SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 8, 1999
ADEN ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
California 00-18140 87-0447215
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) Identification No.)
13314 I Street, Omaha, Nebraska 68137
(Address of principal executive offices) (Zip Code)
(402) 334-5556)
(Registrants telephone number, including area code)
Item 5. Other Information
On January 11, 1999, the Registrant announced that it has expanded
the services it will market to consumers on the Internet to include long
distance and local telephone service, electricity and gas service. These
services will be offered in certain geographic regions through an
agreement with Massachusetts based TelEnergy Inc.
(www.telenergy.com). See Attachment.
TelEnergy is a service company offering residential consumers the
convenience of ONE-stop shopping for essential household utilities
such as electricity, natural gas, heating oil, and local and long distance
telephone. These services are consolidated on a single, monthly bill
with ONE point of customer service.
Registrant and its marketing partner NETWorks Direct, Inc. intend to
utilize their network of approximately 600 Internet independent agents
to market these products. Initially, the energy products will be sold
only in the state of Massachusetts. Based upon commercial success
and the ability of TelEnergy Inc. to obtain licensing in other states, the
geographic focus may expand in the future. The communication
products will be sold in the US and abroad.
According to Scott Christensen, President of Registrant, "The
TelEnergy relationship is a good fit for our Registrant's direction in
securing new business and service opportunities through the up-selling
and cross-selling to consumers on our database that we are developing
through our various affiliations. The future of Registrant's growth
and expansion will be directly related to database marketing practices
and principles and our ability to communicate directly to our core
customer groups. An Internet company's ability to utilize continuous
loop direct marketing will impact its future profitability and rate of
growth."
Registrant is not profitable at the present time and does not expect to
be in the near future. Registrant has limited financial resources and
there can be no assurance it will raise sufficient capital to fund its
operations or fulfill the Agreement. Registrant has a significant amount
of debt that is currently in default and it is a party in certain litigation.
In exchange for certain consideration, a shareholder entered into an
agreement previously to assume all of its debt and indemnify the
Registrant for all known litigation.
At the present time, there are currently 100 million shares of common
stock outstanding and approximately 20 million warrants to purchase
common stock at prices ranging from $.01 per share to $.05 per share.
Registrant is also required to issue an additional 7 million shares to an
officer and shareholder of Registrant for common stock he tendered to
the Registrant as treasury stock in order to permit stock issuance for
the Agreement described above and other matters.
Certain information above contains forward-looking statements that
may involve risk and uncertainties. Registrant believes that its
expectations are based on reasonable assumptions. However, no
assurances can be given that its goals will be achieved. Factors that
could cause actual results to differ materially include, but are not
limited to, changes in federal, state and local regulations, new product
introductions by competitors and changes in technology.
Attachment:
MARKETING REPRESENTATIVE AGREEMENT
This MARKETING REPRESENTATIVE AGREEMENT (the
"Agreement") is entered into this 11th day of January, 1999 (the
"Starting Date") by and between (a) TELENERGY,
INCORPORATED, a Massachusetts corporation, with its principal
place of business at 288 Walnut Street, Newton, Massachusetts 02160
(the "Company") and (b) Aden Enterprises, Inc., and NETWorks
Direct, Inc.,with an address as set forth on the signature page hereof
(the "Marketing Representative").
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the
Marketing Representative hereby agree as follows:
1. Engagement of Marketing Representative.
1.1 Engagement and Acceptance. The Company
hereby engages the Marketing Representative to serve in the
capacity of a sales representative, and perform the services
generally described in Article 2 below. Subject to the terms
and conditions contained in this Agreement, the Marketing
Representative hereby accepts such engagement, agrees to
render the services described in Article 2 below, and agrees to
devote the Marketing Representative's best efforts, knowledge
and abilities to the performance of such services to and for
benefit of the Company.
1.2 Status as Independent Contractor. It is the
intention of the parties that the Marketing Representative be an
independent contractor and not an employee, agent, joint
venturer, or partner of the Company. Nothing in this
Agreement shall be interpreted or construed as creating or
establishing the relationship of employer and employee
between the Company and either the Marketing Representative
or any employee or agent of the Marketing Representative.
1.3 Non-Exclusive. Subject to the provisions of
Article 6 below, the Marketing Representative shall retain the
right to perform work for others during the term of this
Agreement so long as the Marketing Representative satisfies
the Marketing Representative's obligations to the Company
under this Agreement.
2. Scope of Marketing Representative's Services.
2.1 Services. The services of the Company to be
sold and promoted by the Marketing Representative include
the Company's package of household services, which include
but are not limited to, telecommunications, electrical and gas
services (collectively, with any additional services the
Company may sell, the "Telenergy Package"). The Telenergy
Package shall be marketed and sold as a complete package.
The individual components of the Telenergy Package may not
be marketed or sold separately without the prior written
consent of the Company.
2.2 Acceptance of Orders. All orders for the
Telenergy Package procured by the Marketing Representative
are subject to the reasonable acceptance or rejection by the
Company. Criteria for determining the Company's acceptance
of orders shall include, but not be limited to, the customer's
annual telecommunications and energy usage, geographic
location, creditworthiness and established payment history.
2.3 Marketing Materials. The Marketing
Representative shall only use the marketing or promotional
materials prepared and provided by the Company. The
Company may, in its sole discretion, provide marketing support
in the form of advertising, telemarketing and direct mail.
3. Term; Termination.
3.1 Term. Subject to the provisions contained in
Section 3.2 below, the Marketing Representative shall market
and sell the Telenergy Package during the period commencing
on the date hereof and terminating on the second anniversary
of the date hereof (hereinafter referred to as the "Term"). The
Term may be extended by agreement between the Company
and the Marketing Representative evidenced in writing.
3.2 Termination. Either party may, at any time,
terminate the Agreement upon delivery to the other party of a
thirty (30) day advance written notice thereof. Upon
termination, the Marketing Representative shall only be eligible
to receive the compensation specifically set forth in the
Agreement. Notwithstanding the above, the provisions of
Articles 6 and 8 below shall survive the termination of this
Agreement.
4. Compensations.
4.1 General. In consideration of the services to be
rendered by the Marketing Representative pursuant to Article 2
above, and subject to the provisions set forth in Section 6.2
below, the Company shall pay to the Marketing Representative
the commissions and fees as calculated and determined on
Schedule A attached hereto (collectively, the "Commissions");
provided, however, notwithstanding the foregoing, the
Marketing Representative shall have no right to receive, and
the Company shall have no obligation to pay, any Commission
for any Telenergy Package sold by the Marketing
Representative unless and until (a) the Company has actually
received full payment in cash for such Telenergy Package; and
(b) the Marketing Representative has fully and properly
complied with the provisions of Article 5 below with respect to
such Telenergy Package. As used in this Agreement, any
Commission which satisfies the requirements of clauses (a) and
(b) of this Section 4.1 is an "Earned Commission."
4.2 Payment of Earned Commissions. Each Earned
Commission shall be due and payable to the Marketing
Representative on the last day of the first month following the
month in which Company has actually received full payment in
cash for the Telenergy Package sold by the Marketing
Representative with respect to such Earned Commission.
4.3 No Reimbursement of Costs and Expenses.
The Marketing Representative shall pay all costs and expenses
associated with the Marketing Representative's sales and
marketing activities (including without limitation, all of its
administrative and overhead expenses).
4.4 No Other Benefits. The Marketing
Representative is an independent contractor and shall not be
entitled to any benefits, coverages or privileges, including,
without limitation, social security, unemployment, vacation,
medical or pension payments, indemnification rights or other
privileges made available to employees of the Company. The
Marketing Representative agrees that it will be solely
responsible for the payment of any taxes imposed upon the
compensation paid under this Agreement and that the
Company will have no obligation to compensate the Marketing
Representative or withhold for such taxes.
4.5 Customer's Choice of Programs. The Company
embarks upon multiple programs that provide benefits to
consumers. Marketing Representative acknowledges that
while the customer may be introduced to TelEnergy through
Marketing Representatives efforts, the customer, at his/her sole
discretion, may opt to participate in a different program at
some point after becoming a TelEnergy customer. In this case,
Marketing Representative may become ineligible for some or
all of the commissions from Customer. The Company will take
no action to entice or encourage any customer to switch from
one program to another.
5. Reporting of Customer Groups. The Marketing
Representative agrees to complete and submit to the Company a
prospect customer group form (the "Group Form," a copy of which is
attached as Schedule B) for each Customer Group (as hereinafter
defined) solicited by the Marketing Representative. Within five (5)
business days after the receipt of the Group Form, the Company shall
approve, modify or reject such Group Form. The Company shall not
be obligated to pay any Commission on the sale of Telenergy Package
to any Customer Group or member of a Customer Group until the
Marketing Representative has submitted the Group Form and such
form has been approved by the Company. A "Customer Group" shall
be defined as any company, organization, association, entity or the like
with at least 25 potential customers.
6. Special Covenants of the Marketing Representative.
6.1 In General. The Marketing Representative
acknowledges that: (a) during its engagement by the Company,
the Marketing Representative will have access to information
which is confidential and proprietary to the Company, its
affiliates or its customers and which is not readily available to
the public; and (b) the Company has invested substantial sums
to develop the business of the Company and would not enter
into this Agreement but for the covenants of the Marketing
Representative contained herein. In order to motivate the
Company further to enter into this Agreement, the Marketing
Representative hereby covenants with the Company, which
covenants shall survive termination of the Services of the
Marketing Representative hereunder and termination of this
Agreement, as follows:
6.1.1 Confidential Information. During and
after termination of this Agreement, the Marketing
Representative shall keep secret and retain in the
strictest confidence all confidential matters of the
Company or any affiliate of the Company, and of their
suppliers, clients, employees, agents and consultants,
including without limitation, "know-how", trade
secrets, client lists, operational methods, confidential
strategic or technical specifications, product research
and development data, marketing and sales materials,
inventions and research projects and other business and
financial affairs of the Company or any affiliate of the
Company (collectively "Confidential Information"),
learned by the Marketing Representative heretofore or
hereafter, and shall not disclose, directly or indirectly,
such Confidential Information to anyone or use the
same, directly or indirectly, for his own benefit or the
benefit of any third party, either during or after his
engagement by the Company, except (i) as required in
the course of performing the Marketing
Representative's duties hereunder; and (ii) for such
matters which may at that time be in the public domain
and no longer confidential by reason of the disclosure
of the same other than through the wrongful
participation of the Marketing Representative in such
disclosure. The Marketing Representative
acknowledges that Confidential Information is of
critical importance to the Company and a violation of
the provisions of this Section 6.1.1 would seriously and
irreparably impair and damage the business of the
Company and the Marketing Representative agrees to
keep all Confidential Information in a fiduciary capacity
for the benefit of the Company. The Marketing
Representative shall not, during any time thereafter, use
or disclose, directly or indirectly, any Confidential
Information with or to any person other than the
Company or authorized employees thereof at the time
of such disclosure, or such other persons to whom the
Marketing Representative has been specifically
instructed to make disclosure by the President of the
Company and in all such cases only to the extent
required in the course of the Marketing
Representative's service to the Company. The
Marketing Representative shall deliver promptly to the
Company on the termination of this Agreement, or at
any time the Company may request, all memoranda,
notes, records, reports, manuals and other documents
(and all copies thereof) relating to the business of the
Company, and all property associated therewith, which
the Marketing Representative may then possess or have
under his control.
6.1.2 Non-Competition. For a period
commencing on the Starting Date and terminating
twenty-four (24) months after termination of the
Company's engagement of the Marketing
Representative, for any reason or no reason, with or
without cause, the Marketing Representative shall not,
whether as an individual, partner, owner, shareholder,
director, officer, employee, agent, principal, trustee or
in any other ownership or agency capacity: (i) engage
or participate, directly or indirectly to provide any
services which are directly competitive with the
Telenergy Package or any component to the Telenergy
Package in New England; (ii) solicit any officer,
director or employee of the Company or any affiliate of
the Company, including any individual who was such at
any time during the term of this Agreement, to leave his
or her employment; or (iii) call upon, solicit, divert or
attempt to solicit or divert from the Company any of its
clients who were such at any time during the term of
this Agreement.
6.2 Remedies for Breach. If the Marketing
Representative commits a breach of any of the provisions of
this Article 6, the Marketing Representative agrees that (a) the
Marketing Representative shall have no right to receive, and
the Company shall have no obligation to pay, any Commission
for any Telenergy Package sold by the Marketing
Representative; and (b) the Company shall have, in addition to
all other rights and remedies at law or in equity, the right and
remedy to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach will cause
irreparable injury to the Company and that money damages
may not provide an adequate remedy to the Company.
6.3 Enforcement. If any of the covenants contained
in this Agreement or any part thereof is unenforceable because
of the duration of such provision or the geographic area or
scope of activities covered thereby, the parties agree that the
court making such determination shall have the power to
reduce the duration or geographic area or scope of activities of
such provision and, in its reduced form, such provision shall
then be enforceable.
6.4 Knowledge of Telenergy Package. The
Marketing Representative agrees to use its best efforts to
become knowledgeable in the telecommunications, natural gas,
heating oil and electric utility industries.
6.5 Reputation of the Company, The Marketing
Representative acknowledges that the success of the Company
and the Marketing Representative depends on the reputation of
the Company and the Marketing Representative agrees to not
intentionally or negligently engage in any business activity that
could harm the business reputation of the Company, any of the
Company's underlying service providers or the Company's
relationship with existing or potential customers.
7. [INTENTIONALLY LEFT BLANK]
8. Indemnification. The Marketing Representative shall
hold harmless and indemnify the Company against any costs, expenses
(including reasonable legal fees), judgments and any other liabilities, of
any nature or kind whatsoever arising out of or based upon: (a) the
Marketing Representative's failure to comply with any provision of this
Agreement; (b) the Marketing Representative's negligence or
malfeasance in the performance of any services hereunder or any other
negligence or malfeasance of the Marketing Representative for which a
claim has been asserted against the Company; (c) the Marketing
Representative's breach of any contract with a third party; or (d) the
Marketing Representative's misrepresentation of any material fact to
the Company or any other party. The indemnifications provided in this
Article 8 shall survive the termination of this Agreement.
9. Miscellaneous.
9.1 Prior Discussions. This Agreement sets forth
the entire understanding between the parties hereto with
respect to the subject matter hereof, and supersedes all
discussions and negotiations between the parties hereto, either
express or implied, concerning the transactions contemplated
herein, notwithstanding any custom, usage or oral agreement
or understanding to the contrary.
9.2 Binding Agreement. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and
their respective heirs, executors, legal representatives,
successors and permitted assigns, whether by merger,
consolidation, reorganization, sale of assets or otherwise.
9.3 Assignment and Subcontracting. This
Agreement may not be assigned without the prior written
consent of the other party. Furthermore, the sale and
marketing of the Telenergy Package to be provided hereunder
by the Marketing Representative may not be subcontracted,
delegated or performed by a successor to the Marketing
Representative without the prior written consent of the
Company. It is understood that this Agreement may be
assigned by the Company or any other organization which
succeeds to the business or assets of the Company by reason of
any sale, merger, consolidation or other similar transaction.
9.4 Notices. All notices required or permitted
hereunder shall be in writing and shall be deemed to have been
given upon: delivery in hand; delivery to a recognized
overnight delivery service that guarantees overnight delivery
(which shall include Federal Express or Express Mail) with
charges paid or to be paid by sender; or three (3) days after
depositing the same in the United States mail, postage prepaid,
certified, return receipt requested, and, in each case addressed
to the receiving party at its address set forth in the first
paragraph of this Agreement. Any party hereto may change its
address hereunder by giving notice of such change in
accordance with the foregoing provisions to the other party
hereto. The foregoing means of delivering notice shall not
preclude any party from providing notice by another means not
specifically listed herein, provided proof of the date and time of
such delivery can be properly and adequately established.
9.5 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original, but such counterparts together shall
constitute one and the same instrument.
9.6 Amendment and Waiver. This Agreement may
be amended, modified, superseded, cancelled, renewed or
extended and the terms or covenants hereby may be waived,
only by a written instrument signed by all of the parties hereto,
or in the case of a waiver, by the party waiving compliance.
The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by the
party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or
more instances, shall be deemed to be, or construed as, a
further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this
Agreement.
9.7 Headings; Use of Terms. Headings appearing
in this Agreement are intended for convenience only and shall
not be interpreted to be a part of this Agreement. The use of
the singular of terms in this Agreement which are defined in the
plural shall mean and refer to any one of them; and pronouns
used herein shall be deemed to include the singular and the
plural and all genders. The use of the connective "or" is not
intended to be exclusive; the term "may not" is intended to be
prohibitive and not permissive; use of "includes" and
"including" is intended to be interpreted as expansive and
amplifying and not as limiting in any way.
9.8 Dispute Resolution. In the event that any
dispute should arise between the parties hereto with respect to
any matter covered by this Agreement, the parties hereto shall
resolve such dispute in accordance with the procedures set
forth in this Section 9.8. The parties shall first use their best
efforts to resolve such dispute among themselves. If the
parties are unable to resolve the dispute within thirty (30)
calendar days after the commencement of efforts to resolve the
dispute, either party may submit the dispute to arbitration by
and under the rules of the American Arbitration Association.
Any arbitration pursuant to this Section shall be conducted in
Boston, Massachusetts. Any arbitration award may be entered
in and enforced by any court having jurisdiction thereover and
the parties hereby consent and commit themselves to the
jurisdiction of the courts of The Commonwealth of
Massachusetts for purposes of the enforcement of any
arbitration award.
9.9 Legal Fees and Expenses. If any party hereto
commences any action concerning the interpretation or
enforcement of this Agreement, the prevailing party in any such
action, whether through arbitration, litigation or otherwise,
shall be entitled to the payment of its reasonable attorneys fees
and costs by the other party.
9.10 Governing Law; Jurisdiction. This Agreement
is executed and delivered in The Commonwealth of
Massachusetts, and for all purposes shall be construed in
accordance with and governed by the laws of The
Commonwealth of Massachusetts, without giving effect to the
conflict of law provisions thereof.
9.11 Interpretation of Agreement; Severability.
Should any provision of this Agreement require interpretation
or construction, it is agreed by the parties hereto that the court
or other entity interpreting them shall not apply a presumption
that the provisions thereof shall be more strictly construed
against the party who itself or through its agents prepared the
same, it being agreed that the parties or their respective
attorneys and agents have fully participated in the preparation
and negotiation of all provisions of this Agreement. To the
extent permitted by law, the parties hereto waive any provision
of law which renders any provision of this Agreement, invalid
or unenforceable in any respect. If any provision of this
Agreement shall be held invalid or unenforceable, the
remainder of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed under seals by their duly authorized
representatives, on the date and year first above written.
TELENERGY, INCORPORATED
By: /s/___________________________
Christopher J. McKeown
President
Marketing Representative
/s/ Michael S. Luther
Aden Enterpries, Inc.
/s/ Michael S. Luther
` NETWorks Direct, Inc.
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