EXHIBIT 4.8
CONTRACT
Customer: FOCUS Enhancements, Inc.
Date: December 22, 1998
Term of Contract: One Year
Contract Begins: January 1, 1999
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The undersigned, acting on behalf of FOCUS Enhancements, Inc. ("the customer"),
hereby contracts with R. J. Falkner & Company, Inc., ("Falkner") for a period of
not less than one year, for the provision of consulting services to include the
following:
(1) The preparation of at least two "Research Profile" reports during the next
twelve months, and one each six months thereafter;
(2) Distribution of such reports to the brokerage community, money managers,
mutual funds, and individual investors, upon request, or as instructed by the
customer, along with exposure of such reports on the StreetNet investor
information site on the Internet and on the R. J. Falkner & Company, Inc.
website (www.rjfalkner.com);
(3) Assistance in the writing and editing of shareholder communiques, annual
reports, etc., in order to optimize their effectiveness in conveying the
messages desired by management;
(4) The handling of all logistics involving the release of news to the financial
media and to the investment community, including "blast fax" exposure to brokers
and money managers;
(5) Interfacing with Nasdaq StockWatch to assure that new releases are
distributed in accordance with appropriate regulations, and that Nasdaq is
notified in advance of pending news releases;
(6) Distribution of such communiques to the brokerage community, institutional
and individual investors, and research analysts at over 5,000 firms throughout
the U. S., Europe, and Canada;
(7) Telephone and personal meetings with individual investor groups,
regional/national brokerage firms, and/or institutional investors, when
appropriate;
(8) Arrangement of management presentations to stockbroker groups, research
analysts, and/or portfolio managers, on a selective basis, in various cities
around the U. S. and Canada; and
(9) Any other services involving investor relations, upon request (at an hourly
rate, when appropriate).
A cash retainer fee for these services will be payable at the rate of $3,000 per
month, in advance. In addition to such monthly retainer, the customer will be
invoiced for reimbursement of expenses directly incurred in the provision of
these services on a monthly basis. Such expenses will primarily involve
publishing, printing and postage costs
related to the distribution of "Research Profile" reports and shareholder
communiques; telephone calls placed on the customer's behalf; and travel
expenses required to visit the customer and/or for trips to visit brokerage
firms/investor groups/institutions on behalf of the customer (such trip expenses
are pro-rated among several customers). Documentation of these expenses will be
provided on each monthly invoice, and the customer agrees to reimburse R. J.
Falkner & Company, Inc. for such expenses within 30 days following receipt of
such invoices. Such reimbursable expenses shall not exceed $500 per month,
unless pre-approved by an officer of FOCUS Enhancements, Inc.
In addition to the cash compensation outlined above, R. Jerry Falkner (as an
individual) and Richard W. West will each be granted a 5-year option to purchase
15,000 shares of FOCUS Enhancements, Inc. common stock (after taking into
account a planned reverse stock split), with such option to be issued no later
than January 15, 1999. The exercise price on the option will be equivalent to
the market price of the common stock on the closing transaction price, as
reported by Nasdaq, on December 31, 1998. Customer hereby agrees to register the
shares underlying this option whenever any other option shares are registered
with the SEC, or within twelve months of the "start date" of this contract,
whichever occurs sooner.
This contract may be cancelled by the Customer after twelve months, upon written
notice to be received by R. J. Falkner & Company prior to January 1, 2000. If
such notice is not forthcoming, the services of R. J. Falkner & Company, Inc.
will continue on a month-to-month basis. At any time after completion of the
initial one-year term of the contract's starting date, either party may cancel
the services of R. J. Falkner & Company, Inc. upon 30 days' written notice. If
the customer chooses to terminate the services of R. J. Falkner & Company, Inc.
prior to January 1, 2000, customer agrees to pay R. J. Falkner & Company, Inc.
all advance retainer fees for the months remaining in the initial twelve-month
term of the contract, plus unreimbursed expenses.
Falkner represents, warrants, and covenants that: (i) all work performed
hereunder will be performed with care, skill, and diligence, in accordance with
the highest applicable professional standards recognized by Falkner's
profession; (ii) it is responsible for the professional quality, technical
accuracy, completeness and coordination of all reports, designs, drawings,
plans, information, specifications, and other services furnished under this
Agreement; (iii) it shall comply with all applicable federal, state and local
laws, ordinances, codes and regulations in performing its services; (iv) that
all work shall be performed to Customer's reasonable satisfaction of Customer;
(v) that it has the right to disclose all information transmitted to Customer
under this Agreement and that it has all rights and title necessary to provide
the services and deliverables outlined herein; (vi) that all work and services
hereunder will be performed by fully trained, experienced and qualified
personnel; (vii) that it has not and will not enter into any agreements or
arrangements which preclude compliance with the provisions of this Agreement;
and (ix) that its invoice charges under this Agreement will not exceed
comparable rates it charges other customers in substantially similar
transactions.
Falkner will keep the Proprietary Information of the Customer in strict
confidence and shall not, without the prior written approval of the Customer (a)
disclose any Proprietary Information to a third party, (b) use Proprietary
Information in any way for the benefit of any third party, and/or (c) use
Proprietary Information in any way other than for the purposes of this
Agreement. The Falkner will limit access to Proprietary Information to only
those employees who have an absolute need to know of such Proprietary
Information in order to accomplish the purposes of this Agreement and who are
aware of and have agreed to respect the relevant provisions of this Agreement.
Third party access to Proprietary Information shall be restricted to those third
parties who have first executed a confidentiality agreement protecting against
disclosure of such Proprietary Information and naming Customer as a third party
beneficiary of the confidentiality agreement so that Customer can enforce the
provisions of the confidentiality agreement in Customer's own name. Further,
prior to entering a confidentiality agreement with a third party, Falkner shall
obtain approval to communicate or transfer Proprietary Information under the
confidentiality agreement, such approval being given at the sole discretion of
Customer. For the purposes of this Agreement, "Proprietary Information" means
technical and/or business information which is disclosed to Falkner by Customer,
whether orally, or in written or other tangible form. This Agreement and the
terms hereof shall be considered Proprietary Information. Proprietary
Information does not include, and no obligation is imposed on, information which
(i) is already in or subsequently enters the public domain through no fault of
Falkner; (ii) is supplied by Customer to another party without a duty of
confidentiality to Customer; (iii) is disclosed pursuant to the order or
requirements of a governmental administrative agency or other governmental body
provided that such disclosure is pursuant to a protective order and Customer has
been notified of such a disclosure request in advance.
Falkner agrees that for the term of this Agreement, the terms and conditions of
this Confidentiality provision shall survive termination of this Agreement.
Falkner shall, at its expense, defend any claim or action brought against
Customer, and Customer's subsidiaries, affiliates, directors, officers,
employees, agents and independent contractors, to the extent it is based upon a
claim that the Falkner acted negligently, willfully disseminated misinformation
or otherwise acted with willful misconduct. Customer shall have the right to
employ separate counsel and participate in the defense of any claim or action.
Falkner shall reimburse Customer upon demand for any payments made or loss
suffered by it at any time after the date hereof, based upon the final
adjudication of of any judgement by a court of competent jurisdiction, or
pursuant to a bona fide compromise or settlement of claims, demands, or actions,
in respect to any damages related to any claim or action. Falkner would only be
liable for damages which the court determined were the result of negligence
and/or misconduct on the part of Falkner. Falkner may not settle any claim or
action under this Section on Customer's behalf without first obtaining
Customer's written permission, which permission will not be unreasonably
withheld. In the event Customer and Falkner agree to settle a claim or action,
Falkner agrees not to publicize the settlement without first obtaining
Customer's written permission, which permission will not be unreasonably
withheld.
Falkner agrees that it is strictly an independent contractor and shall so
represent itself to all third parties. Neither party has the right to bind the
other in any manner whatsoever and nothing in this Agreement shall be
interpreted to make either party the agent or legal representative of the other
or to make the parties joint venturers. In no event shall Falkner be deemed in
any way to be an employee of Customer. Falkner acknowledges and agrees that this
consulting arrangement shall not give or extend to Falkner any rights with
respect to contributions by the Customer to any deferred compensation plan,
bonus plans, or fringe benefits (including, but in no way limited to holiday
pay, medical or life insurance benefits, sick pay or paid vacation) except as
otherwise provided herein, and further agrees to hold the Customer harmless from
any employment, income or other taxes or any other damages which may be assessed
in connection with payments to Falkner or which may be suffered by Customer due
to any breach of the foregoing warranties.
Falkner convents and agrees that it has, in full force and effect, Workers'
Compensation, Public Liability and Property Damage insurance, and that Falkner
further indemnifies Customer against loss resulting from injury to Falkner
during the course of performance of service work under this Agreement. Falkner
further assumes full responsibility for any acts of damage or destruction,
including personal injury, caused directly or indirectly by the Falkner during
the course of such work.
All notices under this Agreement shall be made in writing and shall be deemed
properly delivered when (i) delivered personally, or (ii) by the mailing of such
notice to the parties entitled thereto, registered or certified mail, postage
prepaid to the parties at the addresses set forth above, and in the case of
Customer, to the attention of Thomas Massie, Chief Executive Officer, cc.
General Counsel.
Falkner shall not subcontract or assign the Agreement, or otherwise dispose of
its right, title, or interest therein or any part thereof to any third party,
without obtaining the prior written consent of the Customer. The hiring or use
of outside services, subcontractors by Falkner in connection with this Agreement
shall not be permitted without the prior written approval of Customer.
This Agreement contains the entire agreement between the parties hereto and
supersedes all prior and contemporaneous agreements, arrangements, negotiations
and understandings between the parties hereto, relating to the subject matter
hereof. There are no other understandings, statements, promises or inducements,
oral or otherwise, contrary to the terms of this Agreement. No waiver of any
term, provision, or condition of this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or shall
constitute, a waiver of any other provision hereof, whether or not similar, nor
shall such waiver constitute a continuing waiver, and no waiver shall be binding
unless executed in writing by the party making the waiver.
No supplement, modification or amendment of any term, provision or condition of
this Agreement shall be binding or enforceable unless executed in writing by the
parties hereto. The subject headings of the articles, paragraphs and
subparagraphs of this Agreement are included solely for purposes of convenience
and reference only, and shall not be deemed to explain, modify, limit, amplify
or aid in the meaning, construction or interpretation of any of the
provisions of this Agreement. Should any part, term or provision of this
Agreement or any document required herein to be executed be declared invalid,
void or unenforceable, all remaining parts, terms and provisions hereof shall
remain in full force and effect and shall in no way be invalidated, impaired or
affected thereby.
The parties acknowledge that this contract is entered into in the state of
Colorado and that performance of the contract will be accomplished in the states
of Colorado and Massachusetts.
This contract cannot be assigned without the agreement of both parties.
Signed:
/s/ Thomas L. Massie
Thomas L. Massie
Chairman and Chief Executive Officer
FOCUS ENHANCEMENTS, INC.
/s/ R. Jerry Falkner, CFA
R. Jerry Falkner, CFA
President
R. J. Falkner & Company, Inc.
Date:
Note: Please retain one original copy of this contract for your records, and
return one original copy to R. J. Falkner & Company, Inc.