Exhibit 10.5
THIS AGREEMENT made this day of May , 1999, effective the 15th day of
March,1999.
BETWEEN:
E-CAPITAL MANAGEMENT INC.
a body corporate, duly incorporated under the laws of Canada
(hereinafter "E-Capital")
OF THE FIRST PART
- and -
▇▇▇▇▇▇▇.▇▇▇ CORPORATION
a body corporate, duly incorporated under the laws of Delaware
(hereinafter "thinWEB")
OF THE SECOND PART
WHEREAS E-Capital has expertise in arranging financing for companies and
assisting in the going public process;
AND WHEREAS E-Capital made an agreement with ThinWeb Software Incorporated
("Software") on or about March 15, 1999 and has been providing services to
Software since that time while the detailed terms of its engagement were being
finalized. Reference hereinafter to "thinWEB" is intended to also include
Software where the context requires;
AND WHEREAS thinWEB acknowledges the services provided to Software to date and
desires to continue to utilize the services of E-Capital and to confirm the
terms thereof.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set out, the
parties agree as follows:
1. thinWEB hereby retains E-Capital and E-Capital hereby agrees to assist
thinWEB in its efforts to obtain financing and go public, subject to the terms,
conditions and provisions hereof.
2. E-Capital hereby agrees to provide its services to thinWEB, and thinWEB
agrees to retain E-Capital on an exclusive basis, until the earlier of:
(a) 60 days after the date upon which thinWEB becomes publicly traded;
(b) December 31, 1999; or
(c) the date upon which the directors of thinWEB unanimously agree that E-
Capital has failed in its efforts to obtain acceptable financing and assist
in taking thinWEB public to the extent that it is no longer in the best
interests of thinWEB to continue this agreement.
3. The services to be rendered to thinWEB shall be subject to the approval and
direction of thinWEB's board of directors and designated management to whom E-
Capital and its President shall report.
4. E-Capital shall use such employees, consultants and contractors as it deems
necessary to assist in the performance of its activities on thinWEB's behalf.
5. E-Capital is not precluded from engaging in similar business activities on
behalf of third parties provided such activities do not interfere with the
performance of its duties and responsibilities to thinWEB.
6. The general services to be provided shall include:
(a) introduction of thinWEB to suitable financial institutions, merchant
banks, investment funds, broker-dealers, underwriters, sophisticated
investors, and the like, both in North America and abroad, for the purpose
of arranging financings and underwriting or investment commitments;
(b) assistance in negotiating, or negotiating on behalf of thinWEB, with
those parties referred to in 6(a) above;
(c) providing strategic advice to thinWEB with respect to financing and
going public planning;
(d) assisting in the identification and evaluation of going public
alternatives;
(e) assisting in identifying qualified advisors and consultants to aid
thinWEB in its efforts to obtain financing and go public; and
(f) all such other activities which may be considered necessarily
ancillary to the foregoing.
7. In addition to the general services described above E-Capital agrees to
arrange the following transactions:
(a) a seed investment of not less than $500,000 USD by way of private
placement of common shares of thinWEB at a price of $.50 USD per share
(which may be subject to a "finders fee" of up to 10% to a third party
consultant);
(b) the locating, negotiating for and acquiring by reverse takeover of a
suitable US shell for going public purposes;
(c) locating, introducing and negotiating with sophisticated foreign
investors to invest in thinWEB and to provide bridge financing on terms to
be negotiated, until such time as thinWEB goes public or completes a
significant financing;
(d) introducing a knowledgeable consultant to assist in investigating the
feasibility of establishing an R&D affiliate in a low tax foreign
jurisdiction; and
(e) arranging a private placement equity financing, on terms acceptable to
thinWEB, resulting in the receipt by thinWEB of net proceeds of not less
than $5,000,000 USD.
8. E-Capital shall at all times observe and comply with all applicable
federal, state and provincial securities laws, rules and regulations in
connection with any of its aforementioned activities and will take all
reasonable steps within its control to prohibit any persons affiliated with E-
Capital from engaging in any activities in contravention of such laws, rules and
regulations.
9. In consideration of the services to be performed by E-Capital it shall
receive the following compensation:
(a) it shall be reimbursed all reasonable out of pocket expenses incurred by
it, its employees, contractors and consultants while engaged in activities on
behalf of thinWEB, the reasonableness of which shall be determined by thinWEB's
management;
(b) it, or its nominee, shall be issued for nominal consideration 1,500,000
convertible preferred shares of thinWEB, which shares shall be convertible into
common shares of thinWEB on a one for one basis, provided that the conversion of
the shares shall only occur if E-Capital has been instrumental in arranging an
acceptable $5,000,000 USD net equity financing as described in paragraph 7(e)
above by November 1, 1999 (unless extended by thinWEB).
10. E-Capital shall be responsible for the payment of all of its employees
remuneration. The costs and expenses of any contractors retained by E-Capital
shall be the sole responsibility of E-Capital, unless otherwise approved by
thinWEB.
11. Either party may terminate this agreement for cause, immediately upon
notice to the other party upon occurrence of any of the following events:
(a) a material breach of any term or provision of this Agreement,
(b) violation of any law, rule or regulation.
12. E-Capital shall keep all information it receives about thinWEB, its
operations and technology confidential except as is necessary for its activities
described above. E-Capital shall, wherever reasonably possible, obtain non-
disclosure agreements before providing information about thinWEB to any third
parties.
13. This Agreement and matters of its construction, validity and performance
shall be governed by the laws of Ontario. If any legal action or other
proceeding is brought for the enforcement or interpretation of this Agreement,
such legal proceeding shall be brought in Ontario.
14. Notice given by either party to the other shall be considered received on
the day of actual receipt. Notice to the parties shall be at the following
addresses:
To E-Capital:
▇▇▇▇ ▇▇▇▇▇▇, President
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
To thinWEB:
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Suite 101, Phase 3, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
15. This Agreement shall not be assigned without prior written consent.
16. The provisions of this Agreement shall enure to the benefit of and are
binding on the successors and permitted assigns of the parties.
IN WITNESS WHEREOF the parties have approved and executed this Agreement.
E-CAPITAL MANAGEMENT INC.
per:_______________________________
▇▇▇▇▇▇▇.▇▇▇ CORPORATION
per:________________________________
SCHEDULE "A"
LIST OF SHAREHOLDERS
AMERY ASSOCIATES INC.
ARRENDADORA SOLARSA S.A.
BUTTERNUT CAPITAL LIMITED
▇▇▇▇▇▇ EQUITY LIMITED
CORPORATE SOLUTIONS LIMITED
GREENSTED EQUITIES LIMITED
INTERNATIONAL SHAREHOLDINGS CORP.
SEISMIC INVESTMENTS LIMITED
STRATHGLEN CAPITAL LIMITED