Exhibit 10.2
CONSULTING AGREEMENT
This Consulting Agreement (herein the "Agreement") is entered into this
31st day of August, 2005 by and between AGU ENTERTAINMENT CORP, a Delaware
corporation, (herein "the Company") and DKK-RK Enterprises, Inc., (herein "the
Consultant").
RECITALS
The Consultant provides financial advisory services (the "Services") to
private and public companies. The Company desires to obtain the assistance of
the Consultant, and on the basis of previous telephone conversations and
meetings between the Company and the Consultant as well as other discussions,
preliminary financial statements, initial reports submitted by the Company, and
the representations that the Company has made to the Consultant describing the
Company and its principals, the present and proposed business activities of the
Company, its operations, financial condition and capital structure, and various
agreements and documents related thereto, the Consultant is willing to provide
such assistance, with respect to the Services. The Company acknowledges that the
Consultant has provided substantial assistance over the last 18 months and
desires to compensate him for past services as well as for future services
through this Agreement.
Now, therefore, in consideration of the mutual covenants and promises
contained herein, the sufficiency of which is hereby acknowledged by each of the
parties, the Company and the Consultant hereby agree as follows:
I. ENGAGEMENT
The Company hereby engages and retains the Consultant as a non-exclusive
Business Consultant for and on behalf of the Company to perform the Services (as
that term is hereinafter defined) and the Consultant hereby accepts such
appointment on the terms and subject to the conditions herein set forth and
agrees to use its best efforts in providing such Services.
II. INDEPENDENT CONTRACTOR
A. The Consultant is, and in all respects deemed to be, an
independent contractor in the performance of its duties
hereunder, any law of any jurisdiction to the contrary
notwithstanding.
B. The Consultant will not, by reason of this Agreement or the
performance of the Services, be or be deemed to be, an
employee, agent, partner, co-venturer or controlling person of
the Company, and the Consultant will have no power to enter
into any agreement on behalf of or otherwise bind the Company.
C. The Consultant will not have or be deemed to have, fiduciary
obligations or duties to the Company and will be free to
pursue, conduct and carry on for its own account (or for the
account of others) such activities, employment ventures,
businesses and other pursuits as the Consultant in its sole,
absolute and unfettered discretion may elect. The Consultant
is a registered broker-dealer and has the ability to provide
the Services.
D. Notwithstanding the above, no activity, employment, venture,
business or other pursuit of the Consultant during the term of
this Agreement will conflict with the Consultant's obligations
under this Agreement or be adverse to the Company's interests
during the term of this Agreement.
III. SERVICES
The Consultant agree to provide the Services as defined above. In
addition, the Consultant covenants as follows:
A. Best Efforts. The Consultant will devote such time and best
efforts to the affairs of the Company as is reasonable and
adequate to render the Services contemplated by this
Agreement.
B. The Consultant is not responsible for the performance of any
services rendered hereunder without the Company providing the
necessary information in writing prior thereto, nor will the
Consultant include any services that constitute the rendering
of any legal opinions or performance of work that is in the
ordinary purview of the Certified Public Accountant. The
Consultant cannot guarantee results on behalf of the Company,
but will pursue all reasonable avenues available through its
network of contacts. At such time as an interest is expressed
by a third party in the Company's needs, the Consultant will
notify the Company and advise it as to the source of such
interest and any terms and conditions of such interest. The
acceptance and consummation of any transaction is subject to
acceptance of the terms and conditions by the Company.
C. In conjunction with the Services, the Consultant agrees to:
1. Make itself available to the officers of the Company at such
mutually agreed upon place during normal business hours for
reasonable periods of time, subject to reasonable advance notice and
mutually convenient scheduling, for the purpose of advising the
Company in the preparation of such reports, summaries, corporate
and/or transaction profiles, due diligence packages and/or other
material and documentation ("Documentation") as will be necessary,
in the opinion of the Consultant, to properly present the Company to
other entities and individuals that could be of benefit to the
Company.
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2. Make itself available for telephone conferences with the principal
financial sales and/or operating officer(s) of the Company during
normal business hours.
3. Advise the Company's management in evaluating proposals and
participating in negotiations with prospective investors, investor
groups or their agents.
IV. EXPENSES
Both the Company and the Consultant agree that:
A. Both the Consultant and the Company will be responsible for their
own normal and reasonable out-of-pocket expenses. "Normal and
reasonable out-of-pocket expenses" will include but are not limited
to: accounting, long distance communication, express mail, outside
Consultant, etc., and other costs involved in the execution of this
Agreement.
B. The Company will designate counsel to prepare the appropriate
documents (including subscription agreement) with regard to the
terms of the transaction and the closing thereof.
V. COMPENSATION
In exchange for the Services previously rendered and to be rendered during
the term of this Agreement, the Company shall pay the Consultant as follows:
A. The Company will grant Consultant an option to purchase 550,000
warrants of the common stock of the Company upon the following
terms: (i) 100,000 options at an exercise price of $2.00 per share
for a term of one year; (ii) 200,000 options at an exercise price of
$3.00 per share for a term of one year; (iii) 100,000 options at an
exercise price of $4.00 per share for a term of two years; and (iv)
150,000 options at an exercise price of $5.00 per share for a term
of two years; and
B. The Company will pay the Consultant the sum of $97,205.50 on
December 15, 2005.
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VI. REPRESENTATIONS, WARRANTIES AND COVENANTS
A. Execution. The Execution, delivery and performance of this
Agreement, in the time and manner herein specified, will not
conflict with, result in a breach of, or constitute a default under
any existing agreement, indenture, or other instrument to which
either entity may be bound or affected.
B. Non-Disclosure and Non-Circumvention. The Company hereby irrevocably
agrees not to circumvent, avoid, bypass, or obviate, directly or
indirectly, the intent of this Agreement, to avoid payment of fees
in any transaction with any corporation, partnership or individual,
introduced by the Consultant to the Company, in connection with any
project, any loans or collateral, or other transaction involving any
products, transfers, or services, or addition, renewal extension,
rollover, amendment, renegotiations, new contracts, parallel
contracts/agreements, or third party assignments thereof. The
Company understands and acknowledges that its obligations under this
Non-Disclosure and Non-Circumvention Agreement are for the benefit
of the Consultant and its successors and assigns, and that the
Consultant's failure or delay in exercising any right, power and
privilege hereunder shall not operate as a waiver thereof, nor shall
any single or partial exercise thereof or the exercise of any other
right, power and privilege hereunder operate as a waiver. The
obligations of this Agreement shall remain in effect for a period of
twelve (12) months following the expiration of the term of this
Agreement.
C. Corporate Authority. Both the Company and the Consultant have full
legal authority to enter into this Agreement and to perform the same
in the time and manner contemplated.
D. The individuals whose signatures appear below are authorized to sign
this Agreement on behalf of their respective corporations.
E. The Company will cooperate with the Consultant, and will promptly
provide the Consultant with all pertinent materials and requested
information in order for the Consultant to perform its Services
pursuant to this Agreement.
VII. CONSULTANT'S SECURITIES REPRESENTATIONS
A. Investment Representations. Consultant understands that the
securities set forth in Section V A (the "Securities") are being
offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon Purchaser's
representations contained in this Agreement, including, without
limitation, that the Consultant is an "accredited investor" within
the meaning of Regulation D under the Securities Act. The Consultant
confirms that it has received or has had full access to all the
information, including the SEC Reports, it considers necessary or
appropriate to make an informed investment decision with respect to
the Securities to be purchased by it under this Agreement. The
Consultant further confirms that it has had an opportunity to ask
questions and receive answers from the Company regarding the
Company's and its Subsidiaries' business, management and financial
affairs and the terms and conditions of the offering of the
Securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information
furnished to the Consultant or to which the Consultant had access.
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B. Consultant Bears Economic Risk. The Consultant has substantial
experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so
that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own
interests. The Consultant must bear the economic risk of this
investment until the Securities are sold pursuant to: (i) an
effective registration statement under the Securities Act; or (ii)
an exemption from registration is available with respect to such
sale.
C. Acquisition for Own Account. The Consultant is acquiring the
Securities for the his own account for investment only, and not as a
nominee or agent and not with a view towards or for resale in
connection with their distribution.
D. Consultant Can Protect Its Interest. The Consultant represents that
by reason of its, or of its management's, business and financial
experience, the Consultant has the capacity to evaluate the merits
and risks of its investment in the Securities and to protect its own
interests in connection with the transactions contemplated in this
Agreement. Further, Consultant is aware of no publication of any
advertisement in connection with the transactions contemplated in
the Agreement.
E. Accredited Investor. The Consultant represents that he is an
accredited investor within the meaning of Regulation D under the
Securities Act.
F. Legends. The Securities shall bear substantially the following
legend:
"THE SECURITIES AND THE SHARES OF COMMON STOCK UNDERLYING
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE OR SUCH UNDERLYING SHARES OF COMMON
STOCK UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AGU
ENTERTAINMENT CORP. THAT SUCH REGISTRATION IS NOT REQUIRED."
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The Securities, if not issued by DWAC system (as hereinafter defined), shall
bear a legend which shall be in substantially the following form until such
shares are covered by an effective registration statement filed with the SEC:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO AGU ENTERTAINMENT CORP. THAT SUCH
REGISTRATION IS NOT REQUIRED."
G. Transfer or Resale. The Consultant understands that except as
provided in this Agreement: (i) the Securities have not been and are
not being registered under the Act or any state securities laws, and
may not be offered for sale, sold, assigned or transferred unless
(A) subsequently registered thereunder, or (B) Consultant shall have
delivered to the Company an opinion of counsel, in a generally
acceptable form, to the effect that such securities to be sold,
assigned or transferred may be sold, assigned or transferred
pursuant to an exemption from such registration requirements; and
(ii) any sale of such securities made in reliance on Rule 144 under
the Securities Act (or a successor rule thereto) ("Rule 144") may be
made only in accordance with the terms of Rule 144 and further, if
Rule 144 is not applicable, any resale of such securities under
circumstances in which the seller (or the person through whom the
sale is made) may be deemed to be an underwriter (as that term is
defined in the Securities Act) may require compliance with the some
other exemption under the Securities Act or the rules and
regulations of the SEC thereunder.
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VIII. TERM AND TERMINATION
A. This Agreement shall be effective upon its execution and shall
remain in effect for One (1) year.
B. Either party shall have the right to terminate this engagement
hereunder by furnishing the other with a 30-day written notice of
such termination.
C. However, no termination of this Agreement by the Company shall in
any way affect the right of the Consultant to receive, as a result
of its services rendered, transactions consummated and introductions
made its fees on any transactions which result in the Company
receiving financing or other benefits hereunder.
IX. CONFIDENTIAL DATA
A. The Consultant shall not divulge to others, any trade secret or
confidential information, knowledge, or data concerning or
pertaining to the business and affairs of the Company, obtained by
the Consultant as a result of its engagement hereunder, unless
authorized, in writing, by the Company.
B. The Company shall not divulge to others, any trade secret or
confidential information, knowledge, or data concerning or
pertaining to the business and affairs of the Consultant, obtained
by the Company as a result of its engagement hereunder, unless
authorized, in writing, by the Consultant.
C. The Consultant shall not be required, in the performance of its
duties, to divulge to the Company or any officer, director, agent,
or employee of the Company, any secret or confidential information,
knowledge, or data concerning any other person, firm or entity
(including, but not limited to, any such persons, firm or entity
which may be a competitor or potential competitor of the Company),
which the Consultant may have or be able to obtain otherwise than a
result of the relationship established by this Agreement.
X. OTHER MATERIAL TERMS AND CONDITIONS:
A. Indemnity. Each party hereby agrees to indemnify the other from any
claims, losses or damages arising from any material breach of this
agreement. Such indemnification shall include payment of judgments,
if any, and costs of legal representation and court costs, if any.
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B. Additional Instruments. Each of the parties shall, from time to
time, at the request of others, execute, acknowledge and deliver to
the other party any and all further instruments that may be
reasonably required to give full effect and force to the provisions
of this Agreement.
C. Entire Agreement. Each of the parties hereby covenants that this
Agreement is intended to and does contain and embody herein all of
the understandings and Agreements, both written or oral, of the
parties hereby with respect to the subject matter of this Agreement,
and that there exists no oral agreement or understanding expressed
or implied liability, whereby the absolute, final and unconditional
character and nature of this Agreement shall be in any way
invalidated, empowered or affected. There are no representations,
warranties or covenants other than those set forth herein.
D. Governing Laws. This Agreement shall be deemed to be made in,
governed by and interpreted under and construed in all respects in
accordance with the laws of the State of Florida irrespective of the
country or place of domicile or residence of either party. In the
event of controversy arising out of the interpretation construction,
performance or breach of this Agreement, the parties hereby agree
and consent to the jurisdiction and venue of the District or County
Court of Palm Beach County, Florida; or the United States District
Court for the Southern District of Florida, and further agree and
consent that personal service or process in any such action or
proceeding outside of the State of Florida and Palm Beach County
shall be tantamount to service in person within Palm Beach County,
Florida and shall confer personal jurisdiction and venue upon either
of said Courts.
E. Assignments. The benefits of the Agreement shall inure to the
respective successors and assigns of the parties hereto and of the
indemnified parties hereunder and their successors and assigns and
representatives, and the obligations and liabilities assumed in this
Agreement by the parties hereto shall be binding upon their
respective successors and assigns; provided that the rights and
obligations of the Company under this Agreement may not be assigned
or delegated without prior consent of the Consultant, and any such
purported assignment shall be null and void. Notwithstanding the
foregoing, the Consultant may not assign or delegate its obligations
and rights under this Agreement without consent of the Company, in
the Company's sole discretion.
F. Originals. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original
and constitute one and the same agreement. Facsimile copies with
signatures shall be given the same legal effect as an original.
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G. Addresses of Parties. Each party shall, at all times, keep the other
informed of its principal place of business if different from that
stated herein, and shall promptly notify the other of any change,
giving the address of the new place of business or residence.
H. Notices. All notices that are required to be or may be sent pursuant
to the provision of this Agreement shall be sent by certified mail,
return receipt requested, or by overnight package delivery service
to each of the parties at the address appearing herein, and shall
count from the date of mailing or the validated air xxxx.
I. Modification and Waiver. A modification or waiver of any of the
provisions of this Agreement shall be effective only if made in
writing and executed with the same formality as this Agreement. The
failure of any party to insist upon strict performance of any of the
provisions of this Agreement shall not be construed as a waiver of
any subsequent default of the same or similar nature or of any other
nature.
J. Attorneys' Fees. If any arbitration, litigation, action, suit, or
other proceeding is instituted to remedy, prevent or obtain relief
from a breach of this Agreement, in relation to a breach of this
Agreement or pertaining to a declaration of rights under this
Agreement, the prevailing party will recover all such party's
attorneys' fees incurred in each and every such action, suit or
other proceeding, including any and all appeals or petitions there
from. As used in this Agreement, attorneys' fees will be deemed to
be the full and actual cost of any legal services actually performed
in connection with the matters involved, including those related to
any appeal or the enforcement of any judgment calculated on the
basis of the usual fee charged by attorneys performing such
services.
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IN WITNESS WHEREOF the parties have duly executed this Consulting Agreement this
____ day of August, 2005.
AGU Entertainment Corp
By: /s/ Xxxxx X. Xxxx Dated: September 1, 2005
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Xxxxx Xxxx, CEO
DKK-RK Enterprises, Inc.
By: /s/ Xxxxxx X. Xxxx Dated: September 1, 2005
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