AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
SEPTEMBER 15, 1997
COMMISSION NO. 0-24256
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
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REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ENHANCED SERVICES COMPANY, INC.
(Exact name of registrant as specified in its charter)
COLORADO
(State of other jurisdiction of incorporation or
organization)
84-1075908
(I.R.S. Employer Identification Number)
16000 BARKERS POINT LANE
HOUSTON, TEXAS 77079
(Address of Principal Executive Offices)
WALL STREET FINANCIAL
1997 CONSULTING AND WARRANT COMPENSATION AGREEMENT
(Full title of the Plan)
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KENNETH DUCKMAN
ENHANCED SERVICES COMPANY, INC.
16000 BARKERS POINT LANE
HOUSTON, TEXAS 77079
(Name and address of agent for service)
Telephone number, including area code of agent for service:
(713) 556-5051
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Copy to:
JOSEPH GREENBERGER, ESQ.
GREENBERGER & FORMAN
1370 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-4602
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to to be price per offering registration
be registered registered share (1) price (1) fee
- ------------- ---------- --------- --------- ------------
Common Stock, 12,500(2) $3.00(3) $37,500 $125.00
$.001 par 12,500(2) $3.25(3) $40,625 $135.42
value 12,500(2) $3.75(3) $46,875 $156.25
12,500(2) $4.00(3) $50,000 $166.67
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$175,000 $583.34
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
(2) Reflects shares of common stock issuable upon exercise of the Company's
Common Stock Purchase Warrants issued under the Wall Street Financial
1997 Consulting and Warrant Compensation Agreement ("Warrants").
(3) Based on exercise price of the Warrants.
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PROSPECTUS
ENHANCED SERVICES COMPANY. INC.
50,000 Shares of Common Stock
($.001 Par Value)
TO BE ISSUED PURSUANT TO THE WALL STREET FINANCIAL
1997 CONSULTING AND WARRANT COMPENSATION AGREEMENT
This Prospectus is part of a Registration Statement which registers an
aggregate 50,000 shares of Common Stock, $.001 par value ("Common Stock") of
Enhanced Services Company, Inc. (the "Company") which may be issued, as set
forth herein, to Wall Street Financial ("WSF"), pursuant to common stock
purchase warrants ("Warrants") to purchase up to 50,000 shares of the Common
Stock of the Company. All of the Warrants were granted to WSF pursuant to the
Wall Street Financial 1997 Consulting and Warrant Compensation Agreement (the
"Agreement"). The Company has been advised by WSF that it may sell all or a
portion of its shares of Common Stock from time to time as follows: (a) block
trades in which the brokers or dealers so engaged will attempt to sell shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and (d) in privately negotiated transactions not involving a broker
or dealer. In effecting sales, brokers or dealers engaged to sell shares may
arrange for other brokers or dealers to participate. Brokers or dealers engaged
to sell shares will receive compensation in the form of commissions or discounts
in amounts to be negotiated by WSF immediately prior to each sale. The Company
will receive no proceeds from any sales of Common Stock by WSF. WSF and the
brokers and dealers through whom sales of the shares are made may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), and any profits realized by them on the sale of the
shares may be considered to be underwriting compensation.
No other person is authorized to give any information or make any
representation not contained or incorporated by reference in this Prospectus in
connection with the offer contained in this Prospectus, and, if given or made,
such other information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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This Prospectus does not constitute an offer to sell or the solicitation
of any offer to buy any security other than the securities covered by this
Prospectus, nor does it constitute an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized, or in which
the person making such offer or solicitation is not qualified to do so, or to
any person to whom it is unlawful to make such offer or solicitation.
The date of the Prospectus is September 11, 1997.
TABLE OF CONTENTS
Page
Available Information........................................................1
Information Incorporated by Reference........................................1
The Company..................................................................2
Wall Street Financial 1997 Consulting and
Warrant Compensation Agreement.............................................2
Warrent Terms and Provisions...........................................3
Federal Income Tax Effects.............................................4
Restrictions Under Securities Laws.....................................4
Legal Matters................................................................5
Experts......................................................................5
Statement on Indemnification.................................................6
<PAGE>
AVAILABLE INFORMATION
Enhanced Services Company, Inc. (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), and, in accordance therewith, files reports and other materials with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other materials filed by the Company can be inspected and copied (at
prescribed rates) at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such
reports, proxy statements and other information can also be inspected and copied
at the offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), with respect to an aggregate of 50,000 shares of the Company's
Common Stock, which may be issued to Wall Street Financial ("WSF"), a consultant
of the Company, upon the exercise of common stock purchase warrants issued to
said consultant, pursuant to a written consulting agreement. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information with respect to the
Company and the shares of the Common Stock offered by this Prospectus, reference
is made to the Registration Statement, including the exhibits thereto.
Statements in this Prospectus as to any document are not necessarily complete,
and where any such document is an exhibit to the Registration Statement or is
incorporated by reference herein, each such statement is qualified in all
respects by the provisions of such exhibit or other document, to which reference
is hereby made, for a full statement of the provisions thereof. A copy of the
Registration Statement, with exhibits, may be obtained from the Commission's
office in Washington, D.C. (at the above address) upon payment of the fees
prescribed by the rules and regulations of the Commission, or examined there
without charges.
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INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the SEC are incorporated herein by
reference:
1. The Company's latest Annual Report on Form 10-KSB for its fiscal year
ended November 30, 1996;
2. All other reports filed pursuant to Section 13 or 15(d) of the 1934 Act
since the end of the fiscal year covered buy the Annual report on Form 10-K
referred to in paragraph 1 above; and
3. The description of the Common Stock contained in the Company's
registration statement on Form 10-SB, filed under section 12 of the 1934 Act
including any amendment or report updating such description.
All reports and other documents subsequently filed by the Company pursuant
to sections 13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the termination
of the offering shall be deemed to be incorporated by reference herein and to be
a part hereof form th date of the filing of such reports and documents.
THE COMPANY HEREBY UNDERTAKES TO FURNISH WITHOUT CHARGE TO EACH PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON,
A COPY OF ANY OR ALL OF THE DOCUMENTS DESCRIBED ABOVE, OTHER THAN EXHIBITS TO
SUCH DOCUMENTS. REQUESTS SHOULD BE ADDRESSED TO MR. KENNETH DUCKMAN, PRESIDENT,
ENHANCED SERVICES COMPANY, INC., 16000 BARKERS POINT LANE, HOUSTON, TEXAS 77079,
TELEPHONE NUMBER (713) 556-5051.
THE COMPANY
The Company was incorporated under the laws of the State of Colorado on
March 16, 1987 as Crystal Venture Fund, Inc. The Company provides upgrade,
repair and maintenance and asset management services for users of portable
computers, as well as multimedia presentation development services. The
Company's principal executive offices are located at 16000 Barkers Point Lane,
Houston, Texas 77079, and its telephone number is (713) 556-5051.
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WALL STREET FINANCIAL ("WSF") 1997 CONSULTING
AND WARRANT COMPENSATION AGREEMENT
Effective July 7, 1997, the Laptop Solutions Inc.,("LSI) a wholly-owned
subsideary of the Company and Wall Street Financial entered into the Wall Street
Financial 1997 Consulting and Warrant Compensation Agreement (the "Agreement").
Under the terms of the Agreement, CBS will consult with and advise LSI with
respect to matters concerning: (i) investor relations; (ii) dissemination of
press releases and quarterly and annual reports; (iii) communications with
analysts; and (iv) potential acquisitions. The term of the Agreement began on
July 7, 1997, as of and will continue for a period of one year unless sooner
terminated as provided therein.
In consideration for its agreement to provide such services, pursuant to
the Agreement the Company issued to CBS, as a consulting fee, common stock
purchase warrants ("Warrants"), to purchase an aggregate of 50,000 shares of the
Company's Common Stock at $.01 per share, at exercise prices of $3.00, $3.25,
$3.75 and $4.00, with respect to 12,500, 12,500, 12,500 and 12,500 shares,
respectively. The Warrants were issued as of August 7, 1997, expire on August 6,
1998 and are exercisable in whole or part until then.
WARRANT TERMS AND PROVISIONS
All of the Warrants were issued pursuant to the Agreement and were not
issued pursuant to any program or plan being administered by either the Board of
Directors of the Company or any committee of the Board of Directors organized
for that purpose. The specific terms of the Warrants are as follows:
(a) WARRANT EXERCISE PRICES. The exercise prices per share of Common
Stock issuable or exercisable on the Warrants set forth above were
established by the Board of Directors based on negotiations with
reference to the average of the bid prices for the Company's Common
Stock as reported on the SmallCap Market of the National Association
of Securities Dealers, Inc. during early July, 1997, when the
Company and WSF concluded negotiations of the Warrants and the
Agreement, when such average price was in the $2.50 range.
(b) TERM OF WARRANTS. The Warrants may be exercised in whole or in part
at any time through August 6, 1998, unless the expiration date of
the Warrant and the term of the Consulting Agreement are extended by
the Company in writing to a later date.
(c) MANNER OF EXERCISE. WSF may exercise all or any whole number of such
Warrants for cash during the term of the Warrants.
(d) TRANSFERABILITY. The Warrants are not transferable by WSF without
the Company's prior written approval.
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(e) REDEMPTION. There are no redemption rights afforded to the Company
in connection with the Warrants.
(f) ADJUSTMENTS. The number of shares of Common Stock of the Company
purchasable upon exercise of the Warrants and the exercise price of
the Warrants are subject to adjustment upon the occurrence of
specified events primarily involving stock dividends, stock splits,
reorganizations, reclassifications, consolidations and mergers.
(g) NO RIGHT AS STOCKHOLDER. WSF is not, by virtue of ownership of the
Warrant, entitled to any rights whatsoever of a stockholder of the
Company.
FEDERAL INCOME TAX EFFECTS
A Warrant holder does not recognize taxable income on the date of the
grant of the Warrant, which is a non-statutory option, but recognizes ordinary
income generally at the date of exercise in the amount of the difference between
the Warrant exercise price and the fair market value of the common Stock on the
date of exercise. However, in the event that the holder is, or may become,
subject to the restrictions on resale of common stock under Section 16 of the
Securities Exchange Act of 1934, such person generally recognizes ordinary
income at the end of the six-month period following the date of exercise in the
amount of the difference between the option exercise price and the fair market
value of the common stock at the end of the six-month period. Nevertheless, such
holders may elect within 30 days after the date of exercise to recognize
ordinary income as of the date of exercise. The amount of ordinary income
recognized by the Warrant holder is deductible by the company in the year that
income is recognized. The foregoing is not intended to be a complete statement
of applicable law and WSF should rely on its own legal counsel with respect
thereto.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of any shares of Common Stock acquired upon the exercise of the
Warrants must be made in compliance with federal and state securities laws.
Officers, directors and 10% or greater stockholders of the Company, as well as
certain other persons or parties who may be deemed to be "affiliates" of the
Company under the Federal Securities Laws, should be aware that resales by
affiliates can only be made pursuant to an effective Registration Statement,
Rule 144 or any other applicable exemption. Officers, directors and 10% and
greater stockholders are also subject to the "short swing" profit rule of
Section 16(b) of the Securities Exchange Act of 1934. Section 16(b) of the
Exchange Act generally provides that if an officer, director or 10% and greater
stockholder sold any Common Stock of the Company acquired pursuant to the
exercise of a stock option, he would generally be required to pay any "profits"
resulting from the sale of the stock and receipt of the stock option. Section
16(b) exempts all warrant
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exercises from being treated as purchases and, instead, treats a warrant grant
as a purchase of the underlying security, which grant\purchase may be matched
with any sale of the underlying security within six months of the date of grant.
The foregoing is not intended to be a complete statement of applicable law and
WSF should rely on its own legal counsel with respect thereto.
TRANSFER AGENT
The Transfer Agent for the shares of common stock is the Corporate Stock
Transfer Co., 370 17th Street, Denver, Colorado 80202.
LEGAL MATTERS
Certain legal matters in connection with the securities offered hereby are
being passed upon for the Company by Greenberger & Forman, 1370 Avenue of the
Americas, New York, New York 10019-4602, counsel to the Company.
EXPERTS
The audited consolidated financial statements of the Company incorporated
by reference in this Prospectus have been so incorporated in reliance on the
report of Schumacher & Associates, Inc., independent certified public
accountants, given on the authority of said firm as experts in auditing and
accounting.
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<PAGE>
STATEMENT ON INDEMNIFICATION
Under provisions of the Company's Amended and Restated Articles of
Incorporation, any person made a party to any lawsuit by reason of being a
director or officer of the Company, or any parent or subsidiary thereof, shall
be indemnified by the Company to the full extent authorized by the Colorado
Corporation Code, as amended. Said Code was repealed on July 1, 1994 and was
replaced by articles 101-117 of the Colorado Business Corporation Act.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (c) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) The Registrant's Annual Report on Form 10-KSB for the fiscal year
ended November 30, 1994 and the Registrant's effective registration statement on
Form 10-SB;
(b) All other reports filed pursuant to Section 13 or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Registrant's Form
10-KSB referred to in (a) above.
(c) The class of securities to be offered hereby is registered under
Section 12 of the Exchange Act. A description of the Registrant's securities is
set forth in Item 11 of its Form 10-SB which is incorporated as a part of this
Registration Statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
a. Article VIII of Registrant's Amended and Restated Articles of
Incorporation provides:
The Corporation may and shall indemnify each director, officer and any employee
or agent of the Corporation, his heirs, executors and administrators, against
any and all expenses or liability reasonably incurred by him in connection with
any action, suit or proceeding to which he may be a party by reason of his being
or having been a director, officer, employee or agent of the Corporation to the
full extent required or permitted by the Colorado Corporation Code, as amended."
Said Code was repealed on July 1, 1994 and was replaced by articles 101-117 of
the Colorado Business Corporation Act.
b. Article 109 of the Colorado Business Corporation Act provides that:
7-109-101. DEFINITIONS. As used in this article:
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(1) "Corporation" includes any domestic or foreign predecessor entity of
the corporation in a merger, consolidation, or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee, fiduciary, or agent of another foreign or domestic corporation or
other person, or of an employee benefit plan. A director shall be considered to
be serving an employee benefit plan at the corporation's request if his duties
to the corporation also impose duties on or otherwise involve services by him to
the plan or to participants in or beneficiaries of the plan. "Director"
includes, unless the context requires otherwise, the estate or personal
representative of a director.
(3) "Expenses" includes counsel fees.
(4) "Liability" means the obligation incurred with respect to a proceeding
to pay a judgment, settlement, penalty, fine including an excise tax assessed
with respect to an employee benefit plan, or reasonable expenses.
(5) "Official capacity", when used with respect to a director, means the
office of director in a corporation, and, when used with respect to a person
other than a director, as contemplated in Section 7-109-107 means the office in
a corporation held by the officer or the employment or agency relationship
undertaken by the employee fiduciary, or agent on behalf of the corporation.
"Official capacity" does not include service for any other foreign or domestic
corporation or any other person or employee benefit plan.
(6) "Party" includes a person who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending or completed action, suit,
or proceeding, whether civil, criminal, administrative, or investigative and
whether formal or informal.
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7-109-102. AUTHORITY TO INDEMNIFY DIRECTORS. (1) Except as provided in
paragraph (4) of this section, a corporation may indemnify a person made a party
to a proceeding because the person is or was a director if:
(a) the person conducted himself in good faith;
(b) the person reasonably believed:
(I) In the case of conduct in an official capacity with the
corporation, that his conduct was in the corporation's best interests; or
(II) In all other cases, that his conduct was at least not opposed
to the corporation's best interests; and
(c) In the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of the participants in or
beneficiaries of the plan is conduct that satisfies the requirements of
subparagraph (II) of paragraph (b) of subsection (1) of this section. A
director's conduct with respect to an employee benefit plan for a purpose that
he did not reasonably believe to be in the interests of the participants in or
beneficiaries of the plan shall be deemed not to satisfy the requirements of
paragraph (a) of subsection (1) of this section.
(3) The termination of any proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent, is not of
itself determinative that the director did not meet the standard of conduct
described in this section.
(4) A corporation may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation;
or
(b) In connection with any proceeding charging improper personal
benefit to the director, whether or not involving action in his official
capacity, in which he was adjudged liable on the basis that he derived an
improper personal benefit proceeding.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of a corporation is limited to reasonable expenses
incurred in connection with the proceeding.
7-109-103. MANDATORY INDEMNIFICATION OF DIRECTORS. Unless limited by its
articles of incorporation, a corporation shall indemnify
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a person who was wholly successful, on the merits or otherwise, in defense of
any proceeding to which he was a party because the person is or was a director,
against reasonable expenses incurred by him in connection with the proceeding.
7-109-104. ADVANCE OF EXPENSES TO DIRECTORS.
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of the final
disposition of the proceeding if:
(a) The director furnishes the corporation a written affirmation of
his good-faith belief that he has met the standard of conduct described in
section 7-109-102;
(b) The director furnishes the corporation a written undertaking,
executed personally or on his behalf, to repay the advance if it is determined
that he did not meet such standard of conduct; and
(c) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this article.
(2) The undertaking required by paragraph (b) of subsection (1) of this
section shall be an unlimited general obligation of the director, but need not
be secured and may be accepted without reference to financial ability to make
repayment.
(3) Determinations and authorizations of payments under this section shall
be made in the manner specified in section 7-109-106.
7-109-105. COURT-ORDERED INDEMNIFICATION OF DIRECTORS. (1) Unless
otherwise provided in the articles of incorporation, a director who is or was a
party to a proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court considers necessary,
may order indemnification in the following manner:
(a) If it determines the director is entitled to mandatory indemnification
under section 7-109-103, the court shall order indemnification in which case the
court shall also order the corporation to pay the director's reasonable expenses
incurred to obtain court-ordered indemnification.
(b) If it determines that the director is fairly and reasonably entitled
to indemnification in view of all the relevant circumstances, whether or not he
met the standard of conduct set forth in section 7-109-102(1) or was adjudged
liable in the circumstances described in section 7-109-102(4), the court may
order such indemnification as the court deems proper; except that the
indemnification with respect to any
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proceeding in which liability shall have been adjudged in the circumstances
described in section 7-109-102(4) is limited to reasonable expenses incurred in
connection with the proceeding and reasonable expenses incurred to obtain
court-ordered indemnification.
7-109-106. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION OF
DIRECTORS. (1) A corporation may not indemnify a director under section
7-109-102 unless authorized in the specific case after a determination has been
made that indemnification of the director is permissible in the circumstances
because he has met the standard of conduct set forth in section 7-109-102. A
corporation shall not advance expenses to a director under section 7-109-104
unless authorized in the specific case after the written affirmation and
undertaking required by section 7-109-104(1)(a) and (1)(b) are received and the
determination required by Section 7-109-104(1)(c) has been made.
(2) The determinations required to be made by subsection (1) of this
section shall be made:
(a) By the board of directors by a majority vote of those present
at a meeting where a quorum is present, which quorum shall consist of directors
not parties to the proceeding or;
(b) If a quorum cannot be obtained, by a majority vote of a
committee of the board designated by the board, which committee shall consist of
two or more directors not parties to the proceeding; except that directors who
are parties to the proceeding may participate in the designation of directors
for the committee.
(3) If a quorum cannot be obtained and the committee cannot be established
under paragraph (b) of this section, or even if a quorum is obtained or a
committee designated, if a majority of the directors constituting such quorum or
committee so directs, the determination required to be made by subsection (1)
shall be made:
(a) By independent legal counsel selected by a vote of the board of
directors or the committee in the manner specified in paragraph (a) or (b) of
subsection (2) of this section or, if a quorum of the full board cannot be
obtained and a committee cannot be established, by independent legal counsel
selected by a majority vote of the full board; or
(b) By the shareholders.
(4) Authorization of indemnification and evaluation as to reasonableness
of expenses shall be made in the same manner as the determination that
indemnification is permissible; except that, if the determination that
indemnification is permissible is made by independent legal counsel,
authorization of indemnification and
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evaluation as to reasonableness of expenses shall be made by the body that
selected said counsel.
7-109-107. INDEMNIFICATION OF OFFICERS, EMPLOYEES, FIDUCIARIES, AND
AGENTS. Unless otherwise provided in the articles of incorporation:
(a) An officer is entitled to mandatory indemnification pursuant to
section 7-109-103 of this section and is entitled to apply for court-ordered
indemnification pursuant to section 7-109-105 in each case to the same extent as
a director;
(b) A corporation may indemnify or advance expenses to an officer,
employee, fiduciary or agent of the corporation who is not a director to the
same extent as to a director; and
(c) A corporation may also indemnify and advance expenses to an officer,
employee, fiduciary or agent of the corporation who is not a director to a
greater extent if not inconsistent with public policy, and if provided for by
its bylaws, general or specification of its shareholders or directors, or in a
contract.
7-109-108. INSURANCE. A corporation may purchase and maintain insurance on
behalf of a person who is or was a director, officer, employee, fiduciary, or
agent of the corporation and who, while a director, officer, employee,
fiduciary, or agent of the corporation is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, fiduciary, or
agent of any other foreign or domestic corporation or other person or of an
employee benefit plan, against any liability asserted against or incurred by him
in any such capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against the same liability
under 7-109-102, 7-109-103, or 7-109-107. Any such insurance may be procured
from any insurance company designated by the board of directors, whether such
insurance company is formed under the laws of this state or any other
jurisdiction of the United States or elsewhere, including any insurance company
in which the corporation has an equity or any other interest through stock
ownership or otherwise.
7-109-109. LIMITATION OF INDEMNIFICATION OF DIRECTORS. (1) a provision
treating a corporation's indemnification of, or advance of expenses to,
directors that is contained in its articles of incorporation or bylaws, in a
resolution of its shareholders or board of directors, or in a contract, except
an insurance policy, or otherwise, is valid only to the extent the provision is
not inconsistent with sections 7-109-101 to 7-109-108. If the articles of
incorporation limit indemnification or advance of expenses, indemnification and
advance of expenses are valid only to the extent not inconsistent with the
articles of incorporation.
(2) Sections 7-109-101 to 7-109-108 do not limit a corporation's power to
pay or reimburse expenses incurred by a director in connection
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with an appearance as a witness in a proceeding at a time when he or she has not
been made a named defendant or respondent in the proceeding.
7-109-110. NOTICE TO SHAREHOLDERS OF INDEMNIFICATION OF DIRECTOR. If a
corporation indemnifies or advances expenses to a director under this article in
connection with a proceeding by or in the right of the corporation, the
corporation shall give written notice of the indemnification or advance to the
shareholders with or before the notice of the next shareholders' meeting. If the
next shareholder action is taken without a meeting at the instigation of the
board of directors, such notice shall be given to the shareholders at or before
the time the first shareholder signs a writing consenting to such action.
c. Article 108 of the Colorado Business Corporation Act provides as
follows:
7-108-402. LIMITATION OF CERTAIN LIABILITIES OF DIRECTORS AND OFFICERS (1)
If so provided in the articles of incorporation, the corporation shall eliminate
or limit the personal liability of a director to the corporation or to its
shareholders for monetary damages for breach of fiduciary duty as a director;
except that any such provision shall not eliminate or limit the liability of a
director to the corporation or to its shareholders for monetary damages for any
breach of the director's duty of loyalty to the corporation or to its
shareholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts specified in section 7-108-403,
or any transaction from which the director directly or indirectly derived an
improper personal benefit. No such provision shall eliminate or limit the
liability of a director to the corporation or to its shareholders for monetary
damages for any act or omission occurring before the date when such provision
becomes effective.
(2) No director or officer shall be personally liable for any injury to
person or property arising out of a tort committed by an employee unless such
director or officer was personally involved in the situation giving rise to the
litigation or unless such director or officer committed a criminal offense in
connection with such situation. The protection afforded in this subsection (2)
shall not restrict other common-law protections and rights that a director or
officer may have. This subsection (2) shall not restrict the corporation's right
to eliminate or limit the personal liability of a director to the corporation or
to its shareholders for monetary damages for breach of fiduciary duty as a
director as provided in subsection (1) of this section.
<PAGE>
Item 8. EXHIBITS.
The following documents are filed as Exhibits to this Registration
Statement:
4(a) -- Wall Street Financial 1997 Consulting and Warrant Compensation
Agreement and Forms of Warrants
5 -- Opinion of Greenberger & Forman as to the validity of the
shares being registered
24.1 -- Consent of Greenberger & Forman
24.2 -- Consent of Schumacher & Associates, Inc., Certified Public
Accountants
25 -- Power of Attorney (following signature page of Registration
Statement)
Item 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to
include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 of Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-8
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purposes of determining any liability under the Act,
each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described in Item 6 or otherwise, the registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 11th day of
September, 1997.
ENHANCED SERVICES COMPANY, INC.
(Registrant)
By: S/KENNETH DUCKMAN
Kenneth Duckman, President
and Chief Executive
Officer
By: S/ROBERT SMITH
Robert Smith,
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE CAPACITY DATE
- --------- -------- ----
S/MICHAEL BERNARD
Michael Bernard Director September 10, 1997
S/KENNETH DUCKMAN
Kenneth Duckman Director September 10, 1997
S/JOHN MEANEY
John Meaney Director September 10, 1997
S/BILL S. MURSKI
Bill S. Murski Director September 9, 1997
S/BERTRAM PARISER
Bertram Pariser, Ph.D. Director September 11, 1997
S/RALPH LABARGE
Ralph LaBarge Director September 11, 1997
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<PAGE>
EXHIBIT 25
POWER OF ATTORNEY
We, the undersigned officers and directors of ENHANCED SERVICES COMPANY,
INC., hereby severally constitute and appoint Bertram Pariser, Ph.D., and
Kenneth Duckman and each of them (with full power to each of them to act alone),
our true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for us and in our stead, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and all documents relating thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing necessary or
advisable to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, we have executed this instrument on the dates set
forth below.
Date: September 10,1997 S/MICHAEL BERNARD
MICHAEL BERNARD
Date: September 10, 1997 S/KENNETH DUCKMAN
KENNETH DUCKMAN
Date: September 10, 1997 S/JOHN MEANEY
JOHN MEANEY
Date: September 9, 1997 S/BILL MURSKI
BILL S. MURSKI
Date: September 10, 1997 S/BERTRAM PARISER
BERTRAM PARISER, Ph.D.
Date: September 10, 1997 S/RALPH LABARGE
RALPH LABARGE
II-11
<PAGE>
INDEX TO EXHIBITS
NO. EXHIBIT PAGE
4(a) Wall Street Financial 1997 Consulting and Warrant Compensation II-13, 28
Agreement and Forms of Warrants
5 Opinion of Greenberger & Forman as to the validity of
the shares being registered II-29, 30
24.1 Consent of Greenberger & Forman II-31
24.2 Consent of Schumacher & Associates, Inc., Certified Public
Accountants II-32
25 Power of Attorney (following signature page of Registration
Statement) II-11
II-12
EXHIBIT 4 (a)
CONSULTING AND WARRANT COMPENSATION AGREEMENT
THIS AGREEMENT is executed and made effective this 7th day of July 1997,
between Laptop Solutions, Inc., a Texas corporation (the "Company"), and Wall
Street Financial ("Consultant").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the parties hereto agree as follows:
1. CONSULTATION.
The Company hereby retains the services of Consultant, as an independent
contractor, which retention is accepted and agreed to be performed by
Consultant, subject to and upon the terms and conditions set forth below.
2. TERM.
The term of this Agreement shall begin on the date hereof, and shall
continue for a period of 6 months (or such longer period as the Company and the
Consultant may agree in writing) unless earlier terminated by the Company for
Cause, as defined in Section 6.4 hereof.
3. CONSULTANT'S STATUS.
It is understood and agreed that Consultant shall be at all times and for
all purposes hereunder an independent contractor to the Company and under no
circumstances shall be deemed an employee, partner or joint venturer of or with
the Company. Consultant agrees that he shall not directly or indirectly imply or
represent to others, or permit another to imply or represent to others that
Consultant has any authority to act for, represent or bind the Company in any
matter by virtue of this Agreement.
4. SERVICES OF CONSULTANT.
4.1 Upon the request of the Company, Consultant shall consult with and
advise the Company with respect to matters concerning: (i) investor relations;
(ii) dissemination of quarterly and annual reports as filed by the Company with
the Securities and Exchange Commission; (iii)
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<PAGE>
communications with analysts; and (iv) potential acquisitions. Said services
shall not relate to any capital raising transaction.
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<PAGE>
4.2 Consultant agrees to exercise its best efforts, skill and
diligence in the performance of its services hereunder and shall perform all
services in a workmanlike fashion.
4.4 Throughout the term of this Agreement, Consultant shall provide
services to the Company on a part-time basis and may perform the same or similar
services for other persons or entities not inconsistent with its undertakings
hereunder.
5. COVENANTS AND ACKNOWLEDGMENTS OF CONSULTANT.
5.1 Consultant covenants and agrees for itself and its Affiliates
(hereinafter defined) that it will not, during the term of this Agreement or
thereafter, communicate, divulge or otherwise disclose to any other person,
firm, association, or corporation, or use, without the express written consent
of the Company, any Confidential Information (hereinafter defined) of the
Company.
5.2 For purposes of this Agreement, Confidential Information shall
mean all information relating to the Company or its subsidiaries provided to the
Consultant in writing except for that information contained (i) in its filings
with the Securities and Exchange Commission and prior press releases or (ii) in
a writing received by the Consultant from the Company which is not marked
"confidential."
5.3 Consultant shall not make an untrue statement of material fact
regarding the Company or omit to state a material fact in the judgment of
Consultant necessary in order to make any statement regarding the Company made
by the Consultant not misleading, PROVIDING, HOWEVER, that the Consultant shall
be entitled to rely on (i) reports filed by the Company with the Securities and
Exchange Commission, (ii) written press releases issued by the Company without
the Consultant's advice or consultation, and (iii) written press releases issued
by the Company with the Consultant's advice or consultation which it has, based
on reasonable investigation, reasonable grounds to believe and believes make no
untrue statement of a material fact and omit to state no material fact necessary
to make any statement made not misleading.
6. COMPENSATION.
6.1 As consideration for all services to be rendered by Consultant
pursuant to Section 4 above, the Company agrees to issue to Consultant Common
Stock Purchase Warrants ("Warrants") exercisable to purchase 50,000 shares of
Common Stock of the Company (25% at $3.00, 25% at $3.25, 25% at $3.75, 25% at
$4.00).
6.2 All 50,000 Warrants shall be exercisable for a period of 1 year
commencing upon the date hereof and expiring on August 7, 1998, unless the
expiration date of the Warrants shall be extended to a later date in writing by
the Company.
6.3 The warrant certificates (the "Warrant Certificates") to be
delivered pursuant to this Agreement shall be in the form set forth as Exhibit
A, with such appropriate insertions, omissions, substitutions and other
variations as required or permitted by this Agreement (Exhibit A to follow).
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<PAGE>
6.4 Notwithstanding the foregoing, the Warrants described in Section
6.1 above shall terminate and be of no further legal force or effect if, prior
to their exercise, this Agreement is terminated by the Company for Cause. For
the purposes of this Agreement, the term "for Cause" shall mean (i) Consultant
shall commit a material breach of this Agreement unless such breach shall be
cured by the Consultant within a period of thirty (30) days after written notice
by the Company of such breach, (ii) Consultant, or its officers, directors
and/or employees, are shown to have engaged in any act of fraud or dishonesty
detrimental to the Company, or its subsidiaries, or any of its customers or
clients, or (iii) Consultant has been grossly negligent in the performance of
its duties or responsibilities hereunder.
7. EXPENSES.
Consultant shall be responsible for all of its expenses related to
telephone, mail, printing, press releases, broker meetings, the expenses related
to running its operations, including its employees, affiliates, and general
administrative expenses. The Company will only be responsible for any specific
obligations it requests the Consultant to do which might include travel,
accommodations, broker presentations, etc. The Company will be responsible for
all expenses related to lodging for said Consultants to and from the Company's
different facilities and to and from any locations the Company specifically
requests Consultants to go to. Otherwise the Consultant will pay for all of its
expenses related to its work. The Company will be responsible for providing
copies of its normal printed information.
8. REGISTRATION RIGHTS.
8.1 On or before August 7, 1997, the Company shall cause to be
prepared and filed with the SEC a Registration Statement on Form S-8 or other
appropriate form registering all the shares of Common Stock issuable upon
exercise of the Warrants (the "Registration Statement").
8.2 In connection with the preparation and filing of the
Registration Statement, the Company agrees to (i) use its bests efforts to cause
such Registration Statement to become and remain effective; (ii) prepare and
file with the SEC such amendments and supplements to such Registration Statement
as may be necessary to keep such Registration Statement effective for the entire
period warrants remain outstanding; (iii) furnish to the Consultant such number
of copies of a prospectus, in conformity with the requirements of the Act, and
such other documents as Consultant may reasonably request in order to facilitate
the disposition of the shares of Common Stock; and (iv) use its best efforts, at
the Consultant's request, to register and qualify the shares of such states that
Consultant gives notice to the Company, provided, however, that the Company
shall not be required in connection therewith to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify, (ii) subject itself to any tax or obligation to collect any tax in any
such jurisdiction, or (iii) consent to general services or process in such
jurisdiction. The Consultant agrees to cooperate in all reasonable respects with
the preparation and filing of the Registration Statement.
II-16
<PAGE>
8.3 All fees and other expenses incurred in connection with the
registration of the shares of Common Stock underlying the Warrants shall be
borne by the Company, including, without limitation, fees of the Company's legal
counsel, Securities and Exchange Commission filing fees, printing costs,
accounting fees and costs, transfer agent fees and any other miscellaneous costs
and disbursements. The Consultant shall be liable for any and all underwriting
discounts, brokerage commissions or other fees or expenses incurred in
connection with the sale or other disposition by the Consultant of the shares of
Common Stock covered by the Registration Statement.
8.4 To the extent permitted by law, the Company will indemnify and
hold harmless Consultant, including its officers, directors, employees, agents,
and representatives, against any losses, claims, damages, liabilities, or
expenses, including without limitation attorney's fees and disbursements, to
which Consultant may become subject under the Act to the extent that such
losses, claims, damages or liabilities arise out of or are based upon any
violation by the Company of the Act or under the Securities Exchange Act of
1934, or any rule or regulation promulgated thereunder applicable to the
Company, or arises out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of any violation by the Company of any rule
or regulation promulgated under the Act applicable to the Company and relating
to action or inaction required of the Company in connection with such
Registration Statement; provided, however, that such indemnity contained in this
paragraph shall not apply to any loss, damage or liability to the extent that
same arises out of or is based upon an untrue statement or omission made in
connection with such Registration Statement in reliance upon and in conformity
with information furnished in writing expressly for use in connection with such
Registration Statement by Consultant.
8.5 Except for the obligations of the Company set forth in Sections
8.1 and 8.2 above, all obligations relating to compliance with applicable laws
and regulations governing the distribution of securities in connection with
Consultant's sale of common stock of the Company acquired pursuant to the
exercise of the Warrants shall be the sole obligation of the Consultant.
9. REPRESENTATIONS AND WARRANTIES OF THE CONSULTANT.
The Consultant hereby represents and warrants to the Company that
there are no agreements or binding obligations enforceable against the
Consultant which would be violated by its entering into this agreement or
providing the services to be provided hereunder.
10. INDEMNIFICATIONS.
10.1 The Consultant agrees to indemnify, defend and hold harmless
the Company, and officers, directors, shareholders, agents, employees (hereafter
"Affiliates") of the Company, attorneys, successors and assigns, from and
against, and pay or reimburse each of them for, any and all claims, losses,
damages, judgments, amounts paid in settlement, costs and legal, accounting or
other expenses that any of them may sustain or incur as a result of any
misrepresentation, any inaccuracy in, or any breach of, any warranty or
representation or any non-performance of any covenant or other obligation on the
part of the Consultant contained in this Agreement.
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<PAGE>
10.2 The Company agrees to indemnify, defend and hold harmless the
Consultant, and its Affiliates, attorneys, successors and assigns, from and
against, and pay or reimburse each of them for, any and all claims, losses,
damages, judgments, amounts paid in settlement, costs and legal, accounting or
other expenses that any of them may sustain or incur as a result of any
misrepresentation, any inaccuracy in, or any breach of, any warranty or
representation or any non-performance of any covenant or other obligation on the
part of the Company contained in this Agreement.
11. ATTORNEYS' FEES.
In the event there is any litigation or arbitration between the
parties concerning this Agreement, the successful party shall be awarded its
reasonable attorneys' fees and litigation costs, including the costs incurred in
the collection of any judgment.
12. NOTICES.
Any notice, request, instruction, or other document to be given
hereunder by any party hereto to any other party hereto shall be in writing and
delivered personally or by overnight courier or sent by facsimile transmission,
if to Consultant to:
Wall Street Financial
5353 Manhattan Circle, Suite 201
Boulder, CO 80303
Attention: David Lilja
with a copy to:
Gray, Plant, Mooty, Mooty & Bennett
3400 City Center
33 South 6th Street
Minneapolis, MN 55402
Attention: Lindley Branson, Esq.
if to the Company:
Laptop Solutions, Inc.
16000 Barkas Point Lane
Suite 100
Houston, TX 77079
Attention: Ken Duckman
with a copy to:
Company
Address
City, ST ZIP Attention:
or at such other address for a party as shall be specified by like notice.
II-18
<PAGE>
13. PARTIAL INVALIDITY.
If any provisions of this Agreement are in violation of any statute
or rule of law of any state or district in which it may be sought to be
enforced, then such provisions shall be deemed null and void only to the extent
that they may be in violation thereof, but without invalidating the remaining
provisions.
14. NON-ASSIGNABILITY.
14.1 The obligations of the Consultant to perform hereunder shall
not be assignable by it without prior written consent of the Company.
14.2 This Agreement shall be binding upon the respective parties
hereto and their successors and permitted assigns.
15. WAIVER.
No waiver of any breach of any one of the agreements, terms,
conditions or covenants of this Agreement by the Company shall be deemed to
imply or constitute a waiver of any other agreement, term, condition or covenant
of this Agreement. The failure of either party to insist on strict performance
of any agreement, term, condition or covenant, herein set forth, shall not
constitute or become construed as a waiver of the right of either or the other
thereafter to enforce any other default of such agreement, term, condition or
covenant; neither shall such failure to insist upon strict performance be deemed
sufficient grounds to enable either party hereto to forego or subvert or
otherwise disregard any other agreement, term, condition or covenant of this
Agreement.
16. GOVERNING LAW.
This Agreement and the rights and duties of the parties shall be
construed enforced in accordance with the laws of the State of Colorado.
17. FAX/COUNTERPARTS.
This Agreement may be executed by telex, telecopy or other facsimile
transmission, and such facsimile transmission shall be valid and binding to the
same extent as if it were an original. Further, this Agreement may be signed in
one or more counterparts, all of which when taken together shall constitute the
same document.
18. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof. There are no representations,
warranties, conditions or obligations except as herein specifically provided.
Any amendment or modification hereof must be in writing.
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<PAGE>
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
this Agreement effective on the day and year first above written.
ENHANCED SERVICES COMPANY
BY: _______________________________
KENNETH DUCKMAN, PRESIDENT
WALL STREET FINANCIAL
BY: _______________________________
DAVID LILJA, PRESIDENT
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<PAGE>
SERVICES PROVIDED BY WALL STREET FINANCIAL
1. Daily communication with existing brokers that are active in the Company's
stock.
2. Introducing our existing broker network to the Company.
3. Research and develop new relationships with brokers and investment banking
firms interested in retailing the Company's stock.
4. Development of a high quality investor package on the Company to be sent out
to brokers and institutional investors.
5. Communicate with research analyst(s) to write research reports on the Company
and distribute with investor package.
6. Develop a corporate profile and include in investor package.
7. Mail, at our own expense, investor packages to interested brokers for the
Company.
8. Meet with brokers in different parts of the country to introduce the Company.
9. Distribute news releases and updates from the Company.
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<PAGE>
ENHANCED SERVICES COMPANY, INC.
WARRANT CERTIFICATE
Warrant No. 97-4 Warrant for 12,500 shares of Common Stock,
$.001 par value
THIS WARRANT CERTIFIES THAT, for value received,) Wall Street Financial, a
Texas corporation ("WSF"), is the registered owner of a Warrant entitling WSF,
subject to the terms and conditions hereinafter set forth, to subscribe for,
purchase and receive 12,500 fully paid and non-assessable shares of Common
Stock, $.001 par value (the "Common Stock"), of Enhanced Services Company, Inc.,
a Colorado corporation (the "Company"), subject to modification and adjustment
as set forth herein, upon the presentation and surrender of this Warrant
Certificate at any time prior to the Expiration Date (as hereinafter defined),
at the business office of the Company, and upon payment therefor of the exercise
price ("Exercise Price") of $4.00 per share of Common Stock, subject to
modification and adjustment as set forth herein. If the rights represented
hereby shall not be exercised at or before the Expiration Date, this Warrant
shall become and be void without further force or effect, and all rights
represented hereby shall cease and expire.
This Warrant Certificate and the Warrant represented thereby are issued
pursuant to, and is subject in all respects to the terms and conditions set
forth in the Wall Street Financial 1997 Consulting and Warrant Compensation
Agreement between the Company and WSF dated July 7, 1997 (the "Agreement"), to
which reference is hereby made for the provisions hereof. Unless the context
indicates otherwise, capitalized terms used herein without definition shall have
the meaning ascribed to them in the Agreement.
1. TERM OF WARRANT. The rights evidenced by this Warrant Certificate may
be exercised in whole or in part at any time, commencing upon the issuance
hereof and ending at 5:00 o'clock p.m., Central Time on August 6, 1998 unless
the Company agrees in writing to a later date ("Expiration Date"), except that,
the Warrants shall terminate in the event that the Agreement is terminated for
Cause.
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<PAGE>
2. ADJUSTMENTS OF EXERCISE PRICE AND SHARES. If, and to the extent that,
the number of issued shares of Common Stock of the Company shall be increased or
reduced by change in par value, split up, reclassification, distribution of a
dividend payable in stock, or the like, the number of shares subject to the
Warrant and the exercise price per share shall be proportionately adjusted. If
the Company is reorganized or consolidated or merged with another corporation,
WSF shall be entitled to receive warrants covering shares of such reorganized,
consolidated or merged company in the same proportion, at an equivalent price
and subject to the same conditions as the Warrant. Upon the happening of any
event requiring an adjustment of the exercise price or the number of shares
subject to this Warrant hereunder, the Company shall forthwith give written
notice thereto to WSF stating the adjusted exercise price and the adjusted
number of shares purchasable upon the exercise hereof resulting from such event
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
3. MANNER OF EXERCISE. WSF may exercise all or any whole number of such
Warrants prior to the Expiration Date in the manner stated herein. WSF must
provide the Company with not less than two (2) business days' prior written
notice prior to the exercise of any of the Warrant. The Exercise price shall be
payable in lawful money of the United States of America. On exercise, this
Warrant Certificate, together with the purchase form provided herein duly
executed by WSF, plus payment of the Exercise Price in cash or by certified
check payable to the order of the Company, shall be surrendered to the Company.
Upon partial exercise of the rights evidenced by this Warrant Certificate, there
shall be issued to WSF a new Warrant Certificate evidencing any unexercised
rights.
4. RESERVATION OF COMMON STOCK. The Company agrees that the number of
shares of Common Stock sufficient to provide for the exercise of the Warrant
upon the basis herein set forth will at all times during the term of this
Warrant be reserved for the exercise thereof.
5. ISSUANCE OF COMMON STOCK UPON EXERCISE. The Company, at its expense,
shall cause to be issued, as soon as practicable, but not later than ten (10)
days after exercise of this Warrant, a certificate or certificates in the name
of WSF reflecting the number of shares of Common Stock to which WSF is entitled
upon such exercise. All shares of Common Stock or other securities delivered
upon the exercise of the Warrants shall be validly issued, fully paid and
non-assessable.
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<PAGE>
6. NO RIGHT AS STOCKHOLDER. WSF is not, by virtue of ownership of the
Warrant, entitled to any rights whatsoever of a stockholder of the Company.
7. REDEMPTION. The Company shall not have the right to redeem this
Warrant.
8. ASSIGNMENT. This Warrant MAY NOT be transferred or assigned by WSF
without the Company's prior written approval (which, in its absolute discretion,
it may decline), and any purported transfer or assignment made without the
Company's prior written approval shall be void.
ENHANCED SERVICES COMPANY, INC.
Date: August 7, 1997 By: ________________________________
Kenneth Duckman, President
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<PAGE>
II-25
<PAGE>
ENHANCED SERVICES COMPANY, INC.
WARRANT CERTIFICATE
Warrant No. 97-1 Warrant for 12,500 shares of Common Stock,
$.001 par value
THIS WARRANT CERTIFIES THAT, for value received,) Wall Street Financial, a
Texas corporation ("WSF"), is the registered owner of a Warrant entitling WSF,
subject to the terms and conditions hereinafter set forth, to subscribe for,
purchase and receive 12,500 fully paid and non-assessable shares of Common
Stock, $.001 par value (the "Common Stock"), of Enhanced Services Company, Inc.,
a Colorado corporation (the "Company"), subject to modification and adjustment
as set forth herein, upon the presentation and surrender of this Warrant
Certificate at any time prior to the Expiration Date (as hereinafter defined),
at the business office of the Company, and upon payment therefor of the exercise
price ("Exercise Price") of $3.00 per share of Common Stock, subject to
modification and adjustment as set forth herein. If the rights represented
hereby shall not be exercised at or before the Expiration Date, this Warrant
shall become and be void without further force or effect, and all rights
represented hereby shall cease and expire.
This Warrant Certificate and the Warrant represented thereby are issued
pursuant to, and is subject in all respects to the terms and conditions set
forth in the Wall Street Financial 1997 Consulting and Warrant Compensation
Agreement between the Company and WSF dated July 7, 1997 (the "Agreement"), to
which reference is hereby made for the provisions hereof. Unless the context
indicates otherwise, capitalized terms used herein without definition shall have
the meaning ascribed to them in the Agreement.
1. TERM OF WARRANT. The rights evidenced by this Warrant Certificate may
be exercised in whole or in part at any time, commencing upon the issuance
hereof and ending at 5:00 o'clock p.m., Central Time on August 6, 1998 unless
the Company agrees in writing to a later date ("Expiration Date"), except that,
the Warrants shall terminate in the event that the Agreement is terminated for
Cause.
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<PAGE>
2. ADJUSTMENTS OF EXERCISE PRICE AND SHARES. If, and to the extent that,
the number of issued shares of Common Stock of the Company shall be increased or
reduced by change in par value, split up, reclassification, distribution of a
dividend payable in stock, or the like, the number of shares subject to the
Warrant and the exercise price per share shall be proportionately adjusted. If
the Company is reorganized or consolidated or merged with another corporation,
WSF shall be entitled to receive warrants covering shares of such reorganized,
consolidated or merged company in the same proportion, at an equivalent price
and subject to the same conditions as the Warrant. Upon the happening of any
event requiring an adjustment of the exercise price or the number of shares
subject to this Warrant hereunder, the Company shall forthwith give written
notice thereto to WSF stating the adjusted exercise price and the adjusted
number of shares purchasable upon the exercise hereof resulting from such event
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
3. MANNER OF EXERCISE. WSF may exercise all or any whole number of such
Warrants prior to the Expiration Date in the manner stated herein. WSF must
provide the Company with not less than two (2) business days' prior written
notice prior to the exercise of any of the Warrant. The Exercise Price shall be
payable in lawful money of the United States of America. On exercise, this
Warrant Certificate, together with the purchase form provided herein duly
executed by WSF, plus payment of the Exercise Price in cash or by certified
check payable to the order of the Company, shall be surrendered to the Company.
Upon partial exercise of the rights evidenced by this Warrant Certificate, there
shall be issued to WSF a new Warrant Certificate evidencing any unexercised
rights.
4. RESERVATION OF COMMON STOCK. The Company agrees that the number of
shares of Common Stock sufficient to provide for the exercise of the Warrant
upon the basis herein set forth will at all times during the term of this
Warrant be reserved for the exercise thereof.
5. ISSUANCE OF COMMON STOCK UPON EXERCISE. The Company, at its expense,
shall cause to be issued, as soon as practicable, but not later than ten (10)
days after exercise of this Warrant, a certificate or certificates in the name
of WSF reflecting the number of shares of Common Stock to which WSF is entitled
upon such exercise. All shares of Common Stock or other securities delivered
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upon the exercise of the Warrants shall be validly issued, fully paid and
non-assessable.
6. NO RIGHT AS STOCKHOLDER. WSF is not, by virtue of ownership of the
Warrant, entitled to any rights whatsoever of a stockholder of the Company.
7. REDEMPTION. The Company shall not have the right to redeem this
Warrant.
8. ASSIGNMENT. This Warrant MAY NOT be transferred or assigned by WSF
without the Company's prior written approval (which, in its absolute discretion,
it may decline), and any purported transfer or assignment made without the
Company's prior written approval shall be void.
ENHANCED SERVICES COMPANY, INC.
Date: August 7, 1997 By: _________________________________
Kenneth Duckman, President
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EXHIBIT 5
GREENBERGER & FORMAN
ATTORNEYS AT LAW
1370 Avenue of the Americas
New York, New York 10019-4602
-------
TELEPHONE: (212) 7574001
TELECOPIER : (212) 757-4053
September 11, 1997
Securities and Exchange Commission
450 Fifth Street Northwest
Washington, D.C. 20549
Re: S.E.C. Registration Statement
on Form S-8 of 65,000 Shares
of Common Stock of Enhanced Services Company, Inc.
COMMISSION FILE NO. 0-24256
Ladies and Gentlemen:
We have acted as counsel to Enhanced Services Company, Inc. (the
"Company") in connection with a Registration Statement to be filed with the
United States Securities and Exchange Commission, Washington, D.C., pursuant to
the Securities Act of 1933, as amended, covering the registration of the
aggregate of 65,000 shares of the Company's $.001 par value Common Stock (the
"Common Stock") which may be issued to Creative Business Strategies, Inc.
("CBS"), a consultant to the Company, pursuant to the Creative Business
Strategies, Inc. 1997 Consulting and Warrant Compensation Agreement (the "CBS
Agreement"), under Common Stock Purchase Warrants exercisable to purchase up to
65,000 shares of the Company's Common Stock.
As a basis of our opinion expressed below, we have examined such
records of the Company, such certificates of public officials, and such other
documents as we have deemed relevant and necessary. We have assumed the
conformity to the originals of all copies and the authenticity of all originals.
As to various questions of fact to our material, we have relied, after due
investigation, upon inquiries made by us of an officer or officers of the
Company.
Based upon the foregoing, we are of the opinion as follows:
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1. The Company has been duly incorporated and organized under the
laws of the State of Colorado and is validly existing as a corporation in good
standing under the laws of that state.
2. The Company's authorized capital consists of Twenty Million
(20,000,000) shares of Capital Stock of the Company, of which 15,000,000 shares
are designated Common Stock having a par value of $.001 per share and of which
5,000,000 are designated preferred stock, having a par value of $.001 per share.
3. The 65,000 shares of the Company's Common Stock proposed to be
issued pursuant to the exercise of Warrants granted under the CBS Agreement
will, upon the exercise of such Warrants and the payment of the warrant exercise
price pursuant to the terms thereof and such Warrants as more fully described in
the Registration Statement, be duly and validly authorized, legally issued,
fully paid and nonassessable.
Very truly yours,
GREENBERGER & FORMAN
By:S/JOSEPH GREENBERGER
Joseph Greenberger
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EXHIBIT 24.1
GREENBERGER & FORMAN
ATTORNEYS AT LAW
1370 Avenue of the Americas
New York, New York 10019-4602
-------
TELEPHONE: (212) 7574001
TELECOPIER : (212) 757-4053
September 11, 1997
Securities and Exchange Commission
450 Fifth Street Northwest
Washington, D.C. 20549
Re: S.E.C. Registration Statement
on Form S-8 of 65,000 Shares
of Common Stock of Enhanced Services Company, Inc.
Commission File No. 0-24256
Ladies and Gentlemen:
We hereby consent to the inclusion of our opinion regarding the
legality of the securities being registered by the Registration Statement to be
filed with the United States Securities and Exchange Commission, Washington, DC,
pursuant to the Securities Act of 1933, as amended, by Enhanced Services
Company, Inc., a Colorado corporation, in connection with its offering of up to
65,000 shares of its common stock which may be issued pursuant to the Warrants
granted under the Creative Business Strategies, Inc. 1997 Consultant and Warrant
Compensation Agreement, as more fully described in such Registration Statement.
We further consent to the reference in such Registration Statement
to our having given such opinion.
Very truly yours,
GREENBERGER & FORMAN
By:
Joseph Greenberger
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EXHIBIT 24.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this registration
statement of Enhanced Services Company, Inc. on Form S-8 or our report appearing
in and incorporated by reference in the Annual report on Form 10-KSB, as
amended, of Enhanced Services Company, Inc. For the fiscal year ended November
30, 1996. We also consent to the reference to us under the heading "Experts" in
the Prospectus constituting part of this Registration statement.
_____________________________
SCHUMACHER & ASSOCIATES, INC.
Denver, Colorado
September 10, 1997
