1
Exhibit 4.13
CONSULTING AGREEMENT
BETWEEN
SECURFONE AMERICA, INC.
AND
XXXXX X. XXXXXX
THIS CONSULTING AGREEMENT (the "Agreement") is made and is effective as
of October 1, 1997, by and between SECURFONE AMERICA, INC., a Delaware
corporation (the "Corporation") and XXXXX X. XXXXXX, an individual (the
"Consultant") with reference to the following facts:
R E C I T A L S
A. The Corporation is engaged in the business of providing prepaid
cellular and landline telephone services.
B. The Consultant has developed significant skill, expertise and
goodwill in the field of media relations and marketing through the internet.
C. The Corporation desires to retain the Consultant in the capacity of
independent consultant on behalf of the Corporation to provide advisory and
consulting services to the Corporation.
D. The Consultant desires to accept such arrangement with the
Corporation in such capacity and is willing to render such services to the
Corporation, subject to the terms and conditions set forth herein.
E. The Consultant has represented and warranted to the Corporation that
the Consultant is free to enter into this Agreement and to perform all of the
duties and obligations of the Consultant pursuant hereto.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual covenants and conditions hereinafter set forth, the parties hereto agree
as follows:
1. INDEPENDENT CONTRACTOR RELATIONSHIP
1.1 ENGAGEMENT. The Corporation hereby engages the Consultant, and the
Consultant hereby accepts engagement with the
-- 1 --
2
Corporation, subject to all of the terms and conditions set forth in this
Agreement, during the term specified in Section 3, below, of this Agreement.
1.2 RELATIONSHIP CREATED. For purposes of this Agreement, the
relationship created between the Corporation and the Consultant shall be that of
independent contractor, and not that of employer/employee, principal/agent,
partner, joint venturers, vendor/vender, or otherwise. It is understood that
each party to this Agreement is placing its trust and confidence in the other to
perform all duties contained herein and to act in each other's best interests
and thus create a reciprocal confidential relationship.
2. DUTIES OF THE CONSULTANT
2.1 GENERAL DUTIES. The Consultant shall do and perform all services,
acts or things necessary or advisable to assist the media relations and internet
advertising activities of the Corporation, subject always to the policy set by
the Board of Directors and the President of the Corporation. In particular, the
duties of the Consultant shall include the following:
(a) The Consultant shall advise the Corporation with respect
to its relations with the media, for advertising, marketing and public
relations purposes;
(b) The Consultant shall, at such times and in such manner as
shall be determined by the Corporation, appear on behalf of the
Corporation and shall act on behalf of the Corporation as a media
representative and spokesperson of the Corporation, and, in such
capacity, the Consultant shall permit the Corporation to use the name
and likeness of the Consultant for public relations purposes (provided
however, that the Corporation shall not be entitled to use the name or
likeness of the Consultant for advertising or marketing purposes
without the consent of the Consultant);
(c) The Consultant shall assist the Corporation in
establishing, maintaining and exploiting a web site on the internet;
(d) The Consultant shall utilize her best efforts to develop
new business for the Corporation;
(e) The Consultant shall advise the management of the
Corporation of any breakdown or potential breakdown in relations with
the media and shall attempt to ensure that corrective action is taken
by the Corporation; and
-- 2 --
3
(f) The Consultant shall NOT enter into any contracts on
behalf of the Corporation pursuant to which the Corporation shall be
obligated to pay any money to any third party without the prior written
approval of the Corporation.
2.2 DEVOTION OF TIME. The Consultant shall devote such productive time,
ability, and attention to the business of the Corporation as the Consultant
shall determine in her sole discretion. During the term hereof, the Consultant
may devote time to other business interests, provided however, that the
Consultant shall not cause or permit any customer or account of the Corporation
to be solicited for or on behalf of any other person engaged in competition with
the Corporation.
2.3 ADHERENCE TO RULES. The Consultant at all times during the term of
this Agreement and in the performance her duties pursuant to this Agreement
shall strictly adhere to and obey all of the rules and regulations of the
Corporation now in effect or subsequently modified governing the conduct of
representatives of the Corporation. Without limiting the generality of the
foregoing, the Consultant expressly represents and warrants to the Corporation
that the Consultant shall not engage in any activity, arrangement or transaction
which violates any provision of Federal, State or local law.
2.4 LOYAL PERFORMANCE. The Consultant agrees that, to the best of her
ability and experience, she will at all times loyally and conscientiously
perform all the duties and obligations either expressly or implicitly required
of her by the terms of this Agreement.
3. TERM AND TERMINATION
3.1 TERM. The term of this Agreement shall be for a period of one (1)
year, provided that this Agreement may be terminated at any time by the
Corporation or by the Consultant on written notice to the other, with or without
cause.
3.2 DUTIES UPON TERMINATION OF THIS AGREEMENT. Upon termination of this
Agreement by either party:
(a) Neither party shall be released or discharged from any
obligation, debt or liability which has previously accrued and remains
to be performed as of the date of such termination;
(b) All compensation (as defined in Paragraph 4.1, below, of
this Agreement), paid to the Consultant shall remain the property of
the Consultant without any refund, proration or set-off; and
-- 3 --
4
(c) The Consultant shall return to the Corporation any and all
physical embodiments of the trade secrets of the Corporation,
including, but not limited to, any and all Information (as defined in
Paragraph 6.1 below), which is in the possession of the Consultant or
any third party to whom the Consultant have delivered such physical
embodiment.
4. COMPENSATION OF THE CONSULTANT
4.1 IN GENERAL. As compensation for the services to be
rendered by the Consultant hereunder, the Corporation shall issue and deliver
to the Consultant TEN THOUSAND (10,000) fully paid and non-assessable shares of
common capital stock (the "Shares") of the Corporation.
4.2 RESTRICTIONS ON THE SHARES. The Consultant
acknowledges and agrees that: (i) the Shares, when issued by the
Corporation, shall be subject to restrictions and limitations on
transferability of the Shares pursuant to Federal and State securities laws;
and (ii) the Consultant shall not sell, assign, transfer, hypothecate or convey
the Shares without first complying with all applicable Federal and State
securities laws.
4.3 VALUATION OF THE SHARES. The Consultant
acknowledges and agrees that the Corporation has made no representations
or warranties to the Consultant with respect to the current value of the Shares
or with respect to any possible future value of the Shares. The Consultant
further acknowledges and agrees that the Shares represent a speculative
investment and that, in the event that the Shares decline in value, the
Corporation (including, without limitation, its officers, directors, employees,
shareholders, agents and representatives) shall have no obligation to pay any
further or additional compensation to the Consultant pursuant to this
Agreement.
5. RELATIONSHIP OF PARTIES
5.1 CONTRACTOR'S EXPENSES. During the term of this
Agreement, the Consultant shall be an independent contractor with respect to
the Corporation and shall not be an employee of the Corporation. Accordingly,
the Consultant shall bear all of her own expenses in performing her services
pursuant to this Agreement, including, without limitation, automobile,
telephone, travel, office, telephone, business promotion, entertainment, taxes,
insurance, and legal and accounting expenses. The Consultant shall not be
entitled to any of the benefits provided by the Corporation to its employees,
and the Consultant specifically waives, and agrees to indemnify and hold
harmless the Corporation against, any claim including, without limitation,
health or life insurance, vacation pay, sick pay, retirement or pension
benefits, Social Security contributions, workers'
-- 4 --
5
compensation insurance, state disability insurance, F.I.C.A. or F.U.T.A. tax
payments, reimbursement of business related expenses, welfare and pension
benefits and obligations of the Corporation under the Employee Retirement Income
Security Act of 1974, or other benefits of any kind customarily afforded to an
employee. The Consultant acknowledges that she is aware of her obligations to
pay payroll, self-employment, income, license, franchise and other taxes, and
the Consultant agrees to pay all such taxes as required by law and to indemnify
and hold harmless the Corporation from and against any claim, expense, loss,
liability or damage relating thereto.
5.2 INDEPENDENCE OF PARTIES. No agency, employment,
partnership or joint venture is intended to be created by this Agreement. Each
party hereto shall refrain from making any representation tending to create an
apparent agency, employment, partnership or joint venture relationship between
the parties. Neither the Consultant nor any of her employees, agents or
subcontractors shall have any claim against the Corporation for any
compensation or remuneration except as otherwise provided in paragraph 4.1,
above of this Agreement.
6. PROPRIETARY INTERESTS AND RIGHTS OF THE CORPORATION
6.1 TRADE SECRETS AND CONFIDENTIAL INFORMATION. Upon
termination of his Agreement by either party for any reason whatsoever (or for
no reason), the Consultant shall immediately surrender and deliver to the
Corporation all property belonging to the Corporation (excluding the Shares,
which shall constitute the property of the Consultant), including, without
limitation, policies, procedures, operating manuals, business practices, forms,
contracts, customer lists, pricing schedules and other information which will
be used in operating the Corporation's business and which are a trade secret
nature or confidential information (collectively, the "Information"), it being
understood by the Consultant that the Information and any documents or
instruments evidencing the Information are and have always been the exclusive
property of the Corporation and that the Consultant shall not make or use any
copies thereof.
6.2 REMEDIES FOR BREACH. The Consultant agrees that the
remedy at law for any breach of the foregoing Paragraph 6.1 will be inadequate,
and that the Corporation shall be entitled, in addition to any other remedies
it may have under this Agreement or at law, to injunctive and other equitable
relief against the Consultant for any such breach.
-- 5 --
6
7. REPRESENTATIONS OF CONTRACTOR
7.1 REPRESENTATIONS AND WARRANTIES OF CONTRACTOR. The Consultant
represents and warrants to the Corporation as follows:
(a) The Consultant has all right, power and authority to enter
into this Agreement and to perform all of her obligations pursuant
hereto without the consent or approval of any other person.
(b) The Consultant is not subject to or a party to any
covenant or agreement not to compete with any third party in connection
with the business of the Corporation or to refrain from soliciting or
servicing any business in connection with such business.
(c) In performing her obligations pursuant to this Agreement,
the Consultant will not be violating the terms of any agreement,
understanding, covenant, obligation, law, rule or undertaking, whether
oral or written, express or implied, to which the Consultant is
subject.
(d) In performing her obligations pursuant to this Agreement,
the Consultant shall not knowingly utilize or exploit in any way any
policies, procedures, operating manuals, business practices, forms,
contracts, customer lists, pricing schedules or similar property
belonging to any other person, firm or entity without the express
written consent of such other person, firm or entity.
7.2 REPRESENTATIONS TO SURVIVE. The representations and warranties set
forth in this Section 7 shall be true and correct as of the date of this
Agreement and throughout the entire term of this Agreement and shall survive
termination of this Agreement. All of the representations and warranties set
forth in this Section 7 have been made by the Consultant after conferring with
legal counsel of her choice.
8. GENERAL PROVISIONS
8.1 SEVERABILITY. The invalidity of any provision of this Agreement, as
determined by a Court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
8.2 WAIVERS AND CONSENT. No waiver of any provision hereof shall be
deemed a waiver of any other provision hereof, or of any subsequent breach of
the same or any other provision. Consent to or approval by either party of any
action shall not be deemed to
-- 6 --
7
render unnecessary the obtaining of such party's consent to or approval of any
subsequent acts.
8.3 HEADINGS. The headings of Sections, paragraphs and subparagraphs in
this Agreement are for convenience and reference only, and they in no way
define, limit, or describe the scope or intent of this Agreement or of the
provisions of such Sections, paragraphs or subparagraphs.
8.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter contained herein
and supersedes all prior negotiations, agreements, statements of understanding,
presentations, and proposals of the parties. No supplement, modification, or
amendment to this Agreement shall be binding unless executed in writing by the
Corporation and the Consultant. The Consultant acknowledges that she has been
advised by independent counsel of her choice prior to entering into this
Agreement.
8.5 NOTICES. Any written notice, demand, request or other communication
required or permitted to be given hereunder shall be in writing and may be
served personally or by registered mail, postage prepaid, and return receipt
request, addressed as follows:
IF TO THE CORPORATION: Xxxxxxx Xxxxxxx, President
Securfone America, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
IF TO THE CONSULTANT: Xx. Xxxxx X. Xxxxxx
00000 Xxxxxx Xxxxx Xxxx #000
Xxx Xxxxx, XX 00000-0000
or to such other address as such party may have advised the other parties to
this Agreement in writing. Any such notice shall be deemed to have been given as
of the date so delivered, if delivered personally, or as of the third (3RD)
business day following the date of deposit in the United States mail.
8.6 ASSIGNABILITY; BINDING EFFECT. The Consultant shall not be entitled
to delegate any of her duties hereunder without the prior written consent of the
Corporation, and any attempted delegation in violation hereof shall be void and
ineffectual. This Agreement shall bind and inure to the parties, their personal
representatives, successors and permitted assigns.
8.7 ARBITRATION. The parties hereby agree to use their best efforts to
resolve any differences that may arise pursuant to the performance of their
obligations under this Agreement. In the event that any such differences cannot
be resolved, the
--7--
8
subject matter of such dispute between the parties shall be submitted to final
and binding arbitration by the American Arbitration Association in San Diego
County, State of California, in accordance with the commercial rules then
existing of the American Arbitration Association. In any such arbitration
proceeding, the parties shall have the same rights of discovery as they would
have pursuant to the California Civil Discovery Act as if an action were filed
in the California Superior Court. Notwithstanding any provision to the contrary
set forth herein, the Corporation shall be entitled to seek injunctive relief
against the Consultant from a court of competent jurisdiction if the Consultant
violates or attempts to violate any of the covenants, conditions, terms and
provisions of this Agreement.
8.8 ATTORNEYS' FEES. If either party brings an arbitration proceeding
or an action for judicial review or enforcement of the arbitration proceedings,
award or decision, or of this Agreement, the prevailing party in any such
arbitration or action, on trial and/or appeal, shall be entitled to its
reasonable attorneys' fees to be paid by the non-prevailing party as fixed by
the arbitrator or the court, as the case may be.
8.8 FURTHER ASSURANCES. Each of the parties agrees to execute,
acknowledge and deliver such further instruments and documents and to do all
such further acts as may be necessary and proper to carry out and effectuate the
terms of this Agreement.
8.9 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which taken together shall
constitute but one and the same instrument which may be sufficiently evidenced
by one counterpart signed by the party who is to be charged with it.
8.10 PRONOUNS, PLURALITY. All pronouns and any variation thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the person or persons, entity or entities, may require. As used
herein, the singular shall constitute the plural and the plural shall constitute
the singular where appropriate.
8.11 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California.
8.12 AUTHORIZED SIGNATORY. The person executing this Agreement on
behalf of the Corporation hereby represents and warrants to the Consultant that
he is the duly authorized representative of the Corporation and that the
Corporation has taken all necessary corporate action to ratify and approve the
execution of this Agreement in accordance with its terms.
-- 8 --
9
8.13 SURVIVAL OF PROVISIONS. Each of the covenants, agreements,
representations and warranties contained herein shall, to the extent applicable,
survive the termination of this Agreement.
8.14 INTERPRETATION OF AGREEMENT. This Agreement shall be interpreted
as if it were prepared by both of the parties hereto and no rule of construction
shall be applied with respect to either party as the preparer of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
consisting of 9 pages, including this page, as of the date set forth at the
beginning of this Agreement.
THE CORPORATION: SECURFONE AMERICA, INC.,
a Delaware corporation
By: /S/ XXXXXXX XXXXXXX
----------------------------
Xxxxxxx Xxxxxxx, President
THE CONSULTANT:
/S/ XXXXX XXXXXX
-------------------------------
XXXXX X. XXXXXX
-- 9 --
