CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") is made and entered effective
January 1, 1999, by and between MULTI-LINK TELECOMMUNICATIONS, INC., a Colorado
corporation ("Multi-Link"), having an office at 000 Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000 and OCTAGON STRATEGIES, INC., a Colorado corporation,
having an office at 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 ("Consultant").
RECITALS
A. Multi-Link is engaged in the business of providing advanced voice and
facsimile messaging services to predominately small and medium sized businesses
in the Denver, Colorado local calling area;
B. Consultant is a consulting company owned and operated by Xxxxx X.
Xxxxxxxxx; and
C. Consultant desires to provide consulting services to Multi-Link, and
Multi-Link desires to obtain consulting services from Consultant, as an
independent contractor, under the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties do hereby agree and contract as follows:
1. Appointment. Multi-Link hereby appoints Consultant, and Consultant
hereby accepts such appointment, to provide consulting services to Multi-Link on
a full time basis in the capacity as an independent contractor of Multi-Link.
The parties agree that the consulting services shall be performed by Xxxxx X.
Xxxxxxxxx, an officer of Consultant.
2. Scope of Appointment. Consultant's scope of appointment as a Consultant
to and independent contractor of Multi-Link shall include:
(a) Consulting with the other Managing Directors of Multi-Link and
such other persons as Multi-Link may designate from time to time on matters
relating to the business and operations of Multi-Link;
(b) Providing assistance and advice towards Multi-Link's goal of
becoming the preeminent provider of complex voice and data messaging
services for small businesses in the United States;
(c) Maintaining responsibility for Multi-Link's financing and
strategic planning departments;
(d) Identifying acquisition candidates for Multi-Link; and
(e) Such other related duties as Multi-Link and Consultant shall agree
upon from time to time.
3. Relationship Between the Parties. It is the intention of the parties
that Consultant shall act only as its agent for a particular purpose and as an
independent contractor of Multi-Link. Consultant shall represent itself only as
being "associated with" or a "representative of" or an "agent of" or an
"independent contractor of" Multi-Link. Nothing contained in this Agreement is
intended to create or shall be construed to create the relationship of employer
and employee between Multi-Link and Consultant as such relationship is construed
under federal or state tax law or regulations or pronouncements by taxing
authorities. Further, this Agreement is not intended to be and shall not be
construed as a partnership or joint venture.
4. Compensation Arrangements. Multi-Link shall compensate Consultant for
the provision of the consulting services being provided under the terms of this
Agreement as follows:
(a) Consulting Fees. Multi-Link shall pay Consultant annual consulting
fees ("Consulting Fees") in the amount of $53,333 per year, payable in
equal monthly installments on or before the first day of each month during
the term of this Agreement for the consulting services performed in the
immediately preceding month. The Consulting Fees shall be prorated for any
partial months at the beginning or end of the term during which Consultant
provides consulting services to Multi-Link. The Consulting Fees may be
increased during the term of this Agreement by the Board of Directors of
Multi-Link, in its sole discretion.
(b) Expense Reimbursement. On a monthly basis, Multi-Link shall
reimburse Consultant for reasonable expenses incurred by Consultant during
the previous month while performing Consultant's duties under this
Agreement, including expenses for entertainment, travel, automobile and
similar items incurred on behalf of Multi-Link. In order to receive
reimbursement for its expenses, Consultant shall submit invoices to
Multi-Link and attach copies of receipts showing that Consultant has paid
the amounts for which Consultant is requesting reimbursement. In any event,
any expenses over $1,000 in any month must be approved in writing by
Multi-Link before being incurred by Consultant.
5. Consultant Actions.
(a) Nondisclosure. Consultant recognizes and acknowledges that, as a
Consultant to Multi-Link, Consultant will have access to certain
proprietary and confidential information that are valuable and unique
assets of Multi-Link and its subsidiaries and affiliates (collectively
"Affiliates"), including but not limited to financial information and
information pertaining to the software, marketing and sales operations,
financing operations, potential acquisitions and customer lists
(hereinafter "Confidential Information") used by Multi-Link or the
Affiliates in their businesses. As a condition to having such access to the
Confidential Information during the Term of this Agreement (as defined in
Paragraph 10 of this Agreement), Consultant shall not, during the Term of
this Agreement or for a period of three years thereafter, except as
permitted by the next sentence, disclose any Confidential Information to
any person, firm, corporation, association or other entity for any reason
or purpose whatsoever without the prior written consent or authorization of
the Board of Directors of Multi-Link and the Affiliates. Notwithstanding
the prohibitions contained in the foregoing sentence, Consultant shall be
permitted to disclose such information during the Term of this Agreement to
other persons employed by or providing consulting services to Multi-Link or
the Affiliates who have a need to know such information for a proper
purpose related to the consulting services being provided hereunder or to
the business of Multi-Link or the Affiliates. Upon termination of this
Agreement, Consultant shall neither take nor retain any papers, customer
lists, manuals, files or other documents or copies thereof belonging to
Multi-Link or the Affiliates. To the extent any items of Confidential
Information constitute trade secrets under Colorado law, Consultant's
obligations of confidentiality and nondisclosure shall continue to survive
after said three year period to the greatest extent permitted by applicable
law. These rights of Multi-Link are in addition to those Multi-Link has
under the common law or applicable statutes for the protection of trade
secrets.
(b) Noncompetition. As a further condition to having such access to
the Confidential Information described in Section 5.a above, Consultant
shall not, without the prior written consent of the Board of Directors of
Multi-Link, directly or by assisting others, whether through itself, its
shareholders or any entity in common control with Multi-Link, during the
Term of this Agreement and for a period of six months after the termination
of this Agreement for any reason (the "Restrictive Period"), on
Consultant's own behalf or in the service or on behalf of others, whether
or not for compensation, engage in any activity or consulting service that
involves leasing, selling or operating voice mail systems in any state of
the United States where Multi-Link is engaged in the business of leasing,
marketing, selling or operating voice mail systems or in any country
outside of the United States where Multi-Link is engaged in the business of
leasing, marketing, selling or operating voice mail systems. In addition,
during the Restrictive Period, Consultant and its shareholders shall not
have any controlling interest in any person, firm, corporation or business,
through a subsidiary or parent entity or other entity which engages in
leasing, marketing, selling or operating voice mail systems.
Notwithstanding the foregoing, Consultant and its shareholders may own
shares of other competing companies whose securities are publicly traded,
so long as such securities do not constitute five percent or more of the
outstanding securities of any such company.
(c) Non-Solicitation of Multi-Link Employees. Consultant further
agrees that during the Term of this Agreement and for six months
immediately following cessation for any reason of Consultant's services
provided hereunder, Consultant shall not solicit or in any manner encourage
employees of Multi-Link or the Affiliates to leave the employ of Multi-Link
or the Affiliates. The foregoing prohibition applies only to employees with
whom Consultant or its employees, agents or representatives had material
contact pursuant to Consultant's duties during the Term of this Agreement.
"Material contact" means interaction between Consultant and an employee of
Multi-Link or the Affiliates: (i) with whom Consultant actually dealt; or
(ii) whose dealings with Multi-Link or the Affiliates or services for
Multi-Link or the Affiliates were handled, coordinated or supervised by
Consultant.
(d) Non-Solicitation of Multi-Link Customers. During the Term of this
Agreement and for six months immediately following cessation for any reason
of Consultant's services provided hereunder, Consultant shall not, on
Consultant's own behalf or on behalf of any person, partnership,
association, corporation or business organization, entity or enterprise
(except Multi-Link and the Affiliates), solicit any customer of Multi-Link
or the Affiliates, or any representative of any such customer with a view
to selling or providing any product, equipment or service competitive or
potentially competitive with any product, equipment or service sold or
provided by Multi-Link or the Affiliates during the two year period
immediately preceding cessation of Consultant's services provided
hereunder, provided that the restrictions set forth herein shall apply only
to customers of Multi-Link or the Affiliates, or representatives of such
customers with whom Consultant or its employees, agents or representatives
had material contact during such two year period. "Material contact" exists
between Consultant and each of the existing customers of Multi-Link or its
Affiliates: (i) with whom Consultant actually dealt; or (ii) whose dealings
with Multi-Link or the Affiliates were handled, coordinated or supervised
by Consultant.
(e) Intellectual Property. Consultant shall disclose to Multi-Link all
ideas and business plans developed by Consultant during the term of this
Agreement which relate to the business conducted by Multi-Link or the
Affiliates. All patents, patent applications, patent licenses, formulas,
inventions, improvements, designs, discoveries, processes, software,
copyrights, know-how, proprietary information, rights, trademarks, or trade
names, or future improvements thereto developed or conceived of by
Consultant or its employees or agents during any period of providing
consulting services to Multi-Link shall be promptly disclosed to, and all
rights with respect thereto shall be assigned by Consultant or its
employees or agents to Multi-Link in consideration of the remuneration paid
or payable to Consultant hereunder, and shall be considered work made for
hire for Multi-Link within the meaning of Title 17 of the United States
Code. Consultant acknowledges that "software" as used in this Section 5.e
shall include without limitation all ideas, concepts, know-how, methods,
techniques, structures, information and materials relating to the software
including source code, object and load modules, requirements
specifications, design specifications, design notes, flow charts, decoding
sheets, annotations, documentation, and the structures, organization,
sequence, designs, formulas and algorithms which reside in the software and
which are not generally known to the public or within the industries of
trades in which Multi-Link competes.
(f) Remedies. Consultant acknowledges and agrees that its obligations
provided in this Section 5 are necessary and reasonable in order to protect
Multi-Link and the Affiliates and their respective businesses and
Consultant expressly agrees that monetary damages could be inadequate to
compensate Multi-Link or the Affiliates for any breach by Consultant of its
covenants and agreements set forth herein. Accordingly, Consultant agrees
and acknowledges that any such violation or threatened violation of this
Section 5 will cause irreparable injury to Multi-Link or the Affiliates and
that, in addition to any other remedies that may be available, in law, in
equity or otherwise, Multi-Link and the Affiliates may be entitled to
obtain injunctive relief against the prospective breach of this Section 5
or the continuation of any such breach by Consultant.
(g) Construction. In the event that any provision of this Section 5
should ever be deemed to exceed the time, geographic, or other limitations
permitted by applicable law, then such provision shall be reformed to the
maximum time geographic, or other limitations permitted by applicable law.
The provisions of this Section 5 shall be applicable for the period
indicated and shall survive the termination of this Agreement.
6. Consultant Responsibilities. Consultant hereby agrees to be responsible
for, pay, and fully indemnify and hold harmless Multi-Link from, and contribute
to Multi-Link all losses, claims, actions and expenses which are incurred by
Multi-Link and arises by reason of any of the following:
(a) Any loss or damage suffered by Multi-Link or other party with
respect to a transaction originated by Consultant as a result of a material
error by Consultant or any agent, other employee, or third party utilized
by Consultant in conducting its consulting services, including such
person's fraudulent activity or negligence; and
(b) Any liability resulting from Consultant's failure to comply with
this Agreement or any applicable federal or state law, rules or
regulations, with respect to any other person who is either an employee,
agent or an independent contractor of Multi-Link, Consultant or of any
other person or firm with which Multi-Link or Consultant may have a
business relationship.
Consultant hereby agrees that the foregoing indemnification shall survive the
termination of this Agreement and shall be valid and binding irrespective of any
investigation made by or on behalf of Multi-Link.
7. Other Terms. The following additional terms and understandings shall
apply to this Agreement:
(a) Consultant shall supply Consultant's own equipment, office
supplies, copies and tools necessary or appropriate for Consultant's
performance under this Agreement.
(b) Consultant shall be responsible for all transportation for
Consultant and shall assume all responsibility and liability in connection
therewith.
(c) Consultant shall be available such time and hours as are necessary
to perform Consultant's duties hereunder and shall have no obligation to
work any particular hours nor any obligation to perform any services other
than those described in Section 2 above and other services related to
performing those duties.
(d) Consultant agrees that, with respect to each transaction on which
Consultant performs consulting services, Consultant will use Consultant's
best efforts to comply with the reasonable requests of Multi-Link's
authorized representatives or agents.
(e) Consultant agrees that all transactions originated through any
consulting services provided by Consultant for Multi-Link during the term
of this Agreement are for the sole benefit of, and as such shall be deemed
the sole property of, Multi-Link.
(f) Consultant agrees to conduct Consultant's activities under this
Agreement in accordance with all applicable laws, rules, regulations which
may be established from time to time by applicable governmental, and with
all applicable procedures which may be established from time to time by
Multi-Link.
(g) Neither Multi-Link nor Multi-Link's agents or representatives
shall have any right to control or direct the details, manner or means by
which Consultant accomplishes the tasks which Consultant is obligated to
perform under this Agreement, provided that Consultant shall apply and
follow reasonable and ethical business practices and procedures.
(h) Consultant shall have the right to hire assistants or use
Consultant's employees to complete some or any portion of the services to
be furnished by Consultant, provided that Consultant (i) agrees that work
performed by such persons is performed in accordance with the terms of this
Agreement, (ii) that Consultant shall be responsible for all aspects of
obligations which may be deemed to arise as a result of the hiring or
employment of others by Consultant and (iii) that all such persons shall be
deemed to be employees of Consultant and not Multi-Link.
(i) Consultant agrees and acknowledges that Consultant does not have
the authority to incur obligations, responsibilities or liabilities on
behalf of Multi-Link.
8. Tax Obligations. Consultant agrees to furnish Consultant's internal
revenue service tax identification or social security number to Multi-Link and
to comply with all tax laws applicable to the operation of a business such as
that to be conducted by Consultant, including, but not limited to, the reporting
of all gross receipts therefrom as income from the operation of a business, the
payment of all self-employment taxes, compliance with all employment tax
requirements or withholding obligations on any employees used by Consultant, and
compliance with state employment and workmen's compensation laws. Consultant
hereby acknowledges that Consultant will not be treated as an employee with
respect to the services rendered under this Agreement for federal or state tax
purposes, that no federal or state taxes will be withheld from amounts paid to
Consultant under this Agreement, that Multi-Link will not be obligated to make
any tax payments on behalf of Consultant or relating to the services to be
performed under this Agreement and that Multi-Link will file an appropriate Form
1099 with the Internal Revenue Service relating to compensation to be paid to
Consultant. Consultant shall indemnify and hold Multi-Link harmless from any and
all tax liabilities which may be imposed upon Consultant or upon Multi-Link due
to payments made by Multi-Link to Consultant, at any time by any governmental
agency, whether state or federal, as a result of this Agreement or the
relationship created hereby.
9. Term and Termination. The term ("Term") of this Agreement shall commence
on January 1, 1999 and terminate on January 1, 2002 unless terminated pursuant
to the following:
(a) By the mutual agreement of the parties.
(b) By Consultant upon 30 days written notice to Multi-Link delivered
in accordance with this Agreement.
(c) By Consultant, in its sole discretion, if Multi-Link desires to
require over 25% of the consulting services to be performed at a location
outside of the Denver, Colorado metropolitan area, in which event
Multi-Link shall pay Consultant, in a single lump-sum payment ("Termination
Payment") which shall be paid within 30 days after the effective date of
Consultant's termination under this Section 9.c, an amount equal to the
greater of (i) the Consulting Fees payable to Consultant pursuant to the
terms of this Agreement for the remaining Term hereof, or (ii) the
Consulting Fees that Consultant was entitled to receive pursuant to this
Agreement during the 12 months immediately preceding Consultant's
termination pursuant to this Section 9.c.
(d) By Multi-Link upon 30 days written notice delivered in accordance
with this Agreement to Consultant; provided, however, that Multi-Link shall
pay Consultant the Termination Payment described in Section 9.c above in a
single lump-sum payment which shall be paid within 30 days after the
effective date of Consultant's termination under this Section 9.d.
(e) By Multi-Link in the event of Consultant's material failure or
refusal to observe the provisions of this Agreement or perform any of the
duties required of Consultant under this Agreement, but only after
Multi-Link shall have provided Consultant with written notice of such
failure or refusal and Consultant shall have failed to correct such failure
or refusal within five days after the giving of such notice. Under such
circumstances, Multi-Link shall pay Consultant all Consulting Fees accrued
under this Agreement to the date of termination.
(f) By Multi-Link immediately upon providing written notice to
Consultant in the event of Consultant's or its agent's or employee's fraud,
misappropriation or embezzlement of funds, or conviction for any crime
punishable as a felony. Under such circumstances, Multi-Link shall pay
Consultant all Consulting Fees accrued under this Agreement to the date of
termination, subject to any offset by Multi-Link due to the fraud,
misappropriation or embezzlement of funds.
(g) This Agreement shall automatically be terminated upon the death of
Xxxxx X. Xxxxxxxxx, if Consultant files a voluntary petition in bankruptcy
or is adjudicated bankrupt as a result of an involuntary petition in
bankruptcy being filed against Consultant, a receiver is appointed for
Consultant's business, Consultant makes a general assignment for the
benefit of creditors, Xxxxx X. Xxxxxxxxx is convicted of a crime or offense
that is reasonably likely, in the sole opinion of Multi-Link, to materially
and unfavorably affect Multi-Link or its reputation or goodwill, or Xxxxx
X. Xxxxxxxxx becomes disabled and unable to perform Consultant's services
hereunder for a period of two continuous months.
In the event of a termination of Consultant's services under this Agreement for
cause in accordance with Sections 9.e and 9.f, Multi-Link shall have no further
obligation to Consultant. However, termination of Consultant's consulting
services for cause shall not terminate or extinguish Consultant's obligation or
liability to pay to Multi-Link or any of the Affiliates any amount owed to them
by Consultant, including, but not limited to, any amounts misappropriated,
embezzled or otherwise obtained by Consultant or its agents or employees without
prejudice to any other rights or remedies of Multi-Link or the Affiliates at law
or in equity.
10. Relationship Following Termination. In the event of termination of this
Agreement for any reason, Multi-Link and Consultant will cooperate reasonably
with each other to complete business pending on the date of termination, to
account in a reasonable manner to each other for services performed prior or
subsequent to termination and for other matters which may require mutual
cooperation. Notwithstanding the foregoing, Consultant shall surrender to
Multi-Link all files and documents relating to any transactions with which
Consultant provided consulting services, whether such transactions have closed,
are pending, or have been terminated for other reasons, and all supplies and
other materials and properties owned or furnished by Multi-Link in the
possession of Consultant. Multi-Link and Consultant agree that if this Agreement
is terminated for any cause or reason, all amounts due under this Agreement
shall be determined as if the date of termination was the last day of a month
and payment of all amounts due Consultant or Multi-Link shall be made within a
reasonable time after such termination but not later than 10 days after the end
of the calendar month in which the termination occurred, unless otherwise stated
herein.
11. Governing Law and Venue. This Agreement shall be construed in
accordance with the laws of the State of Colorado. The parties agree that this
Agreement was entered into in the City and County of Denver, in the State of
Colorado and that Multi-Link's principal place of business is in the City and
County of Denver, Colorado. Therefore, the parties agree that any legal actions
instituted by either party relating to this Agreement shall be instituted and
heard in the appropriate state court in the City and County of Denver, Colorado.
12. Headings. Headings are not to be considered a part of this Agreement
and are included solely for convenience and are not intended to be accurate
descriptions of the contents hereof.
13. Assignment, Binding Effect. Consultant may not assign this Agreement.
All of the terms and provisions of this Agreement shall be binding upon and
shall insure to the benefit of the parties hereto and their respective
successors and Multi-Link's assigns.
14. Attorneys' Fees and Costs. In the event of any default or breach on the
part of Consultant of any provision of this Agreement, in addition to all other
remedies available to Multi-Link, Consultant shall pay Multi-Link all amounts
due and all damages, costs and expenses, including reasonable attorneys' fees
and costs, incurred by Multi-Link, whether or not Multi-Link actually commences
any legal action or proceeding as a result of such default, plus interest at the
highest rate allowable by law, accruing from the date of such default.
15. No Waiver. No provision of this Agreement may be waived except by an
agreement in writing signed by the waiving party. A waiver of any term or
provision shall not be construed as a waiver of any other term or provision.
16. Notices. All notices and other transmissions to be given or required to
be given hereunder shall be in writing and delivered to the person entitled
thereto by hand delivery or by certified or registered mail, postage prepaid and
return receipt requested, or by an overnight courier service that maintains
delivery records with charges prepaid, or by facsimile transmission, to such
other party's address (or to such party's facsimile transmission number). If the
notice is sent by hand delivery or facsimile transmission, it shall be deemed to
have been given to the party on the date when receipt thereof is acknowledged.
If the notice is sent by mail or courier service, it shall be deemed to have
been given to the party entitled thereto on the date after the day when
deposited in the United States mail or with a courier service for delivery to
that party, addressed as follows:
If to Multi-Link:
Multi-Link Telecommunications, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
If to Consultant:
Octagon Strategies, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
or such other address as any party may hereafter designate by giving written
notice to the other party.
17. Duplicate of Originals. This Agreement may be executed in several
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
18. Severability. If any provision of this Agreement is declared by any
court of competent jurisdiction to be invalid for any reason, such invalidity
shall not affect the remaining provisions which shall be fully severable and
this Agreement shall be construed and enforced as if such invalid provisions had
never been included.
19. Entire Agreement. This Agreement is the sole and entire agreement
between the parties relating to the subject matter hereof, and supersedes all
prior understandings, agreements and documentation relating to the subject
matter hereof. This Agreement may be amended only by a written instrument
executed by the authorized representatives of both parties.
WHEREFORE, the parties have set their hands and seals effective the day and
year first above written.
CONSULTANT:
OCTAGON STRATEGIES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxxx, President
MULTI-LINK:
MULTI-LINK TELECOMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxx
President and Chief Operating Officer
