EXHIBIT 4(A)
CONSULTING AGREEMENT
CONSULTING AGREEMENT ("Agreement"), entered into as of April 1, 1998
("Commencement Date") between Xxxxxxx Miles Creative Communication, Ltd., a
corporation organized under the laws of the United Kingdom ("Xxxxxxx") with a
business address at Xxxxxxx Xxxxx, 00 Xxxxxxxx, Xxxxx-xx-Xxxxxx, Xxxxxxxxxxx,
Xxxxxx Xxxxxxx XX0 0XX and Enhanced Services Company, Inc. ("Enhanced"), a
Colorado corporation with its principal offices at 00000 Xxxxxxx Xxxxx Xxxx.
Xxxxxxx, XX 00000.
WHEREAS, Xxxxxxx is a corporation with experience in business affairs
and in assessing and providing oversight to business enterprises;
WHEREAS, Enhanced wishes to have the services of Xxxxxxx available on a
consulting basis to advise it on business affairs and Xxxxxxx is willing to act
in such capacity on the terms and conditions hereof;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, Enhanced and Xxxxxxx
hereby agree as follows:
1. EMPLOYMENT DUTIES AND AGREEMENTS
(a) Enhanced hereby retains Xxxxxxx (the "Consulting
Arrangement"), as an independent contractor, on the terms
and conditions hereof as special advisor on business
affairs, with such duties, responsibilities, obligations
and powers commensurate with such roles, as are described
herein and which are reasonably assigned from time to time
by the Board of Directors of Enhanced and Xxxxxxx hereby
accepts the Consulting Arrangement on the terms and
conditions hereof. Xxxxxxx shall report to the Board of
Directors of Enhanced and shall devote such time as may be
necessary, on a part time basis, to the affairs of
Enhanced and, upon request, shall provide assistance to
Enhanced's other subsidiaries and affiliates
("Affiliates").
(b) It is understood and agreed that Xxxxxxx shall be at all
times and for all purposes hereunder an independent
contractor to Enhanced and under no circumstances shall be
deemed an employee, partner or joint venturer of or with
Enhanced. Xxxxxxx agrees that it shall not directly or
indirectly imply or represent to others, or permit another
to imply or represent to others that Xxxxxxx has any
authority to act for, represent or bind Enhanced in any
matter by virtue of this Agreement.
(c) During the term of the Consulting Arrangement, Xxxxxxx
shall participate in the strategic planning and
implementation of the business development and affairs of
Enhanced and, in particular, shall advise and consult with
Enhanced on the future business and strategic
opportunities available in the United Kingdom and shall be
responsible for providing management and strategic
oversight for the assessment and
reorganization of the London-based operations formerly
conducted by Softbank Interactive Marketing, Inc., and
shall assist Enhanced in determining the best course of
conduct with respect to its involvement in and the
prospects for use of the London facilities, developing a
business plan identifying strategic partners and other
relationships and assessing overall opportunities for the
future operations or conduct of business in London-based
markets.
(d) Xxxxxxx shall faithfully and diligently endeavor to
represent and to promote the business and best interests
of Enhanced and shall make available to Enhanced, when and
if requested, the general knowledge possessed by it
relating to any aspect of its duties and responsibilities
hereunder. Throughout the term of this Consulting
Arrangement, Xxxxxxx shall provide services to Enhanced on
a part-time basis and may perform the same or similar
services for other persons or entities not inconsistent
with its undertakings hereunder.
(e) Xxxxxxx shall keep accurate records showing the dates and
times devoted to the services provided for herein and a
description thereof, and shall present such records to
Enhanced on request.
(f) Xxxxxxx hereby agrees to allow Enhanced, upon prior
written consent, to use its name, biography and likeness
in connection with information that may be disseminated
concerning Enhanced in a manner acceptable to Xxxxxxx.
Xxxxxxx agrees to actively participate, in a manner
consistent with its duties hereunder, on behalf of
Enhanced in the general promotion of Enhanced.
2. COMPENSATION
(a) As compensation for the performance by Xxxxxxx of its
obligations hereunder during the Consulting Arrangement,
Enhanced hereby grants to Xxxxxxx a stock purchase warrant
(the "Warrant"), to acquire Seventy-Five Thousand (75,000)
Common Shares of Enhanced at an exercise price of $0.10
per share and fully vested and exercisable on the date of
issuance and for two years thereafter.
(b) The Warrant to be delivered pursuant to this Agreement
shall be in the form set forth as Exhibit A, attached
hereto, with such appropriate insertions, omissions,
substitutions and other variations as required or
permitted by this Agreement.
(c) Notwithstanding the foregoing, the Warrant granted
hereunder shall terminate and be of no further legal force
or effect if, prior to the exercise of all or a portion of
the Warrant, this Agreement is terminated by the Company
for Cause pursuant to Paragraph 4 below, or if Xxxxxxx
voluntarily terminates this Agreement during the Initial
Term. For purposes hereof, the effective date of
termination of the Warrant (if not previously exercised)
shall be as of (i) the date of written notice from
Enhanced of its election to terminate this Agreement for
"Cause", under Sections 4(b)(i)(b) and (c), provided the
Warrant (if not previously exercised) shall be reinstated
if the reason for such Agreement termination was cured by
Xxxxxxx as provided in Section 4(b)(i)(c); or (ii) as of
the Commencement Date, if Xxxxxxx voluntarily terminates
this
Agreement during the Initial Term, but not later than May
15, 1999,
(d) REGISTRATION RIGHTS.
(i) On or before April 30, 1998 Enhanced shall use its
best efforts to cause to be prepared and filed with
the Securities and Exchange Commission ("SEC") a
Registration Statement on Form S-8 or any other
appropriate form registering all the shares of
Common Stock issuable upon exercise of the Warrant
(the "Registration Statement").
(ii) In connection with the preparation and filing of
the Registration Statement, Enhanced agrees to (1)
use its best efforts to cause such Registration
Statement to become and remain effective; (2)
prepare and file with the SEC such amendments and
supplements to such Registration Statement as may
be necessary to keep such Registration Statement
effective for the entire period the Warrant
remains outstanding; (3) furnish to Xxxxxxx such
number of copies of a prospectus, in conformity
with the requirements of the Securities Act of
1933, as amended (the "Act"), and such other
documents as Xxxxxxx may reasonably request in
order to facilitate the disposition of the Common
Shares underlying the Warrant; and (4) use its
best efforts, at Xxxxxxx'x request, to register
and qualify the Common Shares underlying the
Warrant of such states that Xxxxxxx gives notice
to Enhanced, provided, however, that Enhanced
shall not be required in connection therewith to
(1) qualify generally to do business in any
jurisdiction where it would not otherwise be
required to qualify, (2) subject itself to any tax
or obligation to collect any tax in any such
jurisdiction, or (3) consent to general services
or process in such jurisdiction. Xxxxxxx agrees to
cooperate in all reasonable respects with the
preparation and filing of the Registration
Statement.
(iii) All fees and other expenses incurred in connection
with the registration of the Common Shares
underlying the Warrant shall be borne by Enhanced,
including without limitation, fees of Enhanced's
legal counsel, SEC filing fees, printing costs,
accounting fees and costs, transfer agent fees and
any other miscellaneous costs and disbursements.
Xxxxxxx shall be responsible for any and all
underwriting discounts, brokerage commissions or
other fees or expenses incurred in connection with
the sale or other disposition by Xxxxxxx of the
Common Shares underlying the Warrant covered by
the Registration Statement.
(iv) To the extent permitted by law, Enhanced will
indemnify and hold harmless Xxxxxxx, including its
officers, directors, employees, agents, and
representatives, against any losses, claims,
damages, liabilities, or expenses, including
without limitation attorney's fees and
disbursements, to which Xxxxxxx may become subject
under the Act to the extent that such losses,
claims, damages or liabilities arise out of or are
based upon any violation by Enhanced of the Act or
under the Securities Exchange Act of 1934, or any
rule or regulation promulgated thereunder
applicable to Enhanced, or arises out of or are
based upon any untrue or alleged untrue statement
of any material fact contained in the Registration
Statement, or arise out of or are based upon the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, or arise out of any violation by
Enhanced of any rule or regulation promulgated
under the Act applicable to Enhanced and relating
to action or inaction required of Enhanced in
connection with such Registration Statement;
provided, however, that such indemnity contained
in this paragraph shall not apply to any loss,
damage or liability to the extent that same arises
out of, or is based upon, an untrue statement or
omission made in connection with such Registration
Statement in reliance upon and in conformity with
information furnished by Xxxxxxx.
(v) Except for the obligations of Enhanced set forth in
Sections (i), (ii), (iii) and (iv) above, all
obligations relating to compliance with applicable
laws and regulations governing the distribution of
securities in connection with Xxxxxxx'x sale of
Common Shares of Enhanced acquired pursuant to the
exercise of the Warrant shall be the sole
obligation of Xxxxxxx.
(vi) Xxxxxxx agrees (absent proper "blue sky"
qualifications) that it will not sell the Common
Shares acquired upon the exercise of the Warrant in
any state other than the States of Colorado, New
York and such other states or foreign jurisdictions
where such Common Shares may be sold without any
further registration, qualification or action.
3. EXPENSES
(a) During the Consulting Arrangement, Enhanced shall pay or
reimburse Xxxxxxx for all reasonable and necessary
out-of-pocket expenses incurred by Xxxxxxx which relate to
its services hereunder and which have been approved, by an
agreed budget or otherwise, in advance of being incurred
with such payments or reimbursements to be made on
Enhanced's normal employee payroll schedule. Such
reimbursable expenses shall include, but not be limited
to, telephone, facsimile, office supplies and costs, and
travel expenses.
4. TERM AND TERMINATION
(a) The initial term ("Initial Term") shall be one (1) year
commencing on the Commencement Date, renewable, at
Enhanced's election ("Subsequent Term"). The Consulting
Arrangement will continue for the Initial Term and the
Subsequent Term unless terminated by a "Termination
Event", as defined below.
(b) For purposes of this Agreement, the following events shall
constitute "Termination Events":
(i) Termination of the Consulting Arrangement by
Enhanced for "Cause". For purposes of this
Agreement, the term "Cause", when used in
connection with the termination of the Consulting
Arrangement by Enhanced shall mean, and shall be
limited to, Xxxxxxx'x: (a) commission of any
fraudulent or criminal act; (b) failure to act on
behalf of Enhanced in breach of this Agreement
(including, without limitation, any violation of
Paragraph 5 hereof); or (c) a material breach of
this Agreement (which shall include Xxxxxxx'x
failure to substantially perform the duties
required of it hereunder for a period of 30
consecutive days) unless such breach shall be
cured by Xxxxxxx within a period of thirty (30)
days after written notice by the Company of such
breach.
(ii) The voluntary termination of the Consulting
Arrangement by Xxxxxxx effective upon 15 days
written notice; or
(iii) The expiration of the Initial Term or the
expiration of any Subsequent Terms when no
provision for renewals or extensions have been
made.
5. PROTECTION OF CONFIDENTIAL INFORMATION
(a) Xxxxxxx acknowledges that during the course of its
services to Enhanced, it will acquire Proprietary
Information and Trade Secrets (as hereinafter defined), of
Enhanced. For purposes of this Agreement:
(i) "Proprietary Information" shall mean all
unpublished materials and information created,
discovered, owned or otherwise controlled by
Enhanced or its affiliates relating to the
products of Enhanced or its affiliates, including,
but not limited to financial information, data or
statements, product research and development,
existing and future product plans, designs and
schematics, patents, client lists, computer data,
documentation, algorithms, processes and know-how
(whether or not reduced to writing and whether or
not patentable or copyrightable), and business and
marketing plans and strategies, pricing policies,
cost and profit information, supplier identifies,
packaging and the like, whether disclosed orally,
in writing, or by inspection. "Proprietary
Information" shall also include all other
materials and information which have been clearly
identified by Enhanced as "Proprietary
Information", "Trade Secrets" or confidential
information. The term "Proprietary Information"
shall not include any information which is now
generally known or available or which hereafter
through no act or failure on the part of Xxxxxxx
becomes generally known or available; and
(ii) "Trade Secrets" shall mean the whole or any
portion or phase of any scientific or technical
information, design, process, procedure, formula
or improvement related to the Technology which is
secret and is not generally available to the
public, which Enhanced or its affiliates both
marks and treats as "Confidential," and which
gives the one who uses it an advantage over
competitors who do not know of or use the Trade
Secret. A Trade Secret may include, without
limitation, Proprietary Information relating to
programs or products now existing or currently
under design or development by Enhanced or its
affiliates.
(b) Non-Disclosure:
Xxxxxxx agrees to hold the Proprietary Information and
Trade Secrets of which Xxxxxxx may acquire knowledge
hereunder in the strictest confidence unless ordered to
disclose same subject to legal proceedings instituted by
third parties or as required to fulfill authorized
government requirements. Xxxxxxx further agrees not to
disclose any Proprietary Information or Trade Secrets
except to the Board of Directors of Enhanced, employees,
advisers, counsel and consultants of Enhanced and its
affiliated companies, if any, on a "need to know basis"
and then only to those persons who reasonably require the
same for the purposes hereof and who are bound by a
confidentiality agreement consistent in format and
substance, with this Paragraph 5 and the policies of the
Board of Directors of Enhanced.
(c) Return of Documents and Materials
Xxxxxxx shall deliver promptly upon the termination of the
Consulting Arrangement, and at any other time as Enhanced
may request, all documents, financial records, technology,
software, source codes, object codes, hardware (and all
copies thereof), in whatever medium, relating to the
business of Enhanced that Xxxxxxx possesses or has under
its control.
6. CONFLICTING AGREEMENTS.
Xxxxxxx warrants and represents that there are no existing or
proposed agreements to which it is a party that may adversely
affect Xxxxxxx'x ability to render its services to Enhanced
hereunder.
7. INDEMNIFICATION.
(a) Xxxxxxx agrees to indemnify, defend and hold harmless
Enhanced, and the officers, directors, shareholders,
agents, employees of Enhanced, Enhanced's attorneys,
successors and assigns, from and against, and pay or
reimburse each of them for, any and all claims, losses,
damages, judgments, amounts paid in settlement, costs and
legal, accounting or other expenses that any of them may
sustain or incur as a result of any misrepresentation or
any non-performance of any covenant or other obligation on
the part of Xxxxxxx contained in this Agreement.
(b) Enhanced agrees to indemnify, defend and hold harmless
Xxxxxxx, and the officers, directors, shareholders,
agents, employees of Xxxxxxx, Xxxxxxx'x attorneys,
successors and assigns, from and against, and pay or
reimburse each of them for, any and all claims, losses,
damages, judgments, amounts paid in settlement, costs and
legal, accounting or other expenses that any of them may
sustain or incur as a result of any misrepresentation or
any non-performance of any covenant or other obligation on
the part of Enhanced contained in this Agreement.
8. ATTORNEY'S FEES.
In the event there is any litigation or arbitration between the
parties concerning this Agreement, the successful party shall be
awarded its reasonable attorneys' fees and litigation costs,
including the costs incurred in the collection of any judgment.
9. NOTICES.
(a) Any notice, request, instruction, or other document to be
given hereunder by any party hereto to any other party
hereto shall be in writing and delivered personally or by
overnight courier or sent by facsimile transmission:
If to Xxxxxxx, to: Xxxxxxx Miles Creative Communication,
Ltd.,
Xxxxxxx Xxxxx
00 Xxxxxxxx
Xxxxx-xx-Xxxxxx
Xxxxxxxxxxx, Xxxxxx Xxxxxxx
XX0 0XX
If to Enhanced, to: Enhanced Services Company, Inc.
00000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
phone: (000) 000-0000
fax: (000) 000-0000
or at such other address for a party as shall be specified
by like notice.
(b) All notices required or permitted to be given under this
Agreement shall be in writing. Notices may be served by:
(i) certified or registered mail postage pre-paid with
return receipt requested, or by private courier, prepaid;
(ii) by facsimile or other telecommunication device
capable of transmitting or creating a written record, with
a copy sent by U.S. mail or by personal delivery three
days after the initial facsimile transmission; or (iii)
personally. Mailed notices shall be deemed delivered three
days after mailing, properly addressed, return receipt
signed. Couriered notices shall be deemed delivered on the
date the courier warrants a delivery has occurred.
Facsimile notices shall be deemed delivered when receipt
is acknowledged by the addressee or its office. Personal
delivery shall be effective when accomplished upon
signature of receipt. All notices shall be given to the
parties at the addresses first given above unless a party
changes its address by giving notice to the other party as
provided herein.
10. MISCELLANEOUS PROVISIONS
(a) No provision of this Agreement shall be deemed to have
been waived unless such waiver is in writing signed by the
waiving party. No failure by any party to insist upon the
strict performance of any provision of this Agreement, or
to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach, of
such provision or any other provision. No waiver of any
provision of this Agreement shall be deemed a waiver of
any other provision of this Agreement or waiver of such
provision with respect to any subsequent breach, unless
expressly provided in writing.
(b) This Agreement constitutes the entire Agreement of the
parties relating to the subject matter hereof. There are
no terms, conditions or obligations other than those
contained in this Agreement. This Agreement supersedes all
prior communications, representations or agreements
between the parties relating to the subject matter hereof.
This Agreement may not be amended except in writing
executed by the parties.
(c) The invalidity or unenforceability of any particular
provision of this Agreement shall not effect the other
provisions hereof; all of which shall remain enforceable
in accordance with their terms. Should any of the
obligations hereunder be found illegal or unenforceable,
such obligations shall be enforceable within whatever
terms a court of competent jurisdiction shall deem
allowable by law.
(d) Xxxxxxx may not assign, sell, subcontract, delegate or
otherwise transfer its obligations under this Agreement,
without the prior written consent of Enhanced's Board of
Directors, and any attempted assignment or delegation
shall be void and without effect.
(e) This Agreement shall inure to the benefit of the
successors and assigns of Enhanced as if such Agreement
had been originally negotiated and entered into by and
between Xxxxxxx and any such successors or assigns,
provided such successors or assigns undertake in writing
to perform all of Enhanced's obligations hereunder.
(f) This Agreement shall be governed by and construed in
accordance with the laws of the California for agreements
wholly negotiated, entered into and performed within the
State of California.
(g) Xxxxxxx acknowledges that Enhanced and its affiliated
companies are new and evolving companies and that
protection of Proprietary Information, Confidential
Information, Work Product, Trade Secrets and
Opportunities, are important to future prospects for
growth and business development of Enhanced. Xxxxxxx
acknowledges that Enhanced may not have an adequate remedy
at law in the event of any breach or threatened breach by
Xxxxxxx of any provision of Paragraph 5 and that Enhanced
may suffer irreparable damage and injury as a result.
(h) The section headings in this Agreement are included for
convenience only; they do not give full notice of the
terms of any portion of this Agreement, and are not
relevant to the interpretation of any provision of this
Agreement.
(i) This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute
one agreement binding on all the parties, notwithstanding
that all parties are not signatories to the same
counterpart.
(j) All rights and obligations shall cease upon termination of
this Agreement, except for the rights and obligations set
forth in or arising out of paragraphs 4 and 7(g), which
shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
XXXXXXX MILES CREATIVE COMMUNICATION, LTD.
By: /s/ XXXXXXX MILES
Title: Managing Director
ENHANCED SERVICES COMPANY, INC.
By: /s/ XXXXX XXXXXXXX
Title: President
CONSULTING AGREEMENT
CONSULTING AGREEMENT ("Agreement"), commencing as of March 15, 1998
("Commencement Date") between Xxxxxxx X. Xxxxxx ("RAF"), an individual, with a
mailing address of X.X. Xxx 000, Xxxxxxx, Xxxxx Xxxxxx 00000, and Enhanced
Services Company, Inc. ("Enhanced"), a Colorado corporation, with its principal
offices at 00000 Xxxxxxx Xxxxx Xxxx, Xxxxxxx, XX 00000.
WHEREAS, RAF is an attorney admitted to practice law in Massachusetts
and a businessman with experience in business affairs and in assessing and
providing oversight to business enterprises;
WHEREAS, Enhanced wishes to have the services of RAF available on a
consulting basis to assist it with strategic planning and corporate finance and
industry analysis, and to generally supervise its legal affairs with emphasis on
acquisitions and strategic relationships, and RAF is willing to act in such
capacity on the terms and conditions hereof;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, Enhanced and RAF hereby
agree as follows:
1. EMPLOYMENT DUTIES AND AGREEMENTS
(a) Enhanced hereby retains RAF (the "Consulting Arrangement")
as an independent contractor, on the terms and conditions
hereof as special advisor on business affairs, with such
duties, responsibilities, obligations and powers
commensurate with such roles, as are described herein and
which are reasonably assigned from time to time by the
Board of Directors of Enhanced and RAF hereby accepts the
Consulting Arrangement on the terms and conditions hereof.
RAF shall report to the Board of Directors of Enhanced and
shall devote such time as may be necessary, on a part-time
basis, to the affairs of Enhanced and, upon request, shall
provide assistance to Enhanced's other subsidiaries and
affiliates ("Affiliates").
(b) It is understood and agreed that RAF shall be at all times
and for all purposes hereunder an independent contractor
to Enhanced and under no circumstances shall be deemed an
employee, officer, partner or joint venturer of or with
Enhanced. RAF agrees that he shall not directly or
indirectly imply or represent to others, or permit another
to imply or represent to others that RAF has any authority
to act for, represent or bind Enhanced in any matter by
virtue of this Agreement.
(c) During the term of the Consulting Arrangement, RAF shall
participate in the strategic planning and implementation
of the business development and affairs of Enhanced and,
in particular, shall advise and consult with Enhanced on
future business and strategic opportunities, and shall
supervise its legal affairs.
(d) RAF shall faithfully and diligently endeavor to represent
and to promote the business and best interests of Enhanced
and shall make available to Enhanced, when and if
requested, the general knowledge possessed by him relating
to any aspect of his duties and responsibilities
hereunder. Throughout the term of this Consulting
Arrangement, RAF shall provide services to Enhanced on a
part-time basis and may perform the same or similar
services for other persons or entities not inconsistent
with his undertakings hereunder.
(e) RAF shall keep accurate records showing the dates and
times devoted to the services provided for herein and a
description thereof, and shall present such records to
Enhanced on request.
(f) RAF hereby agrees to allow Enhanced to use his name,
biography and likeness in connection with information that
may be disseminated concerning Enhanced. RAF agrees to
actively participate, in a manner consistent with his
duties hereunder, on behalf of Enhanced in the general
promotion of Enhanced.
2. COMPENSATION
(a) As compensation for the performance by RAF of his
obligations hereunder during the Consulting Arrangement,
Enhanced hereby grants to RAF a stock purchase warrant
(the "Warrant") to acquire Fifty Thousand (50,000) Common
Shares of Enhanced at an exercise price of $4.00 per
share, which Warrant shall be fully vested and exercisable
on the date of issuance and for two years thereafter.
(b) The Warrant to be delivered pursuant to this Agreement
shall be in the form set forth as Exhibit A, attached
hereto, with such appropriate insertions, omissions,
substitutions and other variations as required or
permitted by this Agreement.
(c) Notwithstanding the foregoing, the Warrant granted
hereunder shall terminate and be of no further legal force
or effect if, prior to the exercise of all or a portion of
the Warrant, this Agreement is terminated by the Company
for Cause pursuant to Paragraph 4 below, or if RAF
voluntarily terminates this Agreement during the Initial
Term. For purposes hereof, the effective date of
termination of the Warrant (if not previously exercised)
shall be as of (i) the date of written notice from
Enhanced of its election to terminate this Agreement for
"Cause", under Section 4(b)(i), provided the Warrant (if
not previously exercised) shall be reinstated if the
reason for such Agreement termination was cured by RAF as
provided in Section 4(b)(i)(c); or (ii) as of the
Commencement Date, if RAF voluntarily terminates this
Agreement during the Initial Term, but not later than May
15, 1999,
(d) REGISTRATION RIGHTS
(i) On or before May 15, 1998 Enhanced shall use its
best efforts to cause to be prepared and filed with
the Securities and Exchange Commission ("SEC") a
Registration Statement on Form S-8 or any other
appropriate form registering all the shares of
Common Stock issuable upon exercise of the Warrant
(the "Registration Statement").
(ii) In connection with the preparation and filing of
the Registration Statement, Enhanced agrees to (1)
use its best efforts to cause such Registration
Statement to become and remain effective; (2)
prepare and file with the SEC such amendments and
supplements to such Registration Statement as may
be necessary to keep such Registration Statement
effective for the entire period the Warrant
remains outstanding; (3) furnish to RAF such
number of copies of a prospectus, in conformity
with the requirements of the Securities Act of
1933, as amended (the "Act"), and such other
documents as RAF may reasonably request in order
to facilitate the disposition of the Common Shares
underlying the Warrant; and (4) use its best
efforts, at RAF's request, to register and qualify
the Common Shares underlying the Warrant in such
states that RAF gives notice to Enhanced;
provided, however, that Enhanced shall not be
required in connection therewith to (a) qualify
generally to do business in any jurisdiction where
it would not otherwise be required to qualify, (b)
subject itself to any tax or obligation to collect
any tax in any such jurisdiction, or (c) consent
to general service of process in such
jurisdiction. RAF agrees to cooperate in all
reasonable respects with the preparation and
filing of the Registration Statement.
(iii) All fees and other expenses incurred in connection
with the registration of the Common Shares
underlying the Warrant shall be borne by Enhanced,
including without limitation, fees of Enhanced's
legal counsel, SEC filing fees, printing costs,
accounting fees and costs, transfer agent fees and
any other miscellaneous costs and disbursements.
RAF shall be responsible for any and all
underwriting discounts, brokerage commissions or
other fees or expenses incurred in connection with
the sale or other disposition by RAF of the Common
Shares underlying the Warrant covered by the
Registration Statement.
(iv) To the extent permitted by law, Enhanced will
indemnify and hold harmless RAF, including his
employees, agents and representatives, against any
losses, claims, damages, liabilities, or expenses,
including without limitation attorney's fees and
disbursements, to which RAF may become subject
under the Act to the extent that such losses,
claims, damages or liabilities arise out of or are
based upon
any violation by Enhanced of the Act or under the
Securities Exchange Act of 1934, or any rule or
regulation promulgated thereunder applicable to
Enhanced, or arises out of or are based upon any
untrue or alleged untrue statement of any material
fact contained in the Registration Statement, or
arise out of or are based upon the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading, or arise
out of any violation by Enhanced of any rule or
regulation promulgated under the Act applicable to
Enhanced and relating to action or inaction
required of Enhanced in connection with such
Registration Statement; provided, however, that
such indemnity contained in this paragraph shall
not apply to any loss, damage or liability to the
extent that same arises out of, or is based upon,
an untrue statement or omission made in connection
with such Registration Statement in reliance upon
and in conformity with information furnished by
RAF.
(v) Except for the obligations of Enhanced set forth in
Sections (i), (ii), (iii) and (iv) above, all
obligations relating to compliance with applicable
laws and regulations governing the distribution of
securities in connection with RAF's sale of Common
Shares of Enhanced acquired pursuant to the
exercise of the Warrant shall be the sole
obligation of RAF.
(vi) RAF agrees that he will not sell the Common Shares
acquired upon the exercise of the Warrant in any
state other than the States of Colorado, New York
and such other states or foreign jurisdictions
where such Common Shares may be sold without any
further registration, qualification or action.
3. EXPENSES
(a) During the Consulting Arrangement, Enhanced shall pay or
reimburse RAF for all reasonable and necessary
out-of-pocket expenses incurred by RAF which relate to his
services hereunder and which have been approved, by an
agreed budget or otherwise, in advance of being incurred
with such payments or reimbursements to be made on
Enhanced's normal employee payroll schedule. Such
reimbursable expenses shall include, but not be limited
to, telephone, facsimile, office supplies and costs, and
travel expenses.
4. TERM AND TERMINATION
(a) The initial term ("Initial Term") shall be one (1) year
commencing on the Commencement Date, renewable, at
Enhanced's election ("Subsequent Term") for an additional
one year period upon issuance of a comparable warrant, for
an additional fifty thousand (50,000) shares of Common
Stock of Enhanced. The Consulting Arrangement will
continue for the Initial Term and the Subsequent Term
unless terminated by a "Termination Event", as defined
below.
(b) For purposes of this Agreement, the following events shall
constitute "Termination Events":
(i) Termination of the Consulting Arrangement by
Enhanced for "Cause". For purposes of this
Agreement, the term "Cause", when used in
connection with the termination of the Consulting
Arrangement by Enhanced shall mean, and shall be
limited to, RAF's: (a) commission of any
fraudulent or criminal act (other than a
misdemeanor [, etc.]); (b) failure to act on
behalf of Enhanced in breach of this Agreement
(including, without limitation, any violation of
Paragraph 5 hereof); or (c) a material breach of
this Agreement (which shall include RAF's failure
to substantially perform the duties required of
him hereunder for a period of 30 consecutive days)
unless such breach shall be cured by RAF, after
written notice to RAF, within a period of thirty
(30) days after written notice by Enhanced of such
breach.
(ii) The voluntary termination of the Consulting
Arrangement by RAF effective upon 15 days written
notice; or
(iii) The expiration of the Initial Term or the
expiration of any Subsequent Terms when no
provision for renewals or extensions have been
made.
5. PROTECTION OF CONFIDENTIAL INFORMATION
(a) RAF acknowledges that during the course of his services to
Enhanced, he will acquire Proprietary Information and
Trade Secrets (as hereinafter defined) of Enhanced. For
purposes of this Agreement:
(i) "Proprietary Information" shall mean all
unpublished materials and information created,
discovered, owned or otherwise controlled by
Enhanced or its affiliates relating to the
products of Enhanced or its affiliates, including,
but not limited to financial information, data or
statements, product research and development,
existing and future product plans, designs and
schematics, patents, client lists, computer data,
documentation, algorithms, processes and know-how
(whether or not reduced to writing and whether or
not patentable or copyrightable), and business and
marketing plans and strategies, pricing policies,
cost and profit information, supplier identifies,
packaging and the like, whether disclosed orally,
in writing, or by inspection. "Proprietary
Information" shall also include all other
materials and information which have been clearly
identified by Enhanced as "Proprietary
Information", "Trade Secrets" or confidential
information. The term "Proprietary Information"
shall not include any information which is now
generally known or available or which hereafter
through no act or failure on the part of RAF
becomes generally known or available; and
(ii) "Trade Secrets" shall mean the whole or any portion
or phase of any scientific or technical
information, design, process, procedure, formula
or improvement related to the Technology which is
secret and is not generally available to the
public, which Enhanced or its Affiliates both xxxx
and treat as "Confidential," and which gives the
one who uses it an advantage over competitors who
do not know of or use the Trade Secret. A Trade
Secret may include, without limitation,
Proprietary Information relating to programs or
products now existing or currently under design or
development by Enhanced or its affiliates.
(b) Non-Disclosure
RAF agrees to hold the Proprietary Information and Trade
Secrets of Enhanced, of which RAF may acquire knowledge
hereunder, in the strictest confidence unless ordered to
disclose same subject to legal proceedings instituted by
third parties or as required to fulfill authorized
government requirements. RAF further agrees not to
disclose any Proprietary Information or Trade Secrets
except to the Board of Directors of Enhanced, employees,
advisers, counsel and consultants of Enhanced and its
affiliated companies, if any, on a "need to know basis"
and then only to those persons who reasonably require the
same for the purposes hereof and who are bound by a
confidentiality agreement consistent in format and
substance, with this Paragraph 5 and the policies of the
Board of Directors of Enhanced.
(c) Return of Documents and Materials
RAF shall deliver promptly upon the termination of the
Consulting Arrangement, and at any other time as Enhanced
may request, all documents, financial records, technology,
software, source codes, object codes, hardware (and all
copies thereof), in whatever medium, relating to the
business of Enhanced that RAF possesses or has under his
control.
6. CONFLICTING AGREEMENTS
RAF warrants and represents that there are no existing or
proposed agreements to which he is a party that may adversely
affect RAF's ability to render his services to Enhanced
hereunder.
7. INDEMNIFICATION
(a) RAF agrees to indemnify, defend and hold harmless Enhanced
and the officers, directors, shareholders, agents and
employees of Enhanced, Enhanced's attorneys, successors
and assigns, from and against, and pay or reimburse each
of them for, any and all claims, losses, damages,
judgments, amounts paid in settlement, costs and legal,
accounting or other expenses that any of them may sustain
or incur as a result of any misrepresentation or any
non-performance of any covenant or other obligation on the
part of RAF contained in this Agreement.
(b) Enhanced agrees to indemnify, defend and hold harmless RAF
and the officers, directors, shareholders, agents and
employees of RAF, RAF's attorneys, successors and assigns,
from and against, and pay or reimburse each of them for,
any and all claims, losses, damages, judgments, amounts
paid in settlement, costs and legal, accounting or other
expenses that any of them may sustain or incur as a result
of any misrepresentation or any non-performance of any
covenant or other obligation on the part of Enhanced
contained in this Agreement.
8. ATTORNEY'S FEES
In the event there is any litigation or arbitration between the
parties concerning this Agreement, the successful party shall be
awarded its reasonable attorneys' fees and litigation costs,
including the costs incurred in the collection of any judgment.
9. NOTICES
(a) Any notice, request, instruction, or other document to be
given hereunder by any party hereto to any other party
hereto shall be in writing and delivered personally or by
overnight courier or sent by facsimile transmission:
If to RAF, to: X.X. Xxx 000
Xxxxxxx, XX 00000
phone: (000) 000-0000
If to Enhanced, to: Enhanced Services Company, Inc.
00000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
phone: (000) 000-0000
fax: (000) 000-0000
or at such other address for a party as shall be specified
by like notice.
(b) All notices required or permitted to be given under this
Agreement shall be in writing. Notices may be served by:
(i) certified or registered mail postage pre-paid with
return receipt requested, or by private courier, prepaid;
(ii) by facsimile or other telecommunication device
capable of transmitting or creating a written record, with
a copy sent by U.S. mail or by personal delivery three
days after
the initial facsimile transmission; or (iii) personally.
Mailed notices shall be deemed delivered three days after
mailing, if properly addressed, with return receipt
signed. Couriered notices shall be deemed delivered on the
date the courier warrants a delivery has occurred.
Facsimile notices shall be deemed delivered when receipt
is acknowledged by the addressee or its office. Personal
delivery shall be effective when accomplished upon
signature of receipt. All notices shall be given to the
parties at the addresses first given above unless a party
changes its address by giving notice to the other party as
provided herein.
10. MISCELLANEOUS PROVISIONS
(a) No provision of this Agreement shall be deemed to have
been waived unless such waiver is in writing signed by the
waiving party. No failure by any party to insist upon the
strict performance of any provision of this Agreement, or
to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach, of
such provision or any other provision. No waiver of any
provision of this Agreement shall be deemed a waiver of
any other provision of this Agreement or waiver of such
provision with respect to any subsequent breach, unless
expressly provided in writing.
(b) This Agreement constitutes the entire Agreement of the
parties relating to the subject matter hereof. There are
no terms, conditions or obligations other than those
contained in this Agreement. This Agreement supersedes all
prior communications, representations or agreements
between the parties relating to the subject matter hereof.
This Agreement may not be amended except in a writing
executed by the parties.
(c) The invalidity or unenforceability of any particular
provision of this Agreement shall not effect the other
provisions hereof; all of which shall remain enforceable
in accordance with their terms. Should any of the
obligations hereunder be found illegal or unenforceable,
such obligations shall be enforceable within whatever
terms a court of competent jurisdiction shall deem
allowable by law.
(d) RAF may not assign, sell, subcontract, delegate or
otherwise transfer his obligations under this Agreement,
without the prior written consent of Enhanced's Board of
Directors, and any attempted assignment or delegation
shall be void and without effect.
(e) This Agreement shall inure to the benefit of the
successors and assigns of Enhanced as if such Agreement
had been originally negotiated and entered into by and
between RAF and any such successors or assigns, provided
such successors or assigns undertake in writing to perform
all of Enhanced's obligations hereunder.
(f) This Agreement shall be governed by and construed in
accordance with the laws of the State of California for
agreements wholly negotiated, entered into and performed
within the State of California.
(g) RAF acknowledges that Enhanced and its affiliated
companies are new and evolving companies and that
protection of Proprietary Information, Confidential
Information, Work Product, Trade Secrets and
Opportunities, are important to future prospects for
growth and business development of Enhanced. RAF
acknowledges that Enhanced may not have an adequate remedy
at law in the event of any breach or threatened breach by
RAF of any provision of Paragraph 5 and that Enhanced may
suffer irreparable damage and injury as a result.
Accordingly, in the event of any such breach or threatened
breach, RAF hereby consents to Enhanced's application for
injunctive relief against it by any court of competent
jurisdiction without the posting of any bond or security
therefor.
(h) The section headings in this Agreement are included for
convenience only; they do not give full notice of the
terms of any portion of this Agreement, and are not
relevant to the interpretation of any provision of this
Agreement.
(i) This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute
one agreement binding on all the parties, notwithstanding
that all parties are not signatories to the same
counterpart.
(j) All rights and obligations shall cease upon termination of
this Agreement, except for the rights and obligations set
forth in or arising out of, Paragraphs 5 and 7, which
shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
XXXXXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXX
ENHANCED SERVICES COMPANY, INC.
By: /s/ XXXXX MENGHOFF
Title: President
