EXHIBIT 10.2
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into this 8th day of
February, 2006, to be effective February 1, 2006, by and between National Health
Partners, Inc., an Indiana corporation (the "Company"), and Xxxxx X. Xxxxx
("Consultant").
WITNESSETH:
WHEREAS, Consultant desires to provide consulting services to the
Company and the Company desires to retain Consultant to provide such consulting
services to the Company.
NOW, THEREFORE, in consideration of the promises and conditions set
forth herein, the receipt and sufficiency of which hereby is acknowledged, and
intending to be legally bound, the Company and Consultant agree as follows:
1. Retention. The Company hereby retains Consultant to provide certain
consulting services to the Company for a term commencing on the date hereof and
terminating February 1, 2009 (the "Consulting Term"), unless extended by mutual
agreement of the parties, and Consultant hereby accepts such engagement,
pursuant to the terms and conditions set forth herein.
2. Independent Contractor. Consultant and the Company acknowledge and agree that
the relationship hereunder created is one of an independent contractor and not
one of employment. Consultant shall at all times during the Consulting Term act
as an independent contractor and nothing hereunder shall be construed to be
inconsistent with this relationship or status or create or imply a relationship
of employer-employee between the Company and Consultant. Consultant shall not
hold himself out to third parties as an employee or officer of the Company, and
shall have no authority to bind or commit the Company, legally or otherwise.
Except as expressly provided herein, the Consultant shall not be entitled to any
benefits paid by the Company to its employees. The Consultant shall be solely
responsible for any tax consequences applicable to him by reason of this
Agreement and the relationship established hereunder, and the Company shall not
be responsible for the payment of any federal, state or local taxes or
contributions imposed under any employment insurance, social security, income
tax or other tax law or regulation with respect to the Consultant's performance
of consulting services hereunder. Company and Consultant shall report any and
all payments made by the Company pursuant to this Agreement to the appropriate
governmental agencies in a manner consistent with Consultant's status as an
independent contractor.
3. Consulting Services. Consultant shall provide the following services to the
Company (collectively, "Consulting Services"): (i) assist the Company in
maintaining a system of internal controls and procedures adequate to ensure that
financial information of the Company is collected and reported in an accurate
and timely manner; (ii) assist the Company in the preparation and review of
financial reports, including financial statements, reports to shareholders, tax
returns, reports for government regulatory agencies, and other accounting and
tax related reports, as well as summaries, budgets and forecasts related to the
Company's future business needs and growth; and (iii) perform such other
services as the Company and Consultant may agree upon. Consultant shall devote a
minimum of 40 hours per week to the performance of the Consulting Services
during the five-month period commencing February 1, 2006 and ending June 30,
2006. Thereafter, Consultant shall comply with reasonable requests by the
Company for the Consulting Services and shall devote reasonable time and
reasonable best efforts, skill and attention to the performance of the
Consulting Services. Consultant shall be solely responsible for determining the
method, details and means of performing the Consulting Services. Consultant
shall report to the Chief Executive Officer of the Company or such other person
as the Chief Executive Officer shall designate. Consultant agrees to remain a
guarantor under the Electronic Exchange Systems (EXS) Merchant Application and
Agreement, dated in or around October 2005, by and among the Company, Global
Payments Direct, Inc., HSBC Bank USA, National Association, and Concord EFS
National Bank, until December 31, 2006.
4. Compensation. In consideration of Consultant agreeing to provide the
Consulting Services to the Company, the Company hereby agrees to pay Consultant
the following consideration:
(a) 250,000 shares of common stock, par value $.001 per share ("Common
Stock"), of the Company, such shares to be issued to Consultant within five
business days of the date hereof pursuant to the National Health Partners, Inc.
2006 Stock Incentive Plan under the Registration Statement on Form S-8,
Registration No. 333-131589, filed with the Securities and Exchange Commission
on February 6, 2006;
(b) 50,000 shares of Common Stock, such shares to be "restricted
securities" as such term is defined under Rule 144(a)(3) of the Securities Act
of 1933, as amended (the "Act"), and issued to Consultant within five business
days of the date hereof;
(c) for the two-month period commencing February 1, 2006 and ending
March 31, 2006, a fee of $14,520 per month, payable semi-monthly;
(d) for the two-month period commencing February 1, 2006 and ending
March 31, 2006, reimbursement of all costs of supplemental insurance,
prescription medications, vision expenses, chiropractic expenses and related
medical costs, the aggregate amount of such costs and expenses for any fiscal
year of the Company not to exceed the average amount of such costs and expenses
incurred by the Company for executive employees of the Company during the
immediately preceding fiscal year; and
(e) Subject to and in accordance with the Company's policies and
procedures and upon presentation of itemized accounts, Consultant shall be
reimbursed by the Company for reasonable and necessary business-related expenses
incurred by Consultant on behalf of the Company during the Consulting Term.
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5. Lock-up.
(a) During the period commencing February 1, 2006 and ending April 1, 2006,
Consultant shall not, without the prior written approval of the Company,
directly or indirectly: (i) offer to sell, sell, or contract to sell, lend,
pledge, hypothecate or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any security exercisable or convertible into
shares of Common Stock; or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of any shares of Common Stock or any security exercisable or
convertible into shares of Common Stock.
(b) During the period commencing April 1, 2006 and ending December 31,
2006, Consultant shall not, without the prior written approval of the Company,
directly or indirectly:
(i) offer to sell, sell, or contract to sell, lend, pledge,
hypothecate or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any security exercisable or
convertible into shares of Common Stock; or
(ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of
ownership of any shares of Common Stock or any security exercisable or
convertible into shares of Common Stock,
with respect to an aggregate of more than 25,000 shares of Common Stock during
any calendar month.
The restrictions set forth in this section shall apply whether any of
the transactions described in clauses (a) or (b) are to be settled by delivery
of shares of Common Stock, in cash or otherwise.
6. Termination. This Agreement may be terminated by the Company at any time for
any reason or by mutual consent of the Company and Consultant, and shall
terminate on the date of Consultant's death. The Consultant's estate will not be
entitled to any other compensation under this Agreement.
7. Non-Solicitation; Non-Compete.
(a) Non-Solicitation. Consultant shall not, directly or indirectly,
including through any affiliate, solicit, hire, negotiate with, or contact any
employee of the Company for the purpose of hiring them or causing them to
terminate their employment relationship with the Company; provided, however,
that if the Company terminates an employee, or if an employee leaves the Company
for a period of six (6) months not in relation to any solicitation by
Consultant, Consultant may hire such employee.
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(b) Non-Compete. Consultant shall not, directly or indirectly, refer
business from any Customer (as defined below) of the Company to any enterprise
or business (other than the Company) that is in direct competition with the
Company business, nor shall Consultant receive any commissions based on sales or
otherwise relating to the Company business from any Customer that is in direct
competition with the Company's business. For the purposes of this Section 7,
"Customer" means any person, firm, corporation, partnership, association or
other entity to which the Company or any of its affiliates sold or provided
goods or services during the 12-month period prior to the time at which any
determination is required to be made as to whether any such person, firm,
corporation, partnership, association or other entity is a Customer, or who or
which was approached by or who or which has approached an employee of the
Company for the purpose of soliciting business from the Company or the third
party, as the case may be.
(c) Consultant agrees that the duration and scope of the
non-competition and non-solicitation provisions set forth above are reasonable.
In the event that any court determines that the duration or the geographic
scope, or both, are unreasonable and that such provisions are to that extent
unenforceable, the parties hereto agree that such provisions shall remain in
full force and effect for the greatest time period and in the greatest area that
would not render it unenforceable. The parties intend that the non-competition
and non-solicitation provisions herein shall be deemed to be a series of
separate covenants, one for each and every county of each and every state of the
United States of America and each and every political subdivision of each and
every country outside the United States of America where this provision is
intended to be effective.
8. Business Opportunities. Consultant agrees that during the Consulting Term,
Consultant will not take personal advantage of any business opportunities that
are similar or substantially similar to the business of the Company. In
addition, all material facts regarding any such business opportunities must be
promptly and fully disclosed by Consultant to the Chief Executive Officer of the
Company as soon as the Consultant becomes aware of such opportunity, and in no
event later than forty-eight (48) hours after learning of such opportunity.
9. Company Property. All records, files, lists, including computer generated
lists, drawings, documents, software, documents, equipment, models, binaries,
object modules, libraries, source code and similar items, customer lists, health
care provider lists, lists of prospective customers, and contracts relating to
the Company's business that Consultant shall prepare or receive from the Company
and all Confidential Information (as defined below) shall remain the Company's
sole and exclusive property ("Company Business Property"). Upon termination of
this Agreement, Consultant shall promptly return to the Company all property of
the Company in Consultant's possession, including Company Business Property.
Consultant further represents that Consultant will not copy or cause to be
copied, print out, or cause to be printed out any Company Business Property
other than as specifically authorized and required in the performance of
Consultant's duties hereunder. Consultant additionally represents that, upon
termination of this Agreement, Consultant will not retain in Consultant's
possession any such Company Business Property.
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10. Protection of Confidential Information of the Company. Consultant
understands that Consultant's consulting arrangement with the Company creates a
relationship of trust and confidence between Consultant and the Company.
Consultant will not use or disclose, or allow anyone else to use or disclose,
any Confidential Information (as defined below) relating to the Company, its
products, services, suppliers or customers except as may be necessary in the
performance of Consultant's duties hereunder or as may be specifically
authorized in advance by appropriate officers of the Company. "Confidential
Information" shall include, but not be limited to, information consisting of
research and development, patents, trademarks and copyrights and applications
thereto, technical information, computer programs, software, methodologies,
innovations, software tools, know-how, knowledge, designs, drawings,
specifications, concepts, data, reports, processes, techniques, documentation,
pricing, marketing plans, customer and prospect lists, trade secrets, financial
information, salaries, business affairs, suppliers, profits, markets, sales
strategies, forecasts, and any other information not available to the general
public, whether written or oral, that Consultant knows or has reason to know the
Company would like to treat as confidential for any purpose, such as maintaining
a competitive advantage or avoiding undesirable publicity. Consultant will keep
Confidential Information secret and will not allow any unauthorized use of the
same, whether or not any document containing it is marked as confidential. These
restrictions, however, will not apply to Confidential Information that has
become known to the public generally through no fault or breach of Consultant or
that the Company regularly gives to third parties without restriction on use or
disclosure.
11. Notices. All notices, requests, demands, and other communications hereunder
must be in writing and shall be deemed to have been duly given if delivered by
hand or mailed within the continental United States by first class, registered
mail, return receipt requested, postage and registry fees prepaid, to the
applicable party and addressed as follows:
If to the Company:
National Health Partners, Inc.
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
If to the Consultant:
To the address specified for Consultant in the
Company's records.
12. Representations and Warranties. Consultant hereby represents and warrants to
the Company as follows: (i) Consultant has the legal capacity and unrestricted
right to execute and deliver this Agreement and to perform all of his
obligations hereunder, and (ii) the execution and delivery of this Agreement by
Consultant and the performance of his obligations hereunder will not violate or
be in conflict with any fiduciary or other duty, instrument, agreement,
document, arrangement, or other understanding to which Consultant is a party or
by which he is or may be bound or subject.
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13. Miscellaneous.
(a) Breach. The parties agree that in the event one party breaches any part or
parts of this Agreement, legal proceedings may be instituted against that party
for breach of contract. The nonprevailing party in such legal proceedings shall
reimburse the prevailing party for the reasonable costs and expenses, including
attorneys fees, incurred.
(b) Non-Disparagement. The Company and Consultant shall not engage in any
conduct or make any statement that would disparage the other or their respective
business interests in any way.
(c) Injunctive Relief. Consultant hereby agrees and acknowledges that
in the event of a breach or threatened breach of this Agreement by Consultant,
the Company may suffer irreparable harm and monetary damages alone would not
adequately compensate the Company. Accordingly, the Company will therefore be
entitled to injunctive relief to enforce this Agreement.
(d) Survival. Notwithstanding any termination of this Agreement,
Consultant's obligations under Sections 7, 8, 9 & 10 shall survive and remain in
full force and effect in accordance with their respective terms.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania. Any action arising
out of or relating to any of the provisions of this Agreement may be brought and
prosecuted only in the courts of, or located in, the Commonwealth of
Pennsylvania, and in the event of such election the parties hereto consent to
the jurisdiction and venue of said courts.
(f) Captions. Captions herein are inserted for convenience, do not
constitute a part of this Agreement, and shall not be admissible for the purpose
of proving the intent of the parties.
(g) Counterparts. This Agreement may be executed in counterparts and
delivered via fax, each of which shall be deemed an original, and both of which
together shall constitute one and the same instrument.
(h) Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties hereto with respect to the
Consulting Services to be performed by Consultant for the Company, and
supersedes and cancels all previous negotiations, agreements, commitments, and
writings regarding such services. Neither of the parties hereto has relied upon
any representations made by or on behalf of the other party and the same are not
enforceable except to the extent set forth in writing in this Agreement.
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(i) Amendment and Waiver. The provisions of this Agreement may not be
amended, modified, repealed, waived, extended or discharged except by an
agreement in writing signed by the Company and Consultant. Any waiver or consent
from the Company with respect to any term or provision of this Agreement or any
other aspect of Consultant's conduct shall be effective only in the specific
instance and for the specific purpose for which given and shall not be deemed,
regardless of frequency given, to be a further or continuing waiver or consent.
(j) Successors and Assigns. Neither this Agreement, nor any of
Consultant's rights, powers, duties or obligations hereunder, may be assigned by
Consultant. This Agreement shall be binding upon and inure to the benefit of
Consultant and Consultant's heirs and legal representatives and the Company and
its successors.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date written above.
/s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx
NATIONAL HEALTH PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
Chief Executive Officer
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