PROFESSIONAL SERVICES AGREEMENT
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This PROFESSIONAL SERVICES AGREEMENT (the "AGREEMENT") is made this 22nd day of
February, 2007, by and among DIGITALFX INTERNATIONAL, INC., a Florida
corporation (the "COMPANY"), and BOLSOVER ENDEAVOURS, party unlimited ("BOLSOVER
ENDEAVOURS").
RECITALS
A. The Company and Bolsover Endeavours entered into an oral agreement
for Bolsover Endeavours to provide certain services to the Company.
B. The parties desire to enter into this Agreement to memorialize the
terms and conditions of the foregoing oral agreement.
C. The Company desires to engage Bolsover Endeavours to provide the
Company (i) the services of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("PROFESSIONAL"), and (ii) the
various sales, marketing and management services set forth herein, in each case
subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:
SECTION I.
EFFECTIVE DATE
The effective date of this Agreement shall be January 1, 2007 (the
"EFFECTIVE DATE").
SECTION II.
DUTIES
2.1 Engagement. Bolsover Endeavours is hereby engaged to provide the
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services of Professional and to provide the services set forth herein, and
Bolsover Endeavours hereby accepts such engagement. The primary purpose of the
engagement hereunder will be to assist in expanding the number of affiliate
distributors (the "DISTRIBUTORS") of the Company and of ▇▇▇▇▇▇▇▇▇▇.▇▇▇, a
digital media website operated by DigitalFX Networks, LLC, a Nevada limited
liability company and wholly-owned subsidiary of the Company, and to provide
such other activities as the Company shall reasonably determine from time to
time.
2.2 Authority. Professional shall have the authority to incur such
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costs and expenses on behalf of VMdirect, L.L.C., VMDirect UK, Ltd., VMDirect
EU, Ltd. and other foreign subsidiaries of the Company as subsequently
established in accordance with approved budgets.
2.3 Executive Appointment. Professional shall be appointed as the
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President of International Development of VMdirect, L.L.C. Notwithstanding such
appointment, Bolsover Endeavours shall remain an independent consultant of the
Company providing services through Professional, an employee of Bolsover
Endeavours, in accordance with the provisions of Section VII.
It shall be Professional's responsibility to manage international operations for
the Company for all countries outside of North America.
2.4 Professional's Responsibilities. Without limiting any portion of
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the foregoing, the parties acknowledge and agree that Professional's
responsibilities will also encompass, but not be limited to, the following:
(a) Taking such action as is necessary or required to establish
and oversee the operation and growth of the Company's activities in all
countries outside of North America (collectively the "BOLSOVER COUNTRIES"),
including Australia, the United Kingdom and New Zealand which are currently in
operation.
(b) Taking such action as is necessary and required to identify,
in consultation with ▇▇▇▇▇ ▇▇▇▇▇▇, four (4) additional countries outside of
North America (the "INITIAL EXPANSION COUNTRIES") other than Australia, the
United Kingdom and New Zealand, in which Professional will establish and oversee
the operation and growth of the Company's activies within the first twelve (12)
months of the Effective Date, and thereafter to identify other countries in
which Professional will establish and oversee the operation and growth of the
Company's activies.
(c) Opening operations in the Initial Expansion Countries during
the first twelve (12) months after the Effective Date and thereafter opening
operations in additional Bolsover Countries as validated by the Company. The
parties to this Agreement understand that Professional's ability to open
operations in new countries will be dependent upon (i) the Company making the
necessary changes to the affiliate program as required by each targeted country
and (ii) the Company being able to deliver a working, translated version of the
website, except if India is chosen as one of the new countries in which case the
website shall remain in English.
(d) Responsibility for obtaining regulatory documents and taking
all action necessary to legally sell the Company's products in the Bolsover
Countries within the timeframes outlined above.
(e) Professional will have the authority to advance funds to lead
Distributors (one per Initial Expansion Country) and pay draws up to $5,000 per
month per lead Distributor for three (3) months after the Effective Date and
prior to that lead Distributor earning commissions in said country. After such
three (3)-month period, the performance of the lead Distributors will be
evaluated by Professional and ▇▇▇▇▇ ▇▇▇▇▇▇.
(f) Obtaining minimum sales of $5 million per annum, as calculated
in January 2008 using actual sales for November and December, 2007, annualized
for the Bolsover Countries, by the end of the first twelve (12) months after the
Effective Date. Notwithstanding the foregoing, 10% of the sales required by
this Section 2.4(f) may be sales generated by Professional in North America
during fiscal 2007.
(g) Obtaining minimum sales of $10 million per annum, as
calculated in January 2009 using actual sales for November and December, 2008,
annualized for the Bolsover Countries, by the end of the second twelve
(12)-month period after the Effective Date. Notwithstanding the
foregoing, 10% of the sales required by this Section 2.4(g) may be sales
generated by Professional in North America during fiscal 2008.
(h) Obtaining minimum sales of $15 million per annum, as
calculated in January 20010 using actual sales for November and December, 2009,
annualized for the Bolsover Countries, by the end of the third twelve (12)-month
period after the Effective Date. Notwithstanding the foregoing, 10% of the
sales required by this Section 2.4(h) may be sales generated by Professional in
North America during fiscal 2009.
(i) Obtaining the minimum sales levels set forth in Sections
2.4(f), (g) and (h) without incurring costs and using resources that are not in
accordance with the annual budget for the Bolsover Countries approved by
Professional and the Company. Professional has reviewed and accepted the fiscal
2007 aggregate sales budget developed by the Company's corporate finance staff
for the Bolsover Countries. Professional shall revise or re-forecast the fiscal
2007 sales budget for each Bolsover Country as requested by the Company.
Commencing with fiscal 2008, Professional shall prepare the sales budget for
each Bolsover Country on an annual basis or for interim periods as requested by
the Company.
(j) Visiting the Company's headquarters in Las Vegas, Nevada at
least once per three (3)-month period.
(k) Providing leadership from his homes in Australia and the
United Kingdom.
2.5 Company's Responsibilities. The Company (or its subsidiaries) will
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be required to employ or contract with two persons in support of Professional's
activities hereunder, one of whom will provide administrative support to
Professional from Las Vegas, Nevada, and the other of whom will provide
translation and communication services from Australia.
SECTION III.
USE OF AGENTS OR ASSISTANTS
Bolsover Endeavours shall engage the services of any agents or assistants
which it may deem proper, and it may further employ, engage, or retain the
services of such other persons or corporations to aid or assist in the proper
performance of its duties. The costs of the services of such agents or
assistants shall be chargeable to Bolsover Endeavours, and any expenses incurred
by Bolsover Endeavours or Professional in engaging such agents or assistants
shall be paid by Bolsover Endeavours, unless any such expenditures are
previously approved in writing by the Company or are contained within an
approved budget. Without limiting the foregoing, the parties acknowledge and
agree that Bolsover Endeavours shall at all times use, and that the Company
specifically requires and has bargained under the terms of this Agreement for
the use of, Professional.
SECTION IV.
CONSULTING FEE
4.1 Professional Fee. Bolsover Endeavours shall be granted an
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"affiliate spot or level" under which new sales to and by affiliates generated
thereunder will be used for commission calculation purposes. This affiliated
level shall not be announced to the network and shall be held in
strictest confidence. The Company shall not pay Professional or Bolsover
Endeavours commissions in connection with the granted affiliate level. In
consideration for the services provided hereunder, Bolsover Endeavours will
receive, on a monthly basis, an amount (the "PROFESSIONAL FEE") equal to
$20,833.33 (USD). The Professional Fee shall be paid within twenty (20) days
after each month end. If the commissions that would have been paid to Bolsover
Endeavours for the entire twelve (12)-month period under the granted affiliate
level are greater than the Professional Fees during the prior twelve (12)
months, then Bolsover Endeavours shall receive the additional compensation as a
bonus within sixty (60) days after the twelve (12)-month period has ended. Such
bonus shall be the difference in the amount due and owing under the granted
affiliate level and the Professional Fee paid over the corresponding twelve
(12)-month period. Notwithstanding the foregoing, if commissions accrued under
the granted affiliate level exceed the Professional Fee for three (3)
consecutive months, then Bolsover Endeavours shall be paid the difference
between the Professional Fee and the amount accrued under the granted affiliate
level in accordance with normal and customary payments to affiliates in place at
that time, and such amounts shall be excluded from the bonus payable to
Professional hereunder.
4.2 Reimbursable Expenses. In addition to the foregoing, the Company
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shall pay for business class airfare (for any flight over four (4) hours) and
reasonable hotel accommodations. Professional shall be issued a corporate credit
card that will only be used to charge business expenses related to expenditures
made on behalf of the Company. The credit card statement and required
documented receipts will be submitted to the Company and all approved expenses
shall be paid within ten (10) business days after the Company has received and
approved the claimed expenditures of Professional on behalf of the Company.
Professional agrees to provide the Company with copies and access to such
receipts (including copies), ledgers, and other records as may be reasonably
appropriate for the Company or its accountants to verify the amount and nature
of any such expenses.
4.3 Stock Issuance. Professional shall receive, within ten (10)
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business days of the Effective Date, 10,000 shares of the common stock of the
Company (the "SHARES"). The Shares shall be restricted shares within the
meaning contemplated under the Securities Act of 1933, as amended (the "1933
ACT").
4.4 Affiliate Level. In the event that Professional continues to
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provide services to the Company pursuant to this Agreement and the combined
annual sales in United States dollars for the Bolsover Countries equal or exceed
$15 million, the affiliate level granted to Bolsover Endeavours shall become
permanent and shall not be affected by the termination of this Agreement. For
the avoidance of doubt, upon any termination hereof, Professional shall not be
entitled to any compensation, payment or other remuneration except as expressly
set forth in Section VI.
SECTION V.
INVESTOR REPRESENTATIONS
5.1 Accredited Investor. Professional is an "accredited investor"
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within the meaning of Rule 501 of Regulation D promulgated under the 1933 Act.
5.2 Investment Intent. Professional is acquiring the Shares for its
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own account, not as nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof in
any transaction which would be in violation of the securities laws of the United
States or any state thereof. By executing this Agreement, Professional further
represents that Professional does not presently have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Shares.
5.3 Restricted Status. Professional understands that the Shares have
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not been registered under the 1933 Act by reason of a specific exemption
therefrom, and that Professional must, therefore, bear the economic risk of such
investment indefinitely, unless the Shares are registered under the 1933 Act or
unless an exemption from registration is available. Professional further
understands that the Shares are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired in a transaction
not involving a public offering and that under such laws and applicable
regulations restricted securities may be resold without registration under the
1933 Act only in certain limited circumstances, and it represents that it is
familiar with Rule 144 and Rule 144A promulgated under the 1933 Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the 1933 Act.
5.4 Sophistication. Professional acknowledges that it (i) has a
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pre-existing personal or business relationship with the Company, or (ii) by
reason of Professional's business or financial experience, it is able to fend
for itself, can bear the economic risk of its investment and has such knowledge
and experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the Shares.
5.5 Regulatory Approval. Professional understands that no securities
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administrator of any state or any other jurisdiction has made any finding or
determination relating to the fairness of an investment in the Shares and that
no securities administrator of any state or any other jurisdiction has
recommended or endorsed, or will recommend or endorse, the offering of the
Shares.
5.6 No Solicitation. Professional acknowledges that no general
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solicitation or general advertising (including communications published in any
newspaper, magazine or other broadcast) has been received by Professional and
that no public solicitation or advertisement with respect to the offering of the
Shares has been made to Professional.
5.7 Advice of Counsel. Professional has relied solely upon the advice
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of Professional's own tax and legal advisors with respect to the tax and other
legal aspects of the investment in the Shares.
5.8 Reliance on Representations. Professional acknowledges that
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neither the Company nor DFXN, nor any officer, director, employee, agent or
representative thereof, have made any representations or warranties of any kind
to Professional including representations regarding future revenues, earnings or
profits of the Company or DFXN, the future value of the Shares, the future
capitalization of the Company or DFXN, the occurrence or timing of any public
offering by the Company or DFXN, the amount of future business that may be
transacted by the Company or DFXN or otherwise. Professional further understands
that the Company's and DFXN's success in achieving its goals and objectives in
the future and implementing its business plan cannot be predicted and is subject
to numerous factors not within the control of the Company or DFXN. Professional
is not purchasing the Shares based upon representations, oral or written, by any
person with respect to the
future value of, or income from, the Shares, or the length of time that
Professional will be required to remain as the owner of the Shares but rather
upon an independent examination and judgment as to the prospects of the Company
or DFXN.
5.9 Legends. It is understood that the certificates evidencing the
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Shares may bear one or all of the following legends:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED, TRANSFERRED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE ACT
AND THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE
COMMISSION THEREUNDER."
Any other legend required by applicable state securities laws.
SECTION VI.
DEVOTION OF TIME
6.1 Devotion of Time. Professional shall devote such time to the
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performance of his duties under this Agreement as is reasonably necessary for a
satisfactory performance. Should the Company require additional services not
included in the Agreement, Professional shall make a reasonable effort to get
such additional services into his time schedule without decreasing the
effectiveness of the performance of his duties hereunder.
6.2 Method for Provision of Services. Professional shall have the
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right to determine the method, details, and means of performing the work to be
performed for the Company. The Company shall, however, be entitled to exercise
general power of supervision and control over the results of work performed by
Professional to assure satisfactory performance, including the right to inspect,
the right to stop work, the right to make suggestions or recommendations as to
the details of the work, and the right to propose modifications to the work.
6.3 Reporting and Evaluation. Professional shall report to a
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representative designated by the Company. Bolsover Endeavours acknowledges
that, from time to time, the Company may monitor Bolsover Endeavours' employees
for the purpose of evaluating the professionalism of such employees and the
performance of contracted services. Said monitoring may be done personally or
by mechanical, electronic or other means. Bolsover Endeavours hereby consents
to such monitoring and agrees that the same may be undertaken without its
knowledge and without further notification to Bolsover Endeavours.
6.4 Termination.
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(a) Any party can terminate this Agreement upon thirty (30) days
prior written notice of termination delivered to the other party. If Bolsover
Endeavours terminates this Agreement
for any reason prior to the time that combined annual sales in United States
dollars for the Bolsover Countries equal or exceed $15 million, Bolsover
Endeavours shall be entitled to no further compensation or consulting fee
hereunder and shall lose the granted affiliate level. If the Company terminates
this Agreement for cause (as defined below), Bolsover Endeavours shall lose its
granted affiliate level.
(b) This Agreement shall terminate at the Company's option (except
for the restrictions set forth in Sections VII and IX which shall remain in full
force and effect) upon the delivery of written notice by the Company to Bolsover
Endeavours in the event of the occurrence of any of the following: (a)
Professional becomes disabled by accident or illness so as to be unable to
perform duties required under this Agreement for a period of thirty-one (31)
working days; (b) the death of Professional; (c) the Company terminates this
Agreement "for cause" which, in the sole discretion of the Company, shall
include, without limitation, (i) activities which in the reasonable judgment of
the Company, exercised in good faith, adversely affect the Company or its
subsidiaries, or their respective relations with customers or regulatory or
licensing agencies with jurisdiction thereof, (ii) any act or omission knowingly
undertaken or omitted by Professional or Bolsover Endeavours with the intent of
causing damage to the Company or its subsidiaries, or their respective
properties, assets, businesses, stockholders, officers, directors or employees;
(iii) any act of Professional or Bolsover Endeavours involving a material
personal profit to Professional or Bolsover Endeavours, including, without
limitation, any fraud, misappropriation or embezzlement, involving properties,
assets or funds of the Company or its subsidiaries; (iv) Professional's or
Bolsover Endeavours' material failure to perform their normal duties hereunder;
(v) conviction of, or pleading nolo contendere to (A) any crime or offense
involving monies or other property of the Company or its subsidiaries, (B) any
felony offense; or (C) any crime of moral turpitude; (vi) a violation by
Professional or Bolsover Endeavours of any policy of the Company or its
subsidiaries, or of any law, regulation or regulatory policy applicable to
Professional or Bolsover Endeavours, or (vii) Professional's chronic or habitual
use or consumption of drugs or alcoholic beverages; (d) the failure or refusal
of Professional, Bolsover Endeavours or its employees, agent or subcontractors
to comply with any other provisions of this Agreement; and/or (e) Professional
or Bolsover Endeavours fails to achieve the objectives stated herein. If the
Agreement is terminated by the Company pursuant to this Section 6.4(b), the
right of Professional to any form of compensation or consulting fee under this
Agreement shall cease on the date of such termination. The Company shall have
no further obligation to Professional under any of the provisions of this
Agreement.
SECTION VII.
STATUS
7.1 Independent Contractor. Professional shall be an independent
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contractor and not an employee of the Company under this Agreement. Bolsover
Endeavours and Professional (collectively the "BOLSOVER PARTIES") shall defend
and indemnify the Company, and each of its subsidiaries and/or affiliates (in
each case, whether controlled directly or indirectly through one or more
intermediaries), and their respective predecessors, successors and assigns,
directors, officers, employees, and agents, and each of them (each, an
"INDEMNIFIED PARTY") and hold each such Indemnified Party harmless from and
against any and all losses, liabilities, damages, claims, suits, settlements,
third party costs and expenses, including, as and when incurred, costs of
investigation, settlement and defense and attorneys' fees, court costs, and any
interest costs or penalties arising out
of or relating to (i) any breach of any covenant, agreement, representation or
warranty made by Professional or Bolsover Endeavours under this Agreement, (ii)
any violation of applicable law, statute, act, rule or regulation by
Professional or Bolsover Endeavours in their respective performance of services
under this Agreement, (iii) any act or omission undertaken or omitted by
Professional or Bolsover Endeavours in the performance of their services
hereunder, (iv) any and all claims for withholding of federal, state or local
income taxes, if any, and taxes under Federal Insurance Contribution Act
("FICA") and the Federal Unemployment Taxation Act ("FUTA"), and (v) any claims
raised by any employee, contractor or other agent of Bolsover Endeavours engaged
by Professional or Bolsover Endeavours hereunder, whether or not approved by
Company.
7.2 Taxes. As Professional is acting as an independent contractor, the
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Company shall not be responsible for any taxes, including but not limited to any
state and federal taxes, federal income tax, payroll tax deductions, or any
necessary required fees, or unemployment compensation, state industrial
insurance system contributions or otherwise required by the laws of the United
States or the State of Nevada. The Company shall have no liability and
Professional and/or Bolsover Endeavours shall be responsible for the cost of
providing and maintaining insurance of any type or description, including
without limitation workers' compensation as may be required by state law,
liability, property, business interruption, life or any other insurance.
7.3 Professional Relationship. The parties shall be independent
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contractors to one another, and nothing herein shall be deemed to cause this
Agreement to create an agency, partnership, or joint venture between the
parties. Nothing in this Agreement shall be interpreted or construed as
creating or establishing the relationship of employer and employee between the
Company and either Bolsover Endeavours, Professional or any employee,
subcontractor or agent of Professional and/or Bolsover Endeavours. The Bolsover
Parties shall be entirely and solely responsible for their acts and those of
their employees, agents or subcontractors while engaged in the performance of
services hereunder. The Bolsover Parties are not obligated to perform any
activities in association with the Company except as required by this Agreement
or as otherwise mutually agreed.
SECTION VIII.
COVENANTS
8.1 Prior Agreements. The Bolsover Parties agree that the terms herein
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pertaining to Confidentiality, Non-Competition, Non-Disparagement, Cooperation
and Non-Solicitation are binding and supersede previously executed agreement(s)
or any actual, perceived or contemplated oral agreements. In the event of a
conflict between the Confidentiality, Non-Competition, Non-Disparagement,
Cooperation and Non-Solicitation provisions of this Agreement and any prior
agreement(s) whether written or oral, the provisions of this Agreement shall
control. For the avoidance of doubt, (i) any reference in this Section VIII to
the Company and its subsidiaries shall expressly refer to and include DFXN and
its respective subsidiaries, and (ii) the restrictions provided hereunder with
respect to Professional shall apply to ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as if he was
expressly referenced herein.
8.2 Confidentiality. The Bolsover Parties will have access to trade
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secrets and confidential information about the Company, its products, its
customers, its marketing plans and its
methods of doing business. Each of the Bolsover Parties acknowledges that the
Company's trade secrets, private or secret processes as they exist from time to
time, and information concerning products, developments, manufacturing
techniques, new product plans, equipment, inventions, discoveries, patent
applications, ideas, designs, engineering drawings, sketches, renderings, other
drawings, manufacturing and test data, computer programs, progress reports,
materials, costs, specifications, processes, methods, research, procurement and
sales activities and procedures, promotion and pricing techniques, and credit
and financial data concerning customers of the Company and its subsidiaries, as
well as information relating to the management, operation, or planning of the
Company and its subsidiaries ("PROPRIETARY INFORMATION") are valuable, special,
and unique assets of the Company and its subsidiaries, access to and knowledge
of which may be essential to the performance of the Professional's duties under
this Agreement. In light of the highly competitive nature of the industry in
which the Company and its subsidiaries conduct their businesses, each of the
Bolsover Parties agrees that all Proprietary Information obtained by the
Bolsover Parties as a result of their relationship with the Company and its
subsidiaries shall be considered confidential. In recognition of this fact, each
of the Bolsover Parties agrees that such party will not, during and after the
term of this Agreement, disclose any of such Proprietary Information to any
person or entity for any reason or purpose whatsoever, and such party will not
make use of any Proprietary Information for such party's own purposes or for the
benefit of any other person or entity (except the Company and its subsidiaries)
under any circumstances. At all times during the term of this Agreement and for
an indefinite period thereafter, neither Professional nor Bolsover Endeavours
may, directly or indirectly, disclose or use any of the Proprietary Information;
provided, that such party will not incur any liability for disclosure of
information which (a) is required in the course of such party's engagement by
the Company to be disclosed by any federal, state, or local regulatory body or
court of competent jurisdiction; (b) is permitted to be disclosed in writing by
the Company or (c) is within the public domain or comes within the public domain
without any breach of this Agreement. The Bolsover Parties shall return all
written material in whatever media, photographs and all other documentation made
available or supplied by the Company to such parties and all copies and
reproductions thereof.
8.3 Non-Competition.
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(a) In order to further protect the confidentiality of the
Proprietary Information and in recognition of the highly competitive nature of
the industries in which the Company and its subsidiaries conduct their
businesses, and for the consideration set forth herein, Professional further
agrees as follows:
(i) Restriction on Competition. During and for the period
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commencing on the Effective Date and ending on the date on which Bolsover
Endeavours' consulting relationship with the Company terminates, the Bolsover
Parties will not directly or indirectly engage in any Business Activities
(hereinafter defined), other than on behalf of the Company or its subsidiaries,
whether such engagement is as an officer, director, proprietor, employee,
partner, investor (other than as a holder of less than 1% of the outstanding
capital stock of a publicly-traded corporation), consultant, advisor, agent, or
other participant, in any geographic area in which the products or services of
the Company or its subsidiaries have been distributed or provided during the
period of Bolsover Endeavours' consulting relationship with the Company. For
purposes of this Agreement, the term "BUSINESS ACTIVITIES" shall mean the
design, development, manufacture, sale, marketing, or
servicing of products similar in those offered by the Company, together with all
other activities engaged in by the Company or any of its subsidiaries at any
time during Bolsover Endeavours' consulting relationship with the Company, and
activities in any way related to activities with respect to which Professional
renders consulting services under this Agreement.
(ii) Dealings with Customers of the Company. During and for
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the period commencing on the Effective Date and ending on the date on which
Bolsover Endeavours' consulting relationship with the Company terminates, the
Bolsover Parties will not directly or indirectly engage in any of the Business
Activities (other than on behalf of the Company or its subsidiaries) by
supplying products or providing services to any customer with whom the Company
or its subsidiaries have done any business during the consulting relationship
with the Company, whether as an officer, director, proprietor, employee,
partner, investor (other than as a holder of less than 1% of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent, or
other participant.
(iii) Assistance to Others. During and for the period
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commencing on the Effective Date and ending on the date on which Bolsover
Endeavours' consulting relationship with the Company terminates, the Bolsover
Parties will not directly or indirectly assist others in engaging in any of the
Business Activities in any manner prohibited to the Bolsover Parties under this
Agreement.
(iv) Company's Employees. During and for the period
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commencing on the Effective Date and ending on the date on which Bolsover
Endeavours' consulting relationship with the Company terminates, the Bolsover
Parties will not directly or indirectly induce employees of the Company or any
of its subsidiaries or affiliates to engage in any activity hereby prohibited to
the Bolsover Parties or to terminate their employment.
(b) The Bolsover Parties understand and agree that direct
competition means development, production, promotion, or sale of products or
services competitive with those of Company. Indirect competition means
employment by any competitor or third party providing products or services
competing with Company's products or services, for whom the Bolsover Parties
will perform the same or similar function as the Bolsover Parties have performed
for the Company during their engagement with the Company.
8.4 Non-Disparagement. During the term of this Agreement and for three
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(3) years thereafter, neither the Bolsover Parties nor Company will take any
actions or make any verbal or written statements which disparage the other. In
the case of the Company, this shall include any of its affiliates, or their
respective officers, directors, shareholders, partners or employees.
8.5 Cooperation.
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(a) During the term of this Agreement and for two (2) years
thereafter, (the "COOPERATION PERIOD"), the Bolsover Parties agree to fully
cooperate with the Company and its affiliates during the entire scope and
duration of any litigation or administrative proceedings involving any matters
with which the Bolsover Parties were involved during their engagement with the
Company.
(b) During the Cooperation Period, in the event a Bolsover Party
is contacted by parties or their legal counsel involved in litigation adverse to
the Company or its affiliates, each Bolsover Party (i) agrees to provide notice
to the Company of such contact as soon as practicable; and (ii) acknowledges
that any communication with or in the presence of legal counsel for the Company
(including without limitation the Company's outside legal counsel, the Company's
inside legal counsel, and legal counsel of each related or affiliated entity of
the Company) shall be privileged to the extent recognized by law and, further,
that it will not do anything to waive such privilege unless and until a court of
competent jurisdiction decides that the communication is not privileged. In the
event the existence or scope of the privileged communication is subject to legal
challenge, then the Company must either waive the privilege or pursue litigation
to protect the privilege at the Company's sole expense.
(c) Promptly upon the Company's receipt of expense statements or
vouchers or such other supporting information as the Company may reasonably
require, in accordance with such reasonable practices, policies and procedures
as the Company may adopt from time to time, the Company shall reimburse the
Bolsover Parties for all reasonable expenses incurred in providing services or
assistance as described in this Section 8.5. The Bolsover Parties acknowledge
that such reimbursement is limited to costs and expenses incurred in complying
with the obligations hereunder and do not include fees for services provided.
8.6 Non-Solicitation. During the Cooperation Period, the Bolsover
----------------
Parties agree they will not, directly or indirectly, induce or attempt to induce
any person who is an employee, officer, or agent of the Company, whether
employed directly by Company or as independent contractors, to terminate said
relationship.
8.7 Regulations. The Bolsover Parties recognize that their efforts on
-----------
behalf of the Company are regulated by federal and state laws, statutes and
regulations and agree to conduct their activities under this Agreement in
conformity with all such laws, statutes and regulations.
8.8 Equitable Relief. The Bolsover Parties and the Company expressly
-----------------
agree and understand that monetary damages for any breach of this Agreement,
including, without limitation, this Section VIII, will be inadequate and that
the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that either
Bolsover Endeavours or the Company shall be entitled to immediate injunctive
relief in any court of competent jurisdiction and, if the court so permits, may
obtain specific performance or a temporary or permanent order restraining any
threatened or further breach on the posting of a minimal bond. Nothing
contained in this Section 8.8 shall be deemed to limit the Company's or the
Bolsover Parties' remedies for any breach of this Agreement that may be pursued
or availed.
8.9 Survival Beyond Term of Agreement. The obligations set forth in
------------------------------------
this Section VIII shall survive termination of this Agreement for the periods
provided for in this Section VIII.
8.10 Invalidity. If any of the covenants contained in this Section
----------
VIII are determined by the final judgment of a court of competent jurisdiction
to be unenforceable or invalid because of the geographic scope or time duration
of such restrictions, such provisions will be deemed retroactively modified to
provide for the maximum geographic scope and time duration that would make such
provisions enforceable and valid. However, no such retroactive modification
will affect any of the Company's or the Bolsover Parties' rights hereunder
arising out of the breach of any such covenant. The parties hereby authorize
any court of competent jurisdiction to reform this Agreement to give effect to
the retroactive modification provisions contained in this Section 8.10.
SECTION IX.
PUBLICITY
9.1 Publicity. The contents of this Agreement are confidential and no
---------
party shall issue press releases or engage in other types of publicity of any
nature dealing with the legal details of this Agreement without the other
party's prior written consent. However, approval of such disclosure shall be
deemed to be given to the extent such disclosure is required to comply with
governmental rules, regulations or other government requirements.
9.2 The Bolsover Parties Shall Refrain From Publishing Statements. The
-------------------------------------------------------------
Bolsover Parties shall refrain from publishing any oral or written statements
about Company, any of its subsidiaries or affiliates, or any of such entities'
officers, directors, agents or representatives that are slanderous, libelous, or
defamatory; or that disclose private or confidential information about Company
or any of its subsidiaries or affiliates, or any of such entities' business
affairs, officers, directors, agents, or representatives; or that constitute an
intrusion into the seclusion or private lives of Company or any of its
subsidiaries or affiliates, or any of such entities' officers, employees,
directors, officers, agents, or representatives; or that give rise to
unreasonable publicity about the private lives of Company or any of its
subsidiaries or affiliates, or any of such entities' officers, directors,
agents, or representatives; or that place Company or any of its subsidiaries or
affiliates, or any of such entities' officers, directors, agents, or
representatives in a false light before the public; or that constitute a
misappropriation of the name or likeness of Company or any of its subsidiaries
or affiliates, or any of such entities' officers, directors, agents, or
representatives. A violation or threatened violation of this prohibition may be
enjoined by the courts. The rights afforded the Company and its subsidiaries or
affiliates, or any of such entities' officers, directors, agents, or
representatives under this provision are in addition to any and all rights and
remedies otherwise afforded by law.
SECTION X.
DISPUTES
10.1 Jurisdiction. The Bolsover Parties and Company expressly agree
------------
and understand that the dispute resolution procedures set forth in Section 10.2
for any breach of Sections VI, VIII or IX will be inadequate and that the
damages flowing from such breach are not readily susceptible to being measured
in monetary terms. Accordingly, it is acknowledged that Bolsover Endeavours or
the Company shall be entitled to seek immediate injunctive relief and, if the
court so permits, may obtain specific performance or a temporary or permanent
order restraining any threatened or further breach of Sections VI, VIII or IX on
the posting of a minimal bond. Nothing contained in this Section 10.1 shall be
deemed to limit the Company's or the Bolsover Parties' remedies for any breach
of this Agreement that may be pursued or availed of. For any dispute arising
under Sections VI, VIII or IX of this Agreement, and subject to the final
sentence of this Section 10.1, the parties agree to the exclusive jurisdiction
of the courts of ▇▇▇▇▇ County, State of Nevada. Any other
disputes arising under or relating to the subject matter of this Agreement shall
be resolved in accordance with Section 10.2. Notwithstanding the above, the
Company shall at its option have the right to invoke the dispute resolution
procedures set forth in Section 10.2 for any breach of Sections VI, VIII or IX.
10.2 Resolution of Controversies.
-----------------------------
(a) Except as provided in Section 10.1, any dispute, controversy
or claim between or among two or more parties arising under or relating to the
subject matter of this Agreement (collectively, a "DISPUTE") shall be attempted
to be settled by the parties to such dispute, in good faith, by submitting each
such Dispute to Professional, on the one hand, and to a designated
representative of the Company, on the other hand, who shall meet within ten (10)
days as reasonably requested by either party. If the parties are unable to
resolve the Dispute within thirty (30) days thereafter, then such Dispute shall
be submitted to arbitration in accordance with this Section 10.2.
(b) Any Dispute not resolved in accordance with this Section 10.2
shall be determined solely and exclusively by arbitration under, and practices
then in effect of the American Arbitration Association, or any successors
thereto ("AAA"), in Las Vegas, Nevada, unless the parties otherwise agree in
writing. The parties shall, in connection with such arbitration, be permitted
to conduct any discovery permitted under the Nevada Rules of Civil Procedure;
provided, however, that each party shall only be permitted to present three (3)
-------- -------
witnesses before the arbitrator. Professional and the Company shall jointly
select an arbitrator. In the event Professional and the Company fail to agree
upon an arbitrator within ten (10) days, then each of them shall select an
arbitrator and such arbitrators shall then select a third arbitrator to serve as
the sole arbitrator; provided, that if either party, in such event, fails to
--------
select an arbitrator within seven (7) days, such arbitrator shall be selected by
the AAA upon application of either party. Within twenty (20) days after the
conclusion of the arbitration hearing, the arbitrator shall use his or her best
efforts to prepare written findings of fact and conclusions of law.
(c) Judgment upon the award of the arbitrator in accordance with
this Section 10.2 shall be final and binding and may be entered in any court of
▇▇▇▇▇ County, Nevada and in any United States federal court sitting in ▇▇▇▇▇
County, Nevada, and the parties hereby irrevocably waive any right to appeal
from such judgment. Each party hereby irrevocably submits to the exclusive
jurisdiction of such courts with respect to such matters. Each party hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue in any such suit, action or
proceeding in any of such courts or any claims that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Each party to this Agreement covenants not to institute any action in any court
or before any other Governmental Entity with respect to any matter under or
relating to the subject matter of this Agreement other than in accordance with
this Section 10.2.
10.3 Situs of Arbitration. Arbitration proceedings shall be held in
----------------------
▇▇▇▇▇ County, Nevada. The decision of the arbitrator(s) shall be final and
binding upon the parties hereto, and not subject to appeal. The proceedings,
all pleadings, documents, correspondence and the arbitration award shall be in
English. Judgment upon the award or decision rendered by the arbitrator(s) may
be rendered in
any court having competent jurisdiction thereof, or application may be made to
such court for a judicial recognition of the award or an order of enforcement
thereof, as the case may be.
SECTION XI.
MISCELLANEOUS
11.1 Waiver. Neither the failure nor any delay on the part of any
------
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver (express or implied) of that right, remedy, power or
privilege. No waiver (express or implied) of any right, remedy, power or
privilege with respect to any particular occurrence shall be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence.
11.2 Entire Agreement. This Agreement constitutes the entire Agreement
----------------
of the parties with respect to the subject matter hereof and supersedes any
preexisting agreements between the Company and the Bolsover Parties, as well as
all proposals, oral or written, and all negotiations, conversations or
discussions heretofore had between the parties related to this Agreement. The
parties hereto acknowledge they have not been induced to enter into this
Agreement by any representations or statements, oral or written, not expressly
contained herein. The parties further acknowledge and agree that neither party
will hereafter claim that this Agreement has been altered, modified, or
otherwise changed by oral communication of any kind or character.
11.3 Amendment. This Agreement shall not be deemed or construed to be
---------
modified, amended, rescinded, canceled or waived, in whole or in part, except by
written amendment signed by the parties hereto after the date of this Agreement.
11.4 Notice. All notices and other communications under or in
------
connection with this Agreement shall be in writing and shall be deemed given (a)
if delivered personally (including by overnight express or messenger), upon
delivery, (b) if delivered by registered or certified mail (return receipt
requested), upon the earlier of actual delivery or three days after being
mailed, or (c) if given by telecopy, upon confirmation of transmission by
telecopy provided a confirming copy of such notice was also mailed, in each case
to the parties at the following addresses or to such other address or telecopy
number as shall be specified in writing by the intended recipient of such
notice:
If to Company:
DIGITALFX INTERNATIONAL, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Bolsover Party:
BOLSOVER ENDEAVOURS
c/o ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
Any party may change such party's address for notices by notice duly given
pursuant to this Section 11.4.
11.5 Attorneys Fees. In any action or proceeding to enforce the terms
---------------
of this Agreement or to redress any violation of this Agreement, the prevailing
party shall be entitled to recover as damages its attorney's fees and costs
incurred, whether or not the action is reduced to judgment.
11.6 Governing Law. The laws of the State of Nevada of the United
--------------
States applicable to contracts made or to be wholly performed there (without
giving effect to choice of law or conflict of law principles) shall govern the
validity, construction, performance and effect of this Agreement, except to the
extent governed by federal law, irrespective of the fact that one or more of the
parties now is, or may become, a resident or citizen of a different state or
country. The parties hereby expressly submit solely to the personal
------------------------------------------------------------------
jurisdiction of the court or arbitral forum located in Las Vegas, County of
--------------------------------------------------------------------------------
▇▇▇▇▇, State of Nevada, United States of America and waive any objection or
--------------------------------------------------------------------------------
defense based on personal jurisdiction or venue that might otherwise be asserted
--------------------------------------------------------------------------------
to proceedings in such forum(s).
-----------------------------------
11.7 Construction. The terms and conditions of this Agreement shall be
------------
construed as a whole according to their fair meaning and not strictly for or
against any party. The parties acknowledge that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
apply in the interpretation of this Agreement. The provisions of this Agreement
shall be interpreted in a reasonable manner to give effect to the purpose of the
parties. As used in this Agreement, the masculine, feminine or neuter gender,
and the singular or plural, shall be deemed to include the others whenever and
wherever the context so requires.
(a) For the purposes of this Agreement, unless the context clearly
requires, "or" is not exclusive.
(b) This Agreement shall not be construed for or against any party
by reason of the authorship or alleged authorship of any provisions hereof.
(c) For purposes of this Agreement, "including" shall mean
"including without limitation."
(d) References to law, regulations and other governmental rules
shall mean such laws, regulations and rules as in effect at the time of
determination (taking into account any amendments thereto effective at such time
without regard to whether such amendments were enacted or adopted after the date
of this Agreement) and shall include all successor laws, regulations and rules
thereto.
(e) References to "$" or "dollars" or "funds" or "money" or
"monies" or "amounts" or "cash" or other words of similar import shall mean
lawful currency of the United States.
(f) References to "Federal" or "federal" shall be to the laws,
agencies or other attributes of the United States (and not to any State or
locality thereof).
(g) References to "days" shall mean calendar days; references to
"business days" shall mean all days other than Saturday, Sunday and days that
are legal holidays in the State of Nevada.
11.8 Severability. While the provisions contained in this Agreement
------------
are considered by the parties to be reasonable in all circumstances, it is
recognized that provisions of the nature in question may fail for technical
reasons and, accordingly, it is hereby agreed and declared that if any one or
more of such provisions shall, either by itself or themselves or taken with
others, be adjudged to be invalid as exceeding what is reasonable in all
circumstances for the protection of the interests of the parties, but would be
valid if any particular restriction or provisions were deleted or restricted or
limited in a particular manner, then the said provisions shall apply with such
deletion, restriction, limitation, reduction, curtailment, or modification as
may be necessary to make them valid and effective.
11.9 Necessary Action. Each of the parties shall do any act or thing
-----------------
and execute any or all documents or instruments necessary or proper to
effectuate the provisions and intent of this Agreement. Each of the parties
represents and warrants that they have all requisite authority to execute and
perform this Agreement.
11.10 Voluntary Nature Agreement. Each of the parties represents that
---------------------------
it has carefully read and understood this Agreement, and that it is fully aware
of its legal effect and that it had an opportunity to consult with its own legal
counsel and tax advisors with regard to this Agreement, and with respect to
Bolsover Endeavours, the compensation to be received hereunder. Each of the
parties acknowledges and agrees that it is signing this Agreement freely,
voluntarily and with full knowledge of its terms and consequences.
11.11 Captions and Headings. The captions and headings appearing at
-----------------------
the commencement of the sections of this Agreement are descriptive only and for
the convenience of reference and shall not define, limit or describe the scope
of intent of this Agreement, nor in any way affect this Agreement.
11.12 Counterparts. This Agreement may be executed in two or more
------------
counterparts and by different parties in separate counterparts (including by
facsimile). All counterparts shall constitute one and the same agreement (or
other document) and shall become effective when one or more counterparts of this
Agreement have been signed by each party (including by facsimile) and delivered
to the other party.
11.13 Successors and Assigns. The provisions of this Agreement shall
------------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of the other parties, which consent shall not
be unreasonably withheld.
11.14 Third-Party Beneficiaries. Nothing contained in this Agreement
--------------------------
is intended to nor shall it confer upon any person or entity, other than the
parties hereto and their respective subsidiaries, successors and permitted
assigns, any benefit, right or remedies under or by reason of this Agreement.
11.15 Representations and Warranties. The Bolsover Parties represent
-------------------------------
and warrant that they are not restricted or prohibited, contractually or
otherwise, from entering into and performing each of the terms and covenants
contained in this Agreement, and that their execution and performance of this
Agreement will not violate or breach any other agreements between the Bolsover
Parties and any other person or entity. The Bolsover Parties further represent
and warrant that they have not, and will not in the course of their provision of
services hereunder, share, disclose or use any confidential or other proprietary
information or materials of any third party except as expressly permitted in the
course of their provision of services hereunder.
PLEASE READ THIS AGREEMENT CAREFULLY. YOU ARE ADVISED TO CONSULT WITH AN
ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the day and
year set forth below.
BOLSOVER ENDEAVOURS
------------------------------------- -------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date
DIGITALFX INTERNATIONAL, INC.
By:
--------------------------------- -------------------------------------
Title: Date
ACKNOWLEDGED AND AGREED:
------------------------------------- -------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date