EXHIBIT 10.2
September 24, 2004
3Peas Technologies, Inc.
Att.: Xxxx Xxxxxxxx, President
0000 Xxxx Xxxxxx Xxxx, Xxxxx # 0
Xxx Xxxxx, XX. 89120
Re: Engagement for Consulting Services
Dear Xx. Xxxxxxxx:
This letter confirms our understanding and agreement between 3Peas Technologies,
Inc. ("Client") and TMX Consulting Corp. ("the Consultant") with regard to all
matters described below, including, without limitation, the matters described in
the paragraph 1 as follows:
1. The Client hereby engages TMXC as the Client's sole and exclusive
agent for the purpose of providing financial advisory services to the
Client regarding the development and implementation of the Client's
business plan, including the Client's restructuring and implantation of
the structure necessary to become a publicly traded company.
(a) The Client hereby agrees that upon the signing of this
engagement agreement, if needed, it will change its corporate
structure to have 10-30 million shares issued and outstanding
in preparation for the drafting of the SB-2 Registration
statement.
2. TMXC hereby accepts the engagement described in paragraph 1 and, in
connection with such engagement agrees to:
(a) Provide a general business and financial analysis of the
Client's proposed business plan with respect to the Business;
and
(b) assist in the formulation and evaluation of various
structural and financial alternatives; and
(c) assist the Client in the preparation of the appropriate
documents related to the Client's fund raising activities; and
(d) assist the Client in identifying and evaluating potential
candidates to provide audit services, to serve as a transfer
agent for the company, an NASD member brokerage firm for the
purpose of filing an information statement pursuant to Rule
15c2-11 with the NASD, and other services of importance to a
publicly traded company; and
(e) engage legal counsel for the purpose of drafting an SB-2
or other appropriate registration statement for the Client;
and
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(f) assist in the preparation of all necessary documents to
complete this engagement.
3. The Client shall make available to TMXC all information concerning
the proposed Business which TMXC reasonably requests in connection with
the performance of his obligations hereunder. All such information
provided by or on behalf of the Client shall be complete and accurate
and not misleading in any or all material respects, and TMXC may rely
upon the accuracy and completeness of all such information without
independent verification.
4. As compensation for the services rendered by TMXC hereunder, the
Client shall pay TMXC (or its parent company TMX Holding Corp.) as
follows:
(a) Upon the signing of this engagement letter a Twenty
Thousand Dollar ($20,000) nonrefundable retainer and the
issuance of seven hundred & fifty thousand (750,000) shares of
common stock in the Business; and
(1). The issuance of such shares shall be upon the
company completing any necessary adjustments to its
Issued & Outstanding; and
(b) upon the declaration of the SB-2 as "effective" by the
SEC, the successful approval of the 15c2-11 application by the
NASD, and the initiation of trading on the OTC BB, the Client
shall pay TMXC a fee of $10,000.
(f) All stock and securities based compensation from the
Client to TMXC shall be subject to registration upon the
request of TMXC "Demand Registration Rights" and shall be
included in the proposed SB-2 Registration statement.
5. The Client further acknowledges and agrees that:
(a) It is TMXC's sole discretion to select the legal counsel
to be retained with respect to the drafting and filing of the
proposed SB-2 or other applicable registration statement, and
that TMXC will compensate such legal counsel at it's own
expense, however such counsel shall be agreeable to the
Client; and
(b) Upon the declaration of the SB-2 or other applicable
registration statement as "effective" by the SEC, the Client
will be required to file quarterly, annual, and other mandated
reports with the SEC and the Client shall be responsible for
such fees and expenses incurred; and
(c) The Client is responsible for retaining an SEC Approved
CPA for the preparation of the financial statements to be
included in the above referenced registration statements, and
the fees incurred by such CPA; and
(d) The Client is responsible for the retention and fees
associated from retaining a transfer agent; and
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(e) The Client is responsible for the fees associated with
registering with Standard & Poors Corp. (currently estimated
at $3,600 per year); and
(f) The Client is responsible for the cost of an annual
subscription to the Depository Trust Corp. Weekly Security
Position Report. (currently the annual subscription is $2,750)
(g) TMXC shall have the right to distribute the shares of 3Pea
Technologies, Inc. paid to it under this agreement as a
dividend to its shareholders or to compensate legal counsel
selected by TMXC to draft the appropriate registration
statement.
6. In consideration of TMXC's services contemplated hereby, the Client
agrees to: (a) indemnify and hold harmless TMXC against any and all
losses, claims, damages or liabilities to which TMXC may become subject
arising in any manner out of or in connection with the rendering of
services by TMXC hereunder, unless it is finally judicially determined
by a court of competent jurisdiction that such losses, claims, damages
or liabilities resulted directly from the negligence, bad faith, or
willful misconduct of TMXC; and (b) reimburse TMXC immediately for all
reasonable legal or other expenses reasonably incurred and actually
paid by TMXC in connection with investigating, preparing to defend or
defending any lawsuits, claims or other proceedings naming him as a
defendant and arising in any manner out of or in connection with the
rendering of services by TMXC hereunder.
7. The Client agrees: (a) that the indemnification and reimbursement
commitments set forth in paragraph 6 shall apply whether or not TMXC is
a formal party to any such lawsuits, claims or other proceedings; and
(b) that if TMXC is advised in writing by counsel that there are one or
more defenses available to him that are different from in addition to
those available to the Client, that TMXC is entitled to retain separate
counsel of his choice in connection with any of the matters to which
such commitments relate.
8. The Client and TMXC agree that if any indemnification or
reimbursement sought pursuant to paragraph 6 judicially determined to
be unavailable for a reason other than the negligence, bad faith or
willful misconduct of TMXC, then the Client and shall contribute to the
losses, claims, damages, liabilities and expenses for which such
indemnification or reimbursement is held unavailable (I) in such
proportion as is appropriate to reflect the relative benefits to the
Client on the one hand, and TMXC on the other hand, in connection with
the transactions to which such indemnification or reimbursement
relates, or (ii) if the allocation provided by clause (I) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (1) but
also the relative faults of the Client on the one hand, and TMXC on the
other hand, as well as any other equitable considerations; PROVIDED,
HOWEVER, that in no event shall the amount to be contributed by TMXC
pursuant to this paragraph exceed the amount of fees actually received
by TMXC hereunder.
9. Except as contemplated by the terms hereof or as required by
applicable law or pursuant to an order entered or subpoena issued by a
court of competent jurisdiction, TMXC shall keep confidential all
material non-public information provided to it by the Client, and shall
not disclose such information to any third party, other than such of
its advisors as TMXC determines to have a need to know.
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10. In the event of consummation of any transaction contemplated
herein, TMXC shall have the right to disclose its participation in such
transaction at its own expense, including, without limitation, the
placement of a "tombstone" advertisements in financial and other
newspapers and journals, provided that it first submit a copy of any
such advertisements to the Client for its approval, which approval
shall not be unreasonably withheld or delayed.
11. This engagement will extend for twelve months from the date hereof
and shall renew automatically thereafter on a month-to-month basis
unless either party has given at least ten (10) days' prior written
notice to the other that it desires to terminate this engagement;
PROVIDED, HOWEVER, that in the event of such termination, the Client
shall be responsible for the reimbursement of expenses referred to in
paragraph 5 incurred through date of termination and the payment of
fees under paragraph 4 for transactions of the type contemplated by
this agreement which are concluded during the term hereof or within or
within two (2) years after the day of termination; and provided,
further, that the provisions of paragraphs 6, 7, and 8 shall survive
the termination of this letter and shall be binding upon any successors
or assigns of the Consultant.
12. The terms and provisions of this letter are solely for the benefit
of the Client and TMXC and their respective successors, assigns, heirs
and personal representatives, and no other person shall acquire or have
any right by virtue of this letter. This letter shall be governed by,
and construed in accordance with, the substantive laws of the State of
Nevada without regard to the principle of conflicts of law, and may be
amended, modified or supplemented only by written instrument executed
by parties hereto.
13. The invalidity or unforceability of any provision of this letter
shall not affect the validity or enforceability of any other provisions
of this letter, which shall remain in full force and effect.
14. This letter may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto, not
withstanding that all such parties are not signatories to the original
or the same counterpart.
Sincerely,
/s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx/President
TMX Consulting Corp.
ACCEPTED AND AGREED, as of this
8th day of October, 2004:
/s/ Xxxx Xxxxxxxx
---------------------------------
Xxxx Xxxxxxxx, CEO
3Pea Technologies, Inc.
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