Exhibit 4.6
December 12, 2000
Personal and Confidential
Mr. John Jenkins
Dial-Thru International, Inc.
700 South Flower Street
Suite 2950
Los Angeles, California 90017
Re: Investment Banking Services
Dear John:
We are pleased to set forth the terms of the retention of Founders Equity
Group, Inc. ("Founders Equity") by Dial Thru International, Inc. (the
"Company") as your advisor under the terms of this letter agreement (the
"Agreement").
1. Services. The Company will engage Founders Equity to provide the
following services:
a) Advise the Company on its financing needs, strategic direction and
capitalization and the capital market implications of such
actions;
b) Become familiar, to the extent Founders Equity deems appropriate,
with the business, operations, corporate structure and ownership,
properties, financial conditions, prospects and management of the
Company;
c) Undertake such financial analysis and provide such financial
advisory and investment banking services as the Company may
reasonably request; and.
2. Consideration.
a) A nonrefundable retainer in the amount of $70,000. To be paid
part in cash or in stock when and if the Company has money.
b) A monthly payment of $9,000 beginning January 1, 2000 and
continuing for twelve months thereafter. For the period of
unregistered stock and in cash or stock at the Company's
discretion.
c) 300,000 five year warrants _ The Per Share Warrant Price shall be
the final price of the Company's common stock private placement,
but in no event shall the price be greater than $3.50 per share.
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d) If the Company begins the process of the purchase of assets, a
merger, acquisition, joint venture, or sale to another entity
during the term of this Agreement, Founders Equity shall receive a
fee calculated as follows. This fee will only be earned if
Founders Equity has a role in the transaction. If transaction
happens outside that, no fee will be paid to Founders Equity.
5% of the value of the transaction to the Company up to and
including $2,000,000;
4% of the value of the transaction to the Company greater than
$2,000,000 and up to and including $4,000,000;
3% of the value of the transaction to the Company greater than
$4,000,000 and up to and including $6,000,000;
2% of the value of the transaction to the Company greater than
$6,000,000 and up to and including $8,000,000; and
1% of the value of the transaction to the Company in excess of
$8,000,000.
Value of the transaction (consideration) is defined as the total
proceeds and other consideration (including cash, securities, or
installments) issued or received by the Company in connection with
an acquisition of, merger with or sale to, another company. If a
portion of such consideration is contingent, consideration will be
paid as the Company or its shareholders issue or receive payments,
but not in advance of receiving same. In the event that the
aggregate consideration for the transaction consists in whole or
in part of securities, for the purpose of calculating the amount
of aggregate consideration, the value of such securities will be
the average bid of closing prices for five consecutive days
preceding the consummation of the transaction or, in the absences
of a public trading market thereof, the fair market value thereof
as the Company and Founder Equity agree on the day preceding the
consummation of the transaction.
d) For the purposes of this Agreement, a "Source" shall include any
and all investors, agents, investment bankers, and similar
providers of capital including referrals by Founders Equity,
whether or not introduced to the Company directly by Founders
Equity. The Company hereby agrees that, for a period of three (3)
years from the date of this Agreement, the Company will not
solicit any kind of financial consideration from any Source
introduced to the Company by Founders Equity without Founders
Equity's express written consent and that such consent once given
by Founders Equity will require the Company to request such
consent for each subsequent communication.
e) In addition to any fees payable to Founders Equity hereunder, the
Company hereby agrees, from time to time upon request from
Founders Equity, to reimburse Founders Equity for all of its
reasonable travel, accounting, printing, third party document
preparation, and other out-of-pocket expenses which are incurred
in connection with this engagement. All expense amounts will be
reasonable and necessary, and any amounts exceeding $1,000 will be
approved of in advance by the Company.
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3. Information. In connection with Founders Equity activities on the
Company's behalf, the Company will cooperate with Founders Equity and
will furnish Founders Equity with all information and data concerning the
Company which Founders Equity reasonably requests (collectively, the
"Information"). The Company will provide Founders Equity with reasonable
access to the Company and the Company's officers, directors, employees,
independent accountants to the extent Founders Equity deems it
appropriate.
a) The Company represents that all Information concerning the Company
and/or the Company, made available to Founders Equity by the
Company, will be complete and correct in all material respects and
will not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances under
which such statements are made. The Company further represents and
warrants that any projections concerning the Company provided by
the Company to Founders Equity will have been prepared in good
faith and will be based upon assumptions, which, in the light of
the circumstances under which they were made, are reasonable.
b) The Company acknowledges and agrees that, in rendering its
services hereunder, Founders Equity will be using and relying on
the Information without independent verification thereof by
Founders Equity and that Founders Equity does not assume
responsibility for the accuracy or completeness of the Information
or any other information which it may receive regarding the
Company. Any advice rendered by Founders Equity pursuant to this
Agreement is solely for the benefit of The Company and may not be
relied upon in any manner whatsoever by any other person and may
not be disclosed publicly without the prior written consent of
Founders Equity.
c) Founders Equity agrees to keep confidential all material non-
public Information provided to it by The Company, except as
required by law or as contemplated by the terms of this Agreement.
Notwithstanding anything to the contrary, Founders Equity may
disclose non-public Information to its agents and advisors
whenever Founders Equity determines that such disclosure is
necessary or advisable to provide the services contemplated
hereunder.
4. Disclaimer of Responsibility for Acts of the Company and Indemnification.
The obligations of Founders Equity described in this Agreement consist
solely of financial services to the Company. In no event shall Founders
Equity be required by this Agreement to act as the agent of the Company
or otherwise to represent or make decisions for the Company. All final
decisions with respect to acts of the Company or its affiliates, whether
or not made pursuant to or in reliance on information or advice furnished
by Founders Equity hereunder, shall be those of the Company or such
affiliates and Founders Equity shall under no circumstances be liable for
any expense incurred or loss suffered by the Company as a consequence of
such decisions.
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The Company agrees to indemnify and hold harmless Founders Equity and its
affiliates, and the respective directors, officers, agents and employees
of Founders Equity and its affiliates and each other entity or person, if
any, controlling Founders Equity or any of its affiliates within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended, (Founders Equity and each
such entity and person being collectively referred to as an "Indemnified
Party") from and against any losses, claims, damages or liabilities (or
actions in respect thereof) (i) caused by any untrue statement or alleged
untrue statement of material fact contained in any selling memorandum, or
caused by an omission or alleged omission to state therein a material
fact, required to be stated therein or necessary to make the statement
therein, in the light of the circumstances under which they were made,
not misleading or (ii) otherwise relating to, arising out of or in
connection with the activities contemplated herein. The Company will
reimburse any Indemnified Party for all reasonable expenses (including
without limitation, fees and disbursements of counsel) incurred by such
Indemnified Party in connection with the investigating, preparing or
defending any such action or claim in connection with this transaction to
which the Indemnified Party is a party, in each case, as such expenses
are incurred or paid
5. Term of Engagement. This Agreement shall be a one year Agreement
commencing on the date of this Agreement. The term shall automatically
be extended for additional six-month terms unless one party notifies the
other of its desire not to renew prior to the commencement of the
extended term.
6. Assignability. This Agreement may not be assigned by either party
without the prior written consent of the other party; provided, however,
that Founders may, at its sole discretion and without notice, designate
one or more of its affiliates to perform all or part of the services
outlines herein.
If the foregoing correctly sets forth our Agreement, please sign the
enclosed copy of this letter in the space provided and return it to us.
Very truly yours,
FOUNDERS EQUITY GROUP, INC.
By: /s/ Scotty D. Cook
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Scotty D. Cook
Chairman and CEO
Confirmed and Agreed to this 12th day of December, 2000.
Mr. John Jenkins
By: /s/ John Jenkins
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