SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report July 22, 2002
(Date of Earliest Event Reported) (July 1, 2002)
DSTAGE.COM, INC.
(EXACT NAME OF SMALL BUSINESS REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(State or other jurisdiction of Incorporation)
000-30785 52-2195605
(Commission File Number) (I.R.S. Employer Identification No.)
000-111-5818 7389 (BUSINESS SERVICES NEC)
(Central Index Key) Standard Industrial Classification
1600 BROADWAY, SUITE 2400 80202
DENVER, COLORADO (Zip Code)
(Address of principal executive offices)
(303) 542-1802
Registrant's telephone number, including area code
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Item 1. Changes in Control of Registrant
On July 1, 2002, the Company executed an investment banking agreement (the
"Investment Banking Agreement") with the Camelot Group, Inc. ("Camelot"),
whereby the Camelot Group agreed to fund a $150,000 convertible note through
existing Dstage shareholders and pursue raising an additional $500,000 to
$1,000,000 on a best efforts basis. Under the terms of the agreement, Camelot
has an option to attend Dstage board meetings as an "ex-officio" member, and,
upon funding, to name one director for election to the Dstage board of
directors. In exchange for their services, valued at approximately $200,000,
and funding of $150,000, certain Dstage shareholders have agreed to pay Camelot
Group a total of 700,000 shares of Dstage common stock. Each participating
shareholder holds individual interests of less than 5% of Dstage's outstanding
common stock, none of the participating shareholders are affiliates of the
Company and none of the participating shareholders are, or previously were,
officers or directors of the Company. Dstage will be indebted to these
shareholders for a total principal amount of $350,000, and anticipates executing
1 year, 10%, convertible demand notes, with interest and principal due at
maturity and a conversion ratio of 1 to 1 based on the closing bid for
Dstage.com's common stock on July 1, 2002. None of the planned notes will
contain put provisions or other provisions that would cause the amount of shares
due, upon conversions, to increase under any circumstances.
The additional shares that will be issued, should these shareholders convert
their notes, along with Camelot's right to name a director for election to the
Company's board, should Camelot's efforts be successful, would result in a
change in control of the Company.
The foregoing description of the Investment Banking Agreement is qualified in
its entirety to the full text of such Investment Banking Agreement, a copy of
which is attached hereto as an Exhibit and which is incorporated by reference.
Item 2. Acquisition or Deposition of Assets
N/A
Item 3. Bankruptcy or Receivership.
N/A
Item 4. Changes in Registrant's Certifying Accountant.
N/A
Item 5. Other.
N/A
Item 7. Financial Statements and Exhibits.
N/A
Item 8. Change in Fiscal Year.
N/A
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Item 9. Regulation FD Disclosure.
N/A
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dstage.com, Inc.
(Registrant)
/s/
Frank R. Maresca, CEO
July 22, 2002
Exhibits:
1.1 Camelot Investment Banking Agreement
Exhibit 1.1
June 21, 2002
Ms. Sue Perrault
President
Dstage.com
1600 Broadway, Suite 2400
Denver, CO 80202
Dear Ms. Perrault:
The purpose of this letter of agreement ("Agreement") is to outline the terms
and conditions under which The Camelot Group ("Camelot") will provide advisory
and related services ("Services") to Dstage.com (the "Company"), for the
Engagement Period (as hereinafter defined). The terms pursuant to which Camelot
is to assist and advise the Company in connection with the Services are:
1. Services: The Company hereby engages Camelot to act as its advisor in
matters relating to (i) mergers and acquisitions (ii) corporate finance
activities; (iii) disposition of Company assets; (iv) all other matters as may
be agreed upon between the Company and Camelot.
2. Engagement Period: Twelve (12) months. The period shall automatically renew
for an additional Ninety (90) days if notice is not given Ninety (90) days prior
to the end of the Engagement Period.
3. Compensation: Camelot has been compensated for their services in full by
certain Dstage Investors (the "Dstage Investors") that hold individual interests
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of less than 5% of Dstage.com's outstanding common stock as of the date of this
agreement and are not affiliates of the Company. Upon payment of $150,000 to
Dstage.com by Camelot, in accordance with 9(a) herein, Dstage acknowledges that
the Dstage Investors will pay additional consideration to Camelot on behalf of
Dstage, and that Dstage will be liable to the Dstage Investors for this
additional consideration.
4. Future Financing: The Company agrees that Camelot will be entitled to a
right of refusal in regards to any financing activity the Company desires to
pursue during the Engagement Period. If Camelot agrees to perform such
financing activity on behalf of the Company, Camelot will be compensated under
its standard fees and commission, above and beyond the terms and conditions in
this letter.
5. Designated Board Member: Upon acknowledgment of this letter the Company will
notify Camelot of all Board activities and permit Camelot to designate an
advisor to attend any and all board functions as an ex-officio member. In the
event Camelot undertakes any financing activity and is successful in the
financing effort for the Company, Camelot shall have the right to name one board
member upon the completion of the financing for the duration of the Engagement
Period.
6. Indemnification: The Company shall indemnify Camelot under its standard
indemnification provisions attached hereto and made a part hereof.
7. Termination: This letter of agreement may not be terminated within Ninety
(90) days after signing. Thereafter, either party may terminate this Agreement
upon Ninety (90) days prior written notice without liability or continuing
obligation to the Company or to Camelot (except for any compensation earned or
to b e received by Camelot as provided for in Section 3 or in Section 4.
Neither termination nor completion of the financing shall affect the provisions
of Sections 3, 4 and 5, and this section 7.
8. Governing Law: The validity and interpretation of the Agreement shall be
governed by the law of the State of Florida applicable to agreements made to be
fully performed therein. Camelot and the Company will attempt to settle any
claim or controversy arising out of this Agreement through consultation and
negotiation in good faith and a spirit of mutual cooperation. If those attempts
fail, then the dispute will be mediated by a mutually acceptable mediator to be
chosen by Camelot and the Company within 15 days after written notice from
either party demanding mediation. Neither party may unreasonably withhold
consent to selection of a mediator, and the parties will share the costs of the
mediation equally. Any dispute which the parties cannot resolve through
negotiation or mediation within six months of the date of the initial demand for
it by one of the parties may then be submitted to binding arbitration under the
rules of the American Arbitration Association for resolution. The use of
mediation will not be construed under the doctrine of latches, waiver of
estoppel to affect adversely the rights of either party. Nothing in paragraph
will prevent either party from resorting to judicial proceedings if (a) good
faith efforts to resolve the dispute under these procedures have been
unsuccessful or (b) interim relief from a court is necessary to prevent serious
and irreparable injury.
9. Miscellaneous:
a) The Camelot Group will raise, on a best efforts basis, between $500,000 and
$1,000,000 with the pricing and fees to be determined later.
b) The Camelot Group will raise $150,000 within the next 3 to 6 weeks for the
Company in exchange for consideration to be paid to Camelot by the Dstage
Investors, the sufficiency of which is hereby acknowledged.
c) It is understood that the obligation of Camelot is to use its best efforts in
all activities, including any financing activity and there is no obligation on
the part of Camelot to participate in any such financing.
d) The Company represents hereby that it is a sophisticated business enterprise
that has retained Camelot for the limited purposes set forth in this letter, and
the parties acknowledge and agree that their respective rights and obligations
are contractual in nature. Each party disclaims an intention to impose
fiduciary obligations on the other by virtue of the engagement contemplated by
this letter.
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If the foregoing is acceptable, please sign a copy of this letter in the space
provided below and return to the undersigned by June 30, 2002. If an executed
copy of the letter of agreement is not received on or prior to such date, this
letter shall be void and no further force or effect.
Very truly yours,
Camelot Group By:___/s/Marie Datil__________
Printed Name/Title:__Marie Datil, CFO________________________
Confirmed and Agreed to this 1st day of July, 2002
DSTAGE.COM, INC. By:_/s/Sue Perrault___________________________ June 30, 2002
Sue Perrault, President
INDEMNIFICATION PROVISIONS
Dstage.com, Inc. (the "Company") agrees to indemnify and hold harmless
Camelot, ("Camelot") against any and all losses, claims, damages, obligations,
penalties, judgements, awards, liabilities, costs, expenses and disbursements
(and any and all actions, suits, proceedings and investigations in respect
thereof and any and all legal and other costs, expenses and disbursements in
giving testimony or furnishing documents in response to a subpoena or
otherwise), including, without limitation, the costs, expenses and
disbursements, as and when incurred of investigating, preparing or defending any
such action, suit, proceeding or investigation (whether or not in connection
with litigation in which Camelot is a party), directly or indirectly, caused by,
relating to, based upon, arising out of, or in connection with Camelot acting
for the Company, including without limitation, any act or omission by Camelot in
connection with acceptance of or the performance or non-performance of its
obligations under the Agreement dated June 21, 2002, between the Company and
Camelot to which these indemnification provisions are attached and form a part
(the "Agreement"). The Company also agrees that Camelot shall not have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement of Camelot except to the extent
that any such liability is found in a final judgement by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from Camelot gross negligence or willful misconduct.
The indemnification provisions shall be in addition to any liability which
the Company may otherwise have to Camelot or the persons indemnified below in
this sentence and shall extend to the following: Camelot, its affiliated
entities, partners, employees, legal counsel, agents, directors, employees,
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legal counsel, agents and controlling persons (within the meaning of the federal
securities laws), and the officers, directors, employees, legal counsel, agents
and controlling persons of any of them. All references to Camelot Partner in
these indemnification provisions shall be understood to include any and all of
the foregoing.
If any action, suit, proceeding or investigation is commenced, as to which
Camelot proposes to demand indemnification, it shall notify the Company with
reasonable promptness; provided, however, that any failure by Camelot to notify
the Company shall not relieve the Company from its obligations hereunder except
to the extent that the Company is materially prejudiced thereby. If the Company
so elects, or is requested by Camelot, the Company will assume the defense of
such action, suit, proceeding or investigation, including the employment of
counsel reasonably acceptable to Camelot, and the payment of fees and
disbursements of such counsel. In the event, however, that the Company fails to
promptly assume the defense thereof with counsel reasonably acceptable to
Camelot, or Camelot determines in its reasonable judgement that it has one or
more defenses different than or in addition to those of the Company, then
Camelot shall have the right to retain one counsel (in addition to any local
counsel) of its own choice to represent it, and the Company shall pay the fees,
expenses, and disbursements of such counsel and such counsel shall, to the
extent consistent with its professional responsibilities, cooperate with the
Company and any counsel designated by the Company. The Company shall be liable
for any settlement of any claim against Camelot made with the Company's written
consent, which consent shall not be unreasonably withheld. The Company shall
not, without the prior written consent of Camelot, settle or compromise any
claim, or permit a default or consent to the entry of any judgement in respect
thereof, unless such settlement, compromise or consent includes, as a
conditional term thereof, the giving by the claimant to Camelot of an
unconditional release from all liability in respect of such claim.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgement by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and Camelot, on the other hand, shall
contribute to the losses, claims damages, obligations, penalties, judgements,
awards, liabilities, costs, expenses, and disbursements, to which the
indemnified persons may be subject in accordance with the relative benefits
received by the Company, on the one hand, and Camelot, on the other hand, and
also the relative fault of the Company, on the one hand, and Camelot, on the
other hand, in connection with the statements, acts or omissions which results
in such losses, claims, damages, obligations, penalties, judgements, awards,
liabilities, costs, expenses or disbursements and the relevant equitable
considerations shall also be considered. No person found liable for a
fraudulent misrepresentation shall be entitled to contribution from any person
who is not also found liable for such fraudulent misrepresentation.
Notwithstanding the foregoing, Camelot shall not be obligated to contribute any
amount thereunder that exceeds the amount of fees previously received by Camelot
pursuant to this Agreement.
Neither termination nor completion of the engagement of Camelot referred to
above shall these indemnification provisions which shall then remain operative,
and in full force and effect.
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