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Microcap & Penny Stocks : Zulu-tek, Inc. (ZULU) -- Ignore unavailable to you. Want to Upgrade?

To: Jon Tara who wrote (6985)	5/12/1998 10:33:00 PM
From: Jon Tara	Read Replies (1) \| Respond to of 18444

There are provisions in both of the consulting agrements for termination by the company for cause, or by the consultant for any reason. HOWEVER, THERE ARE NO PROVISIONS FOR RECOURSE IF THE WARRANTS HAVE BEEN EXERCISED! That is, if an agreement is terminated, the warrants are cancelled, as long as they have not been exercised. If they have been exercised, though, there is NO provision in the agreements for recourse. This seems unusual, in that the warrants are immediately exercisable. So, in theory, they could be exercised, and then the consultants could immediately turn around and quit, keeping any profits from the sale of stock exchanged for warrants.

To: Jon Tara who wrote (6985)	5/12/1998 10:44:00 PM
From: Jon Tara	Respond to of 18444

$2/share exercise price, or 0.10/share? How could they make such a glaring mistake? Here is the exercise price as stated in KM's consulting services agreement: "2. COMPENSATION (a)As compensation for the performance by Kennedy of its obligations hereunder during the Consulting Arrangement, Enhanced hereby grants to Kennedy a stock purchase warrant (the "Warrant"), to acquire Seventy-Five Thousand (75,000) Common Shares of Enhanced at an exercise price of $0.10 per share and fully vested and exercisable on the date of issuance and for two years thereafter." And here is what it says near the top of the S-8: 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, $.001 par value 75,000(2) $2.00(3) $150,000 $44.25(4) 50,000(2) $4.00(3) $200,000(4) $59.00(4) (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 to Kennedy Miles and Richard Fisher Consulting Agreements ("Warrants"). (3) Based on average exercise price of the Warrants. (4) Based on cumulative exercise price