Consultant Agreement

 

 

This Agreement is made as of this 30th day of November 2005 by and between ELITE
CARD SERVICES, INC., whose principal offices are at 6550 N Federal Hwy Suite
510, Ft Lauderdale, Fl 33308 (Consultant), and RelationServe Media, Inc. whose
principal offices are at 6700 N. Andrews Avenue, Ft. Lauderdale, Fl 33309
(Company).

 

RECITALS:

 

 

A.

Consultant represents that Consultant has expertise in the area of E-Mail
Marketing and Appending and is ready, willing, and able to provide consulting
assistance to Company on the terms and conditions set forth herein and from and
after the date of this Agreement shall provide to the Company E-Mail Marketing
and Appending services and shall endeavor to transfer to the Company clients of
the Consultant for such services, as described below.

 

 

B.

Company, in reliance on Consultant’s representations, is willing to engage
Consultant as an independent contractor, and not as an employee, on the terms
and conditions set forth herein.

 

NOW THEREFORE, in consideration of the obligations made and undertaken in this
Agreement, the parties, intending to be legally bound, agree as follows:

 

Section 1

 

SCOPE OF SERVICES

 

1.01. Consultant shall, from time to time, in response to the Company’s
requests, provide consulting services in the areas of E-Mail Marketing and
Appending. From and after the date of this Agreement, Consultant shall use its
reasonable best efforts to transfer to the Company all clients of the Consultant
for such services. To the extent such clients shall not immediately agree or
shall not immediately become clients or customers of the Company, Consultant
shall pay over to the Company all revenues from E-Mail Marketing and Appending
services which Consultant receives from such clients during the term of this
Agreement.

 

1.02. Consultant shall: (i) provide and make available to Company such resources
as Consultant shall deem necessary to perform the services called for by this
Agreement, including but not limited to E-mail servers, database servers,
associated software and proprietary technology, personnel, and 150 million
database records; (ii) make available as the person responsible for performance
hereunder, such natural person as shall from time to time reasonably be
requested by the Chairman of Company, whose personal services shall be required
and shall be a material obligation of Consultant under this Agreement; (iii)
assist Company in developing list management and list brokering services for
customers of the Company.

 

1.03. All work shall be performed at Consultant’s facilities unless otherwise
mutually agreed and shall be performed in a first-class and professional manner
by Consultant with all of such activities performed on a level of skill in the
area commensurate with the requirements of the

 

 

 

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Consultant Agreement

 

 

scope of work to be performed. Consultant shall make sure Consultant’s employees
at all times observe security, confidentiality, and safety policies of Company,
after the Company provides Consultant with copies of the same.

 

1.04. Absent approval by Company of acceptable substitutes, the discontinuance
of work by any of the named employees shall, for purposes of Section 2.02, be
deemed a breach of the terms of this Agreement by Consultant.

 

1.05. Anything in this Agreement to the contrary notwithstanding, the parties
acknowledge and agree that Company shall have no right to control the manner,
means, or method by which Consultant performs the services called for by this
Agreement. Rather, Company shall be entitled only to direct Consultant with
respect to the elements of the services to be performed by Consultant and the
results to be derived by Company, to inform Consultant when such services shall
be performed, and to review and assess the performance of such services by
Consultant for the limited purposes of ensuring that such services have been
performed and confirming that such results are satisfactory.

 

Section 2

 

TERM OF AGREEMENT

 

2.01. This Agreement shall commence on the date and year first above written,
and unless modified by mutual agreement of the parties or terminated earlier
pursuant to the terms of this Agreement, shall continue until the earlier of:
(1) one year from signing of agreement or 30 days following a Change in Control
(as defined in the 2005 Incentive Stock Plan of the Company as filed with the
SEC on July 18, 2005) upon notice by the Company of such termination.

 

2.02. This Agreement may be terminated by either party after one year from date
of this agreement by written notice to the other party. This Agreement may be
terminated immediately upon notice to the other party if the other party
breaches any term of this Agreement and the breaching party fails to cure such
breach within 7 days; provided that, notwithstanding the above, the cure period
for any failure of Company to pay fees and charges due under this Agreement
shall be 7 days from the date of receipt by Company of any written notice of
breach relating to it.

 

2.03. Upon termination of this Agreement for any reason, Consultant shall
promptly return to Company all copies of any Company data, records, or materials
of whatever nature or kind, including all materials incorporating the
proprietary information of Company. Consultant shall also furnish to Company all
work in progress or portions of work in progress, including all incomplete work.

 

2.04. Within 7 days of termination of this Agreement for any reason, Consultant
shall submit to Company an itemized invoice for any fees or expenses unpaid
under this Agreement. After payment of unpaid amounts so invoiced, Company shall
have no further liability or obligation to Consultant for any further fees,
expenses, or other payment.

 

 

 

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Consultant Agreement

 

 

Section 3

 

FEES, EXPENSES, AND PAYMENT

 

In consideration of the services to be performed by Consultant, Company shall
pay the Consultant as follows:

 

3.01 Fees. Upon execution of this Agreement by Consultant and Company, the
Company shall pay Consultant Two Hundred Twenty Thousand Dollars ($220,000) as
the engagement fee, plus Fifty Thousand ($50,000) Dollars thirty (30) days
following execution of this Agreement by Consultant and Company, and fifty
thousand ($50,000) Dollars sixty (60) days following execution of this Agreement
by Consultant and Company.

 

The Company shall also pay the Consultant as compensation for its services
hereunder, in equal semi-monthly or bi-weekly installments during the Term in
accordance with the customary payroll practices of the Company, the sum of Three
Hundred Thousand ($300,000) Dollars per annum.

 

3.02 Equity Awards. Upon execution of this Agreement by Consultant and Company:
(i) Company shall grant to Consultant or designated employees of Consultant
five-year options to purchase a total of 600,000 shares of the common stock of
the Company, all exercisable at $3.85 per share, which options shall be
exerciseable as to one-third (1/3) of such total on each of the six month,
first, and second year anniversaries of the date of grant by the Board of
Directors; provided, however, that all of such options shall be exercisable
immediately upon any Change in Control (as defined under the 2005 Incentive
Stock Plan of the Company) if following such Change in Control this Agreement is
terminated for any reason; and (ii) Company shall grant to Consultant 90,000
shares of unregistered common stock of the Company.

 

The Company may issue such awards and options under the terms of the 2005
Incentive Stock Plan adopted by the Company and the Company shall include all of
such shares, awarded and subject to options, in a registration statement the
Company files for its executives and other plan participants, which registration
statement shall be filed within 12 months of the date of this Agreement.

 

3.03. Acceleration. If Consultant terminates this Agreement because of Company’s
breach, Consultant shall be entitled to the balance of the unpaid fees and
equity awards as outlined in section 3.01 and 3.02.

 

Section 4

 

RIGHTS IN DATA

 

4.01. As between Company and Consultant, except as set forth below in this
Section 4, all right, title, and interest in and to the programs, systems, data,
or materials utilized or produced by Consultant in the performance of the
services called for in this Agreement shall remain Consultant’s property.

 

 

 

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Consultant Agreement

 

 

 

4.02. All right, title, and interest in and to all Deliverables, including all
rights in copyright that may subsist in them, shall be held by Company, and all
Deliverables shall be considered works made for hire. Consultant shall mark all
Deliverables with Company’s copyright or other proprietary notice as directed by
Company and shall take all actions deemed necessary by Company to perfect
Company’s rights in the Deliverables. If the Deliverables shall be deemed not to
constitute works made for hire, or if Consultant should otherwise, by operation
of law, be deemed to retain any rights to any Deliverables, Consultant assigns
all right, title, and interest in and to such Deliverables to Company.
Consultant agrees to execute any documents of assignment or registration of
copyright requested by Company respecting any and all Deliverables.

 

For the purposes of this Agreement, Deliverables shall include, but not be
limited to, any and all materials produced by, for, or with assistance of
Consultant under this Agreement or pursuant to goods or services request by
Company to be provided to or performed for Company at any time, or related to
the business and affairs of the Company.

 

4.03. All right, title, and interest in and to any programs, systems, data, and
materials furnished to Consultant by Company are and shall remain Company’s
property.

 

Section 5

 

PROPRIETARY INFORMATION

 

5.01. Consultant acknowledges that to perform the services called for in this
Agreement, it shall be necessary for Company to disclose to Consultant certain
Trade Secrets that have been developed by Company at great expense and with
considerable effort of skilled professionals. Consultant further acknowledges
that the Deliverables will of necessity incorporate such Trade Secrets.
Consultant agrees that Consultant shall not disclose, transfer, use, copy, or
allow access to any such Trade Secrets to any employees or to any third parties,
except those who have a need to know such Trade Secrets consistent with the
requirements of this Agreement and who have undertaken an obligation of
confidentiality and limitation of use. In no event shall Consultant disclose any
such Trade Secrets to any competitors of Company.

 

5.02. The term “Trade Secret(s)” shall mean any scientific or technical data,
information, design, process, procedure, formula, or improvement that is
commercially valuable to Company and not generally known in the industry. The
obligations set forth in Section 5.01 as they pertain to Trade Secret(s) shall
survive this Agreement and continue for so long as the material remains Trade
Secrets.

 

Section 6

 

CONFIDENTIALITY OF AGREEMENT; PUBLICITY; USE OF MARKS

 

6.01. Disclosure of Confidential Information. The Consultant recognizes,
acknowledges and agrees that it and its personnel has had and will continue to
have access to secret and confidential information regarding the Company,
including but not limited to, its products, formulae, patents,

 

 

 

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Consultant Agreement

 

 

sources of supply, customer dealings, data, know-how and business plans,
provided such information is not in or does not hereafter become part of the
public domain, or become known to others through no fault of the Consultant. The
Consultant acknowledges that such information is of great value to the Company,
is the sole property of the Company, and has been and will be acquired by
Consultant and its personnel in confidence. In consideration of the obligations
undertaken by the Company herein, the Consultant will not (and Consultant shall
take reasonable precautions to assure that its personnel shall not), at any
time, during or after the expiration of the term of the Consultancy hereunder,
reveal, divulge or make known to any person, any information acquired by the
Consultant during the course of the services contemplated hereunder, which is
treated as confidential by the Company, and not otherwise in the public domain.
The provisions of this Section 6.01 shall survive the termination of this
Agreement.

 

6.02. Covenant Not To Compete

 

The Consultant recognizes that the services to be performed by it hereunder are
special, unique and extraordinary. The parties confirm that it is reasonably
necessary for the protection of the Company that the Consultant agree, on its
own behalf and on behalf of its personnel, and accordingly, the Consultant does
hereby agree, that it shall not, directly or indirectly, at any time during the
“Restricted Period” within the “Restricted Area” (as those terms are defined
below):

 

 

 

(i)

except as provided below, engage in the business of acting as an executive
engaged in any business in which the Company is currently or in the future is
engaged, or which constitutes online or offline marketing utilizing email
databases, appending and enhancing customer database records with information,
or opt-in services, or operating web-mining properties (“Competitive Services”),
either on his own behalf or as an officer, director, stockholder, partner,
consultant, associate, employee, owner, agent, creditor, independent contractor,
or co-venturer of any third party; or

 

 

(ii)

solicit to employ or engage, for or on behalf of Consultant’s own self or any
third party, any employee of the Company.

 

The Consultant hereby agrees that it will not, directly or indirectly, for or on
behalf of itself or any third party, at any time during the Term and during the
Restricted Period solicit any customers of the Company with respect to
Competitive Services then being offered or sold by the Company.

 

If any of the restrictions contained in this Article 6 shall be deemed to be
unenforceable by reason of the extent, duration or geographical scope thereof,
or otherwise, then the court making such determination shall have the right to
reduce such extent, duration, geographical scope, or other provisions hereof,
and in its reduced form this Section shall then be enforceable in the manner
contemplated hereby.

 

This Article 6 shall not be construed to prevent the Executive from owning,
directly or indirectly, in the aggregate, an amount not exceeding five percent
(5%) of the issued and outstanding voting securities of any class of any
corporation whose voting capital stock is traded or listed on a national
securities exchange or in the over-the-counter market.

 

 

 

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Consultant Agreement

 

 

 

The term “Restricted Period,” as used herein shall mean the period of the
Consultant’s actual engagement hereunder, provided, however, that during the
initial six (6) months period following the execution of this Agreement by
Consultant and Company, Consultant shall use its reasonable best efforts to
transition any and all accounts for Competitive Services to the Company, as
Company accounts, provided, further, that Consultant shall not be deemed in
breach hereof during such period as long as Consultant has used such reasonable
best efforts, and thereafter during the remainder of the term of this Agreement
the Consultant is actually no longer performing services for the Company. The
term “Restricted Area” as used in this Article 6 shall mean the continental
United States.

 

(f) In no event shall the terms of Section 6.02 be enforceable, should the
Company be in default of any of its obligations to the Consultant at the time of
enforcement by the Company, after notice and opportunity to cure such default.

 

6.03. Nature. For a period of three years from the date of termination of this
Agreement, Consultant shall not disclose the nature of the effort undertaken for
Company or the terms of this Agreement to any other person or entity, except as
may be necessary to fulfill Consultant’s obligations under this Agreement or as
otherwise required by law.

 

6.04. Trademarks. Consultant shall not at any time use Company’s name or any
Company trademark(s) or trade name(s) in any advertising or publicity without
Company’s prior written consent.

 

6.05. Injunctive Relief. The Consultant acknowledges that the services to be
rendered by it under the provisions of this Agreement are of a special, unique
and extraordinary character and that it would be difficult or impossible to
replace such services. Accordingly, the Consultant agrees that any breach or
threatened breach by it of Sections 5 or 6 of this Agreement shall entitle the
Company, in addition to all other legal remedies available to it, to apply to
any court of competent jurisdiction in Broward County, Florida, to seek to
enjoin such breach or threatened breach. The parties understand and intend that
each restriction agreed to by the Consultant hereinabove shall be construed as
separable and divisible from every other restriction, that the unenforceability
of any restriction shall not limit the enforceability, in whole or in part, of
any other restriction, and that one or more or all of such restrictions may be
enforced in whole or in part as the circumstances warrant. In the event that any
restriction in this Agreement is more restrictive than permitted by law in the
jurisdiction in which the Company seeks enforcement thereof, such restriction
shall be limited to the extent permitted by law. The remedy of injunctive relief
herein set forth shall be in addition to, and not in lieu of, any other rights
or remedies that the company may have at law or in equity.

 

Section 7

 

WARRANTIES

 

7.01. Company warrants that Company owns all right, title, and interest in and
to any programs, systems, data, or materials furnished to Consultant pursuant to
this Agreement.

 

 

 

 

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Consultant Agreement

 

 

7.02. Consultant warrants that:

 

(a) 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

 

(b) Consultant is the lawful owner or licensee of any software programs or other
materials used by Consultant in the performance of the services called for in
this Agreement and has all rights necessary to convey to Company the
unencumbered ownership of Deliverables.

 

Section 8

 

INDEMNIFICATION

 

8.01. Each party hereto indemnifies and agrees to hold the other harmless from
and against any and all claims, demands, and actions, and any liabilities,
damages, or expenses resulting therefrom, including court costs and reasonable
attorney fees, arising out of or relating to the breach of its obligations and
warranties set forth herein. Each party’s obligations under this Section 8.01
shall survive the termination of this Agreement for any reason. Each party
agrees to give the other prompt notice of any such claim, demand, or action and
shall, to the extent it is not adversely affected, cooperate fully with the
indemnifying party in the defense and settlement of the claim, demand, or
action.

 

Section 9

 

LIMITATION OF LIABILITY

 

9.01. In no event shall either party be liable to the other for any
consequential damages or lost profits of the other party.

 

Section 10

 

MISCELLANEOUS

 

10.01. Consultant shall not assign, transfer, or subcontract this Agreement or
any of Consultant’s obligations under this Agreement without Company’s prior
written consent; provided, however, that Consultant may assign Consultant’s
right to receive payments under this Agreement to such third parties as
Consultant may designate upon advance written notice to Company of not less than
30 days.

 

10.02. This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida without giving effect to such State’s conflicts of
laws provisions and each of the parties hereto irrevocably consents to the
jurisdiction and venue of the federal and state courts located in the State of
Florida.

 

10.03. The parties are and shall be independent contractors to one another, and
nothing here shall be deemed to cause this Agreement to create an agency,
partnership, or joint venture

 

 

 

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Consultant Agreement

 

 

between the parties. Except as expressly provided in this Agreement, Company
shall not be liable for any debts, accounts, obligations, or other liabilities
whatsoever of Consultant, including (without limitation) Consultant’s obligation
to withhold Social Security and income taxes for Consultant or any of
Consultant’s employees.

 

10.04. All remedies available to either party for one or more breaches by the
other party are and shall be deemed cumulative and may be exercised separately
or concurrently without waiver of any other remedies. The failure of either
party to act on a breach of this Agreement by the other shall not be deemed a
waiver of such breach or a waiver of future breaches, unless such waiver shall
be in writing and signed by the party against whom enforcement is sought.

 

10.05. All notices required or permitting by this Agreement shall be in writing
addressed to the respective parties as set forth above, unless another address
shall have been designated, and shall be delivered by hand or by registered or
certified mail, return receipt requested, postage prepaid.

 

10.06. Anything to the contrary notwithstanding:

 

A. Nothing contained herein shall prohibit: (i) any officer, director,
shareholder or employee of Consultant, and members of their families
(“Consultant’s Personnel”), from conducting the business of Elite Financial
Solutions, Inc.; or (ii) Consultant’s Personnel or affiliates providing List
Management and/or List Brokerage Services to businesses whose customers or
prospective customers are also customers or prospective customers of the
Company, provided, however, that Consultant shall not compete with Company to
provide the same list to the same customer.

 

B. If this Agreement is terminated for any reason, the Company shall not be
entitled to and hereby waives any claim for recission or for return of any
consideration paid or payable hereunder.

 

C. If this Agreement is terminated due to breach by the Company, all obligations
of Consultant hereunder shall be terminated other than Consultant’s obligation
to maintain the confidentiality of any confidential information.

 

10.07. This Agreement constitutes the entire agreement of the parties 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.

 

10.08. This Agreement may be executed by a party hereto and delivered by
electronic facsimile transmission, with the same force and effect as if it had
been executed and delivered in person by that party in the presence of the
other, and the party’s signature on a facsimile copy hereof shall be deemed his
or its authorized original signature. To induce each other to rely upon such
facsimile, any party so executing this Agreement shall not, directly or
indirectly, challenge the validity of such signature.

 

The parties have caused this Agreement to be executed by their duly authorized
representatives as of the date and year first above written.

 

 

 

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Consultant Agreement

 

 

 

RELATIONSERVE MEDIA, INC.

 

ELITE CARD SERVICES, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Danielle Karp

 

By:

/s/ Susan Lowenstein

 

Name: Danielle Karp

 

 

Name: Susan Lowenstein

 

Title:   President

 

 

Title: President