CONSULTING AGREEMENT
This Agreement is entered into by Tsunami Trading Corp. DBA Tsunami Financial
Communications, hereinafter referred to as Tsunami located at One World Trade
Center, New York, NY 10048; International Consulting Group, Inc., hereinafter
referred to as ICG located at 18065 Coastline Dr. Malibu, CA 90265l (the
"Financing Consultants or the "Consultants"), and Thinkpath.com, Inc.,
hereinafter referred to as Thinkpath located at 55 University Ave.Suite 505
Toronto, ON M5J 2H7 and sets forth the terms and conditions for services to be
rendered by Consultant on behalf of Thinkpath in connection with various
corporate advising activities.
Services of the Consultants: This will confirm our engagement Agreement (the
"Agreement"), on an non-exclusive basis, in connection with the efforts of
Tsunami and ICG (the "Consultants") to locate financing for Thinkpath by acting
as a Consultant and by introducing Thinkpath to Debt or Equity (or both) Sources
("Funding Sources") to provide funds acceptable to Thinkpath (a "Funding"). As
used in this Agreement, a "Funding Source" is a source, which leads to a sale,
merger or acquisition of Thinkpath or a Transaction. Transactions includes
preferred stock, options, warrants, secondary offerings, mezzanine financing,
any private placement of securities, recapitalization, revenue participation
note, partnership interests, venture capital investment, joint venture,
strategic alliance or other business combination, or any other Transaction
through which Thinkpath obtains financing or capital, through equity investment,
preferred stock (standard or convertible), loans or debt financing, convertible
debentures, issuance of warrants, letter of credit, "line of credit" or any
agreed combination of debt and equity financing; provided that it is
specifically understood and agreed that it shall be within Thinkpath's
discretion whether and with whom to enter any such Transaction. Thinkpath and
Consultants agree as follows:
The Financing Services contemplated herein include, but are not limited to, the
identification of candidates of Equity or Debt Financing (a Line of Credit,
Revolving Line of Credit, Term Loan, Assets-Based Loans, Cash Flow Structured
Financing, Factoring, Leases Sales/Leasebacks, accounts Receivable and Inventory
Financing, Leverage Buyouts, corporate Recapitalizations, Refinancing) to
provide Working Capital for Thinkpath, any expansion financing, mergers or
acquisitions, or interim "bridge" financing of Thinkpath or other succeeding
entity, and the negotiation of terms of such Equity or Debt Financing
Transactions with Funding Sources. These services will be referred to as the
"Financing Services".
Additionally on a non-exclusive basis Thinkpath desires to have consultants
render fully integrated corporate and investment banking advice, investor
relations advice, public relations advice, work with management in the creation
of shareholder value, help with the production and distribution of informational
materials that highlight corporate activities and potential, in order to develop
stronger relations between Thinkpath and its current and prospective
shareholders. In addition consultants will help Thinkpath to develop high
quality documentation that will showcase Thinkpath to the market makers and to
the financial community that creates public and media attention and ensures
optimal investor awareness; and be involved in the process of distribution of
corporate fact sheets and profiles with the intention of getting Thinkpath to
know its shareholders, brokers, analysts and fund managers as well as
institutional and individual investors.
Additional Terms:
1. This Agreement will commence with your signing this Agreement, and will
continue for a period of 120 days, and may be extended for successive periods on
terms to be mutually agreed to by both parties pursuant to a written agreement.
In the event of termination at the end of 120 days, pursuant to this paragraph,
Thinkpath shall not be obligated for any further payments to Consultants except,
(a) any pre-approved travel expenses incurred, prior to termination, by
Consultants on Thinkpath's behalf; and (b) Thinkpath shall remain obligated to
pay to Consultants the Financing Fee stated in this Agreement in the event that
Thinkpath completes a financing within 24 months of such termination with, or
arranged by, any parties on the Protected List which Consultants will submit to
Thinkpath within 30 days following the notice of termination. In addition,
Thinkpath will be obligated to notify Consultants within thirty (30) days of the
completion of such Funding. Any consulting fee payments made to Consultants
prior to termination shall not be refunded to Thinkpath.
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2. Consultants relationship with Thinkpath shall be that of an independent
contractor and not that of an employee. Consultants will not be eligible for any
employee benefits, nor will Thinkpath make deductions from the consulting fees
for taxes, insurance, bonds or any other subscription of any kind, which shall
be Consultants sole responsibility. Consultants will use its best efforts in
performing the services under this Agreement, within the scope of work specified
in the Agreement.
3. Thinkpath and their officers, directors, employees and/or agents, understand
that Consultants considers its investors, source firms, Funding sources and
compensation arrangements to be confidential and proprietary, and agrees not to
disclose any such information to any person or firm outside of Thinkpath without
prior written consent for Consultants, except as required by law. Thinkpath's
obligations under this paragraph shall survive termination of this Agreement for
a period of 24 months.
4. Consultants shall keep in confidence and shall not disclose or make available
to third parties or make any use of any information or documents relating to the
products, methods of manufacture, trade secrets, processes, business or affairs
or confidential or proprietary information of Thinkpath (other than information
in the public domain through no fault of Consultants), except with the prior
written consent of Thinkpath. Upon termination of this Agreement Consultants
will, upon request by Thinkpath, return all documents, and other materials
related to the services provided hereunder furnished to Consultants by
Thinkpath. Consultant's obligations under this paragraph shall survive
termination of this Agreement.
5. Consultants and Thinkpath further agree to indemnify and hold each other
harmless from and against any and all losses, claims or damages, including any
legal or other expenses reasonably incurred, in connection with defending
against any litigation, whether commenced or threatened, to which either
Thinkpath or Consultants may become subject under any statute, caused by, or
arising out of any service under this Agreement; provided, however, that neither
party shall be liable in any such case to the extent that any loss or damage if
found to have resulted from the other party's gross negligence, intentional
misrepresentation or violation of any statute or regulation.
6. In the event that any controversy or claim arises out of this Agreement, the
parties hereto shall negotiate in good faith to resolve such controversy or
claim. If the parties through negotiation cannot settle such controversy or
claim, such controversy or claim shall be settled by binding arbitration. During
the arbitration, both parties shall continue to perform their obligations under
this Agreement unless the Agreement has been terminated. In addition to any
other recovery, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and costs thereby incurred.
7. If any provision of this Agreement is held to be invalid or unenforceable to
any extent in any context, it shall nevertheless be enforced to the fullest
extent allowed by law in that and other contexts, and the validity and force of
the remainder of this Agreement shall not be affected thereby. Further, a waiver
of the non-performance of any provision of this Agreement must be in writing and
shall apply only to the particular non-performance involved and shall not
constitute an amendment, change or modification of this Agreement or apply to
any other performance requirement.
8. This Agreement shall inure to the benefit of and be binding on the respective
parties hereto and the respective executors, administrators, successors and
assigns.
9. This Agreement reflects the entire agreement between Thinkpath and
Consultants, and the terms herein shall not be modified except by a written
amendment signed by the parties hereto. The signatories below acknowledge that
they have the necessary authority of their respective parties, including board
approval, if required, to enter into this Agreement. A signed faxed copy shall
serve as an original.
10. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
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Third Party Consultants; Equal Participation; Independent Contractors; No
Authority to Bind: Consultant may engage other sources that will share in
duties, obligations and compensation. It is specifically understood and agreed
that Consultant may, in Consultant's discretion, enter into such understandings
or agreements with such other persons or entities. However, the parties hereto
are independent contractors and they shall not be deemed by virtue of this
Agreement to be partners or joint ventures or in any legal relationship with
each other, other than as independent contractors sharing a Consummation Fee for
producing a Transaction defined under this agreement.
Advance Expense Fees: Thinkpath agrees to issue Certificates representing
160,000 shares of Thinkpath common stock each to Tsunami Trading Corp. and
International Consulting Group, Inc., said shares to be unencumbered and free
and clear of any liens or commitments, (delivery terms set forth on schedule A
attached hereto) and Thinkpath agrees to file an SB-2 registration at the
soonest possible time but no later than 30 days from date of execution of this
Agreement. Certificates representing the shares will be delivered via certified
courier no later than the third business day after execution of this Agreement.
Penalty Clause: In the event Thinkpath does not file the SB-2 Registration
Statement within 30 days of execution of this Agreement then Thinkpath agrees to
a 30,000 share per month penalty, to be issued on a pro-rata basis under the
Terms of this Agreement, until such time as Thinkpath files the SB-2
Registration. Thinkpath agrees to file such Registration in manner consistent
with previous Registration Statements and to use its "best-efforts" to complete
the Registration process in timely manner not to exceed 90 days.
Financing Fee: In the event that Thinkpath completes a Financing from a Funding
Source supplied by Consultants, and such Financing occurs during the term of
this Agreement or within 24 months of any termination hereof, Consultants will
receive a Consummation Fee as described below (delivery terms set forth on
schedule A attached hereto).
Cash Portion
Company shall pay, or cause to be paid, to Financial Consultant, in cash at the
closing of each Transaction completed by a Funding Source, a fee ("consummation
Fee") equal to ten percent (10%) of the aggregate consideration to be received
by Thinkpath in such Transaction. "Consideration to be received by Thinkpath" as
used on this Agreement shall mean and include the total value received by
Thinkpath and/or its shareholders, officers and directors in any such
Transaction, including both Cash and any Non-Cash Consideration (e.g.
securities, promissory notes, assumption of debt, asset transfers or any other
Non-Cash Consideration). Payment in full of the Consummation Fee in cash, if
Company receives all cash, shall be a condition precedent to the closing of any
Transaction with a Covered Person. If Thinkpath receives any Non-Cash
consideration, then Financial Consultant shall be paid in like Non-Cash
Consideration on a pro-rata basis. If Thinkpath is sold merged or acquired, than
Cash Compensation shall be based on the Enterprise Value of Thinkpath.
Equity Portion:
Financial Consultants shall receive, in addition to the cash fees or equity set
forth above, Equity in the form of Warrants representing an interest in
Thinkpath or any partnership or enterprise that was funded above (a "Funding")
equal two percent (2%) of the amount of Equity sold to the Investor. However, in
no event should the Equity Compensation from the Initial Funding exceed a total
value of 5% of Thinkpath on a "post money" valuation. For example, if $4.5
million is raised for Thinkpath and that represents 25% ownership of Thinkpath
by the new minority Investor, than the Equity Portion of the Compensation would
be .5%. The exercise price of the Warrants will be 110% of the closing value of
the Equity received by the investor for period of three (3) years.
If any Consideration is received in the form of Warrants, Thinkpath agrees to a
cashless exercise of the underlying Securities and agrees to reserve a
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sufficient amount of stock to cover their obligation. The Warrants in Thinkpath
are exchangeable for shares in another publicly traded company (sale or merger
of Thinkpath included), or other financial Transactions as defined above. In the
event of such Transactions Thinkpath will allow for the immediate registration
of the underlying Securities as described in this paragraph. Thinkpath agrees to
pay all the fees associated with exercise, registration or transfer of the stock
described in this Agreement.
The stock and Warrants will provide for registration rights (including a
one-time demand registration right and unlimited piggyback rights) and customary
anti-dilution provisions (for stock dividends, and splits, and
recapitalizations) consistent with the National Association of Securities
Dealers, Inc. (NASD) Rules of Fair Practice. The intent of this clause is for
Consultants to receive the same treatment as the founding shareholders as it
pertains to any future dilution the founders may have. Thinkpath agrees to pay
for all costs associated with registering such shares.
Liquidation Provision: The Consultants agree to a cumulative liquidation of not
more than 32,000 shares per month until such time as the stock trades above
$2.00 per share at which time they agree to a cumulative liquidation of 96,000
shares per month; however, in the event the stock trades above $3.00 per share
then the Consultants are entitled to full liquidation.
Compensation for Additional Financing: If Consultants provide Contacts or a
Contact List (the "Contact List") to Thinkpath during and after the term of this
Agreement. Upon approval by Thinkpath of that Contact or Contact List, and if
Thinkpath at any time during the Term or within Twenty Four (24) months after
the Term of this Agreement closes any Transaction with (I) any Prospective Party
introduced or referred to Thinkpath by Consultant, or (ii) with any person or
entity listed as a Contact on any contact List delivered to Thinkpath by
Consultant, or (iii) with any person or entity referred to Thinkpath directly by
any Prospective Party introduced or referred to Thinkpath by Consultant or
directly by any Contact introduced or listed on a Contact List (any such person
or entity referred to in (1), (ii), or (iii) above being hereinafter referred to
as a "Covered Person"), then Thinkpath shall pay, or cause to be paid, to
Consultant, in cash at the closing of each Transaction, a fee ("Consummation
Fee") equal to the schedule set forth in the Cash and Equity compensation
sections under the original Consummation Fee.
Term/Termination: This Agreement will commence upon execution for a period of
120 days, and may be extended for successive periods on terms to be mutually
agreed to by both parties pursuant to a written agreement.
Authorization: The individual signing on behalf of each entity that is a party
of this Agreement represents and warrants that they have full authority and
authorization to enter into and perform the terms of this agreement on behalf of
said entity. A signed faxed copy shall serve as an original.
In witness whereof, the parties hereto have executed this Agreement or caused
this Agreement to be executed on the day and year written below.
Tsunami Financial Communications Thinkpath.com, Inc.
Signature: /s/ Brian Angiuli Signature: /s/ Declan French
- -------------------------------------- -----------------------------------
Name: Brian Angiuli Name: Declan French
- -------------------------------------- -----------------------------------
Date: 12/14/00 Date: 12/14/00
- -------------------------------------- -----------------------------------
International Consulting Group, Inc.
Signature: /s/ Edward Klaeger IV
- --------------------------------------
Name: Edward Klaeger IV
- --------------------------------------
Date: 12/14/00
- --------------------------------------
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Schedule A
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Certificates representing shares issued to Consultants in the amount of 160,000
shares each and subsequent Compensation to be disbursed equally as follows:
Physical Delivery Instructions:
- -------------------------------
Tsunami Trading Corp.
One World Trade Center
New York, NY. 10048
516.883.2520
International Consulting Group, Inc.
18065 Coastline Dr.
Malibu, CA. 90265
310.573.7648
Wire Transfer Instructions:
- ---------------------------
Tsunami Financial Communications, LLC
Citibank NA
ABA#: 021000089
FBO: Tsunami Trading Corp.
A/C#: 95840984
International Consulting Group, Inc.
Bank of New York
ABA#: 021-000-018
FBO: Paine Webber
A/C#: 8900114061
FFC: International Consulting Group, Inc.
A/C#: LM-25233
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