<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
NOVEMBER 16, 1998
COMMISSION NO. 0-24256
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
------------
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
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)
3415 S. SEPULVEDA BOULEVARD
LOS ANGELES, CALIFORNIA 90034
(Address of Principal Executive Offices)
CONSULTING AND COMPENSATION AGREEMENT
FOR
ROLLING ROCK CAPITAL CORPORATION
(Full title of the Plan)
------------
ENHANCED SERVICES COMPANY, INC.
3415 S. SEPULVEDA BOULEVARD
LOS ANGELES, CALIFORNIA 90034
(Name and address of agent for service)
Telephone number, including area code of agent for service:
(310) 397-3003
------------
Copy to:
JUSTIN S. WALKER, ESQ.
3415 S. SEPULVEDA BOULEVARD
LOS ANGELES, CALIFORNIA 90034
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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
- ------------- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Common Stock, 161,000(2) $ 0.60(3) $ 96,600 $ 28.50
$.001 par
value
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
(2) Reflects shares of common stock issuable under the Rolling Rock Capital
Corporation Consulting Agreement.
(3) Based on closing bid price of Company Common Stock on October 8, 1998.
<PAGE> 3
PROSPECTUS
ENHANCED SERVICES COMPANY, INC.
161,000 SHARES OF COMMON STOCK
($.001 Par Value)
TO BE ISSUED PURSUANT TO ROLLING ROCK CAPITAL CORPORATION
CONSULTING AGREEMENT
This Prospectus is part of a Registration Statement which registers an
aggregate 161,000 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 Rolling Rock Capital Corporation ("RR") pursuant to a
consulting Agreement. The Company has been advised by RR that they may sell all
or a portion of their respective 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 RR, as
the case may be, immediately prior to each sale. The Company will receive no
proceeds from any sales of Common Stock by RR 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.
- -------------------------
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.
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 November 5, 1998.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
AVAILABLE INFORMATION........................................................1
INFORMATION INCORPORATED BY REFERENCE........................................2
THE COMPANY..................................................................3
ROLLING ROCK CAPITAL CORPORATION CONSULTING AGREEMENT........................3
FEDERAL INCOME TAX EFFECTS...................................................4
RESTRICTIONS UNDER SECURITIES LAWS...........................................4
TRANSFER AGENT...............................................................4
LEGAL MATTERS................................................................4
EXPERTS .....................................................................4
STATEMENT ON INDEMNIFICATION.................................................5
</TABLE>
<PAGE> 5
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 161,000 Shares of the Company's Common
Stock, which may be issued to Rolling Rock Capital Corporation, consultant of
the Company, 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.
1
<PAGE> 6
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, 1997;
2. All other reports filed pursuant to Section 13 or 15(d) of the 1934
Act since the end of the fiscal year covered by the Annual report on Form 10-K
referred to in item 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 the 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 ENHANCED SERVICES COMPANY, INC., 3415
S. SEPULVEDA BOULEVARD, LOS ANGELES, CA 90034, TELEPHONE NUMBER, ATTENTION:
SECRETARY-TREASURER (310) 397-3003.
2
<PAGE> 7
THE COMPANY
The Company was incorporated under the laws of the State of Colorado on March
16, 1987 as Crystal Venture Fund, Inc., and thereafter changed its name to
Enhanced Services Company, Inc. The Company's business is principally focused on
providing an Internet Strategy that consolidates under a single flexible
corporate umbrella, Web-based advertising sales and technology, electronic
commerce and on-line shopping services. The Company also 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 3415 S. SEPULVEDA BOULEVARD,
LOS ANGELES, CALIFORNIA 90034, and its telephone number is (310) 397-3003.
ROLLING ROCK CAPITAL CORPORATION, CONSULTING AGREEMENT
Effective October 8,1998, the Company entered into the Consulting Agreement with
RR. Under the terms of the respective Agreement, RR will provide consulting
services with respect to matters concerning strategic planning and marketing.
The term of the Agreement shall commence on October 8,1998, and will continue
for a period of one year.
In consideration for the respective agreement to provide services, pursuant to
the Agreement, the Company issued to RR as a consulting fee, 161,000 Shares of
the Company's Common Stock at $.001 par value.
3
<PAGE> 8
FEDERAL INCOME TAX EFFECTS
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 Warrant 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 RR should rely
on their legal counsel with respect thereto.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of any shares of Common Stock acquired 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 resale's 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 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 RR should rely on
their 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 Justin S. Walker, General Counsel, Enhanced
Services Co., Inc., 3415 S. Sepulveda Boulevard, Los Angeles, California 90034.
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.
4
<PAGE> 9
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.
5
<PAGE> 10
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, 1997 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:
(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
II-1
<PAGE> 11
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.
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:
II-2
<PAGE> 12
(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 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
II-3
<PAGE> 13
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 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 evaluation as to reasonableness of expenses
shall be made by the body that selected said counsel.
II-4
<PAGE> 14
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 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.
II-5
<PAGE> 15
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. 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.
II-6
<PAGE> 16
Item 8. EXHIBITS.
The following documents are filed as Exhibits to this Registration Statement:
4(a) -- Rolling Rock Capital Corporation Consulting Agreement
5 -- Opinion of Justin S. Walker, Esq. as to the validity of the shares being
registered
24.1 -- Consent of Justin S. Walker, Esq.
25 -- Power of Attorney (following signature page of Registration Statement)
Item 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(i) 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.
(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.
II-7
<PAGE> 17
(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-8
<PAGE> 18
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 Los Angeles, State of California, on the 16th
day of November, 1998.
ENHANCED SERVICES COMPANY, INC. (Registrant)
By: /s/ JUSTIN WALKER
----------------------------------
Justin Walker, Vice President &
General Counsel
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:
/s/ JOSEPH SEARLES Date: November 5, 1988
- ------------------------ ---------------------------------------
Joseph Searles
/s/ KEITH MONTGOMERY Date: November 5, 1988
- ------------------------ ---------------------------------------
Keith Montgomery
/s/ PAUL MESSINA Date: November 5, 1988
- ------------------------ ---------------------------------------
Paul Messina
II-9
<PAGE> 19
POWER OF ATTORNEY
We, the undersigned directors of ENHANCED SERVICES COMPANY, INC.,
hereby severally constitute and appoint Robert Smith and Justin Walker 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.
/s/ JOSEPH SEARLES Date: November 5, 1988
- ------------------------ ---------------------------------------
Joseph Searles
/s/ KEITH MONTGOMERY Date: November 5, 1988
- ------------------------ ---------------------------------------
Keith Montgomery
/s/ PAUL MESSINA Date: November 5, 1988
- ------------------------ ---------------------------------------
Paul Messina
II-10
<PAGE> 20
INDEX TO EXHIBITS
NO. EXHIBIT PAGE
4(a) Rolling Rock Capital Corporation Consulting Agreement
5 Opinion of Justin S. Walker, Esq. as to the validity of the shares
being registered
24.1 Consent of Justin S. Walker, Esq.
25 Power of Attorney (following signature page of Registration Statement)
II-11
<PAGE> 1
EXHIBIT-4(a)
CONSULTING AGREEMENT
AGREEMENT made this 8th day of October, 1998, by and between ROLLING ROCK
CAPITAL CORPORATION, a corporation having its principal place of business at
73255 El Paseo, Suite 11, Palm Desert, California 92260, hereinafter referred
to as the "Consultant", and ENHANCED SERVICES COMPANY, INC., a corporation,
having its principal place of business at 3415 South Sepulveda Boulevard, Suite
500, Los Angeles, CA 90034, hereinafter referred to as "Company".
WHEREAS, Consultant provides marketing and related services to public and
private corporations;
WHEREAS, the Company desires to engage the services of the Consultant for
purposes of creating and executing a marketing program to enhance the exposure
of the Company to the financial community;
WHEREAS, Consultant wishes to accept such engagement; and
WHEREAS, the parties desire to set forth their respective rights, duties and
obligations to each other in writing;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein the parties agree as follows:
1. OBLIGATIONS OF CONSULTANT
1.1 Consultant will review the Company's current business and marketing
plan and advise the Company as to Consultant's suggested changes.
1.2 Consultant will also advise the Company with respect to strategic
planning, developments in the Internet and Electronic Commerce sector,
and mergers and acquisitions.
2. COMPENSATION AND EXPENSES
2.1 Contractor has agreed to accept 161,000 shares of the Company's Common
Stock as full compensation, upon execution of this Agreement. All
shares are immediately registered.
3. TERM OF CONTRACT, TERMINATION
3.1 The term of this Agreement shall be for a period of One (1) year
commencing on the day of date of execution of this Agreement and
terminating One (1) year thereafter, unless renewed or extended in
writing by the parties Thirty (30) days' prior to its termination.
4. OBLIGATIONS OF THE COMPANY
4.1 The Company acknowledges that all persons introduced to the Company
either in person, verbally, in writing or by referral, are the
exclusive contacts, leads and clients of the Contractor.
4.2 The Company represents and warrants that all documents, financial
statements, filings and marketing materials, and any other material
provided to Contractor regarding the Company or its operations, will
be true and accurate, and that the Company will promptly notify
Contractor of any change in any of the material.
1
<PAGE> 2
4.3 Neither Contractor nor the Company may bind one another
contractually, except for the clauses contained herein.
4.4 The Company shall identify Contractor absolutely with regard to any
and all actions of demand made by any person or entity in relation to
the contents of the materials and information provided by the Company.
5. CONFIDENTIALITY
5.1 The parties hereto acknowledge that they may, during the course of
their performance of their obligations under this agreement, gain
access to, or knowledge of confidential or proprietary information
regarding another party, as well as trade secrets belonging to another
party, including the means and methods by which a party conducts its
business operations.
5.2 All parties therefore agree that they will at all times keep
absolutely secret and confidential and that they will not directly or
indirectly disclose to any person at any time or make any authorized
use of any parties confidential information, proprietary information,
or trade secrets, including the means and methods by which the parties
conduct their business operations.
6. DEFAULT
6.1 Upon a breach of any of the terms of this Agreement by one of the
parties hereto ("the defaulting party") the other party ("the
non-defaulting party") shall give written notice of such breach to the
defaulting party giving such party Seven (7) days to remedy such
breach.
6.2 If the breach is not remedied within the Seven (7) day period
aforesaid then the non-defaulting party shall in addition to its other
legal rights be entitled to terminate this Agreement.
7. TERMINATION
7.1 Either party shall be entitled to terminate this Agreement if one of
the parties commits or permits any one or more of the following acts
which will constitute a material breach of this Agreement:
7.1.1 The filing or failure to consent within Ten (10) days of
service any bankruptcy petition.
7.1.2 The liquidation or dissolution of any party.
7.1.3 The appointment of a voluntary administrator, receiver, for
any party.
7.1.4 Making an assignment for the benefit of creditors or making
any composition or arrangement with such creditors.
7.1.5 The violation of any law, ordinance, rule or regulation of any
government authority in connection with the services provided
herein, the operation of the Company, or the materials to be
distributed hereunder.
2
<PAGE> 3
8. ASSIGNMENT
8.1 This Agreement shall not be assigned by either party without the
prior written consent of the other party.
9. CHOICE OF LAW
9.1 All disputes concerning the validity, interpretation, or performance
of the Agreement and any of its terms or provisions, or of any
rights or obligations of the parties hereto, shall be governed by
and resolved in accordance with the laws of the State of California.
10. ARBITRATION
10.1 Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, including without limitation, any
claim that this Agreement, or any part thereof, is invalid, illegal
or otherwise voidable or void, shall be submitted to arbitration in
accordance with the Commercial Rules of the American Arbitration
Association; provided, however that this clause shall not be
construed to limit or to preclude either party from bringing any
action in any court of competent jurisdiction for injunctive or
other provisional relief as necessary or appropriate. The
arbitration shall be conducted in California, or at the office of
the American Arbitration Association, which is closer to said
location. Any award or determination of the arbitration tribunal
shall be final, non-appealable, and conclusive upon the parties, and
judgement thereon may be entered by any court of competent
jurisdiction.
10.2 ATTORNEY'S FEES. If any arbitration or other legal action is
initiated by either of the parties hereto, the prevailing party
shall be entitled to recover from the other party reasonable
attorney's fees in addition to any other relief that may be awarded.
11. NOTICES
11.1 All written notices permitted or required by the provisions of the
Agreement shall (unless otherwise provided) be deemed so delivered
when actually delivered by hand or when placed in United States Mail
by Registered Mail or Certified Mail, Return Receipt Requested,
postage prepaid and addressed to the following address.
If to Zulu: Enhanced Services Company, Inc.
3415 South Sepulveda Boulevard
Suite 500
Los Angeles, CA 90034
Attn: Justin Walker, Esq.
Fax No. (310) 397-6132
With a copy to: Enhanced Services Company, Inc.
3415 South Sepulveda Boulevard
Suite 500
Los Angeles, CA 90034
Attn: Chief Executive Officer
Fax No. (310) 397-6132
3
<PAGE> 4
If to Client: Rolling Rock Capital Corporation
73255 El Paseo
Suite 11
Palm Desert, California 92260
Attn: CEO
Fax No.:
12. WAIVER AND DELAY
12.1 No waiver by either party of any breach or series of breaches of
defaults in performance by the other party, and no failure, refusal or
neglect of either party to exercise any right, power or option given
to it hereunder or to insist upon strict compliance with or
performance of either party's obligations under this Agreement, shall
constitute a waiver of the provisions of this Agreement with respect
to any subsequent breach thereof or a waiver by either party of its
right at any time thereafter to require exact and strict compliance
with the provisions thereof.
13. SUCCESSOR AND ASSIGNS
13.1 This Agreement shall be binding upon and incure to the benefit of the
successors and assigns of the parties hereto, subject to the
restrictions on assignment contained herein.
14. ENTIRE AGREEMENT
14.1 This Agreement contains all of the terms and conditions agreed upon by
the parties hereto with reference to the subject matter hereof. No
other Agreements, oral or otherwise, shall be deemed to exist or to
bind either of the parties hereto, and all prior agreements and
understandings are superseded hereby. This Agreement can not be
modified or changed except by written instrument signed by both of the
parties hereto.
15. TITLES FOR CONVENIENCE
15.1 Titles used in this Agreement are for convenience only and shall not
be deemed to affect the meaning or construction of any of the terms,
provisions, covenants, or conditions of this Agreement.
16. SEVERABILITY
16.1 Nothing contained in this Agreement shall be construed as requiring
the commission of any act contrary to law. Whenever there is any
conflict between any provision of this Agreement and any present or
future statute, law, ordinance or regulation contrary to which the
parties have no legal right to contract, the latter shall prevail, but
in such event the provision of this Agreement thus affected shall be
curtailed and limited only to the extent necessary to bring it within
the requirements of the law. In the event that any part, article,
paragraph, sentence or clause of this Agreement shall be held to be
indefinite, invalid or otherwise unenforceable, the indefinite invalid
or unenforceable
4
<PAGE> 5
provisions shall be deemed deleted, and the remains part of the Agreement shall
continue in full force and effect. If any tribunal or court of competent
jurisdiction deems any provision hereof unenforceable, such provision shall be
modified only to the extent necessary to render it enforceable and this
Agreement shall be valid and enforceable and the parties hereto agree to be
bound by and perform same as thus modified.
IN WITNESS WHEREOF, this Agreement was executed by the parties as of the
date first written above.
Enhanced Services Company, Inc.
By: Justin Walker
Name: Justin Walker
Title: VP and General Counsel
Rolling Rock Capital Corporation
By:_____________________________
Name:___________________________
Title:__________________________
5
<PAGE> 1
EXHIBIT 5
ENHANCED SERVICES COMPANY, INC.
3415 S. Sepulveda Boulevard
Los Angeles, California 90034
November 13, 1998
Securities and Exchange Commission
450 Fifth Street Northwest
Washington, D.C. 20549
RE: S.E.C. Registration Statement on Form S-8 of 161,000 Shares of Common
Stock of Enhanced Services Company, Inc.; COMMISSION FILE NO. 9-24256
Dear Ladies and Gentlemen:
I 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 161,000 shares of the Company's $.001 par value Common Stock (the
"COMMON STOCK") which may be issued to Rolling Rock Capital Corporation, ("RR"),
consultant to the Company pursuant to the Consulting and Compensation Agreement
with RR (THE "CONSULTING AND COMPENSATION AGREEMENT") and otherwise, under
Common Stock Purchase Warrants exercisable to purchase up to 161,000 shares of
the Company's Common Stock.
As a basis of my opinion expressed below, I have examined such records
of the Company, such certificates of public officials, and such other documents
as I have deemed relevant and necessary. I have assumed the conformity to the
originals of all copies and the authenticity of all originals. As to various
questions of fact related to our material, I have relied, after due
investigation, upon inquiries made by myself of an officer or officers of the
Company.
Based upon the foregoing, I am of the opinion as follows:
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.
<PAGE> 2
Securities and Exchange Commission
November 13, 1998
Page 2
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, of which 5,000,000 are designated
preferred stock, having a par value of $.001 per share.
3. The 161,000 shares of the Company's Common Stock proposed to
be issued and granted under the Consulting and Compensation
Agreement and otherwise will, be duly and validly authorized,
legally issued, fully paid and nonassessable.
Sincerely,
ENHANCED SERVICES COMPANY, INC.
_______________________________
Justin Walker, Esq.
<PAGE> 1
EXHIBIT 24.1
ENHANCED SERVICES COMPANY, INC.
3415 S. Sepulveda Boulevard
Los Angeles, California 90034
November 13, 1998
Securities and Exchange Commission
450 Fifth Street Northwest
Washington, D.C. 20549
RE: S.E.C. Registration Statement on Form S-8 of 161,000 Shares of Common
Stock of Enhanced Services Company, Inc.; COMMISSION FILE NO. 9-24256
Dear Ladies and Gentlemen:
I hereby consent to the inclusion of my 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, D.C.,
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
161,000 shares of its common stock which may be issued under the Consulting and
Compensation Agreement with Rolling Rock Capital Corporation and otherwise,
consultant to the Company, as more fully described in such Registration
Statement.
I further consent to the reference in such Registration Statement to my
having given such opinion.
Very truly yours,
ENHANCED SERVICES COMPANY, INC.
________________________________
Justin Walker, Esq.
