the premises, the respective covenants herein,
the sum of $1.00 now paid by each party to each of the others and other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the parties covenant and agree as follows:
1. Assignment of the Lease
The Tenant hereby assigns to the Assignee as of the Effective Date all
of the right, title, benefit and interest of the Tenant in and to the Premises,
together with the unexpected residue of the Term and the Lease and all the
benefit and advantage to be derived therefrom, to hold the same unto the
Assignee henceforth for and during the residue of the Term, subject to the
payment of the rent and performance of the covenants and agreements of the
Tenant under the Lease.
2. Warranties and Covenants of the Tenant in Favour of the Assignee
The Tenant hereby represents and warrants to, and covenants and agrees
with, the Assignee that:
a. notwithstanding any act of the Tenant, the Lease is good, valid and
subsisting, the rents thereby reserved have been duly paid, the
covenants and conditions therein have been duly observed and performed
by the Tenant as of the date hereof, and the Tenant now has good
right, full power and absolute authority to assign the Premises and
the Lease in the manner aforesaid, according to the true intent and
meaning hereof;
b. subject to the payment of rent and the performance of the covenants
and conditions contained in the Lease, the Assignee may enter into and
hold and enjoy the Premises for the residue of the Term, for its own
use and benefit without any interruption by the Tenant or any person
claiming under the Tenant, free from all charges and encumbrances
whatsoever, at the request and cost of the Assignee, execute such
further assurances of the Premises as the Assignee shall reasonably
require;
c. the Tenant has not previously assigned, transferred, charged,
encumbered, sublet or parted with possession of the Premises; and
d. the Tenant has not exercised any renewal options under the Lease.
<PAGE>
3. Covenants of the Assignee in Favour of the Tenant The Assignee hereby
covenants and agrees with the Tenant that the Assignment shall during the
residue of the Term:
a. pay the rent reserved by the Lease;
b. perform and observe the obligations, covenants and conditions therein
contained on the part of the tenant therein named to be observed and
performed; and
c. indemnify and save the Tenant harmless therefrom and from all actions,
suits, costs, losses, charges, damages and expenses for or in respect
thereof, as if the Assignee were the Tenant named in the Lease.
4. Covenants of the Assignees in Favour of the Landlord
The Assignee acknowledges having received a copy of the Lease and
having had an opportunity to review the Lease. The Assignee hereby covenants and
agrees with the Landlord:
a. to pay the rent and additional rent and to observe and perform all of
the covenants, agreements and conditions of the Tenant reserved and
contained in the Lease in the same manner as if the Assignee were the
tenant named in the Lease; and
b. not to assign or sublet or part with possession of the Premises or any
part thereof or the Lease without the prior written consent of the
Landlord pursuant to the Lease.
5. Notice to the Assignee
Notice to the Assignee shall be sufficiently given as and when delivered to
the Premises.
6. Consent of Landlord
Subject to the terms and conditions in the Lease regarding consent by the
Landlord to an assignment of the Lease, the Landlord's receipt of payment of its
administrative and legal fees for processing the Tenant's request for consent,
and to the Landlord's receipt of any required indemnities referred to in section
8 hereof, the Landlord hereby consents on the terms set out herein to the
assignment herein of the Lease to the Assignee.
7. Mutual Agreements as to the Landlord's Consent
The Tenant and the Assignee covenant and represent that:
a. neither the consent of the Landlord herein, nor the payment of any
money , nor the performance by the Assignee of its obligations under
section 4 hereof shall waive or modify in any respect the rights of
the Landlord under the Lease or relieve the Tenant or any else from
the observance and performance of any of the conditions and covenants
in the Lease to be observed or performed by the Tenant;
<PAGE>
b. the consent of the Landlord herein is restricted to the assignment by
the Tenant to the Assignee as set forth herein;
c. the prohibition against the assignment of the Lease and against
subletting or otherwise parting with possession of the Premises as set
forth in the Lease shall otherwise remain in full force and effect;
d. the consent of the landlord herein shall not be deemed to be a consent
to or a waiver of the requirements set forth in the Lease for the
consent of the Landlord to any subsequent assignment of the Lease or
the Term or to any subletting or other parting with possession of the
Premises or any part thereof; and
e. neither the Tenant nor the Assignee have, nor will either of them
create, a security interest in the Improvements within the Premises
except in favour of the Landlord, and for the purposes of this clause
"Improvements" means all elements of, and goods within, the Premises
which constitute "fixtures" for the purposes of the Personal Property
Security Act (British Columbia) including, but not to limit the
generality of the foregoing, all floor coverings, ceilings, light
fixtures, air conditioning fixtures, interior doors, interior
partitions and walls, communication systems, and built-in equipment
and furniture, and it will be a default under the Lease if any such
security interest is created.
8. Enurement
This Agreement shall enure to the benefit of and be binding upon the
parties and their respective heirs, personal representatives, successors and
permitted assigns.
9. Define Terms and Captions
Any Term used in this Agreement which is not defined herein but is defined
in the Lease shall have the meaning given to that term in the Lease. The
<PAGE>
captions appearing in this Agreement have been inserted as a matter of
convenience and for reference only and in no way define, limit or enlarge the
scope or meaning of this Agreement or any provision hereof.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first above written.
The Common Seal of the Landlord
was hereunto affixed in the presence
of:
Title: _________________________
(Authorized Signatory)
Title: _________________________
(Authorized Signatory)
The Common Seal of the Tenant
was hereunto affixed in the presence
of:
Title:__________________________
(Authorized Signatory)
Title:__________________________
(Authorized Signatory)
The Common Seal of the Assignee
was hereunto affixed in the presence
of:
Title:__________________________
(Authorized Signatory)
Title:__________________________
(Authorized Signatory)
iLink Telecom, Inc.
Suite 1170, 666 Burrard St., Vancouver, BC, V6C 2X8
Telephone (604) 717-1110 Fax (604) 717-1109
- ------------------------------------------------------------------------------
April 1, 1999
Attention: Thor Communications Ltd.
- -------------------------------------------------------------------------------
Re: Joint-Venture with iLink Telecom Inc. for Trinidad & Tobago digital phone
license
- -------------------------------------------------------------------------------
Dear Sirs:
This letter is to be considered a formal undertaking that iLink Telecom
Inc. and Thor Communications Ltd. of Trinidad and Tobago are entering into a
joint venture to secure the rights and a license to provide digital mobile
telecommunications for the Republic of Trinidad and Tobago. For the purposes of
the RFP and the application for a license, Thor Communications Ltd. will own 51%
of iLink Telecom Inc. (Trinidad) and iLink Telecom Inc. (BVI) will own 49% of
the Trinidad entity.
Both organizations have hired Industar Digital PCS of Milwaukee to prepare
the RFP for submission to the telecommunications authorities. The costs of the
consulting contract will be pro-rated between both parties. Each party is also
responsible for their expenses incurred in the preparation of the proposal.
Once the license had been awarded by the Telecommunications Ministry, the
board of iLink Telecom Inc. will be responsible for the hiring of an operational
entity to install and run the infrastructure that will be the digital mobile
phone network. It is understood that all invested capital will be serviced and
paid in full before the Trinidad entity receives a dividend from the profits of
the organization.
Until a formal dissolution is implemented by both parties, this joint
venture is to last the duration of the licensing process. If the licensing
process proves unsuccessful, this joint-venture shall be dissolved when other
parties are awarded the licenses.
- ----------------------- -----------------------
Thor Communications Ltd. iLink Telecom Inc.
Amar Bahadoorsingh
President & CEO
CONSULTING AGREEMENT
Date: May 14, 1999
Consultant: Indus, Inc. dba Industar Digital PCS
633 East Mason Street
Milwaukee, WI 53202
Company: i Link Telecom (BC) Inc.
600 Burrard Street
Vancouver, BC
Company and Consultant Agree:
Term of Consulting Service: From 5/15/99 to 6/30/99
1. Scope of Work
Consultant will perform the consulting services for Company or one of its
affiliated corporations (together, the "Company") described in Schedule 1 (the
"Services").
2. Compensation
Company will pay Consultant a fifty thousand dollar ($50,000) consulting fee as
follows:
$15,000 on or before May 28
$10,000 on or before June 15
$10,000 on or before June 30
$15,000 on or before July 15
The total fee (excluding the direct payment by Company of all travel expenses
requested by Consultant under this agreement) may not exceed fifty thousand
dollars ($50,000) without the prior written approval of Company.
3. Manner of Performance
Consultant has the requisite expertise, ability, and legal right to render the
Services and will perform the Services in an efficient manner. Consultant will
abide by all laws, rules, and regulations that apply to the performance of the
Services, including applicable requirements regarding equal employment
opportunity and the provisions of Executive Order 11246 and related rules. Each
of Consultant's employees performing Services will have the expertise to perform
assigned Services in an efficient manner.
The Consultant shall provide the Company with any materials prepared in
conjunction with this Agreement that are intended to be externally distributed
prior to such distribution and the Consultant further agrees that the
distribution of all such materials shall be subject to prior approval by the
Company.
<PAGE>
4. Confidentiality In the course of this agreement, it is anticipated
that Consultant will learn information that Company regards as confidential or
proprietary. Consultant will keep confidential this information which Consultant
may acquire with respect to Company's business, including, but not limited to,
information developed by Consultant and information relating to new products,
customers, pricing, know-how, processes, and practices, unless and until Company
consents to disclosure, or unless such knowledge and information otherwise
becomes generally available to the public through no fault of Consultant.
Consultant will not disclose to others, without Company's consent, the fact that
it is acting on behalf of Company. This undertaking to keep information
confidential will survive the termination of this agreement for a period of one
(1) year. At the termination of this agreement, Consultant will return to
Company all drawings, specifications, manuals, and other printed or reproduced
material (including information stored on machine-readable media) provided by
Company to Consultant and all copies of such information made by Consultant or
its employees.
5. Conflicts of Interest
Consultant represents that it has advised Company of any relationship with third
parties which would prevent Consultant from carrying out the terms of this
agreement.
6. Independent Contractor
Consultant is an independent contractor, not an employee or agent of Company.
Nothing in this Consulting Agreement shall render Consultant, or any of its
agents or employees, an employee or agent of Company, nor authorize or empower
Consultant or its agents or employees to speak for, represent, or obligate
Company in any way. Company recognizes that Consultant retains all the rights
and privileges of an employer, including, but not limited to, the right to hire,
direct, discipline, compensate and terminate its employees assigned to the
Company account. Consultant assumes any and all liabilities regarding ss. 1706
of the Tax Reform Act of 1986 and ss. 414(n) of the Internal Revenue Code of
1986.
7. Ownership of Developments
All written materials and other works which may be subject to copyright and all
patentable and unpatentable inventions, discoveries, and ideas (including, but
not limited to, any computer software) which are made, conceived, or written by
Consultant during the term of this agreement, and for ninety (90) days after it
expires, and which are based upon the Services performed by Consultant for
Company (Developments) shall remain Consultant's property.
8. Disclosures to Company
If during the term of this agreement Consultant discloses any copyrightable
works, inventions, discoveries or ideas to Company which were conceived or
written prior to this agreement or which are not based upon the Services
performed by Consultant for Company under this agreement, Company will have no
liability to Consultant because of its use of such works, inventions,
discoveries, or ideas, except liability for infringement of any valid copyright
or patent now or hereafter issued thereon.
<PAGE>
9. Term
The term of this agreement is as specified on the first page of this agreement,
but in no event will the term of this agreement extend beyond sixty (60) days
from the date of this agreement.
10. Termination
Company may terminate this Consulting Agreement effective the day of notice by
giving Consultant written notice of termination if Consultant:
1) Fails to provide the standard of performance of Services that
substantially meets Company's reasonable expectations; or
2) Fails at any time to provide the contracted Services defined in
Schedule 1.
11. General
No assignment by Consultant of this agreement or any sums due under it will be
binding on Company without Company's prior written consent. This agreement may
not be changed or terminated orally by or on behalf of either party. In the
event either party breaches this agreement, the other party will have the right
to terminate the agreement. In the event of the actual or threatened breach of
any of the terms of paragraph 4, Company will have the right to specific
performance and injunctive relief. The rights granted by this paragraph are in
addition to all other remedies and rights available at law or in equity. This
agreement shall be construed according to the laws of Wisconsin for contracts
made within that state.
Agreed By:
i Link Telecom, Inc. Indus, Inc. dba Industar Digital PCS
By: By:
---------------------- -----------------------
Amar Bahadoorsingh Michael Flanigan
By:
----------------------
Peter M. Schriber
<PAGE>
SCHEDULE 1
Assist in the following tasks:
o Provide leadership in the development of the business strategy
o Based on the strategic focus, and in cooperation with other principals,
write the business plan for the organization which addresses the following
topics--
|X| Staffing, compensation and responsibilities for the following business
functions:
- Executive team
- Human Resources
- Regulatory and legal
- Engineering
- Sales and marketing
- System operations
- Data processing
- Finance and accounting
- Customer Service
- Strategic planning
- Distribution
|X| Develop subscriber forecast
|X| Develop Revenue and Expense Projections
|X| Assist in negotiation of interconnection and cell site backhaul
agreements
iLink Telecom, Inc.
Suite 201 - 1190 Hornby Street, Vancouver, B.C. V6Z 2K5
Tel: (604) 232-0394 Fax: (604) 801-5580 email: [email protected]
February 27th, 1999
Attention: Mr. Randall Owen Walrond
RE: iLink Telecom, Inc. & Randall Owen Walrond Consulting Contract
Dear Mr. Walrond:
This document is to outline the terms of the consulting contract that Randall
Owen Walrond ("Mr. Walrond") will undertake on behalf of iLink Telecom, Inc.
Randall Owen Walrond is a computer consultant specializing in telecom
technologies.
Mr. Walrond will act as the head of Research and Development effective March 1,
1999. This contract will be in place for one year. Either party shall be
entitled to terminate this consulting agreement by providing the other party
with four calendar weeks written notice.
For his duties, Mr. Walrond will be renumerated a sum of $5,000 CDN per
month, with a management review on a semi-annual basis.
Mr. Walrond will be expected to provide:
1. Strategic planning to iLink Telecom, Inc.'s switching division;
2. Technical planning and the development pro-forma cash projections;
3. Input relating to Mergers and Acquisitions within the telecom sector;
4. Management expertise relating to the telecom switching, VoIP, and pre-paid
card divisions;
5. The hiring and staffing of iLink Telecom, Inc.'s telecom division;
6. Be current in the technologies relating to iLink Telecom, Inc. and
the telecom industry as a whole;
7. Oversee the iLink Telecom, Inc. Calgary operation, and ensure it is
running in an effective manner; and,
8. Provide sales support for the telecom switching division.
Mr. Walrond is declaring that he also has a consulting agreement with Telephony
Experts of Los Angeles, California.
A signed copy of this document signifies acceptance of these terms.
Amar Bahadoorsingh Randall Owen Walrond
President
iLink Telecom, Inc.
Suite 201 - 1190 Hornby Street, Vancouver, B.C. V6Z 2K5
Tel: (604) 232-0394 Fax: (604) 801-5580 email: [email protected]
February 27th, 1999
Attention: Mr. Amar Bahadoorsingh, President, Devmar Holdings Ltd.
RE: iLink Telecom, Inc. & Devmar Holdings Ltd. Management Contract
Dear Mr. Bahadoorsingh:
This document is to outline the terms of the management contract that Devmar
Holdings Ltd. ("Devmar") will undertake on behalf of iLink Telecom, Inc. Devmar
Holdings Ltd. is a wholly owned holding corporation owned by Mr. Bahadoorsingh.
Mr. Bahadoorsingh will act as Director, President and Chief Executive Officer,
effective April 1, 1999. This contract will be in place for five years. Either
party shall be entitled to terminate this consulting agreement by providing the
other party with four calendar weeks written notice.
For this, Devmar will be remunerated a sum of $5,000 USD per month plus GST,
with a management review on a semi-annual basis.
Devmar will be expected to provide:
1. Strategic planning to iLink Telecom, Inc.;
2. Financial planning and development pro-forma cash projections;
3. Expertise relating to Mergers and Acquisitions;
4. Management expertise;
5. The hiring and staffing of iLink Telecom, Inc.;
6. Mr. Bahadoorsingh acting as a director of iLink Telecom, Inc.;
7. Assembling a Board of Directors for iLink Telecom, Inc.;
8. Developing a corporate hierarchy for iLink Telecom, Inc.;
9. Provide direction for the corporate governance of iLink Telecom, Inc.;
and,
10. Utilize the funds within iLink Telecom, Inc. to develop a business
that is parallel to the business plan and business model that iLink has
created.
Mr. Bahadoorsingh is declaring that he also has similar consulting agreement
with two private organizations in unrelated fields.
A signed copy of this document signifies acceptance of these terms.
Peter Shriber Devmar Holdings Ltd.
Director Per: Amar Bahadoorsingh, President
GULF ATLANTIC PUBLISHING, INC. AGREEMENT
This GULF ATLANTIC PUBLISHING, INC. Agreement (the "Agreement") is
entered into on this 22nd day of March, 1999, between Gulf Atlantic Publishing,
Inc., a Florida corporation ("GAP"), and iLink Telecom, Inc. a Nevada
corporation ("Client").
Whereas, GAP is in the business of planning, developing and
implementing advertising, marketing and promotional campaigns for corporations
and other business entities ("Advertising and Promotional Services");
Whereas, the Client desires to retain GAP to provide the Advertising
and Promotional Services, and GAP desires to provide such Advertising and
Promotional Services to Client, pursuant to the terms, conditions and provisions
contained in this Agreement;
Now, therefore, in consideration of the mutual promises contained
herein and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Advertising and Promotional Services. Subject to Client's compliance
with each of the representations, warranties and covenants and agreements made
by Client in this Agreement, GAP agrees to provide to Client the Advertising and
Promotional Services identified on Exhibit A which is attached hereto and
incorporated herein by reference, for the period commencing on the latter of
(the "Effective Date") the date that this Agreement is executed and delivered by
Client or the date that GAP receives payment of its fees as herein provided and
expiring on the 365th day following the effective date of this Agreement (the
"Term").
2. Obligations and Responsibilities of Client. As of the date hereof
and during the Term of this Agreement, Client agrees as follows.
1. Representation and Warranties.
Client represents and warrants to GAP that:
(1) Organization. Client is a corporation duly organized, validly
existing and in good standing under the laws of the State of its
incorporation and it is duly qualified to do business as a foreign
corporation in each jurisdiction in which it owns or leases property or
engages in business.
(2) Formal Action. Client has the corporate power and authority to
execute and deliver this Agreement and to perform each of its obligations
hereunder and this Agreement has been duly approved by Client's Board of
Directors.
<PAGE>
(3) Valid and Binding Agreement. This Agreement has been duly executed
and delivered by Client and is the valid and binding obligation of Client
enforceable against it in accordance with its terms.
(4) No Violation. The execution, delivery and performance of this
Agreement does not and will not violate any provisions of the charter or
bylaws of Client or any agreement to which Client is a party or any
applicable law or regulation or order or decree of any court, arbitrator or
agency of government and no action of, or filing with, any governmental or
public body or authority is required in connection with the execution,
delivery or performance of this Agreement.
(5) Litigation. No action, suit or proceeding is pending against or
affecting the Client or any of its properties before any court, arbitrator
or governmental body or administrative agency and none of the persons
owning beneficially or of record more than 10% of the outstanding capital
stock of the Client or any of the directors or officers of Client is a
party to any action, suit or proceeding before any federal or state court,
arbitrator or governmental body or administrative agency (other than
routine traffic violations) and no such person has been a party to any such
proceedings for more than the past five years.
(6) Accuracy of Information. The information furnished by Client to
GAP regarding the business, operations, financial condition, including
financial statements, business plans and biographical information regarding
the Client's directors and officers (collectively referred to as the
"Information Package") is complete and accurate in all material respects
and does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made not misleading.
2. Covenants and Agreements.
Client covenants and agrees to comply with the following covenants:
(1) Client Certification. Client acknowledges that it is responsible
for the accuracy and completeness of the Information Package and for all
other information furnished to GAP and for the accuracy and completeness of
the contents of all materials prepared by GAP for and on behalf of Client.
The Client hereby designates the individuals listed on Exhibit B attached
hereto and incorporated herein by reference as the duly authorized
representatives of Client for purposes of certifying to GAP the accuracy of
all documents, advertisements or other materials prepared by GAP for and on
behalf of Client. The Client agrees to promptly advise GAP in writing of
any condition, event, circumstance or act that would constitute a material
adverse change in the business, properties, financial condition or business
prospects of the Client or which would make any of the information
contained in the Information Package or in any report, advertorial or other
document prepared by GAP for and on behalf of Client misleading in any
material respect. Client hereby agrees that GAP and its directors,
officers, agents and employees may rely on the Information Package and on
<PAGE>
all other information furnished by Client, and on each and every
certification provided by an authorized representative of Client, until GAP
is advised in writing by an authorized representative of Client that the
information previously furnished to GAP is inaccurate or incomplete in any
material respect. Client acknowledges that GAP shall have no obligation to
provide services hereunder until it has received a written certificate from
an authorized representative of Client as follows: GAP shall prepare proofs
and/or tapes of the agreed upon materials and information, as set for
dissemination, for the Client's review and approval and Client shall sign
and return such materials marking all corrections and changes that the
Client believes appropriate. Client acknowledges that GAP will make oral
representations based on the information furnished hereunder and the Client
authorizes such representations.
(2) Books and Records. Client shall maintain true and complete books,
records and accounts in which true and correct entries shall be made of its
transactions in accordance with generally accepted accounting principles
consistently applied ("GAAP").
(3) Financial and Other Information. Client agrees to furnish to GAP
the following information:
(i) Annual Financial Statements. As soon as practicable, and in
any event within 90 days after the close of the Client's fiscal year,
annual financial statements including a balance sheet, an income
statement, a statement of cash flows, and a statement of stockholder's
equity, and all notes thereto prepared in accordance with GAAP and
audited by an independent certified public accountant.
(ii) Quarterly Financial Statements. As soon as practicable, and
in any event within 45 days after the end of each fiscal quarter,
quarterly financial statements, including a balance sheet, a quarterly
and year-to-date income statement, a statement of cash flows, and a
statement of stockholder's equity, prepared by Client in accordance
with GAAP and certified by the chief financial officer and chief
executive officer of Client as fairly presenting, subject to normal
year-end audit adjustments, the Client's financial position as of and
for the periods indicated.
(4) GAP Reliance on Client's Full Disclosure. Client will provide, or
cause to be provided, to GAP all financial and other information requested
by GAP for the purpose of rendering its services pursuant to this
Agreement. Client recognizes and confirms that GAP will use such
information in performing the services contemplated by this Agreement
without independently verifying such information and that GAP does not
assume any responsibility for the accuracy or completeness of such
information. The persons executing this Agreement on behalf of Client
certify that there is no fact known to them which materially adversely
affects or may (so far as the Client's senior management can now reasonably
foresee) materially adversely affect the business, properties, condition
(financial or other) or operations (present or prospective) of the Client
which has not been set forth in written form delivered by Client to GAP.
The persons executing this Agreement on behalf of Client agree to keep GAP
promptly informed of any facts hereafter know to Client which materially
adversely affects or may (so far as the Client's senior management can now
<PAGE>
reasonably foresee) materially adversely affect the business, properties,
condition (financial or other) or operations (present or prospective) of
Client. (5) Legal Representation. Client acknowledges and agrees that it
has been and will continue to be, represented by legal counsel experienced
in corporate and securities laws and Client acknowledges that it has been
advised as to the obligations imposed on it pursuant to such laws and
understands that it will have the obligation and responsibility to see that
all such laws are complied with at all times during the Term of this
Agreement.
3. Compensation. In consideration of the Advertising and Promotional Services
to be performed by GAP hereunder, Client hereby agrees to compensate GAP in
the manner and in the amount specified in Exhibit C which is attached
hereto and incorporated herein by reference thereto. In addition to the
compensation to be paid to GAP as provided in Exhibit C, Client shall
reimburse GAP promptly after a written request therefor accompanied by
appropriate documentation, for all reasonable (less than $1,00.00)
out-of-pocket expenses (including reasonable fees and disbursements of
GAP's counsel, if any) incurred in connection with providing services
hereunder or to the extent provided in Exhibit C.
4. Indemnity. Client acknowledges that it is responsible for the accuracy of
the Information Package and all other information provided to GAP and for
the contents of all materials, advertorials and other information prepared
by GAP for an on behalf of Client as provided herein and Client agrees to
indemnify GAP in accordance with the Indemnification Agreement set forth in
Exhibit D, which is attached hereto and incorporated herein by reference.
5. Relationship of the Parties. This Agreement provides for the providing of
marketing, promotional and advertising services by GAP to Client and the
provisions herein for compliance with financial covenants, delivery of
financial statements, and similar provisions are intended solely for the
benefit of GAP to provide it with information on which it may rely in
providing services hereunder and nothing contained in this Agreement shall
be construed as permitting or obligating GAP to act as a financial or
business advisor or consultant to Client, as permitting or obligating GAP
to participate in the management of client's business, as creating or
imposing any fiduciary obligation on the part of GAP with respect to the
provisions of services hereunder and GAP shall have no such duty or
obligation to client, as providing or counseling Client as to the
compliance by Client with any federal or state securities or other laws
effecting the services to be provided hereunder, or as creating any joint
venture, agency, or other relationship between the parties other than as
explicitly and specifically stated in this Agreement. The Client
acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation
and execution of this Agreement, the provision of services hereunder and
with respect to all matters contained herein, including, without
limitation, the provisions of Section 4 hereof.
6. Survival of Certain Provisions. The Client's obligations to pay the fees
and expenses of GAP pursuant to Section 3 of this Agreement and to comply
with the indemnification provisions pursuant to Section 4 shall remain
<PAGE>
operative and in full force and effect regardless of any termination of
this Agreement and shall be binding upon, and shall inure to the benefit
of, GAP and, in the case of the indemnity agreement, the persons, agents,
employees, officers, directors and controlling persons referred to in the
Indemnification Agreement, and their respective successors and assigns and
heirs, and no other person shall acquire or have any right under or by
virtue of this Agreement. All amounts paid or required to be paid under
Sections 3 and 4 of this Agreement shall be fully earned on the Effective
Date of this Agreement notwithstanding prior termination of this Agreement.
7. Termination. GAP shall have the right in its sole and absolute discretion
to terminate its obligations hereunder and to immediately cease providing
Advertising and Promotional Services pursuant to this Agreement if GAP, in
the exercise of its reasonable judgment, believes that the representations
and warranties made by Client hereunder are inaccurate in any material
respect or if Client breaches any of its covenants and agreements contained
herein or if any federal or state governmental agency or instrumentality
institutes an investigation or suit against Client or pertaining to the
services hereunder.
8. Non-Solicitation Covenant. Client agrees that it will not directly or
indirectly during the term of this Agreement or for three years following
the termination or expiration of this Agreement, either voluntarily or
involuntarily, for any reason whatsoever, recruit or hire or attempt to
recruit or hire any employee of GAP or of any of its affiliates or
subsidiaries, or otherwise induce any such employees to leave the
employment of GAP or of any of its affiliates or subsidiaries or to become
an employee of or otherwise be associated with Client or any affiliate or
subsidiary of Client. Client acknowledges that GAP and its affiliates and
subsidiaries have invested a significant amount of time, energy and
expertise in the training of their employees to be able to provide
Advertising and Promotional Services and Client therefore agrees that this
covenant is reasonable and agrees that the breach of such covenant is very
likely to result in irreparable injury to GAP, which is unlikely to be
adequately compensated by damages. Accordingly, in the event of a breach or
threatened breach by Client of this Section 8, GAP shall be entitled to an
injunction restraining Client and any affiliate, subsidiary or director or
officer thereof from recruiting, or hiring or attempting to recruit or hire
any employee of GAP or of any affiliate or subsidiary of GAP. Nothing
herein shall be construed as prohibiting GAP from pursuing any other
remedies available to GAP for such breach or threatened breach, including
recovery of damages from Client. The undertakings herein shall survive the
termination or cancellation of the Agreement for three years.
9. Miscellaneous.
A. Governing Law. This Agreement shall be governed by the laws
of the State of Florida applicable to contracts executed and performed in the
Circuit Court, Orange County, in the State of Florida (without regard to the
principles of conflicts of laws).
B. Entire Agreement. This Agreement and the Exhibits hereto
embody the entire agreement of the parties with respect to its subject matter.
There are no restrictions, promises, representations, warranties, covenants, or
<PAGE>
undertakings other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter.
C. Amendments to be in Writing. This Agreement may be amended
only in a writing signed by all of the parties.
D. No Waivers by Course of Dealing; Limited Effect of Waivers.
No waiver shall be effective against any party unless it is in a writing signed
by that party. No course of dealing and no delay on the part of GAP in
exercising its rights shall operate as a waiver of that right or otherwise
prejudice GAP. GAP's failure to insist upon the strict performance of any
provision of this Agreement, or to exercise any right or remedy available to
GAP, shall not constitute a waiver by GAP of such provision. No specific waiver
by GAP of any specific breach of any provision of this Agreement shall operate
as a general waiver of the provision or of any other breach of the provision.
Client shall have no right to cure any breach except as specifically provided
herein.
E. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
F. Cumulation of Rights and Remedies. No right or remedy of
GAP under this Agreement is intended to preclude any other right or remedy and
every right and remedy shall coexist with every other right and remedy now or
hereafter existing, whether by contract, at law, or in equity.
G. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties and their successors and assigns.
Client shall not have any right to assign any of its rights or delegate any of
its obligations or responsibilities under this Agreement except as expressly
stated herein.
H. Payment of Fees and Expenses on Enforcing Agreement. In the
event of any dispute between the parties arising out of or related to this
Agreement or the interpretation thereof, at the trial level or appellate level,
the prevailing party shall be entitled to recover from the non-prevailing party
all costs and expenses, including reasonable fees and disbursements of counsel
which may be incurred in connection with such proceeding, without limitation,
including any costs and expenses of experts, witnesses, depositions and other
costs.
I. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing, and shall be delivered to
the parties at the addresses set forth below (or to such other addresses as the
parties may specify by due notice to the others). Notices or other
communications shall be effective when received at the recipient's location (or
when delivered to that location if receipt is refused). Notices or other
communications given by facsimile transmission shall be presumed received at the
time indicated in the recipient's automatic acknowledgment. Notices or other
communications given by Federal Express or other recognized overnight courier
<PAGE>
service shall be presumed received on the following business day. Notices or
other communications given by certified mail, return receipt requested, postage
prepaid, shall be presumed received 3 business days after the date of mailing.
Client: iLink Telecom, Inc.
1190 Hornby Street, Suite 201
Vancouver, BC V6Z 2K5
Attn: Amar Bahadoorsingh
Fax: 604-689-5320
GAP:
Attn: Donald R. Philpott, President
Fax: (407) 628-0807
J. Headings. The headings in this Agreement are
intended solely for convenience of reference. They shall be given no effect
in the construction or interpretation of this Agreement.
K. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not impair the validity or enforceability of
any other provision.
<PAGE>
In Witness Whereof, the parties have executed this Agreement as of the date
first above written.
Attest: iLink Telecom, Inc.
By: ------------------ By:
------------------------
Secretary Amar Bahadoorsingh,
President
[Corporate Seal]
Attest: Gulf Atlantic Publishing, Inc.
By: By:
Secretary -------------------------
Donald R. Philpott,
President
[Corporate Seal]
<PAGE>
EXHIBIT A
Advertising and Promotional Services
The services to be provided are as follows:
A. A Four-Color Financial Sentinel - Featured advertorial mailing of 200,000
will be created of which a two page advertorial will be dedicated to the
Client.
B. A Four-Color Money-World Magazine - Featured advertorial mailing of 100,000
will be created of which a two or four page advertorial will be dedicated
to the Client.
Junior Page advertorial in four separate issues of Money-World Magazine
C. A Four-Color Financial Sentinel Special Project - Featured advertorial
mailing of two editions of 100,000 will be featured of which a four page
advertorial will be dedicated to the Clients.
The parties hereto by signing this Exhibit in the space provided below
signify their agreement regarding the service to be provided by GAP under the
Agreement.
iLink Telecom, Inc.
By: ________________________________
Amar Bahadoorsingh , President
Gulf Atlantic Publishing, Inc.
By: ________________________________
Donald R. Philpott, President
<PAGE>
EXHIBIT B
Client hereby designates the following person or persons to act on its behalf
for the purposes set forth in Section 2.B.(1) of the Agreement.
- ------------------------------------ ---------------------------------
DIRECTOR (PLEASE SIGN) DIRECTOR (PLEASE PRINT)
- ------------------------------------ ---------------------------------
PRESIDENT (PLEASE SIGN) PRESIDENT (PLEASE PRINT)
- ------------------------------------ ---------------------------------
VICE PRESIDENT (PLEASE SIGN) VICE PRESIDENT (PLEASE PRINT)
<PAGE>
EXHIBIT C
COMPENSATION
1. Client agrees to pay to GAP One Hundred Ten Thousand Dollars
($110,000.00) in cash on execution and delivery of the Agreement.
2. Client acknowledges that the consideration to be paid to GAP shall
be fully earned on the date that GAP commences providing services under the
Agreement regardless of whether the Agreement is terminated as provided in the
Agreement prior to completion of all services.
3. Client agrees to pay or reimburse GAP for all expenses arising out
of or related to the provision of services by GAP under the Agreement to the
extent provided in the Agreement and/or in Exhibit A thereto.
<PAGE>
The parties hereto by signing this Exhibit in the space provided below
signify their agreement to the compensation provisions contained herein.
iLINK TELECOM, INC.
By: ___________________________
Amar Bahadoorsingh , President
GULF ATLANTIC PUBLISHING, INC.
By: ______________________________
Donald R. Philpott, President
<PAGE>
EXHIBIT D
INDEMNIFICATION
This Indemnification Agreement constitutes part of the Gulf Atlantic
Publishing, Inc. Agreement (the Agreement) dated the 22nd day of March, 1999,
between Client (as defined in the Agreement) and GAP.
Client acknowledges and agrees that if, in connection with the services
or matters that are the subject of or arise out of such Agreement, GAP becomes
involved (whether or not as a named party) in any action, claim or legal
proceeding (including any governmental inquiry or investigation), Client agrees
to reimburse GAP for its reasonable legal fees, disbursements of counsel and
other expenses (including the cost of investigation and preparation) as they are
incurred by GAP. Client also agrees to indemnify and hold GAP harmless against
any losses, claims, damages or liabilities, joint or several, as incurred, to
which GAP may become subject in connection with the services or matters which
are the subject of or arise out of the Agreement; provided, however, that Client
shall not be liable under the foregoing indemnity in respect of any loss, claim,
damage or liability to the extent that a court having jurisdiction shall have
determined by a final judgment that such loss, claim, damage or liability is a
consequence of intentional fraudulent acts committed by GAP without the
knowledge and/or consent of Client. In the event that the foregoing indemnity is
unavailable by operation of law, then Client shall contribute to amounts paid or
payable by GAP in respect of such losses, claims, damages and liabilities in the
proportion that Client's interest bears to GAP's interest in the matters
contemplated by the Agreement. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, or otherwise,
then Client shall contribute to such amount paid or payable by GAP in such
proportion as is appropriate to reflect not only such relative interests but
also the relative fault of Client on the one hand and GAP on the other hand in
connection with the matters as to which such losses, claims, damages or
liabilities relate and other equitable considerations.
Promptly after GAP's receipt of notice of the commencement of any
action or of any claim, GAP will, if a claim in respect thereof is to be made
against Client under this Indemnity Agreement, notify Client of the commencement
thereof. In case any such action or claim is brought against GAP, Client will be
entitled to participate therein and, to the extent that Client may wish, to
assume the defense thereof, with counsel satisfactory to GAP. After notice from
Client to GAP of Client's election to so assume the defense thereof, Client will
not be liable to GAP for indemnification as provided in the preceding paragraph
for any legal fees, disbursements of counsel or other expenses subsequently
incurred by GAP in connection with the defense thereof other than reasonable
costs of investigation; provided that GAP shall have the right to employ
separate counsel if, in the reasonable judgment of GAP's counsel, it is
advisable for GAP to be represented by separate counsel or if in the reasonable
judgment of GAP's counsel, Client is not vigorously and actively defending
<PAGE>
against any such claim or claims, and in either such event the reasonable legal
fees and disbursements of such separate counsel shall be paid by Client.
The foregoing agreements shall apply to any modification of the
Agreement, shall remain in full force and effect following the completion or
termination of GAP's engagement under the Agreement and shall be in addition to
any rights that GAP may have at common law or otherwise. The agreements in this
Indemnification Agreement shall extend to and inure to the benefit of each
person, if any, who may be deemed to control GAP, be controlled by GAP or be
under common control with GAP and to GAP's, and to each such other person's
respective affiliates, directors, officers, employees and agents. This
Indemnification Agreement shall be binding on any successor of Client.
Client represents that the Indemnification Agreement contained herein
is the legal, valid, binding and enforceable obligation of Client, enforceable
against Client according to its terms.
This Indemnification Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida without regard to principles
of conflicts of law, and the forum for resolution of legal and interpretative
issues shall be the Federal District courts in the State of Florida.
The parties hereto by signing this Exhibit in the space provided below
signify their agreement to the indemnification provisions contained herein.
iLink Telecom, Inc.
By:
----------------------------------
Amar Bahadoorsingh, President
Gulf Atlantic Publishing, Inc. .
By:
----------------------------------
Donald R. Philpott, President
<PAGE>
EXHIBIT E
ADDITIONAL SERVICE OPTION
1. Client has the option to purchase the following additional services from GAP:
A Two-Color Financial Sentinel Special Project - Featured
advertorial mailing of two editions of 150,000 will be
featured of which a four page advertorial will be dedicated to
the Client.
The first mailing of 150,000 will take place no later than
twenty-four (24) days from date Client exercises this option.
The second mailing of 150,000 will take place no later than
fifty-four (54) days from date Client exercises this option.
2. Client will inform GAP no later that July 15, 1999 of intent
to exercise this option. Compensation for this option will be
$225,000.00 paid in two equal installments on October 1st and
November 1st, 1999.
CORPORATE RELATIONS AGREEMENT
This Corporate Relations Agreement (the "Agreement") is entered into on
this 22nd day of March, 1999, between Corporate Relations Group, Inc., a Florida
corporation ("CRG"), and iLink Telecom, Inc. a Nevada corporation ("Client").
Whereas, CRG is in the business of planning, developing and
implementing advertising, marketing and promotional campaigns for corporations
and other business entities ("Advertising and Promotional Services");
Whereas, the Client desires to retain CRG to provide the Advertising
and Promotional Services, and CRG desires to provide such Advertising and
Promotional Services to Client, pursuant to the terms, conditions and provisions
contained in this Agreement;
Now, therefore, in consideration of the mutual promises contained
herein and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Advertising and Promotional Services. Subject to Client's compliance
with each of the representations, warranties and covenants and agreements made
by Client in this Agreement, CRG agrees to provide to Client the Advertising and
Promotional Services identified on Exhibit A which is attached hereto and
incorporated herein by reference, for the period commencing on the latter of
(the "Effective Date") the date that this Agreement is executed and delivered by
Client or the date that CRG receives payment of its fees as herein provided and
expiring on the 365th day following the effective date of this Agreement (the
"Term").
2. Obligations and Responsibilities of Client. As of the date hereof
and during the Term of this Agreement, Client agrees as follows.
1. Representation and Warranties.
Client represents and warrants to CRG that:
(1) Organization. Client is a corporation duly organized, validly
existing and in good standing under the laws of the State of its
incorporation and it is duly qualified to do business as a foreign
corporation in each jurisdiction in which it owns or leases property
or engages in business.
(2) Formal Action. Client has the corporate power and authority
to execute and deliver this Agreement and to perform each of its
obligations hereunder and this Agreement has been duly approved by
Client's Board of Directors.
<PAGE>
(3) Valid and Binding Agreement. This Agreement has been duly
executed and delivered by Client and is the valid and binding
obligation of Client enforceable against it in accordance with its
terms.
(4) No Violation. The execution, delivery and performance of this
Agreement does not and will not violate any provisions of the charter
or bylaws of Client or any agreement to which Client is a party or any
applicable law or regulation or order or decree of any court,
arbitrator or agency of government and no action of, or filing with,
any governmental or public body or authority is required in connection
with the execution, delivery or performance of this Agreement.
(5) Litigation. No action, suit or proceeding is pending against
or affecting the Client or any of its properties before any court,
arbitrator or governmental body or administrative agency and none of
the persons owning beneficially or of record more than 10% of the
outstanding capital stock of the Client or any of the directors or
officers of Client is a party to any action, suit or proceeding before
any federal or state court, arbitrator or governmental body or
administrative agency (other than routine traffic violations) and no
such person has been a party to any such proceedings for more than the
past five years.
(6) Accuracy of Information. The information furnished by Client
to CRG regarding the business, operations, financial condition,
including financial statements, business plans and biographical
information regarding the Client's directors and officers
(collectively referred to as the "Information Package") is complete
and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made not misleading.
2. Covenants and Agreements.
Client covenants and agrees to comply with the following
covenants:
(1) Client Certification. Client acknowledges that it is
responsible for the accuracy and completeness of the Information
Package and for all other information furnished to CRG and for the
accuracy and completeness of the contents of all materials prepared by
CRG for and on behalf of Client. The Client hereby designates the
individuals listed on Exhibit B attached hereto and incorporated
herein by reference as the duly authorized representatives of Client
for purposes of certifying to CRG the accuracy of all documents,
advertisements or other materials prepared by CRG for and on behalf of
Client. The Client agrees to promptly advise CRG in writing of any
condition, event, circumstance or act that would constitute a material
adverse change in the business, properties, financial condition or
business prospects of the Client or which would make any of the
information contained in the Information Package or in any report,
advertorial or other document prepared by CRG for and on behalf of
Client misleading in any material respect. Client hereby agrees that
CRG and its directors, officers, agents and employees may rely on the
Information Package and on all other information furnished by Client,
<PAGE>
and on each and every certification provided by an authorized
representative of Client, until CRG is advised in writing by an
authorized representative of Client that the information previously
furnished to CRG is inaccurate or incomplete in any material respect.
Client acknowledges that CRG shall have no obligation to provide
services hereunder until it has received a written certificate from an
authorized representative of Client as follows: CRG shall prepare
proofs and/or tapes of the agreed upon materials and information, as
set for dissemination, for the Client's review and approval and Client
shall sign and return such materials marking all corrections and
changes that the Client believes appropriate. Client acknowledges that
CRG will make oral representations based on the information furnished
hereunder and the Client authorizes such representations.
(2) Books and Records. Client shall maintain true and complete
books, records and accounts in which true and correct entries shall be
made of its transactions in accordance with generally accepted
accounting principles consistently applied ("GAAP").
(3) Financial and Other Information. Client agrees to furnish to
CRG the following information:
(i) Annual Financial Statements. As soon as practicable,
and in any event within 90 days after the close of the
Client's fiscal year, annual financial statements
including a balance sheet, an income statement, a
statement of cash flows, and a statement of
stockholder's equity, and all notes thereto prepared in
accordance with GAAP and audited by an independent
certified public accountant.
(ii) Quarterly Financial Statements. As soon as practicable,
and in any event within 45 days after the end of each
fiscal quarter, quarterly financial statements,
including a balance sheet, a quarterly and year-to-date
income statement, a statement of cash flows, and a
statement of stockholder's equity, prepared by Client
in accordance with GAAP and certified by the chief
financial officer and chief executive officer of Client
as fairly presenting, subject to normal year-end audit
adjustments, the Client's financial position as of and
for the periods indicated.
(4) CRG Reliance on Clients's Full Disclosure. Client will
provide, or cause to be provided, to CRG all financial and other
information requested by CRG for the purpose of rendering its services
pursuant to this Agreement. Client recognizes and confirms that CRG
will use such information in performing the services contemplated by
this Agreement without independently verifying such information and
that CRG does not assume any responsibility for the accuracy or
completeness of such information. The persons executing this Agreement
on behalf of Client certify that there is no fact known to them which
materially adversely affects or may (so far as the Client's senior
management can now reasonably foresee) materially adversely affect the
business, properties, condition (financial or other) or operations
(present or prospective) of the Client which has not been set forth in
written form delivered by Client to CRG. The persons executing this
Agreement on behalf of Client agree to keep CRG promptly informed of
any facts hereafter know to Client which materially adversely affects
<PAGE>
or may (so far as the Client's senior management can now reasonably
foresee) materially adversely affect the business, properties,
condition (financial or other) or operations (present or prospective)
of Client.
(5) Legal Representation. Client acknowledges and agrees that it
has been and will continue to be, represented by legal counsel
experienced in corporate and securities laws and Client acknowledges
that it has been advised as to the obligations imposed on it pursuant
to such laws and understands that it will have the obligation and
responsibility to see that all such laws are complied with at all
times during the Term of this Agreement.
3. Compensation. In consideration of the Advertising and Promotional
Services to be performed by CRG hereunder, Client hereby agrees to compensate
CRG in the manner and in the amount specified in Exhibit C which is attached
hereto and incorporated herein by reference thereto. In addition to the
compensation to be paid to CRG as provided in Exhibit C, Client shall reimburse
CRG promptly after a written request therefor accompanied by appropriate
documentation, for all reasonable (less than $1,000.00) out-of-pocket expenses
(including reasonable fees and disbursements of CRG's counsel, if any) incurred
in connection with providing services hereunder or to the extent provided in
Exhibit C.
4. Indemnity. Client acknowledges that it is responsible for the accuracy
of the Information Package and all other information provided to CRG and for the
contents of all materials, advertorials and other information prepared by CRG
for an on behalf of Client as provided herein and Client agrees to indemnify CRG
in accordance with the Indemnification Agreement set forth in Exhibit D, which
is attached hereto and incorporated herein by reference.
5. Relationship of the Parties. This Agreement provides for the providing
of marketing, promotional and advertising services by CRG to Client and the
provisions herein for compliance with financial covenants, delivery of financial
statements, and similar provisions are intended solely for the benefit of CRG to
provide it with information on which it may rely in providing services hereunder
and nothing contained in this Agreement shall be construed as permitting or
obligating CRG to act as a financial or business advisor or consultant to
Client, as permitting or obligating CRG to participate in the management of
client's business, as creating or imposing any fiduciary obligation on the part
of CRG with respect to the provisions of services hereunder and CRG shall have
no such duty or obligation to client, as providing or counseling Client as to
the compliance by Client with any federal or state securities or other laws
effecting the services to be provided hereunder, or as creating any joint
venture, agency, or other relationship between the parties other than as
explicitly and specifically stated in this Agreement. The Client acknowledges
that it has had the opportunity to obtain the advice of experienced counsel of
its own choosing in connection with the negotiation and execution of this
Agreement, the provision of services hereunder and with respect to all matters
contained herein, including, without limitation, the provisions of Section 4
hereof.
6. Survival of Certain Provisions. The Client's obligations to pay the fees
and expenses of CRG pursuant to Section 3 of this Agreement and to comply with
the indemnification provisions pursuant to Section 4 shall remain operative and
<PAGE>
in full force and effect regardless of any termination of this Agreement and
shall be binding upon, and shall inure to the benefit of, CRG and, in the case
of the indemnity agreement, the persons, agents, employees, officers, directors
and controlling persons referred to in the Indemnification Agreement, and their
respective successors and assigns and heirs, and no other person shall acquire
or have any right under or by virtue of this Agreement. All amounts paid or
required to be paid under Sections 3 and 4 of this Agreement shall be fully
earned on the Effective Date of this Agreement notwithstanding prior termination
of this Agreement.
7. Termination. CRG shall have the right in its sole and absolute
discretion to terminate its obligations hereunder and to immediately cease
providing Advertising and Promotional Services pursuant to this Agreement if
CRG, in the exercise of its reasonable judgment, believes that the
representations and warranties made by Client hereunder are inaccurate in any
material respect or if Client breaches any of its covenants and agreements
contained herein or if any federal or state governmental agency or
instrumentality institutes an investigation or suit against Client or pertaining
to the services hereunder.
8. Non-Solicitation Covenant. Client agrees that it will not directly or
indirectly during the term of this Agreement or for three years following the
termination or expiration of this Agreement, either voluntarily or
involuntarily, for any reason whatsoever, recruit or hire or attempt to recruit
or hire any employee of CRG or of any of its affiliates or subsidiaries, or
otherwise induce any such employees to leave the employment of CRG or of any of
its affiliates or subsidiaries or to become an employee of or otherwise be
associated with Client or any affiliate or subsidiary of Client. Client
acknowledges that CRG and its affiliates and subsidiaries have invested a
significant amount of time, energy and expertise in the training of their
employees to be able to provide Advertising and Promotional Services and Client
therefore agrees that this covenant is reasonable and agrees that the breach of
such covenant is very likely to result in irreparable injury to CRG, which is
unlikely to be adequately compensated by damages. Accordingly, in the event of a
breach or threatened breach by Client of this Section 8, CRG shall be entitled
to an injunction restraining Client and any affiliate, subsidiary or director or
officer thereof from recruiting, or hiring or attempting to recruit or hire any
employee of CRG or of any affiliate or subsidiary of CRG. Nothing herein shall
be construed as prohibiting CRG from pursuing any other remedies available to
CRG for such breach or threatened breach, including recovery of damages from
Client. The undertakings herein shall survive the termination or cancellation of
the Agreement for three years.
9. Miscellaneous.
A. Governing Law. This Agreement shall be governed by the laws of
the State of Florida applicable to contracts executed and
performed in the Circuit Court, Orange County, in the State of
Florida (without regard to the principles of conflicts of laws).
B. Entire Agreement. This Agreement and the Exhibits hereto embody
the entire agreement of the parties with respect to its subject
matter. There are no restrictions, promises, representations,
warranties, covenants, or undertakings other than those expressly
set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties with
respect to its subject matter.
C. Amendments to be in Writing. This Agreement may be amended only
in a writing signed by all of the parties.
D. No Waivers by Course of Dealing; Limited Effect of Waivers. No
waiver shall be effective against any party unless it is in a
writing signed by that party. No course of dealing and no delay
on the part of CRG in exercising its rights shall operate as a
waiver of that right or otherwise prejudice CRG. CRG's failure to
insist upon the strict performance of any provision of this
Agreement, or to exercise any right or remedy available to CRG,
shall not constitute a waiver by CRG of such provision. No
specific waiver by CRG of any specific breach of any provision of
this Agreement shall operate as a general waiver of the provision
or of any other breach of the provision. Client shall have no
right to cure any breach except as specifically provided herein.
E. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
F. Cumulation of Rights and Remedies. No right or remedy of CRG
under this Agreement is intended to preclude any other right or
remedy and every right and remedy shall coexist with every other
right and remedy now or hereafter existing, whether by contract,
at law, or in equity.
G. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties and their successors and
assigns. Client shall not have any right to assign any of its
rights or delegate any of its obligations or responsibilities
under this Agreement except as expressly stated herein.
H. Payment of Fees and Expenses on Enforcing Agreement. In the event
of any dispute between the parties arising out of or related to
this Agreement or the interpretation thereof, at the trial level
or appellate level, the prevailing party shall be entitled to
recover from the non-prevailing party all costs and expenses,
including reasonable fees and disbursements of counsel which may
be incurred in connection with such proceeding, without
limitation, including any costs and expenses of experts,
witnesses, depositions and other costs.
I. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing, and shall be delivered
to the parties at the addresses set forth below (or to such other
addresses as the parties may specify by due notice to the
others). Notices or other communications shall be effective when
received at the recipient's location (or when delivered to that
location if receipt is refused). Notices or other communications
given by facsimile transmission shall be presumed received at the
time indicated in the recipient's automatic acknowledgment.
Notices or other communications given by Federal Express or other
recognized overnight courier service shall be presumed received
on the following business day. Notices or other communications
<PAGE>
given by certified mail, return receipt requested, postage
prepaid, shall be presumed received 3 business days after the
date of mailing.
Client: iLink Telecom, Inc.
1190 Hornby Street, Suite 201
Vancouver, BC V6Z 2K5
Attn: Amar Bahadoorsingh
Fax: 604-689-5320
Corporate Relations Group:
Attn: Roberto E. Veitia, President
Fax: (407) 628-0807
J. Headings. The headings in this Agreement are intended solely for
convenience of reference. They shall be given no effect in the
construction or interpretation of this Agreement.
K. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not impair the validity or enforceability
of any other provision.
<PAGE>
In Witness Whereof, the parties have executed this Agreement as of the date
first above written.
Attest: iLink Telecom, Inc.:
By: By:
Secretary --------------------
Amar Bahadoorsingh,
President
[Corporate Seal]
Attest: Corporate Relations Group
By: By:
Secretary ------------------------
Roberto E. Veitia,
President
[Corporate Seal]
<PAGE>
EXHIBIT A
Advertising and Promotional Services
The services to be provided are as follows:
A. Growth Industry Report - A minimum of four-page, two-color follow-up mail
pieces designed for additional informational purposes, that is mailed to
respondents, in addition to those brokers requesting said information. A
total of 10,000 will be printed to satisfy CRG's responsibility to the
Client. Any additional Growth Industry Reports needed or requested by the
Client will be at the Client's expense.
B. The Lead Distribution Program - CRG will contact retail brokers, market
makers and/or money managers and will arrange a meeting between
representative of the Client and interested retail brokers, market makers,
and money managers, which will include a show and tell from the top
management of the "Client" in disseminating information to these interested
parties. The aforementioned may be accomplished by a Road Show.
This process will begin immediately upon CRG receiving the payment as stipulated
in Exhibit "C".
C. Other Advertising and Promotional Services.
1. Public relations exposure to newsletter writers, trade and
financial publications. The Client shall be totally responsible
for all travel expenses for the purpose of due diligence of the
Client by financial newsletter writers and/or brokers. The Client
will have total pre-approval rights on these trips. Road Show(s)
- Locations to be determined. Client will cover all expenses of
Road Show(s). Client will have prior approval of those expenses.
CRG will be responsible for CRG's own travel expenses to support
the show
2. Preparation of a Broker Bullet Sheet to be sent to every broker
who indicates an interest in the Client.
3. Lead Tracking Summary maintained for all response leads generated
and provided to the "Client" monthly.
4. Press releases - Up to four (4) press releases - the first Press
Release shall announce the hiring of CRG by the "Client"; with
three Press Releases remaining which may be extended at the
option of the "Client", at the Client's expense, at a rate of
$1,000.00 per Press Release. Should the Client chose to publish
their own Press Release, CRG shall be mentioned as the Client's
Public Relations firm.
<PAGE>
5. CRG will distribute at its cost the due diligence packages to all
inquiring brokers only. The Client shall supply the necessary
materials for this package, if an Arrow Marketing Contract is not
entered into. In the event an Arrow Marketing Contract is not
entered into, the Client will provide CRG with 300 packages or in
the alternative provide a master to CRG and CRG will then charge
the Client for the cost of reproduction.
6. CRG targets a minimum of 3% return of qualified investor leads
specifically generated for the Client.
D. Performance By Client.
1. Client is required to do a Standard & Poor's listing at the
Client's expense.
2. Client is required to provide CRG with all S& P listings on their
attorney's stationary.
3. Client will provide its shareholder's with audited financials on
a yearly basis and unaudited financials on a quarterly basis.
4. Client agrees to send CRG, DTC sheets on a weekly basis.
5. Client agrees to provide CRG with a complete shareholders list on
a semi-annual basis.
6. Client will use its reasonable best efforts to register or
qualify any shares of common stock of Client under the securities
or blue sky laws of such jurisdictions as any broker or market
maker may reasonably request and do any and all other acts and
things which may be reasonably necessary or advisable to enable
such broker or market maker to consummate the disposition in such
jurisdictions of shares of common stock of Client, provided that
the Client will not be required to (1) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this Section and (2) subject itself
to taxation in any such jurisdiction or (3) consent to general
service of process in any such jurisdiction.
<PAGE>
The parties hereto by signing this Exhibit in the space provided below
signify their agreement regarding the service to be provided by CRG under the
Agreement.
iLINK TELECOM, INC.
By: ________________________________
Amar Bahadoorsingh, President
CORPORATE RELATIONS GROUP, INC.
By: ________________________________
Roberto E. Veitia, President
<PAGE>
EXHIBIT B
Client hereby designates the following person or persons to act on its behalf
for the purposes set forth in Section 2.B.(1) of the Agreement.
- ------------------------------------ ---------------------------------
DIRECTOR (PLEASE SIGN) DIRECTOR (PLEASE PRINT)
- ------------------------------------ ---------------------------------
PRESIDENT (PLEASE SIGN) PRESIDENT (PLEASE PRINT)
- ------------------------------------ ---------------------------------
VICE PRESIDENT (PLEASE SIGN) VICE PRESIDENT (PLEASE PRINT)
<PAGE>
EXHIBIT C
COMPENSATION
1. Client agrees to pay CRG Forty Thousand ($40,000.00 ) in cash on execution
and delivery of the Agreement.
2. Client acknowledges that the consideration to be paid to CRG shall be fully
earned on the date that CRG commences providing services under the
Agreement regardless of whether the Agreement is terminated as provided in
the Agreement prior to completion of all services.
3. Client agrees to pay or reimburse CRG for all expenses arising out of or
related to the provision of services by CRG under the Agreement to the
extent provided in the Agreement and/or in Exhibit A thereto.
<PAGE>
The parties hereto by signing this Exhibit in the space provided below
signify their agreement to the compensation provisions contained herein.
iLINK TELECOM, INC.
By: _______________________________
Amar Bahadoorsingh, President
CORPORATE RELATIONS GROUP, INC.
By: ______________________________
Roberto E. Veitia, President
<PAGE>
EXHIBIT D
INDEMNIFICATION
This Indemnification Agreement constitutes part of the Corporate
Relations Agreement (the Agreement) dated the 22nd day of March, 1999, between
Client (as defined in the Agreement) and CRG.
Client acknowledges and agrees that if, in connection with the services
or matters that are the subject of or arise out of such Agreement, CRG becomes
involved (whether or not as a named party) in any action, claim or legal
proceeding (including any governmental inquiry or investigation), Client agrees
to reimburse CRG for its reasonable legal fees, disbursements of counsel and
other expenses (including the cost of investigation and preparation) as they are
incurred by CRG. Client also agrees to indemnify and hold CRG harmless against
any losses, claims, damages or liabilities, joint or several, as incurred, to
which CRG may become subject in connection with the services or matters which
are the subject of or arise out of the Agreement; provided, however, that Client
shall not be liable under the foregoing indemnity in respect of any loss, claim,
damage or liability to the extent that a court having jurisdiction shall have
determined by a final judgment that such loss, claim, damage or liability is a
consequence of intentional fraudulent acts committed by CRG without the
knowledge and/or consent of Client. In the event that the foregoing indemnity is
unavailable by operation of law, then Client shall contribute to amounts paid or
payable by CRG in respect of such losses, claims, damages and liabilities in the
proportion that Client's interest bears to CRG's interest in the matters
contemplated by the Agreement. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, or otherwise,
then Client shall contribute to such amount paid or payable by CRG in such
proportion as is appropriate to reflect not only such relative interests but
also the relative fault of Client on the one hand and CRG on the other hand in
connection with the matters as to which such losses, claims, damages or
liabilities relate and other equitable considerations.
Promptly after CRG's receipt of notice of the commencement of any
action or of any claim, CRG will, if a claim in respect thereof is to be made
against Client under this Indemnity Agreement, notify Client of the commencement
thereof. In case any such action or claim is brought against CRG, Client will be
entitled to participate therein and, to the extent that Client may wish, to
assume the defense thereof, with counsel satisfactory to CRG. After notice from
Client to CRG of Client's election to so assume the defense thereof, Client will
not be liable to CRG for indemnification as provided in the preceding paragraph
for any legal fees, disbursements of counsel or other expenses subsequently
incurred by CRG in connection with the defense thereof other than reasonable
costs of investigation; provided that CRG shall have the right to employ
separate counsel if, in the reasonable judgment of CRG's counsel, it is
advisable for CRG to be represented by separate counsel or if in the reasonable
judgment of CRG's counsel, Client is not vigorously and actively defending
<PAGE>
against any such claim or claims, and in either such event the reasonable legal
fees and disbursements of such separate counsel shall be paid by Client.
The foregoing agreements shall apply to any modification of the
Agreement, shall remain in full force and effect following the completion or
termination of CRG's engagement under the Agreement and shall be in addition to
any rights that CRG may have at common law or otherwise. The agreements in this
Indemnification Agreement shall extend to and inure to the benefit of each
person, if any, who may be deemed to control CRG, be controlled by CRG or be
under common control with CRG and to CRG's, and to each such other person's
respective affiliates, directors, officers, employees and agents. This
Indemnification Agreement shall be binding on any successor of Client.
Client represents that the Indemnification Agreement contained herein
is the legal, valid, binding and enforceable obligation of Client, enforceable
against Client according to its terms.
This Indemnification Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida without regard to principles
of conflicts of law, and the forum for resolution of legal and interpretative
issues shall be the Federal District courts in the State of Florida.
The parties hereto by signing this Exhibit in the space provided below
signify their agreement to the indemnification provisions contained herein.
iLINK TELECOM, INC.
By: ---------------------------------
Amar Bahadoorsingh, President
CORPORATE RELATIONS GROUP, INC.
By: --------------------------------
Roberto E. Veitia, President
DELIVERED BY COURIER CONFIDENTIAL
March 25, 1999
ILINK TELECOM, INC.
Suite 201, 1190 Hornby Street
Vancouver, British Columbia V6Z 2K5
Canada
Attention: Mr. Amar Bahadoorsingh, President
Dear Sirs:
Re: iLink Telecom, Inc.
This letter agreement (the "Agreement") sets forth the terms and conditions
under which iLink Telecom, Inc. (the "Company") has retained Century Capital
Management Ltd. ("Century"): (i) to act as its financial consultant in
connection with financing alternatives (a "Financing") of debt or equity or
equity-related securities (the "Securities") on a best efforts basis and in
compliance with all applicable securities laws; and (ii) to act as its financial
consultant with respect to the Company's various merger and acquisition
activities (herein defined either individually or collectively as an
"Acquisition").
1. Century will assist the Company in effecting a Financing on terms
acceptable to you. In this regard, we propose to undertake certain
activities on your behalf, including, if appropriate, the following:
(a) assisting the Company in initiating discussions with prospective
Acquisition targets ("Targets");
(b) reviewing the financial condition and prospects of Targets including
assisting the Company in its due diligence efforts;
(c) assisting the Company in developing alternative structures and financial
models;
(d) consulting with the Company as to strategy and tactics for successfully
completing the Acquisition;
(e) assisting the Company in negotiating the terms and conditions of the
Acquisition;
(f) assisting in the execution of definitive documentation for the Acquisition;
(g) advising the Company as to the form and structure of the Financing;
(h) assisting in the preparation of a Private Offering Memorandum (the
"Memorandum") describing the Company and the specific Financing
contemplated therein. Responsibility for the contents of such Memorandum
and its conformity with the requirements of all applicable securities laws
shall be solely that of the Company, and the Memorandum shall not be made
available to or used in discussions with prospective investors until both
the Memorandum and its use for that purpose have been approved by the
Company;
<PAGE>
(i) identifying, introducing to, and consulting as to strategy for initiating
discussions with, potential investors;
(j) negotiating the structure and terms of the Securities; and
(k) assisting in the execution of definitive documentation for the Financing.
2. It is acknowledged by the Company that neither Century nor any of its
representatives are registered with or licensed by any securities
commission or like authority as an underwriter, broker, dealer or financial
advisor and that the services to be provided by Century to the Company
hereunder shall expressly not include trading in the Securities (either as
principal or agent), participating in a distribution of the Securities
which is not exempted from the requirements of applicable securities laws,
or engaging in or professing to engage in the business of advising others
with respect to a purchase or sale of the Securities.
3. It is understood that the Company hereby engages Century to act as
financial consultant in connection with the Financing for a period (the
"Term") of twelve months commencing on the execution date of this
Agreement, provided, however, that such Term shall be automatically renewed
for successive six-month periods unless either party gives notice to the
other within thirty (30) days of the expiration of the Term of its desire
that this engagement expire. Notwithstanding the foregoing, Century may at
its sole option, terminate its obligation hereunder if, in the opinion of
Century, a change has occurred in the Company's business or prospects, or
the composition of the Company's management or Board of Directors, which
has adversely affected the marketability of the Securities. It is expressly
understood that the provisions relating to the payment of fees and expenses
and indemnification will survive any such termination or completion of
Century's services.
4. Century's compensation for its role as financial consultant will be as
follows:
(a) 300,000 shares of Common Stock of the Company at a deemed price of US$0.001
per share (the "Shares").
(b) an initial payment of USD$12,500 payable upon execution of this Agreement;
and
(c) a monthly consulting fee of USD$5,000 payable on the first day of each
month commencing April 1, 1999 during the Term of this Agreement.
<PAGE>
5. In addition to the foregoing fees the Company agrees, upon request from
time to time, to promptly reimburse Century for all out-of-pocket expenses,
including, but not limited to, such costs as printing, telephone, fax,
courier service, copying, accommodations and travel and direct computer
expenses, secretarial overtime and fees and disbursements of legal counsel.
6. Century acknowledges that the certificates representing the Shares shall be
subject to the resale restrictions imposed by Rule 144 as promulgated under
the Securities Act of 1933 and shall bear the following legend:
NO SALE, OFFER TO SALE, OR TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT
UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT
OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE
TO SAID SHARES.
7. In connection with Century's engagement, the Company and its directors,
officers, employees, representatives and agents will furnish Century with
all data, material, and information concerning the Company (the
"Information") which Century reasonably requests, all of which will be
accurate and complete in all material respects at the time furnished. The
Company recognizes and confirms that in undertaking the engagement
contemplated hereby, Century will be using and relying exclusively on the
Information provided by the Company without independent verification and
without performing any appraisal of the assets or businesses of the
Company. Century is hereby authorized to use and deliver the Information,
and any other data obtained by Century from reliable published sources, in
accordance with this Agreement and without limitation. In connection with
the engagement of Century hereunder, the Company has entered into a
separate letter agreement (the "Indemnification Agreement"), dated as of
the date hereof, providing for the indemnification of Century and certain
related parties by the Company.
8. In the performance of its obligations hereunder Century shall be an
independent contractor of the Company. Century shall perform the services
enumerated herein according to its own means and methods of work and shall
not be subject to the control or supervision of the Company. The Company
acknowledges that nothing in this Agreement shall be construed to require
Century to provide services to the Company at any specific time or in any
specific place or manner.
9. This Agreement and the Indemnification Agreement constitute the entire
agreement between us and supersede and take precedence over all prior
agreements or understandings, whether oral or written, between Century and
the Company with respect to the Financing and Acquisitions and may only be
modified by written agreement which is signed by both parties. This
Agreement and Indemnification Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada and the parties hereto
irrevocably attorn to the exclusive jurisdiction of the Courts thereof and
the Courts of Appeal therefrom. Should suit be brought to enforce this
Agreement or the Indemnification Agreement, the prevailing party shall be
entitled to recover from the other reimbursement for reasonable attorneys'
fees.
<PAGE>
10. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof and no waiver shall
constitute a continuing waiver. No waiver shall be binding unless written
notice thereof is delivered by the party making the waiver to the other
party.
11. The offer contained herein will expire and be of no further force or effect
unless accepted in writing prior to the close of business on March 31,
1999.
12. Century has obtained legal advice concerning this Agreement and hereby
requests that the Company obtain independent legal advice with respect to
same before executing this Agreement. The Company, in executing this
Agreement, represents and warrants to Century that it has been so advised
to obtain independent legal advice, and that prior to the execution of this
Agreement it has so obtained independent legal advice or has, in its
discretion, knowingly and willingly elected not to do so.
13. The Company acknowledges that Century has not and will not be providing any
legal or accounting advice or services to the Company in respect of any
Financing or Acquisition or any other matter whatsoever and the Company
further acknowledges that the obtaining of all such advice and services are
the sole responsibility of the Company.
Please confirm that the foregoing correctly sets forth our agreement by signing
and returning to us the enclosed duplicate copy of this Agreement together with
the retainer check and Indemnification Agreement. We look forward to working
with you and to the successful conclusion of this engagement.
Yours very truly,
CENTURY CAPITAL MANAGEMENT LTD.
Andrew Hromyk
President
Accepted and Agreed to as of
the day of , 1999.
ILINK TELECOM, INC.
Amar Bahadoorsingh
President
<PAGE>
DELIVERED BY COURIER CONFIDENTIAL
CENTURY CAPITAL MANAGEMENT LTD.
Suite 1910, 1177 West Hastings Street
Vancouver, British Columbia V6E 2K3
Canada
Gentlemen:
In consideration of the agreement of Century Capital Management Ltd. ("Century")
to act on behalf of iLink Telecom, Inc. (the "Company"), in connection with the
Financing and the Acquisition (as those terms are defined in the letter
agreement of even date herewith (the Agreement")), and pursuant to the
Agreement, we hereby agree to indemnify and hold harmless Century, its
affiliates, the respective directors, officers, agents and employees of Century
and its affiliates and each person, if any, controlling Century or any of its
affiliates within the meaning of either Section 15 of the Securities Act of 1933
or Section 20 of the Securities Exchange Act of 1934, (Century and each such
other person are hereinafter referred to as an "Indemnified Person"), from and
against any such losses, claims, damages, expenses and liabilities (or actions
in respect thereof), joint or several, as they may be incurred (including all
legal fees and other expenses incurred in connection with investigating,
preparing, defending, paying, settling or compromising any claim, action, suit,
proceeding, loss, damage, expense or liability, whether or not in connection
with an action in which any Indemnified Person is a named party) to which any of
them may become subject (including in settlement of any action, suit or
proceeding, if such settlement is effected with the Company's consent, which
consent shall not be unreasonably withheld), and which are related to or arise
out of Century's engagement, the transaction contemplated by such engagement or
any Indemnified Person's role in connection therewith, including, but not
limited to, any losses, claims, damages, expenses and liabilities (or actions in
respect thereof) arising out of, based upon or caused by any untrue statement or
alleged untrue statement of a material fact contained in the Private Offering
Memorandum (as that term is defined in the Agreement), or any amendment or
supplement thereto, or in any other document of the Company, or arising out of,
based upon or caused by any omission or alleged omission to state in any of them
a material fact required to be stated therein or necessary to make the
statements in any of them not misleading. The Company will not, however, be
responsible under the foregoing provisions with respect to any loss, claim,
damage, expense or liability to the extent that a court having jurisdiction
shall have determined by a final judgment (not subject to further appeal) that
such loss, claim, damage, expense or liability resulted from actions taken or
omitted to be taken by Century due to its gross negligence or willful
misconduct.
<PAGE>
If the indemnity referred to above should be, for any reason whatsoever,
unenforceable, unavailable to or otherwise insufficient to hold harmless Century
and each Indemnified Person in connection with the transaction, each Indemnified
Person shall be entitled to receive from the Company, and the Company shall pay,
contributions for such losses, claims, damages, liabilities and expenses (or
actions in respect thereof) so that each Indemnified Person ultimately bears
only a portion of such losses, claims, damages, liabilities, expenses and
actions as is appropriate: (i) to reflect the relative benefits received by
Century on the one hand and the Company on the other hand in connection with the
transaction; or (ii) if the allocation on that basis is not permitted by
applicable law, to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of Century and the Company in connection
with the actions or omissions to act which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations; provided, however, that in no event shall the aggregate
contribution of all Indemnified Persons to all losses, claims, damages,
liabilities, expenses and actions exceed the amount of the fee actually received
by Century pursuant to the Agreement. The respective relative benefits received
by Century and the Company in connection with the Agreement shall be deemed to
be in the same proportion as the aggregate fee paid to Century in connection
with the Agreement bears to the total consideration received by the Company in
connection with or arising from the Agreement. The relative fault of Century and
the Company shall be determined by reference to, among other things, whether the
actions or omissions to act were by Century or the Company and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action or omission to act.
The indemnity, contribution and expense payment obligations of the Company
referred to above shall be in addition to any liability which the Company may
otherwise have and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of any Indemnified
Person and the Company. The Company also agrees that the Indemnified Persons
<PAGE>
shall have no liability to the Company or any person asserting claims on behalf
of or in right of the Company for or in connection with any matter referred to
in this letter except to the extent that any such liability results from the
gross negligence or willful misconduct of Century in performing the services
that are the subject of the Agreement and in no event shall such liability
exceed the amount of fees actually received by Century hereunder.
Yours very truly,
ILINK TELECOM, INC
Amar Bahadoorsingh
President
Accepted and Agreed to as of
the day of , 1999.
CENTURY CAPITAL MANAGEMENT LTD.
Andrew Hromyk
President
ADVANTIS OFFICE ACCESS
1. Services.In consideration of payment of the monthly service fee (as defined
below) and so long as Client is not in default of any of its obligations under
this Agreement, Client will be entitled to the following services initialed
below at the facility located at One Sansome Street, Suite 2000, San Francisco,
CA 94104 (the "Facility"):
( ) Corporate Mailing Address.
(a) A private mailbox for package and mail receipt.
(b) Use of the Company's mailing address and facsimile number as follows:
Street: One Sansome Street, Suite 2000 City/State/Zip: San Francisco, CA 94104
Facsimile: (415) 951-4653
All communications to Client must be marked to the attention of client. The
Company assumes no responsibility for communication not so identified.
(c) Receipt of mail and packages by Company's staff during the Company's normal
business hours.
(d) One listing of Client's name in the building directory at the building in
which the Facility is located, as follows
- --------------------------------
( ) Telephone Answering.
(a) Telephone number (s) : _______________, answered by Company's staff during
Company's normal business hours.
(b) Twenty four hour voice mail with remote retrieval of messages.
( ) Corporate Mailing Address and Telephone Answering.
Includes all services in Corporate Mail Address and Telephone Answering.
(X) Flextime.
(a) Includes all services in Corporate Mail Address and Telephone Answering.
(b) Use of Finished Private Office or Conference Room during the following hours
8:30 AM to 5:30 PM _.
Available with all of the above.
(a) Access to additional services offered by Company at Company's current rates
for such services, which Company reserves the right to change from time to time
without prior notice.
(b) Reception service at the Facility during Company's normal business hours.
(c) Kitchen facilities with coffee machine.
2. Use. Client will use the services described above for its business which is
described as consulting and for no other use. Any change of such use by Client
will be a material default hereunder and will result in immediate forfeiture of
the Refundable Retainer. The Client will not make or permit to be made any use
of the Facility that may violate applicable law or invalidate or increase the
premium of any policy of insurance carried on the Facility or the building in
which the Facility is located or covering its operations, or which will suffer
or permit the Facility of the building to be used in any manner which will
suffer or permit the Facility or the building to be used in any manner which, in
the sole judgement of Company, will in any way impair the character, reputation
or appearance of the Facility or the Building as a high quality office building,
or which will impair or interfere with any of the services performed by the
Company.
3. Term. Company agrees to offer the Services described in Paragraph 1 to Client
for a period of twelve (12) months, commencing on the ______ day of _______,
199__ and ending on the ______ day of ______, _____ (the "Initial Term"). Upon
the expiration of the Initial Term and each renewal thereof, this Agreement will
be extended for the same period of time as the Initial Term and upon the same
terms and conditions, except for the Monthly Service Fees, which will be
increased by ten percent (10%) from those than in effect. Either party may
terminate the agreement upon thirty (30) days notice to the other.
4. Monthly Service Fee. Client agrees to pay Company during the term of this
Agreement a Monthly Service Fee of $ _299.00_ per month in advance of the first
day of each month.
5. Refundable Retainer. Client will deposit with Company a Refundable Retainer
equal to two time the Monthly Service Fee. Client acknowledges that the
Refundable Retainer will not be maintained in an interest-bearing segregated
account. In the event of any default by Client under this Agreement, Company may
apply all or any part of the Refundable Retainer to cure such default or to
reimburse Company for any sum which Company may spend by reason of the default.
In the case of every such application, Client will, on demand, pay to the
Company the sum so applied or retained, so the Refundable Retainer is restored
to two times the Service Fee. The Refundable Retainer will be refundable to
Client within sixty (60) days after the later of: (i) termination of the
Agreement; (ii) payment of all outstanding charges payable by Client hereunder;
and(iii) the satisfactory performance by Client of all its other obligations
under this Agreement.
6. Additional Service Charges. Client will pay to Company charges for additional
services rendered to Client upon the rendering to Client of an invoice setting
forth the charges for additional services rendered to Client during the prior
month. Such additional charges may include, but will not be limited to charges
for: postage, shipping, delivery, faxing, bank charges, telephone charges
(including long distance, toll or local message unit calls and applicable tax),
secretarial, administrative, and all other and expenses incurred in Client's
behalf by Company.
7. Employeesof Company. Client agrees that it will not, during the term of this
Agreement and for a period of one year thereafter, directly or indirectly,
employ or offer to employ any person who is or has been an employee of Company
or Company's agent without prior consent from Company. If Client hires either an
employee of Company or Company's agent or any person who has been an employee of
Company or Company's agent within six months prior to the time they are hired by
Client. Client will be liable to Company for liquidated damages equal to six
months wages of the employee, at the rate last paid that employee by Company.
The provisions of this paragraph will survive the expiration of this Agreement
8. Main Lease. This Agreement is subject and subordinate to the main Building
lease governing the Facility, under which Company is bound as tenant, ("Main
Lease") and the provisions of the Main Lease, other than as to the payment of
Monthly Service fee or other monies, are incorporated into this Agreement as if
completely herein rewritten. Client will comply with and be bound by all
provisions of the Main Lease except that the payment of Monthly Service Fee will
be governed by the provisions of this Agreement, and Client will indemnify and
hold Company harmless from and against any claim or liability under the main
lease of Company arising from Client's breach of the Main Lease or this
Agreement.
<PAGE>2
9. Client's Waiver. Client agrees that Company is not liable to Client for: (a)
loss or damage to any document or other article by the U.S. Postal Service, or
any other licensed, common or private carrier delivery services: or loss or
damage arising out of services provided by any telephone company. (b) any
personal or property injury or damage resulting from the acts or omissions of
Company employees, persons leasing office space or services from Company, their
invitees other persons occupying any part of or employed in the building of
which Company premises are a part, or their invitees, or for any injury or
damage to persons or property caused by any person, except as any such loss or
damage arises from willful or grossly negligent misconduct by Company, its
agents, servants, or employees.
10. Default. In the event of a default in the performance of any condition or
covenant hereof by Client including, but not limited to, payment of Monthly
Service Fees or additional service charges, which default is not cured within
five (5) business days of notice of such default, the balance due from the
Client for the unexpired term of this Agreement will become immediately due and
payable and the Company's obligations to provide services hereunder will
immediately cease without further notice.
11. Remedies.Service provided pursuant to this Agreement are without warranty,
Client's sole remedy, and Company's sole obligation, for any failure to render
any service, any error or omission, or any delay or interruptions with respect
thereto, is limited to an adjustment to Client's billing in an amount equal to
the charge for such services for the period during which the failure, delay, or
interruption continues. With the sole exception of the remedy set forth in this
paragraph, Client expressly and specifically agrees to waive, and agrees not to
make any claim for damages, including any indirect, incidental, special,
consequential or punitive damages, arising out of any failure to furnish any
service, any error or omission with respect thereto, or any delay or
interruption of the same. Notwithstanding anything in this Agreement to the
contrary, there will be no such billing adjustment if Client is in default
hereunder.
12. Notices. Any notice under this Agreement will be in writing and will be sent
by certified mail, return receipt requested, or by any expedited service that
provides proof of delivery, to the last address of the party to whom notice is
to be given, as designated by such party in writing.
<PAGE>
Company hereby designates its address as:
Street: One Sansome Street, Suite 2000
City/State/Zip: San Francisco, CA 94104
Telephone:(415) 951-4600
Facsimile:(415) 951-4653
Client hereby designates its address as:
Name: Amar Bahadoorsingh Street: #1170-666 Borrard St.
City/State/Zip:Vancouver, BC V6C 2X8 Telephone: (604)689-3355
Facsimile: (604)689-5320
Advantis Business Centers
By:
Client:
Signed:
Name (Printed):
Title:
First month fixed charges $ 299.00
----------------------------
Refundable Service Retainer $ 598.00
----------------------------
Setup fee $ 100.00
---------------------------
TOTAL OPENING CHARGES $ 997.00
----------------------------
Sublease Agreement
This sublease is made between:
HyPower Fuel Inc. hereinafter referred to as the (the Sublandlord)
And
I Link Telecom Inc. hereinafter referred to as the (the Subtenant)
Whereas GLENMAC CORPORATION LTD. hereinafter referred to as the (the
Landlord) and the Sublandlord have entered into a lease of premises hereinafter
referred to as "the premises", as per "Exhibit A" which a copy is attached to
this agreement;
And whereas the Sublandlord and the Subtenant wish to enter into a Sublease
for a portion of the premises as per "Exhibit B" (office C and office E), of
which a copy is attached to this agreement is hereinafter referred to as the
"Sublease" for the balance of the term of the lease less one day;
The Sublandlord and Subtenant agree as follows;
1. The Sublandlord, hereby subleases the premises to the Subtenant to have and
to hold for the balance of the term of the Lease less one day, commencing
on FEBRUARY 1, 1999 and terminating on March 30, 2000.
The Subtenant, however, may not assign or sublease it's interest in the
premises without the consent of the Sublandlord, which consent expressly
may be unreasonably withheld.
2. The Subtenant agrees to pay, and Sublandlord agrees to accept, as rent for
the use and occupancy of the sublease premises (office C and office E) and
one parking stall, the sum of $625.00 (six hundred and twenty-five dollars)
payable in advance of the 1st day of each month at the address specified in
this Sublease for the services of notices to Sublandlord or at such other
address as Sublandlord may from time to time designate by written notice
served upon the Subtenant. Rent for any broken portion of a calendar month
in which this Sublease terminates will be prorated
3. The Subtenant agrees to observe and perform all of the Sublandlord's
covenants in the lease part from the payment of the rent and additional
rent to the Landlord.
4. The Subtenant shall be subject, as regards both the Landlord and the
Sublandlord to the same obligations and limitations of liability with
respect to damages, loss or injury as are set out in the Lease between the
Landlord and Sublandlord.
<PAGE>
5. The Sublandlord covenants with the Subtenant the right to quiet enjoyment
of the premises, but Subtenant shall not annoy, harass, endanger or
inconvenience any other tenant of the building nor commit any act that
might disturb the quiet enjoyment of any other tenant of the building.
6. The provisions of the Lease between the Landlord and the Sublandlord
regarding the Landlord's remedies against the Sublandlord and the premises
in connection with the Sublandlord's default under the Lease are hereby
incorporated in this Sublease for the Sublandlord's benefit against the
Subtenant and the premises in connection with the Subtenant's default under
this Sublease.
7. Except as otherwise expressly provided by law, all notices or other
communications required or permitted by this lease or by law to be served
on or given to either party by the other party shall be in writing and
shall be deemed duly served and given when personally delivered to the
party. Sublandlord or Subtenant, to whom it is directed or, in lieu of such
personal service, when deposited in the Canadian mail first-class postage
prepaid, addressed to Subtenant at the address of the premises or to the
Sublandlord at #304-320,23rd Avenue S.W., Calgary, Alberta T2S 0J2. Either
party, Sublandlord or Subtenant, may change its address for purposes of
this paragraph by giving written notice of the change to the other party in
the matter provided in this paragraph.
8. Should any litigation be commenced between the parties to this Sublease
convening the premises, this Sublease or the rights and duties of the
either in relation thereto, the party, Sublandlord or Subtenant, prevailing
in such litigation shall be entitled to, in addition to such other relief
as may be granted, a reasonable sum for legal gees to be determined by the
court in such litigation or in separate action brought for that purpose.
Executed this 1 st day of February 1999 in Calgary, Alberta.
--------- ---------------
Sublandlord _________________
HyPower Fuel Inc.
Subtenant _____________________
I Link Telecom Inc.
THIS AGREEMENT FOR PURCHASE AND SALE is made effective the 12th day of
January, 1999
BETWEEN:
REVERE COMMUNICATIONS INC., a corporation formed under the
laws of the Province of Alberta, of 1160, 1122-4th Street
S.W., Calgary, Alberta T2R 1M1 (the "Vendor")
OF THE FIRST PART
AND:
ABDE HOLDINGS LTD., a body corporate incorporated under the
laws of the Province of British Columbia, of 1107-11871
Horseshoe Way, Richmond, British
Columbia V7A 5H5
(the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Vendor carries on the business of providing prepaid telephone calling
card and related telephony services (the "Business") at 260-4311 Viking
Way, Richmond, B.C. and at 1160, 1122-4th Street S.W., Calgary, Alberta;
B. The Purchaser has agreed to buy from the Vendor, and the Vendor has agreed
to sell to the Purchaser, certain of the Vendor's property and assets of
the Business on the terms and subject to the conditions hereinafter
provided;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
covenants, agreements, representations, warranties and payments hereinafter set
forth and provided for, the parties hereto covenant and agree as follows:
1. PURCHASE AND SALE
1.1 Purchase and Sale of Assets. Relying on the representations and
warranties set forth in Part 3 hereof, and upon the subject to the
terms and conditions hereof, the Vendor shall sell, assign and
transfer to the Purchaser and the Purchaser shall purchase from the
Vendor on the Closing Date the following property and assets of the
Business, namely: (a) All equipment, furnishings, leasehold
improvements and machinery (the "Equipment") owned by the Vendor in
connection with the Business including without limitation that
Equipment described in Schedule "A";
(b) The goodwill of the Business (the "Goodwill") including the right to
acquire and transfer (i) the existing customer base; (ii) the
employment contracts of key personnel; (iii) existing licensing
agreements; (iv) transfer of all current copyrights and trademarks;
and (v) all royalties and payments for software sales and licences.
(The property and assets described in Section 1.1 are hereinafter
collectively referred to as the "Assets")
<PAGE>
1.2 Exclusions. Specifically excluded from the purchase and sale herein,
and from the Assets hereinbefore described, are cash on hand or on
deposit and any security deposits.
2. PURCHASE PRICE AND ALLOCATION
2.1 Purchase Price. The total purchase price payable for the Assets shall
be the lesser of $183,828.46 or the amount of the existing account
payable owing to Telus Communications Inc. ("Telus") under the IVR
Platform Services Agreement (the "Purchase Price"), allocated as
follows:
Equipment (@ Richmond, B.C.) $ 10,000.00
Equipment (@ Calgary, AB) $ 13,000.00
Goodwill $160,828.46
It is agreed and understood that in the event that the Purchase Price is less
than $183,828.46 the amount allocated to "Goodwill" will be reduced accordingly.
It is agreed and understood that upon closing the Purchase Price is to be paid
directly to Telus in full and final settlement of the existing indebtedness of
the Vendor to Telus.
Any rebates from Telus payable after the closing date are to be for the benefit
of the Purchaser.
The Purchase Price is inclusive of any other adjustments for prepaids.
2.2 Payment. The Purchase Price is to be paid to Telus, or, as directed by
Telus on the closing date.
3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Vendor. The Vendor hereby
represent and warrant to the Purchaser as follows, with the intent
that the Purchaser shall relay thereon in entering into this
Agreement, and in concluding the purchase contemplated herein.
(a) Capacity to Own and Dispose of Assets. The Vendor has the power and
capacity to own and dispose of the Assets, to enter into this
Agreement and to carry out its terms to the full extent.
(b) Power to Carry on Business. The Vendor has the power to carry on the
Business and holds all licenses and permits required to permit it to
carry on the Business.
(c) Authority to Sell. The execution and delivery of this Agreement and
the completion of the transaction contemplated hereby has been duly
and validly authorized by all necessary action on the part of the
Vendor, and this Agreement constitutes a legal, valid and binding
obligation of the Vendor enforceable against the Vendor in accordance
with its terms.
<PAGE>
(d) Sale will not cause Default. Neither the execution and delivery of
this Agreement, nor the completion of the purchase and sale
contemplated herein will:
i) violate any of the terms and provisions of any order, decree,
statute, by-law, regulation, covenant, restriction applicable to
the Vendor or any of the Assets;
ii) give any person the right to terminate or cancel any instrument
relating to the Assets or remove any of the Assets; or
iii) result in any fees, duties, taxes, assessments or other amounts
relating to any of the Assets becoming due or payable by the
Purchaser other than Social Services Tax payable by the Purchaser
in connection with the purchase and sale of the Assets situate in
the Province of British Columbia.
(e) Assets. At Closing the Vendor will own and possess and have a good and
marketable title to the Assets, free and clear of all mortgages,
liens, charges, pledges, security interests, encumbrances or other
claims whatsoever save and except:
Lease of Calgary Switch from Newcourt Financial Ltd.
(f) Equipment. All of the Equipment is in good working condition.
(g) Books and Records. The Vendor has maintained books, records and files
that relate to the Business and such books, records and files have
been maintained in accordance with generally accepted accounting
principles and, to the best of the knowledge of the Vendor, such
books, records and files contain no material errors or omissions.
(h) Terms of Employment. There are no written contracts with persons
employed in connection with the Business governing conditions of
employment except for Randall Walrond and the Vendor has no employees
who cannot be dismissed on not more than one month's notice.
(i) Collective Agreements. The Vendor is not a party to any collective
agreement relating to the Business with any labour union or other
association of employees, and no part of the Business has been
certified as a unit appropriate for collective bargaining.
(j) Litigation. There is no litigation or administrative or governmental
proceeding or inquiry pending, or to the knowledge of the Vendor,
threatened against or relating to the Business or any of the Assets,
nor does the Vendor know of or have reasonable grounds for believing
that there is any basis for any such action, proceeding or inquiry.
(k) Conformity with Laws. All governmental licenses and permits required
for the conduct in the ordinary course of the operations of the
Business and the uses to which the Assets have been put, have been
obtained and are in good standing and such conduct and uses are not in
breach of any statute, by-law, regulation, covenant, restriction, plan
or permit.
(l) Social Services Tax. The Vendor has not accrued any liability with
respect to Social Service Taxes owing for the period ended January 12,
1999;
<PAGE>
(m) Goods and Service Tax. The Vendor is not liable for the payment of any
tax pursuant to Part IX of the Excise Tax Act to which the Vendor is
not entitled to an input tax credit.
(n) Government Taxes and Remittances. The Vendor is current and in good
standing for all taxes or other governmental remittances due or
payable to Revenue Canada for Income Tax, G.S.T. and employee source
deductions; and under the following British Columbia Acts and their
Alberta counterparts: the Social Services Tax Act; the Employment
Standards Act; the Corporation Capital Tax Act, and, the Workmen's
Compensation Act.
(o) Accuracy of Representations. No certificate furnished by or on behalf
of the Vendor to the Purchaser at the Closing in respect of the
representations, warranties or covenants of the Vendor herein will
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statement contained therein not
misleading.
(p) Canadian Resident. The Vendor is a resident of Canada within the
meaning of the Income Tax Act.
(q) No Commission Payable by the Purchaser. The Vendor confirms to the
Purchaser that in the event that any commission is payable on this
purchase and sale that the Vendor shall pay any and all commission and
will save harmless the Purchaser from any and all costs and expense.
4. COVENANTS OF THE PARTIES
4.1 Consents. The Vendor shall diligently take all reasonable steps
required to obtain all necessary consents and approvals to the
assignment of the Assets before and, to the extent in his sole and
absolute discretion the Purchaser shall agree to completion of the
purchase and sale prior to obtaining any such consent or approval,
after the Closing. The Purchaser will, at the request of the Vendor,
execute and deliver such applications for consent and such assumption
agreements (subject to the Purchaser's approval of the form thereof
acting reasonably), and provide such information as may be necessary
to obtain the consents and approvals and will assist and co-operate
with the Vendor in obtaining the said consents and approvals.
4.2 Goods and Services Tax. The Vendor and Purchaser shall file an
election in prescribed form with the Minister of National Revenue
pursuant to s. 167 of Part IX of the Excise Tax Act of Canada.
4.3 Sales Tax. The Purchaser shall pay all provincial sales taxes and
registration charges and transfer fees properly payable upon and in
connection with the sale and transfer of the Assets by the Vendor to
the Purchaser.
4.4 Termination of Employees. The Vendor will at the time of closing
terminate the employment of all employees, and shall pay all wages and
salaries and termination pay and also amounts due in lieu of holidays
up to and including the Closing Date and will indemnify and save
harmless the Purchaser from and against all claims by any employee of
the Vendor of the wages, salaries, bonuses, pension or other benefits,
severance pay, notice or pay in lieu of notice and holiday pay in
respect of any period prior to the time of closing.
<PAGE>
4.5 Payment of Suppliers. The Vendor will pay all wholesalers and
suppliers to the Vendor up to and including the date of closing and
will indemnify and save harmless the Purchaser from and against all
claims by any wholesaler or supplier in respect of any period prior to
the time of closing.
4.6 Vendor's Covenants of Indemnity. The Vendor will indemnify and hold
harmless the Purchaser from and against:
(a) all liabilities and obligations relative to the Business,
including, without limitation, all liabilities and obligations
relating to his employees, contingent or otherwise, existing at
the time of Closing which are not expressly agreed to be assumed
by the Purchaser pursuant to this Agreement;
(b) any and all damage or deficiency resulting from any
misrepresentation, breach of warranty or nonfulfillment of any
covenant on the part of the Vendor herein contained or from any
misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished to the Purchaser
hereunder; and
(c) any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses incident to any of
the foregoing.
4.7 Purchaser's Covenants of Indemnity. The Purchaser will indemnify and
hold harmless the Vendor from and against:
(a) all liabilities and obligations relative to the Business,
including, without limitation, all liabilities and obligations
relating to his employees, contingent or otherwise, resulting
from and after the time of Closing which are being expressly
agreed to be assumed by the Purchaser pursuant to this Agreement;
(b) any and all damage or deficiency resulting from any
misrepresentation, breach of warranty or nonfulfillment of any
covenant on the part of the Purchaser herein contained or from
any misrepresentation in or omission from any certificate or
other instrument furnished or to be furnished to the Vendor
hereunder; and
(c) any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses incident to any of
the foregoing.
4.8 Material Contracts Assumed. Except for the capital lease with Newcourt
Financial Ltd. for the Calgary switch and as expressly agreed under
Paragraph 6.2 the only contracts being assumed by the Purchaser are as
follows: nil Without limiting the generality of the foregoing, the
Purchaser is not assuming the lease of either the Richmond or Calgary
premises in which the Business is presently situate and undertakes to
have the Equipment removed from such premises by no later than 30 days
following the Closing Date.
4.9 Offer Employment. The Purchaser covenants with the Vendor to offer
employment to Randall Walrond and Rick Villaneuva.
<PAGE>
4.10 Transitional. The Vendor shall cooperate fully with the Purchaser in
connection with the assignment of any contracts and licences.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 Survival of Representations, Warranties and Covenants of the Vendor.
All representations, warranties, covenants and agreements made by the
Vendor in this Agreement or pursuant hereto shall survive the
completion of the transactions contemplated by this Agreement and,
notwithstanding such completion or any investigation at any time made
by or on behalf of the Purchaser, shall continue in full force and
effect for the benefit of the Purchaser. 5.2 Purchaser's
Representations, Warranties and Covenants. All representations,
warranties, covenants and agreements made by the Purchaser in this
Agreement or pursuant hereto shall, unless otherwise expressly stated,
survive the completion of the transactions contemplated by this
Agreement and, notwithstanding such completion or any investigation at
any time made by or on behalf of the Vendor, shall continue in full
force and effect for the benefit of the Vendor.
6. CLOSING ARRANGEMENTS
6.1 Closing. Subject to the terms and conditions hereof, the purchaser and
sale of the Assets shall be completed at a closing (the "Closing") on
January 12, 1999, or such other time as may be mutually agreed upon in
writing by the Vendor and the Purchaser.
6.2 Documents to be delivered at the Closing. At the Closing and
concurrently with the delivery of payment for the balance due and
payable upon Closing, the Vendor shall deliver or cause to be
delivered to the Purchaser:
(a) all deeds of conveyance, bills of sale, transfer and assignments in
form and content satisfactory to the Purchaser's solicitors,
appropriate to effectively vest good and marketable title to the
Assets in the Purchaser to the extent contemplated by this Agreement,
and immediately registerable in all places where registration of such
instruments is required;
(b) the election in prescribed form referred to in paragraphs 4.2;
(c) opinion letter from the Vendor's solicitor stating that the sale is
not in contravention of any securities regulations;
(d) waiver or an assignment by Telus to the Purchaser of the IVR Platform
Services Agreement;
(e) Bill of Sale Absolute of the Assets in Richmond and in Calgary;
(f) All records relating to existing customers of the Vendor;
(g) Cancellation of the employment contracts of key personnel as follows:
Rick Villaneuva and Randall Walrond;
<PAGE>
(h) Assignment of all existing licensing agreements including the right to
continue negotiations to acquire card rights for Playboy and
Lucasfilms;
(i) Assignment of all current copyrights and trademarks including the
"Revere" trademark and the rights to the following domains: ivr.com,
revere.ca and ivr-interactive.com;
(j) Assignment of all royalties and payments for software sale and
licenses including the payments of Revere Voice Mail by Okanagan
Telephone Co. Ltd.;
(k) Assumption of the lease/financing agreement with Newcourt Financial
Ltd. for the Calgary switch including the buy-out rights upon the
termination of such lease;
(l) Certified copies of such resolutions of the shareholders and directors
of the Vendor as are required to be passed to authorize the execution,
delivery and implementation of this Agreement and of all documents to
be delivered by the Vendor pursuant thereto;
(m) Such other documentation as the Purchaser's solicitors may reasonably
request.
6.3 Possession. The Purchaser shall be entitled to possession of the
Assets at 12:00 noon on January 12, 1999.
7. GENERAL PROVISIONS
7.1 Further Assurances. Upon completion of the Closing this Agreement
shall without further act or formality operate as an actual transfer
and conveyance to the Purchaser of title to all the Assets but the
Vendor and the Purchaser hereby covenant and agree that they will from
time to time thereafter execute and do all such further acts, deeds,
transfers, assurances, matters and things as may be necessary to
transfer to and vest in the Purchaser all or any of the Assets and to
give to the Vendor and the Purchaser the full benefit of this
Agreement. For greater certainty, it is hereby agreed that, following
Closing, the Vendor shall hold all of the Assets, to the extent that
the same shall not have been effectually transferred to the Purchaser
by or pursuant to this Agreement, in trust for and as the property of
the Purchaser.
7.2 Time of the Essence. Time shall be of the essence of this Agreement.
7.3 No Assignment. This Agreement and the rights and obligations of any
party hereunder may not be assigned without the express written
consent of the other parties.
7.4 Amendments. This Agreement may only be modified or amended by written
agreement duly executed by the parties.
7.5 Notices. Except as otherwise provided herein, any notice required or
permitted to be given hereunder by any party shall be deemed to have
been well and sufficiently given if mailed by prepaid registered mail,
or sent by facsimile machine ("faxed") to, or delivered at, the
address of the party to whom it is directed hereinbefore set out, or
at such other reasonable address at which personal delivery may be
effected as such party may from time to time give notice of, and any
such notice shall be deemed to have been received, if mailed, 72 hours
after the time of mailng, and if delivered or faxed, upon the date of
delivery or faxing. If normal mail service or fax service is impaired
by strike, slowdown, forced majeure or other cause, then a notice sent
by the impaired means of communication will be deemed not to be
received utnil actually received, and the party sending the notcie
shall utilize another unimpaired means of communications or shall
deliver such notice in order to ensure prompt receipt thereof.
7.6 Headings and Divisions. The divisions of this Agreement into Parts,
paragraphs and subparagraphs and the insertion of headings are for
convenience of reference only and shall not affect the structure or
interpretation of this Agreement.
7.7 Governing Law. This Agreement shall be contrued and enforced in
accordance with the laws of the Province of British Columbia, the laws
of the Province of Alberta and the laws of Canada applicable therein
and shall be treated in all respects as a British Columbia contract.
7.8 Severability. In the event that any provisions of this Agreement or
any part of any provision shall be held to be invalid, illegal or
unenforceable, it shall not affect the validity, legality or
enforceability of any other provision or portion of a provision of
this Agreement.
7.9 Entire Agreement. This Agreement and the instruments referred to
herein constitute the entire Agreement between the parties with
respect to the subject matter hereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral
or written, between the parties, and there are no warranties,
conditions, representations or other between the parties in connection
with the subject matter hereof except as specifically set forth
herein.
7.10 Successors and Assigns. This Agreement and everything contained herein
shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and
permitted assigns.
7.11 Counterpart Execution. This Agreement may be executed in couterparts
and such counterparts together shall constitute a single agreement.
<PAGE>
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
the day and year first above-written.
WITNESS: REVERE COMMUNICATIONS INC. by
its authorized signatory:
------------------------------
Danny Alex, CEO
WITNESS: ABDE HOLDINGS LTD.. by its
authorized signatory:
---------------------------------
Amar Bahadoorsingh, President
<PAGE>
SCHEDULE "A"
EQUIPMENT, FURNISHINGS, LEASEHOLD IMPROVEMENTS
("Equipment")
Part I - at Richmond, B.C.
Computer System and Hardware
File Server with Monitor
Web Server
Voice Mail Server (4 port)
Service Bureau Server (12 port with Fax)
2 Misc. Systems
2 Office Systems with Monitor
2 Development Systems with Monitor
Printer
Scanner
AT & T Telecom Switch (without license) with Monitor
3 Drive External RAID Chassis and Drives
Fax Machine
Inkjet Printer
2-12 Port Network Hubs
19" Rack System
VGA/Mouse Digital Switch Box
Misc. Voice Boards
Furniture and Fixtures
Boardroom Table
6 Boardroom Chairs
2 "Mahogany" Desks
2 "Mahogany" File Cabinets
2 Office Desks
5 Steno Chairs
Lateral File Cabinet
Trade Show Booth
NEC 2000 Telephone Phone System w. 4 sets
Miscellaneous Office Equipment (incl. cutter, binding machine,
laminator, label
machine)
<PAGE>
Part II - at Calgary, AB
Computer System and Hardware
Domain Controller/File Server with Monitor ISDN Switch with 24 Voice
Resources/48 Network Resources T-1 Switch (Telephony Experts 24 Voice -
(leased) Resources/48 Network Resources 19" Rack 5 Drive External RAID
Chassis and Drives Accton Network Hub Ascend Pipeline Router VGA/Mouse
Digital Switch Box
5 Full Size Tower Pentium 100 Computers w. 64M Ram and network cards (1
w. damaged power supply) 5 Mini Tower Pentium 100 Computers w. 32M Ram
and network/sound cards 1 Mini Tower Pentium 233 Computer w. 32M Ram
and network/sound cards and CD Rom. 5 - 14" SVGA Monitors 1 - 14" VGA
Monitor 1 - 17" SVGA Monitor 2 US Robotics modems 1 Ascend ISDN modem 1
- 10 port hub Miscellaneous spare parts Telephone Cards
7 - dialogic D41/D 2 - dialogic 4D 1 - dialogic 12 port
NEC telephone system w. 5 sets
May 24, 1999
Mr. Amar Bahadoorsingh
iLink Telecom Inc.
Suite 1170 666 Burrard Street
Vancouver, B.C. V6C 2X8
RE: Telephony Experts' Talking NT Enterprise SQL with DM3 Quotation
Dear Amar:
Randall Walrond has forwarded us information concerning your immediate needs for
a two node Talking NT Enterprise SQL network. Below, we have detailed the
necessary components in order to make up the network and have applied very
favorable pricing based on the synergy we wish to create with you.
In return for the deeply discounted price level, we request that Telephony
Experts and iLink Telecom participate in a joint press release discussing the
network configuration, technology used and our working relationship. We would
also like to highlight iLink in our Customer Spotlight section of the Telephony
Experts web site, and request a link from your site listing us as your
technology partner. Telephony Experts also requests access to the network for
demonstration purposes (time available to be determined).
Talking NT Enterprise SQL 72 Port Software License with Dialogic Hardware
<TABLE>
<S> <C>
Description Quantity
------------------------------------------------------- ----------------------------------------------------------
Dialogic D240SC-2T1 (supports one inbound and one 1
outbound T-1)
------------------------------------------------------- ----------------------------------------------------------
DM/IPZ431A-T1 24 Port Board (supports 24 channels of 1
Voice over IP)
------------------------------------------------------- ----------------------------------------------------------
Talking NT Enterprise SQL 72 Port License (Debit Card) 1
------------------------------------------------------- ----------------------------------------------------------
Talking NT Enterprise SQL 1
------------------------------------------------------- ----------------------------------------------------------
Total list price (not including shipping $47,439.00
charges)
------------------------------------------------------- ----------------------------------------------------------
iLink Telecom discounted Pricing (not $29,755.00
including shipping charges) (per node)
------------------------------------------------------- ----------------------------------------------------------
</TABLE>
Please advise us of your time line so that the necessary Dialogic hardware can
be ordered. Dialogic does experience random delays and back orders from time to
time. We look forward to being your technology partner and appreciate the
opportunity.
Sincerely,
Chris Heim
August 9, 1999
Board of Directors
iLink Telecom, Inc.
1177 West Hastings Street, Ste. 1910
Vancouver, BC V6E 2K3
Re: Common Stock of iLink Telecom, Inc.
Registered on Form SB-2 filed August 9, 1999
Gentlemen:
We act as securities counsel to iLink Telecom, Inc. (the "Company"), a
Nevada corporation, in connection with the registration under the Securities Act
of 1933, as amended (the "Securities Act"), of approximately 58,000 shares of
the Company's Common Stock (the "Shares"), all of which may be issued upon the
conversion of the Series A Preferred Stock and resold, as further described in a
registration statement on Form SB-2 filed under the Securities Act (the
"Registration Statement") on August 9, 1999.
For the purpose of rendering this opinion, we examined originals or
photostatic copies of such documents as we deemed to be relevant. In conducting
our examination, we assumed, without investigation, the genuineness of all
signatures, the correctness of all certificates, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies, and the accuracy and completeness
of all records made available to us by the Company. In addition, in rendering
this opinion, we assumed that the Shares will be offered in the manner and on
the terms identified or referred to in the prospectus, including all amendments
thereto.
Our opinion is limited solely to matters set forth herein. Attorneys
practicing in this firm are admitted to practice in the State of California and
we express no opinion as to the laws of any other jurisdiction other than the
laws of the State of Nevada and the laws of the United States.
Based upon and subject to the foregoing, after giving due regard to such
issues of law as we deemed relevant, and assuming that (i) the Registration
<PAGE>
May 3, 1999
Page 2
Statement becomes and remainseffective, and the prospectus which is part thereof
(the "Prospectus"), and the Prospectus delivery procedures with respect thereto,
fulfill all of the requirements of the Securities Act, throughout all periods
relevant to the opinion, and (ii) all offers and sales of the Shares have been
and will be made in compliance with the securities laws of the states, having
jurisdiction thereof, we are of the opinion that the Shares, offered by the
Selling Shareholders have been, and the Shares to be issued upon the exercise of
Warrants for adequate consideration will be, validly issued, fully paid, and
non-assessable.
We hereby consent in writing to the use of our opinion as an exhibit to the
Registration Statement and any amendment thereto.
Sincerely yours,
BARTEL ENG LINN & SCHRODER
/s/ ROGER D. LINN
----------------------
Roger D. Linn
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated April 16, 1999 in the Registration Statement (Form SB-2)
and related Prospectus of iLink Telecom, Inc. for the registration of shares of
its common stock to be offered for resale upon conversion of 145 Series A
Preferred stock.
/s/ ERNST & YOUNG LLP
---------------------
Chartered Accountants
Vancouver, Canada
August 6, 1999.
