EXHIBIT 4.5
CONSULTING AGREEMENT
Program Addition and Internet Integration Services
THIS CONSULTING AGREEMENT (this "Agreement"), made and entered into
this 5th day of August, 1996, by and between North American Resorts, a Florida
Corporation(hereinafter "Customer"), and DIGITALMIND, a Nevada Corporation
(hereinafter "Consultant"):
SECTION 1
SCOPE OF SERVICES
1.1 PROJECT SERVICES; PROGRAMMING AND MATERIALS. Consultant shall
provide development, integration and implementation services in support of
Sunrise Project, as more fully described in Part 1 of Exhibit A attached hereto.
As part of such services, Consultant shall use its best efforts to prepare,
complete, and install the programming and materials identified as to be
furnished by Consultant in Part 2 of Exhibit A attached hereto (the "Software").
1.2 CONDUCT OF SERVICES. All work shall be performed in a workmanlike
and professional manner by employees of Consultant having a level of skill
commensurate with the requirements of this Agreement. Consultant shall require
its employees at all times to observe security and safety policies of Customer.
Consultant shall cause its employees to be bound by written agreements or
policies sufficient to give effect to the license in Section 6 hereof.
SECTION 2
METHOD OF PERFORMING SERVICES
2.1 METHOD OF PERFORMING SERVICES. Consultant shall have the right to
determine the method, details, and means of performing the work to be done for
Customer. Customer shall have no right to, and shall not, control the manner or
determine the method of accomplishing Consultant's services. Customer may,
however, require Consultant's personnel at all times to observe security and
safety policies of Customer. In addition, Customer shall be entitled to exercise
broad general power of supervision and control over the results of work
performed by Consultant's personnel to ensure 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.
2.2 ASSIGNMENT OF PERSONNEL. Customer may interview the personnel
Consultant assigns to Customer's work. If Customer determines that such
personnel are not appropriate for the work being assigned based on their
specific or general skills or their background and experience, Consultant shall
make a reasonable effort to assign other qualified personnel.
2.3 SCHEDULING. Consultant will try to accommodate work schedule
requests to the extent possible. Should any personnel of Consultant be unable to
perform scheduled services because of illness, resignation, or other causes
beyond Consultant's reasonable control, Consultant will attempt to replace such
employee within a reasonable time, but Consultant shall not be liable for delays
resulting from factors beyond its control.
2.4 REPORTING. Customer will advise Consultant of the individuals to
whom Consultant's personnel will report for purposes of day-to-day work
assignments. Customer and Consultant shall develop appropriate administrative
procedures for coordinating with Consultant's personnel. Customer shall
periodically prepare an evaluation of the performance of Consultant's personnel.
Should Customer not be satisfied with the performance of one or more of
Consultant's personnel, Customer may request, on reasonable notice, that
Consultant terminate their assignment to Customer's work.
2.5 PLACE OF WORK. Consultant's personnel will perform their work for
Customer primarily at Customer's premises except when such projects or tasks
may, as agreed by Customer, be performed off site. Customer agrees to provide
working space and facilities, and any other services and materials Consultant or
its personnel may reasonably request in order to perform the work assigned to
them.
SECTION 3
TERM AND TERMINATION
3.1 TERM. The term of this Agreement shall commence on the date set
forth above and shall continue through the completion of the services set forth
in Exhibit A attached hereto, and thereafter for so long as Customer seeks or
obtains services from Consultant.
3.2 TERMINATION. This Agreement may be terminated by either party upon
written notice, if the other party breaches any obligation provided hereunder
and the breaching party fails to cure such breach within the sixty- (60-) day
period; provided that the cure period for any failure of Customer to pay fees
and charges due hereunder shall be fifteen (15) days from the date of receipt by
Customer of notice of such failure.
3.3 REMAINING PAYMENTS. Within sixty (60) days of termination of this
Agreement for any reason, Consultant shall submit to Customer an itemized
invoice for any fees or expenses theretofore accrued under this Agreement.
Customer, upon payment of accrued amounts so invoiced, shall thereafter have no
further liability or obligation to Consultant whatsoever for any further fees or
expenses arising hereunder. In the event Consultant terminates this Agreement
because of the breach of Customer, Consultant shall be entitled to a pro rata
payment for work in progress based on the percentage of work then completed,
plus the full amount of payment attributable to programming and materials
already furnished by Consultant. Notwithstanding any termination of the terms of
this Agreement, the rights and licenses granted under Section 6 hereof shall
continue in effect in accordance with their terms.
SECTION 4
FEES, EXPENSES, AND PAYMENT
4.1 FEES. In consideration of the services to be performed by
Consultant, Customer shall pay Consultant the fees set forth in Exhibit B
attached hereto.
4.2 REIMBURSEMENT OF EXPENSES. In addition to the foregoing, Customer
shall pay Consultant its actual out-of-pocket expenses as reasonably incurred by
Consultant in furtherance of its performance hereunder. Consultant agrees to
provide Customer with access to such receipts, ledges, and other records as may
be reasonably appropriate for Customer or its accountants to verify the amount
and nature of any such expenses.
4.3 ADDITIONAL WORK. The fees and charges for any follow-on or
additional work not described in Exhibit A attached hereto shall be performed at
Consultant's then-current rates for such work.
4.4 PAYMENT. Customer shall pay all fees and expenses owing to
Consultant hereunder within 3 days after Consultant has submitted to Customer an
itemized invoice therefor.
SECTION 5
TREATMENT OF PERSONNEL
5.1 COMPENSATION OF CONSULTANT'S PERSONNEL. Consultant shall bear sole
responsibility for payment of compensation to its personnel. Consultant shall
pay and report, for all personnel assigned to Customer's work, federal and state
income tax withholding, social security taxes, and unemployment insurance
applicable to such personnel as employees of Consultant. Consultant shall bear
sole responsibility for any health or disability insurance, retirement benefits,
or other welfare or pension benefits, if any, to which such personnel may be
entitled. Consultant agrees to defend, indemnify, and hold harmless Customer,
Customer's officers, directors, employees, and agents, and the administrators of
Customer's benefit plans from and against any claims, liabilities, or expenses
relating to such compensation, tax, insurance, or benefit matters; provided that
Customer shall promptly notify Consultant of each such claim when and as it
comes to Customer's attention, Customer shall cooperate with Consultant in the
defense and resolution of such claim, and Customer shall not settle or otherwise
dispose of such claim without Consultant's prior written consent, such consent
not to be unreasonably withheld.
5.2 WORKER'S COMPENSATION. Notwithstanding any other workers'
compensation or insurance policies maintained by Customer, Consultant shall
procure and maintain workers' compensation coverage sufficient to meet the
statutory requirements of every state where Consultant's personnel assigned to
Customer's work are located.
5.3 CONSULTANT'S AGREEMENTS WITH PERSONNEL. Consultant shall obtain and
maintain in effect written agreements with each of its personnel who participate
in any of Customer's work hereunder. Such agreements shall contain terms
sufficient for Consultant to comply with all provisions of this Agreement.
5.4 STATE AND FEDERAL TAXES. As neither Consultant nor its personnel
are Customer's employees, Customer shall not take any action or provide
Consultant's personnel with any benefits or commitments inconsistent with any of
such undertakings by Consultant. In particular:
1. Customer will not withhold FICA (Social Security) from
Consultant's payments.
2. Customer will not make state or federal unemployment insurance
contributions on behalf of Consultant or its personnel.
3. Customer will not withhold state and federal income tax from
payment to Consultant.
4. Customer will not make disability insurance contributions on
behalf of Consultant.
5. Customer will not obtain workers' compensation insurance on
behalf of Consultant or its personnel.
SECTION 6
OWNERSHIP RIGHTS
6.1 OWNERSHIP. As between Customer and Consultant, except as set forth
below in this Section 6, all right, title, and interest, including copyright
interests and any other intellectual property, in and to the Software produced
or provided by Consultant under this Agreement shall be the property of
Consultant. To the extent of any interest of Customer therein, Customer agrees
to assign and, upon its creation, automatically assigns to Consultant the
ownership of such Software, including copyright interests and any other
intellectual property therein, without the necessity of any further
consideration.
6.2 CUSTOMER LICENSE. Effective upon completion of the services set
forth in Exhibit A attached hereto and payment by Customer of the fees and
expenses invoiced by Consultant with respect thereto, Customer shall have a
nonexclusive license to use the Software in machine-readable form throughout
Customer's organization. Pursuant to such license, Customer may make additional
copies of the Software for internal use and installation by Customer. Consultant
shall also make available the source code version of the Software, as requested
by Customer, for support and maintenance purposes, provided that the use and
handling of such source code shall be subject to strict confidentiality
procedures. Customer is cautioned against making unreviewed changes to the
Software that could disrupt or impair its functioning.
6.3 CUSTOMER DATA. All right, title, and interest in and to any data
relating to Customer's business are and shall remain the property of Customer,
whether or not supplied to Consultant.
6.4 THIRD-PARTY INTERESTS. Customer's interest in and obligations with
respect to any programming, materials, or data to be obtained from third-party
vendors, regardless of whether obtained with the assistance of Consultant, shall
be determined in accordance with the agreements and policies of such vendors.
SECTION 7
RESPONSIBILITIES OF CUSTOMER FOR SOFTWARE
7.1 LIMITATIONS ON USE. Customer may not use, copy, or modify the
Software, or any copy, adaptation, transcription, or merged portion thereof,
except as expressly authorized by Consultant hereunder. Customer's rights may
not be transferred except to (1) a successor in interest of Customer's entire
business who assumes the obligations of this Agreement or (2) any other party
who is reasonably acceptable to Consultant, enters into a substitute version of
this Agreement, and pays an administrative fee intended to cover attendant
costs. No service bureau work, multiple-user license, or time-sharing
arrangement is permitted. If Customer uses, copies, or modifies the Software or
transfers possession of any copy, adaptation, transcription, or merged portion
of the Software to any other party in any way not expressly authorized
hereunder, Customer's license is automatically terminated.
7.2 TAXES. Customer is solely responsible for payment of any taxes
(including sales or use taxes, intangible taxes, and property taxes) resulting
from Customer's acceptance of this license and possession and use of the
Software, other than taxes based on income to the Consultant. Consultant
reserves the right to have Customer pay any such taxes as they fall due to
Consultant for remittance to the appropriate authority. Customer agrees to hold
harmless Consultant from all claims and liability arising from Customer's
failure to report or pay such taxes.
7.3 QUALIFIED OPERATOR. Customer is responsible for selecting an
operator who is qualified to operate the Software on Customer's own equipment
and is familiar with the information, calculations, and reports that serve as
input and output of the Software. Customer accepts sole responsibility for the
use of the Software in its business and operations.
7.4 ENVIRONMENT AND UTILITIES. Customer is responsible for ensuring a
proper environment and proper utilities for the computer system on which the
Software operates, including an uninterrupted power supply.
7.5 RIGHT TO INSPECT. Customer hereby authorizes Consultant to enter
Customer's premises in order to inspect the Software in any reasonable manner
during regular business hours for purposes of verifying Customer's compliance
with the provisions of this Agreement.
7.6 OBSOLESCENCE. Except as otherwise agreed by Consultant with
reference to further work orders, Consultant is not responsible for obsolescence
of the Software that may result from changes in Customer's requirements.
Consultant assumes no responsibility for the use of superseded, outdated, or
uncorrected versions of the Software.
SECTION 8
PROPRIETARY INFORMATION
8.1 TRADE SECRETS. Customer acknowledges that in order to perform the
services called for in this Agreement, it shall be necessary for Consultant to
disclose to Customer certain Trade Secrets that have been developed by
Consultant at great expense and that have required considerable effort of
skilled professionals. Customer further acknowledges that the Software will of
necessity incorporate such Trade Secrets. Customer agrees that it shall not
disclose, transfer, use, copy, or allow access to any such Trade Secrets to any
employees or to any third parties, excepting those who have a need to know such
Trade Secrets in order to give effect to Customer's rights hereunder and who
have bound themselves to respect and protect the confidentiality of such Trade
Secrets. In no event shall Customer disclose any such Trade Secrets to any
competitors of Consultant.
8.2 SCOPE OF RESTRICTION. As used herein, the term "Trade Secrets"
shall mean any scientific or technical data, information, design, process,
procedure, formula, or improvement that is commercially valuable to Consultant
and not generally known in the industry.
SECTION 9
WARRANTIES
9.1 WARRANTIES OF CUSTOMER. Customer warrants that it owns all right,
title, and interest in and to, or has full and sufficient right and authority to
use in the manner contemplated by this Agreement, any programming, materials, or
data furnished by Customer to Consultant in connection with Consultant's
performance of the services called for by this Agreement.
9.2 WARRANTIES OF CONSULTANT. Consultant warrants that:
1. Consultant's performance of the services called for by this
Agreement do not and shall not violate any applicable law, rule, or regulation;
any contracts with third parties; or any third-party rights in any patent,
trademark, copyright, trade secret, or similar right; and
2. Consultant has sufficient right, title, and interest in and
to the Software, exclusive of rights respecting programs, data, and materials
identified as furnished to Customer by third-party vendors, to grant and convey
the rights accorded to Customer under Section 6 hereof.
9.3 CONFORMITY OF SOFTWARE. Consultant warrants that, commencing upon
installation of the Software and for a period of _____ months thereafter, the
Software shall operate in substantial conformity with the specifications
published by Consultant with respect thereto. If, on the basis of evidence
submitted to Consultant during such period, it is shown that the Software is
nonconforming, then, as the sole and exclusive remedy of Customer, Consultant
shall, at its option, either correct the nonconformity or return all payments
made to Consultant within the prior twelve (12) months for such nonconforming
Software. If it is ultimately determined that no such nonconformity exists, or
that the nonconformity is owing to actions of Customer or third-party vendors,
Customer shall compensate Consultant for its services at Consultant's
established rates.
EXCEPT AS SET FORTH IN THIS SECTION 9, CONSULTANT MAKES NO
REPRESENTATION, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
SECTION 10
LIMITATION OF LIABILITY
10.1 NO CONSEQUENTIAL DAMAGES, ETC. In no event shall Consultant be
liable to Customer for any incidental, indirect, or consequential damages or
lost profits of Customer.
10.2 LOSS OF DATA. In no event shall Consultant be liable for loss of
data or records of Customer, it being understood that Customer shall be
responsible for ensuring proper and adequate back-up and storage procedures.
10.3 FORCE MAJEURE. Consultant shall not be liable to Customer for any
failure or delay caused by events beyond Consultant's control, including,
without limitation, Customer's failure to furnish necessary information;
sabotage; failure or delays in transportation or communication; failures or
substitutions of equipment; labor disputes; accidents; shortages of labor, fuel,
raw materials or equipment; or technical failures.
10.4 INSURANCE. Customer must have data insurance to cover any loss of
data.
SECTION 11
HIRING OF CONSULTANT'S PERSONNEL
11.1 ADDITIONAL VALUE FROM HIRING. Customer acknowledges that
Consultant provides a valuable service by identifying and assigning personnel
for Customer's work. Customer further acknowledges that Customer would receive
substantial additional value, and Consultant would be deprived of the benefits
of its work force, if Customer were to directly hire Consultant's personnel
after they have been introduced to Customer by Consultant.
11.2 NO HIRING WITHOUT PRIOR CONSENT. Without the prior written consent
of Consultant, Customer shall not recruit or hire any personnel of Consultant
who are or have been assigned to perform work until one (1) year after the
termination of this Agreement.
11.3 HIRING FEE. In the event that Customer hires any personnel of
Consultant who are or have been assigned to perform work for Customer, within
one (1) year of the date of such hiring, Customer shall pay Consultant an amount
equal to twenty-five percent (25%) of the total first year compensation Customer
pays such personnel as a fee for the additional benefit obtained by Customer.
SECTION 12
MISCELLANEOUS
12.1 GOVERNING LAW. This Agreement shall be governed and construed in
all respects in accordance with the laws of the State of Florida as they apply
to a contract entered into and performed in that State.
12.2 INDEPENDENT CONTRACTORS. The parties are and shall be independent
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 Customer and
either Consultant or any employee or agent of Consultant.
12.3 NOTICES. All notices required or permitted hereunder shall be
given in writing addressed to the respective parties as set forth herein, unless
another address shall have been designated, and shall be delivered by hand or by
registered or certified mail, postage prepaid.
12.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto and supersedes all prior representations, proposals,
discussions, and communications, whether oral or in writing. This Agreement may
be modified only in writing and shall be enforceable in accordance with its
terms when signed by the party sought to be bound.
12.5 PARTIES IN INTEREST. This Agreement is enforceable only by
Consultant and Customer. The terms of this Agreement are not a contract or
assurance regarding compensation, continued employment, or benefit of any kind
to any personnel assigned to Customer's work, or any beneficiary of any such
personnel, and no such personnel (or any beneficiary thereof) shall be a
third-party beneficiary under or pursuant to the terms of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives, on the date and year first
above written.
NORTH AMERICAN RESORTS
By: /s/ Thomas Arrigoni
----------------------------
Thomas Arrigoni
Title: President
Date: August 5,1996
Address for correspondence:
315 E. Robinson Street #190
Orlando Florida 32801
DIGITALMIND
By: /s/ Francis Palmeira
----------------------------
Francis Palmeira
Title: Chairman
Date: August 5, 1996
Address for correspondence:
1350 E. Flamingo Rd #75
Las Vegas Nevada 89119
Exhibit A
On site tech support 30 hours a month.
On line service 720 a month.
Consulting On site 30 hours a month.
License to use WIRS (Worldwide Internet Reservation System).
Services include access Internet lines, processing and hosting reservation
system.
Exhibit B
500,000 trade stocks of North American Resorts ($40,000.00) plus monthly cost of
$2,000.00. Additional hours at $125.00 a hour.