EXHIBIT 10.2
CONSULTING AGREEMENT
AGREEMENT setting forth the terms and conditions upon which PAGEONE
BUSINESS PRODUCTIONS, LLC ("PageOne") is engaged by TradeQwest Inc. together
with any successors (collectively "THE COMPANY") to effect transactions (the
"Transactions") intended to merge or otherwise combine THE COMPANY with a United
States reporting company and for related matters, and subsequently to advise THE
COMPANY in matters of finances and future acquisitions and for related matters,
i.e., the raising of capital in order to effectuate said acquisitions. The
Transactions will take place after THE COMPANY merger is finalized.
SERVICES PROVIDED
MERGER SERVICES FOR BUSINESS COMBINATION
Following its engagement, PageOne and its affiliates will:
Advise THE COMPANY on the structure of the Transactions and actions to
be taken by THE COMPANY in preparation for the completion of the Transactions;
Merge THE COMPANY into Pangaea Communications, Inc.:, a Delaware
corporation ("PANGAEA ") (the "Business Combination") which is a reporting
company under ss.12(g) of the Securities Exchange Act of 1934, as amended, with
PANGAEA as the surviving corporation.
Prepare, assist in preparing or review the Agreement for the Business
Combination ("Business Combination Agreement");
Prepare and file with the Securities and Exchange Commission a Form 8-K
describing the Business Combination with the Company ("The Company" hereinafter
shall mean PANGAEA , following the Business Combination, unless the context
requires otherwise);
Introduce the Company to one or more market makers for the purpose of
making an orderly and efficient market in the Company's securities;
Assist the Company with listing its securities on the NASD OTC Bulletin
Board or, if the Company meets such requirements, apply for admission to
quotation of the Company's securities on the NASDAQ Stock Market and/or its
listing on a regional or national stock exchange, if requested by the Company;
Take any other actions reasonably required of PageOne to complete the
Transactions as contemplated by this Agreement.
PageOne will provide, at its expense, PANGAEA , a reporting company
whose common stock is registered under Section 12(g) of the Securities Exchange
Act of 1934 ("xxx 0000 Xxx"), and which has filed all reports required to be
filed under section 12 or 13(d) of the 1934 Act, with audited and interim
financial statements showing no material assets or liabilities.
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THE COMPANY, at its election, will merge into PANGAEA . Upon the
effective date of the Business Combination, the officers and directors selected
by THE COMPANY will become the officers and directors of PANGAEA . The name of
PANGAEA following the Business Combination will be chosen by THE COMPANY.
Upon the effective date of the Business Combination, there will be
issued and outstanding by THE COMPANY (i) 1,000,000 common shares issued to
PageOne or its designees (the "PageOne Shares") and (ii) such common stock and
other securities as designated by THE COMPANY in the Business Combination
Agreement. This shall occur upon selling a minimum of 3,400,000 shares of common
stock of the Company via a Regulation D 506 offering, or other suitable offering
(the "Offering"). PageOne Shares will not be diluted to less than ten percent
(10%) of the issued and outstanding common stock of THE COMPANY until the
Business Combination and the first round of financing are completed. First round
of financing is defined as the raising of $10,000,000.
MANAGEMENT ADVISORY AND ACQUISITION SERVICES
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Following its engagement, PageOne and its affiliates will:
1. MANAGMENT ADVISORY SERVICES.
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Provide THE COMPANY with such regular and customary management advisory
services as are reasonably requested by THE COMPANY, provided that PageOne shall
not be required to undertake duties not reasonably within the scope of the
management advisory services in which it is generally engaged. In performance of
its duties, PageOne shall provide THE COMPANY with the benefits of its best
judgment and efforts. It is understood and acknowledged by the parties that the
value of PageOne's advice is not measurable in a quantitative manner and PageOne
shall be obligated to render advice, upon the request of THE COMPANY , in good
faith, as shall be determined by PageOne. PageOne's duties may include, but will
not necessarily be limited to:
(1) Advice regarding the formation of corporate goals and their
implementation;
(2) Advice regarding the financial structure of THE COMPANY or its
divisions or any programs and projects undertaken;
(3) Advice regarding due diligence; and,
(4) Advice regarding corporate organization, personnel and selection
of needed specialty skills.
THE COMPANY acknowledges that PageOne and its affiliates are in the
business of providing management advisory services (of all types contemplated by
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this Agreement) to others. Nothing herein contained shall be construed to limit
or restrict PageOne or its affiliates in conducting such business with respect
to others or in rendering such advice to others, provided that such conduct of
business is not in conflict with the purposes of this Agreement.
2. ACQUISITION TRANSACTION
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For purposes of this Agreement, the term "Acquisition Transaction"
means the following:
(1) any merger, consolidation, reorganization or other business
combination pursuant to which the businesses of a third party are
combined with that of THE COMPANY;
(2) the acquisition, directly or indirectly, by THE COMPANY of all or
a substantial portion of the assets or common equity of a third party
by way of negotiated purchase or otherwise; or,
(3) the acquisition, directly or indirectly, by a third party of all
or a substantial portion of the assets or common equity of THE COMPANY
by way of negotiated purchase or otherwise.
In connection with a proposed Acquisition Transaction, PageOne's
advisory services may include the following if requested in writing by the
Company:
(1) assistance in the finding and evaluation of a third party from a
financial point of view;
(2) assistance and advice with respect to the form and structure of
the Acquisition Transaction and the financing thereof;
(3) conducting discussions and negotiations regarding an Acquisition
Transaction; and,
(4) providing other related advice and assistance as THE COMPANY may
reasonably request in connection with an Acquisition Transaction.
PAYMENTS
(a) THE COMPANY will pay PageOne $150,000 for its services and the services of
its affiliates in regard to the Transactions. Payment of this amount will be
made as follows: $75,000 on the Business Combination and $75,000 on the
acceptance by NASD and issuance of a trading symbol on the NASD OTCBB.
(b) THE COMPANY hereby grants PageOne a 5-year transferable warrant
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("PageOne Warrant") to acquire up to 350,000 registered shares of the Company's
common stock at a strike price of $1.00 per share, on an anti-dilutive basis.
The Company will execute and deliver to PageOne a form of common stock purchase
warrant agreement, warrant and warrant exercise subscription not inconsistent
with the terms provided herein.
For the period beginning with the execution of this agreement and
through the Business Combination and first round of financing defined as the
raising of $10,000,000, the Company will not at any time take or allow any
action (whether by reverse stock split or otherwise) which would have the effect
of reducing the percentage of common shares issued and outstanding owned by
PageOne or its designee under this Agreement (the PageOne Shares) to less than
10%; in which event additional shares will be issued to PageOne to restore such
percentage of ownership to 10%.
EXPENSES. AS IT PERTAINS TO ALL OFFERINGS.
PageOne will bear its expenses incurred in regard to the Transactions,
including, without limitation, transfer agent costs up to the time an NASD
application for a trading symbol is made, travel, telephone, duplication costs,
and postage.
THE COMPANY will pay its own and third-party expenses (other than those
of PageOne) including, without limitation, Federal, state and NASDAQ filing
fees, underwriting and market making costs, corporate financial relations,
accounting fees, duplicating costs and other expenses of the Company.
AGREEMENT TO COMPLETE TRANSACTIONS.
THE COMPANY agrees that it will timely take all steps necessary to
complete the Transactions to include, without limitation, providing all
information in a timely manner for the filing of an 8-K Current Report following
the Business Combination; causing audited financial statements to be prepared in
proper form for THE COMPANY to permit timely filing of the audited financials
for the acquired assets; obtaining consents of the Board of Directors and the
shareholders of THE COMPANY, as required; causing all necessary documents to be
properly and timely prepared, executed, approved or ratified, and filed, as
appropriate; making timely and fully all required payments related to the
registration and listing of the Company's securities for public trading,
including filing fees; and timely taking all other actions reasonably required
of it to complete the Transactions.
In the event that at any time THE COMPANY determines not to continue
with the Transactions, PageOne hereby grants to THE COMPANY the right to buy out
the interest of PageOne in this Agreement on the terms contained herein, in
which case PageOne agrees not to seek specific enforcement of this Agreement as
follows:
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(i) If, prior to the completion of the Business Combination and the
Offering, THE COMPANY elects not to continue with the Transactions (or
if THE COMPANY does not timely take all such steps and do all such
things as may be reasonably required of it to complete the
Transactions) PageOne will be entitled to receive in full all costs
and expenses incurred to the date of such occurrence together with the
amount of $75,000.00 and 150,000 shares of common stock in THE
COMPANY, and such amounts shall be deemed to redeem the 1,000,000
shares of stock in the Company described under the heading "SERVICES
PROVIDED," and THE COMPANY will not however, be obligated to make any
payment under this paragraph if the failure to complete the
Transactions is due to any actions or failure to act by PageOne or its
affiliates. Upon payment of the buyout fee provided for herein, all
obligations of the parties under this Agreement will cease except for
obligations which expressly or by their nature survive termination.
PageOne represents and warrants that it will timely take all steps reasonable
and necessary to complete the Transactions and to cause the securities of the
Company to trade in the United States secondary market. Toward such end, and
without limitation on the duties of PageOne provided herein, PageOne agrees at
any time that it appears that it will better contribute to the quick completion
of the Transactions and the commencement of trading of the Company's securities,
PageOne will provide at a reasonable additional charge, the preparation, filing
and effectiveness of a registration statement on Form SB-2 (or other appropriate
form) covering such of THE COMPANY's securities as are designated by THE COMPANY
as well as the securities owned by PageOne or its designees. This will be done
only with the prior approval of THE COMPANY.
PERFORMANCE OF SERVICES BY OTHERS.
From time to time, the achievement of certain results desired by the
Company, including the promotion of interest in its public securities, may be
enhanced by the services of other parties. These parties may include
consultants, advertising agencies, financial analysts and similar persons who
may, directly or indirectly, assist in creating interest in the Company's
securities. All compensation, costs and expenses of such parties, if engaged by
THE COMPANY, will be borne by it.
ACTIONS AND UNDERSTANDINGS FOLLOWING THE BUSINESS COMBINATION.
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THE COMPANY understands the obligations and responsibilities that will
arise in regard to its becoming a reporting company and the trading of its
securities in the public market. THE COMPANY understands that in order to
achieve the greatest market interest in its securities. The Company, its
officers and its directors, all or some, will be required to continuously
interact with the financial community. This interaction will include, without
limitation, timely filing of reports under the Securities Exchange Act of 1934,
including audited financial statements; annual reports to shareholders and
shareholder meetings; issuing periodic press releases; and meetings and
discussions with existing and prospective brokers, market makers, investment
bankers and institutions.
THE COMPANY understands that the ultimate judgment of the financial
community of the investment merits of the Company will depend upon the Company's
ability to successfully carry out its business plans and operations, to operate
at a profit and similar business considerations. THE COMPANY represents in good
faith that it currently has no reason to believe that it will not be able to
complete the Transactions and to achieve its business objectives.
THE COMPANY understands that the first trading in the Company's
securities may be limited, and that to increase the amount, depth and market
price of its securities will require both time and effort by the Company to
develop relations with market makers and to create strong and stable trading of
the Company's securities.
During the Transactions and so long as PageOne or an affiliate is a
shareholder of the Company, THE COMPANY shall provide PageOne continuing and
reasonable access as requested to all information concerning the Company's
operations, past, current and intended, including, without limitation, full
access to the financial records of the Company, to the same extent afforded
other shareholders of the Company. THE COMPANY agrees to notify the transfer
agent, following the Business Combination, (1) to effect a turnover of
responsibility for the account and (2) to advise the transfer agent that PageOne
and its affiliates are no longer "control persons" of the Company, as defined in
the applicable Securities laws.
COMPLIANCE WITH SECURITIES LAW.
Now and following the Business Combination, as applicable, THE COMPANY
represents and warrants that:
They, individually, and their affiliates will at all times observe and
comply with Federal and State securities laws, rules and regulations incident to
the issuance and trading of the securities of the Company and will take all
steps reasonably required within its control to prohibit any persons, whether or
not affiliated with them, individually, from engaging in any transactions in
contravention of such laws, rules and regulations.
They, individually, and their affiliates will furnish all information
and documents concerning it and its affiliates required for the preparation and
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filing of a Form 8-K by the Company and will assure that such information is
complete and accurate and does not contain any material misstatement or omit any
material information. Toward that end, they, individually, and their affiliates
will timely provide all requested information and documents, including officers'
and directors' questionnaires.
They, individually, and their affiliates will not at any time knowingly
engage in any activity which would constitute a prohibited market manipulation
of the securities of the Company and will take all steps reasonably required
within its control to prohibit any officer, director, other affiliate, agent or
employee from engaging in such conduct.
The Company will not at any time issue securities registered on Form
S-8 or issued pursuant to Regulation S of the General Rules and Regulations of
the Securities and Exchange Commission without (i) prior written notification to
PAGEONE and (ii) either the written consent of PAGEONE or a written opinion of
qualified counsel that neither the issuance nor intended use of such securities
will violate any law, rule, or regulation under the Securities Act of 1933 or
the Securities Exchange Act of 1934.
The Company will not issue any securities to any person for the
promotion or maintenance of a trading market in the Company's securities without
first receiving an opinion of qualified counsel that such issuance will be in
accordance with securities laws, rules and regulations and will not, directly or
indirectly, receive from such persons any capital by loan, investment or
otherwise resulting from the sale or pledge of such securities.
For not less than 36 months following execution of this Agreement the
Company will timely make all required Federal, state and other filings necessary
to allow the public trading of the Company's securities and, if the Company's
securities are then quoted on the NASDAQ Stock Market or listed on any regional
or national exchange, will take all actions necessary to maintain such status
for the Company's securities.
For so long as PageOne or its designee is an owner of any of the
securities to be received by it under this Agreement, PageOne shall have the
right to enforce the provisions of this paragraph and to seek damages for any
violation thereof by the Company, including damages for any reduced value of the
PageOne securities if resulting from such violation.
THE COMPANY acknowledges that PageOne is a consultant and is not
providing legal advice herein. THE COMPANY, at its option, will seek legal
advice from qualified legal counsel in such matters as compliance with
Securities laws.
NOTICES.
Any notices required or permitted under this Agreement shall be deemed
to have been given when delivered in writing by hand, certified mail (return
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receipt requested) or commercial courier, such as FedEx, to the following
addresses or to such other addresses as may have been given to each party in the
manner provided for in this paragraph.
In the case of THE COMPANY or the Company to:
Xxxx Xxxxxxxx, Chairman
TradeQwest, Inc.
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
And also to:
Xxxxxx Xxxx, President
TradeQwest, Inc., Suite 1300
00000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
In the case of PageOne to
PageOne Business Productions, LLC
00000 Xxxxxxxxxxxx Xx, Xxxxx 000
Xxxxxx, XX 00000
ARBITRATION.
SCOPE. The parties hereby agree that any and all claims (except only
for requests for injunctive or other equitable relief) whether existing now, in
the past or in the future as to which the parties or any affiliates may be
adverse parties, and whether arising out of this Agreement or from any other
cause, will be resolved by arbitration before the American Arbitration
Association within California.
CONSENT TO JURISDICTION, SITUS AND JUDGMENT. The parties hereby
irrevocably consent to the jurisdiction of the American Arbitration Association
and the situs of the arbitration within California. Any award in arbitration may
be entered in any domestic or foreign court having jurisdiction over the
enforcement of such awards.
APPLICABLE LAW. The law applicable to the arbitration and this
Agreement shall be that of the California, determined without regard to its
provisions which would otherwise apply to a question of conflict of laws.
DISCLOSURE AND DISCOVERY. The arbitrator may, in its discretion, allow
the parties to make reasonable disclosure and discovery in regard to any matters
which are the subject of the arbitration and to compel compliance with such
disclosure and discovery order. The arbitrator may order the parties to comply
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with all or any of the disclosure and discovery provisions of the Federal Rules
of Civil Procedure, as they then exist, as may be modified by the arbitrator
consistent with the desire to simplify the conduct and minimize the expense of
the arbitration.
RULES OF LAW. Regardless of any practices of arbitration to the
contrary, the arbitrator will apply the rules of contract and other law of the
jurisdiction whose law applies to the arbitration so that the decision of the
arbitrator will be, as much as possible, the same as if the dispute had been
determined by a court of competent jurisdiction.
FINALITY AND FEES. Any award or decision by the American Arbitration
Association shall be final, binding and non-appealable except as to errors of
law or the failure of the arbitrator to adhere to the arbitration provisions
contained in this Agreement. The losing party to the arbitration shall pay both
parties costs and counsel fees except as specifically provided otherwise in this
Agreement.
MEASURE OF DAMAGES. In any adverse action, the parties shall restrict
themselves to claims for compensatory damages and/or securities issued or to be
issued and no claims shall be made by any party or affiliate for lost profits,
punitive or multiple damages.
COVENANT NOT TO XXX. The parties covenant that under no conditions will
any party or any affiliate file any action against the other (except only
requests for injunctive or other equitable relief) in any forum other than
before the American Arbitration Association, and the parties agree that any such
action, if filed, shall be dismissed upon application and shall be referred for
arbitration hereunder with costs and attorney's fees to the prevailing party.
INTENTION. It is the intention of the parties and their affiliates that
all disputes of any nature between them, whenever arising, whether in regard to
this Agreement or any other matter, from whatever cause, based on whatever law,
rule or regulation, whether statutory or common law, and however characterized,
be decided by arbitration as provided herein and that no party or affiliate be
required to litigate in any other forum any disputes or other matters except for
requests for injunctive or equitable relief. This Agreement shall be interpreted
in conformance with this stated intent of the parties and their affiliates.
SURVIVAL. The provisions for arbitration contained herein shall
survive the termination of this Agreement for any reason.
ASSIGNMENT.
In order to better carry out the Transactions, PageOne may assign all
or parts of this Agreement provided that the assignee agrees to all the terms
and conditions of this Agreement pertaining to such assignment. An assignment
will not relieve PageOne of any of its obligations under this Agreement.
CONFIDENTIALITY.
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As a result of entering into this Agreement THE COMPANY and PageOne
will have access to information which the other party regards as confidential
and proprietary regarding their methods of carrying out the Transactions
(collectively the "Business of the other Party"). THE COMPANY and PageOne agree
that they will not, except as reasonably required pursuant to this Agreement,
use itself, or divulge, furnish, or make accessible to any person any knowledge,
know-how, techniques, or information with respect to the other party or the
Business of the other Party without the prior written Agreement of the other
party.
TERMINATION.
If (i) either party breaches a provision of this Agreement, (ii) either
party has a reasonable basis to believe that any aspect of the transactions
covered by this Agreement would constitute a fraud or deception on the market,
(iii) either party fails to raise the required capital for funding, or ((iv
)either party fails to meet its obligations under this Agreement in a manner
which would constitute a material breach, the other party (the "Notifying
Party") may give written notice to the other party, (the "Breaching Party") of
such occurrence and, if such party fails to cure such breach within 10 days
after such notice, the Notifying Party may terminate this Agreement on 10 days
written notice to the Breaching Party and the Notifying Party may pursue all
remedies available at law or equity. In the case of an occurrence under clause
(iii), PageOne will be entitled to the buyout fee provided for in this
Agreement.
MISCELLANEOUS.
COVENANT OF FURTHER ASSURANCES. The parties agree to take any further
actions and to execute any further documents which may from time to time be
necessary or appropriate to carry out the purposes of this Agreement.
SCOPE OF AGREEMENT. This Agreement constitutes the entire understanding
of the parties. No undertakings, warranties or representations have been made
other than as contained herein, and no party shall assert otherwise. This
Agreement may not be changed or amended orally.
CURRENCY. All references to currency in this Agreement are to United
States Dollars.
REVIEW OF AGREEMENT. Each party acknowledges that it has had time to
review this Agreement and, as desired, consult with counsel. In the
interpretation of this Agreement, no adverse presumption shall be made against
any party on the basis that it has prepared, or participated in the preparation
of, this Agreement.
EFFECTIVE DATE.
The effective date of this Agreement is April 26, 2001.
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IN WITNESS WHEREOF, the parties have approved and executed this
Agreement.
PAGEONE BUSINESS PRODUCTIONS, LLC
/s/ Xxxxxx Xxxx
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Managing Member
THE COMPANY
/s/ Xxxxxx Xxxx
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President
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