EXHIBIT 10.3
LETTER OF AGREEMENT BETWEEN T2CN HOLDING LIMITED
AND THE CALNEVA FINANCIAL GROUP, LTD.
(the "Agreement")
This agreement made as of the 15th day of July, 2004.
BETWEEN:
T2CN HOLDING LIMITED
C/O S-HR&M FINANCIAL SERVICES LIMITED
KINGSTON CHAMBERS, P.O. BOX 173
ROAD TOWN, TORTOLA
BRITISH VIRGIN ISLANDS
(Hereafter referred to as "T2CN")
AND:
THE CALNEVA FINANCIAL GROUP, LTD.
2443 ALDER STREET
VANCOUVER, BRITISH COLUMBIA
CANADA, V6H 4A4
(Hereafter referred to as "CALNEVA")
WHEREAS:
A. T2CN HOLDING LIMITED ("T2CN") is a private company limited by shares
organized and existing under the laws of the British Virgin Islands. As a result
of PRC legal considerations, T2CN operates an online game business in China
through SHANGHAI T2 ENTERTAINMENT CO., LTD.
EI(0)(pound)IiOIEi1/4(254)O-DI(222)(1)<<E3/4, ("T2 ENTERTAINMENT") a company
wholly owned by Feng, Tao and SHANGHAI NEWMARGIN VENTURE CAPITAL CO., LTD. (
Feng, Tao being a PRC citizen and New Margin being a company incorporated under
the laws of the People's Republic of China). T2CN has entered into a series of
contractual arrangements with T2 ENTERTAINMENT and its shareholders, including
contracts relating to the transfer of assets, the provision of services,
software licenses and equipment and certain shareholders rights and corporate
governance matters. As a result of these contractual arrangements T2CN has the
substantial ability to control T2 ENTERTAINMENT and therefore T2CN is considered
the primary beneficiary of T2 ENTERTAINMENT and accordingly the T2 ENTERTAINMENT
financial results are consolidated with the financial statements for T2CN.
B. THE CALNEVA FINANCIAL GROUP, LTD. is a company incorporated under the laws of
the Province of British Columbia and provides management and financial
consulting services including the following:
(i) assistance with business and financial planning; (ii) assistance
with identifying appropriate investor strategies;
(iii) assistance in raising capital on both a private and public
nature;
(iv) co-ordination with legal and accountant advisors to enable
private; companies to become public on a recognized U.S Exchange;
(v) assistance in the preparation of Public Company Documents and SEC
filings;
(vi) assistance with the implementing of the Company's business and
marketing strategy and specifically to help the Company obtain
market recognition and enhance shareholder value.
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NOW THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TERM OF CONSULTANCY - T2CN hereby agrees to retain CALNEVA to act in a
consulting capacity to the Company, and CALNEVA hereby agrees to provide
services to T2CN commencing on the Effective Date of this agreement and
ending eighteen (18 months from the Effective Date unless terminated by
either party pursuant to the termination clause of this agreement.
2. SERVICES - During the term of this Agreement, CALNEVA'S services may
include, but will not necessarily be limited to providing the following
services on behalf of and for the benefit of T2CN:
(i) Review of the present corporate structure of T2CN HOLDING LIMITED and
SHANGHAI T2 ENTERTAINMENT CO., LTD. to ensure that it is in compliance
with legal and auditing requirements relating to the filing of a
Securities and Exchange Commission document to take the BVI Company or
such other affiliate of BVI company as designated by the company
public on NASDAQ or such other U.S. capital market as T2CN agrees to;
(ii) Preparation of share subscription agreements (for US residents and
non-US residents) for T2CN to comply with US Public Company legal
requirements;
(iii) Assist in the co-ordination and preparation of financial statements
prepared in accordance with U.S generally accepted accounting
principles and to be included in the filing of the documentation to
take T2CN public;
(iv) Assistance to ensure that corporate governance matters are complied
with;
(v) Assistance, on a best efforts basis, to raise financing for T2CN;
(vi) Assistance in the establishment of an audit committee, compensation
committee and corporate governance committee for T2CN;
(vii) Establish a proper system of internal controls within the corporate
organization of T2CN and T2 ENTERTAINMENT. (This is an extremely
important aspect of timely financial reporting and accurate financial
reporting from a Securities & Exchange Commission point of view);
(viii) Assistance in the preparation of a 15C-211 document required by the
NASD to take T2CN public;
(ix) Assistance in the preparation of a Form F-1 (Registration Statement
Under the Securities Act of 1933) for T2CN to register 10,000,000
restricted common shares;
(x) Maintain all Foreign Issuer Securities & Exchange reporting
requirements in a timely matter;
(xi) Co-ordination between the auditors and T2CN management on all
financial reporting requirements;
(xii) Co-ordination between the lawyers and T2CN management on all SEC
reporting requirements;
(xiii) File all necessary documentation relating to "Blue Skying" of the
Public Company's stock in all necessary States of the U.S.;
(xiv) Assistance with the preparation of all director's minutes relating to
stock issuances and co-ordination with the transfer agent;
(xv) Maintain the Corporate Minute Book in T2CN as the Public Company;
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(xvi) Attendance to development of Annual General Meetings materials for
distribution to shareholders;
(xvii) Attendance to the preparation of the Form 20F Securities and Exchange
annual filing for Foreign Issues;
(xviii) Assistance in arranging meetings with analysts and proposed investors
after T2CN has gone public;
(xix) Review of potential acquisition candidates for the Public Company;
(xx) Interview proposed investor candidates for possible investment in
the Public Company;
(xxi) Assistance in the coordination and creation of a strategic public
market strategy to enable the Company to have a liquid market for
their publically traded stock and to increase shareholder awareness of
present corporate status and future development plans;
(xxii) Analyze the Company's needs with respect to public relations, investor
relations;
(xxiii) Oversee and facilitate, for the benefit of the Company, any or all
investor relations or public relations organizations which are engaged
by the Company;
(xxiv) Consult and assist the Company in developing and implementing
appropriate plans and means for presenting the Company and its
business plans, strategy and personnel to the financial community;
(xxv) Assist and advise the Company with respect to its relations with
brokers, dealers, analysts and other investment professionals
(including introduction to new investment professionals);
3. ALLOCATION OF TIME - The Consultant hereby promises to perform and
discharge faithfully the responsibilities, which may be assigned to the
Consultant from time to time by the officers and duly authorized
representatives of the Company under this Agreement. Consultant and
staff shall diligently and thoroughly provide the consulting services
required hereunder. Although no specific hours-per-day requirement will
be required, Consultant and the Company agree that Consultant will
perform the duties set forth herein above in a diligent and
professional manner.
4. REMUNERATION - As full and complete compensation for services described in
this Agreement, the Company shall compensate CALNEVA as follows:
(i) For the understanding of this engagement and for good and valuable
consideration, T2CN agrees to cause to be delivered to CALNEVA
7,200,000 restricted common shares of their stock from treasury.
(ii) If CALNEVA does not manage to obtain a public listing for T2CN due to
CALNEVA's negligence, then CALNEVA will be required to return 500,000
common shares as a penalty for their lack of performance on this
issue. This penalty would not apply to a circumstance when CALNEVA
through no fault of their own were unable to secure a public listing
for T2CN.
5. PLACE OF SERVICES - The Services provided by CALNEVA hereunder will be
performed at CALNEVA's offices except as otherwise requested by T2CN.
6. INDEPENDENT CONTRACTOR - CALNEVA will act as an independent contractor in
the performance of its duties under this agreement. This Agreement neither
expressly not impliedly creates a relationship of principal and agent, or
employee and employer, between CALNEVA's personnel and the
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T2CN. Neither CALNEVA nor CALNEVA's personnel are authorized to enter into
any agreements on behalf of the T2CN. T2CN expressly retains the right to
approve, in its sole discretion, each opportunity introduced by CALNEVA
and to make all final decisions with respect to effecting a transaction on
any such opportunity.
7. CERTAIN RESTRICTIONS - Notwithstanding anything to the contrary and
without prejudice to other explicit or implied restrictions hereunder,
(i) all the proceeds from the private equity funding or public stock
offering of T2CN contemplated by this Agreement shall be remitted to
accounts designated by, under the name of and for the interest of T2CN
before any allocation or application, (ii) terms of private equity
funding of T2CN of a total amount of more than US$2.6 million shall
require prior written consent of T2CN, including without limitation and
in particular with respect to the share subscription price, and (iii)
CALNEVA shall obtain prior written approval of T2CN before contacting
any potential private investor in T2CN(pound) and such approval may be
withheld if the potential investor is regarded as in competition of
T2CN or otherwise unsuitable to invest in T2CN at the discretion of
T2CN.
8. INDEMNIFICATION - Subject to the provisions herein, T2CN and CALNEVA
agree to indemnify, defend and hold each other harmless from and
against all demands, claims, actions, losses, damages, liabilities,
costs and expense (including without limitation, interest, penalties
and attorneys' fees and expenses) asserted against or imposed or
incurred by either party by reason of or resulting from any action by
(or the breach of any representation, warranty, covenant, condition, or
agreement by) the other party to this Agreement.
9. REMEDIES - CALNEVA and T2CN acknowledge that in the event of a breach
of this Agreement, by either party, money damages would be inadequate,
and the non-breaching party would have no adequate remedy at law.
Accordingly, in the event of any controversy concerning the rights or
obligations under this Agreement, such rights or obligations shall be
enforceable in a court of equity by a decree of specific performance.
Such remedy, however, shall be cumulative and non-exclusive, and shall
be in addition to any other remedy to which the parties may be
entitled.
10. MISCELLANEOUS -
(a) Subsequent Events. CALNEVA and T2CN each agree to notify the other
party if, Subsequent to the date of this Agreement, either party incurs
obligations which could compromise its effects and obligations under
this Agreement.
(b) Amendment. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by the
parties hereto.
(c) Further Actions and Assurances. At any time to time, each party
agrees, at its or their expense, to take actions and to execute and
deliver documents as may be reasonably necessary to effectuate the
purpose of this Agreement.
(d) Waiver. Any failure of any party to this Agreement to comply with
any of its obligations, Agreements, or conditions hereunder may be
waived in writing by the party to whom such compliance is owed. The
failure of any party to this Agreement to enforce at any time any of
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the provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the right of such party
thereafter to enforce each and every such provision. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
(e) Assignment. Neither this Agreement nor any right created by it
shall be assignable by either party without the prior written consent
of the other.
(f) Notice. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the party; when
deposited in the mail for transmittal by certified or registered mail,
postage prepaid; when deposited with a public telegraph company for
transmittal; or when sent by facsimile transmission., provided that the
communication is addressed:
(g) In the case of T2CN:
T2CN HOLDING LIMITED
C/O S-HR&M FINANCIAL SERVICES LIMITED
KINGSTON CHAMBERS, P.O. BOX 173
ROAD TOWN, TORTOLA
BRITISH VIRGIN ISLANDS
(h) In the case of CALNEVA:
THE CALNEVA FINANCIAL GROUP, LTD
2443 ALDER STREET
VANCOUVER, BRITISH COLUMBIA
CANADA, V6H 4A4
i. Or to such person or address designed in writing by T2CN or
CALNEVA to receive notice.
(i) Heading. The section and subsection heading in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(j) Governing Law. This Agreement was negotiated in and is being
contracted for in British Columbia, and shall be governed by the laws
of the Province of British Columbia.
(k) Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors, and assigns.
(l) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior agreements,
arrangements, or understandings between the parties relating to the
subject matter of this Agreement. No oral understanding, statements,
promises, or inducements contrary to the terms of this Agreement exist.
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No representations, warranties, covenants, or conditions, express or
implied, other than as set forth herein, have been made by any party.
(m) Severability. If any part of this Agreement is deemed to be
unenforceable, the balance of the Agreement shall remain in full force
and effect.
(n) Counterparts. If facsimile, telecopy, or other reproduction of this
Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, by one or more parties
hereto and such executed copy may be delivered by facsimile or similar
instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen. In this event,
such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
(o) Time is of the Essence. Time is of the Essence of this Agreement
and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
T2CN HOLDING Limited The Calneva Financial Group, Ltd.
By: /s/ Ji Wang By: /s/ D. Bruce Horton
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Ji WANG D. Bruce Horton
President & Director Director