EXHIBIT 10.10
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into this 31st day
of December, 2001, by and between Peachtree Capital Corporation, Inc. (the
"Company"), Xxxxxxx & Associates ("H&A"), and Xxxxxxxx X. Xxxxxxx (the
"Consultant").
WHEREAS, the Company desires to engage the H&A to perform services and
duties for the Company subject to the terms and conditions set forth in this
Agreement;
WHEREAS, as a condition to the execution of that certain Stock Purchase
Agreement dated December 27, 2001 (the "Purchase Agreement") among xxxxx.xxx,
Inc. (the "Parent"), the Company, and Xxxxxxxx X. Xxxxxxx and Xxxxxx Xxxxxxx,
individual residents of the State of Georgia (the "Shareholders" or each a
"Shareholder"), both of whom are also principals of H&A, the parties thereto
agreed to be bound by this Agreement and the covenants contained herein;
WHEREAS, the Xxxxxxxx X. Xxxxxxx was a founder and is currently the
President of the Company and has extensive knowledge of, and is thoroughly
familiar with, all aspects of the business affairs, finances, management,
marketing, programs, business plans, strategies, customers, and methods of
operation of the Company;
WHEREAS, Xxxxxx Xxxxxxx was a founder and has provided financial and
accounting services for the Company through his various business ventures;
WHEREAS, the covenants contained in this Agreement were necessary to induce
the Parent to purchase the Company from the Shareholders in a sale of business
transaction;
NOW, THEREFORE, in consideration of the Parent executing the Purchase
Agreement and the Company's agreement to engage and to continue to engage H&A,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS AND RECITALS. The provisions recited above are incorporated
into this Agreement as are any definitions used above. Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to
them in the Purchase Agreement.
2. TERM OF AGREEMENT. This Agreement shall be for a two year term starting on
the date this Agreement is executed and expiring on the second anniversary
thereof.
3. SERVICES TO BE PROVIDED BY H&A. H&A will cause the Consultant, a principal
of H&A, to continue to serve as the President of the Company, providing all
functions and services that she formerly provided as President of the
Company before the execution of the Purchase Agreement. The services which
the Consultant will provide include, but are not limited to, those services
listed in Article 10 of the Purchase Agreement.
4. COMPENSATION OF H&A. For the services to be provided by H&A under this
Agreement, the Company will provide the following compensation to H&A: 30%
of the Consultant's gross production for customers existing on the date the
Purchase Agreement was signed and 45% of the Consultant's gross production
for customers added after the date of the Purchase Agreement. However, if
at December 31 of each year under the term of this Agreement, H&A's
compensation under these terms is less than $125,000, excluding any bonuses
pursuant to the following section, the Company will make a payment to H&A
that will increase H&A's compensation for the year to $125,000.
5. BONUSES FOR H&A. If Revenues exceed $800,000 during the first year of this
Agreement, the Company will make a bonus payment to H&A in the amount of
$25,000. If Revenues exceed
$900,000 during the second year of-this Agreement, the Company will make a
bonus payment to H&A in the amount of $50,000. "Revenue" under this section
is the same as used to compute the preferred stock revenue target as laid
out in the Series B-1 and Series B-2 preferred stock designations, attached
as exhibits to the Purchase Agreement and incorporated herein by reference.
6. TERMINATION BY THE COMPANY. The Company may terminate this Agreement: (1)
upon the death of the Consultant; (2) upon the disability of the
Consultant; (3) upon determination of cause; or (4) without cause. For the
purposes of this Agreement, "for cause" will constitute unethical behavior,
illegal behavior, and dereliction of duty, and the actions of the
Consultant shall constitute the actions of H&A. If the company terminates
H&A without cause, H&A will receive a monthly severance compensation of
$10,416.67 per month through the remainder of the two year term of this
agreement. In addition, if the Company terminates H&A without cause, or
because of the death or disability of the Consultant, then all shares of
preferred stock owned by Xxxxxx and Xxxxxxxx Xxxxxxx for which the
respective revenue measuring years have not been completed will be treated
as if the relevant "Revenue Targets" described in the respective preferred
stock designations have been fully satisfied. The Company will take all
necessary steps, including amending the preferred stock designations, if
necessary, to accomplish these terms. In addition, if Xxxxxx Xxxxxxx'
employment with the Company is terminated without cause before the end of
the terms of his employment agreement, the shares of preferred stock owned
by Xxxxxx and Xxxxxxxx Xxxxxxx, for which the respective revenue measuring
years have not been completed, will be treated as if the "Revenue Targets"
have been met as described above in this paragraph.
7. OVERHEAD INSURANCE. If this Agreement is terminated because of the
disability of the Consultant as described in the termination section above,
then H&A shall be entitled to any disability benefits payable under the
Company's Unum (Xxxx Xxxxxx Life Insurance) overhead policy # 010283495103
covering the Consultant for a period not to exceed the initial term of this
Agreement. The Company agrees to maintain such policy, including any policy
premium payments not to exceed $250 per month, through the term of the
Agreement.
8. TERM LIFE INSURANCE. If this Agreement is terminated because of the death
of the Consultant as described in the information section above, then H&A
shall be entitled received life insurance benefits payable under the
Company's term life insurance policy covering the Consultant. The amount of
this life insurance shall be $250,000 for the first year following the
closing of the stock purchase and $125,000 for the second year following
the stock purchase. The Company agrees to maintain such policy, including
any policy premium payments through the initial term of this Agreement.
9. RIGHTS TO WORK PRODUCT. Except as expressly provided in this Agreement, the
Company shall be entitled to all benefits, profits and results arising from
or incidental to H&A's performance. To the greatest extent possible, any
work product, property, data, documentation or information or materials
prepared, conceived, discovered, developed or created by the Consultant in
connection with performing any of the Consultant's responsibilities ("Work
Product") shall be deemed to be "work made for hire" as defined in the
Copyright Act, 17 U.S.C.A. Sec. 101 et seq., as amended, and owned
exclusively and perpetually by the Company. H&A and the Consultant hereby
unconditionally and irrevocably transfer and assign to the Company all
intellectual property or other rights, title and interest either may
currently have (or in the future may have) by operation of law or otherwise
in or to any Work Product. H&A and the Consultant agree to execute and
deliver to the Company any transfers, assignments, documents or other
instruments which the Company may deem necessary or appropriate to vest
complete and perpetual title and ownership of any Work Product and all
associated rights exclusively in the Company. The Company shall have the
right to adapt, change, revise, delete from, add to and/or rearrange the
Work Product or any part thereof written or created by the Consultant, and
to combine the same with other works to any extent, and to change or
substitute the title thereof, and with regard to the Work Product, H&A
and the Consultant hereby waive the "moral rights" of authors as that term
is commonly understood throughout the world including, without limitation,
any similar rights or principles of law which H&A or the Consultant may now
or later have by virtue of the law of any locality, state, nation, treaty,
convention or other source. Unless otherwise specifically agreed, H&A and
the Consultant shall not be entitled to any compensation in addition to the
compensation otherwise provided in this Agreement for any exercise by the
Company of its rights set forth in the preceding sentence.
10. COVENANT NOT TO DISCLOSE TRADE SECRETS AND CONFIDENTIAL INFORMATION. During
H&A's engagement, the Consultant will be exposed to "Trade Secrets" and
"Confidential Information" (as those terms are defined in the next
sentences). "Trade Secrets" shall mean information or data of or about the
Company or any affiliated entity, including, but not limited to, technical
or non-technical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans, or lists of actual or potential customers, clients,
distributors, or licensees, that: (a) derive economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic
value from their disclosure or use; and (b) are the subject of efforts that
are reasonable under the circumstances to maintain their secrecy. To the
extent that the foregoing definition is inconsistent with a definition of
"trade secret" mandated under applicable law, the latter definition shall
govern for purposes of interpreting H&A's and the Consultant's obligations
under this Agreement. "Confidential Information" shall mean valuable,
non-public, competitively sensitive data and information relating to the
business of the Company or any affiliated entity, other than Trade Secrets.
H&A and the Consultant acknowledge and agree that any unauthorized
disclosure or use of any of the Trade Secrets or Confidential Information
would be wrongful and would likely result in immediate and irreparable
injury to the Company. Except as required to perform the Consultant's
duties or except with the Company's prior written permission, H&A and the
Consultant shall not, without the express prior written consent of the
Company, redistribute, market, publish, disclose or divulge to any other
person or entity, or use or modify for use, directly or indirectly in any
way for any person or entity: (a) any Trade Secrets at any time during
which such information or data shall continue to constitute a "trade
secret" under applicable law; and (b) any Confidential Information during
H&A's engagement with the Company and for a period of twenty-four (24)
months after termination. H&A and the Consultant agree to cooperate with
any reasonable confidentiality requirements of the Company made known to
H&A or the Consultant by the Company. H&A and the Consultant shall
immediately notify the Company of any unauthorized disclosure or use of any
Trade Secrets or Confidential Information of which either the Consultant or
H&A becomes aware.
11. RETURN OF MATERIALS. At any point during the H&A's engagement, at the
specific request of the Company, or, in any event, as promptly as
practicable after the H&A's services have been terminated, H&A and the
Consultant will return to the Company all Work Product (including any
copies or reproductions thereof and any materials constituting or
containing Trade Secrets or Confidential Information of the Company) that
are in H&A's or the Consultant's possession or control.
12. COVENANTS ARE INDEPENDENT. The covenants on the part of the H&A and the
Consultant contained in the paragraphs in this Agreement shall each be
construed as agreements independent of each other and of any other
provision in this Agreement and the unenforceability of one shall not
effect the remaining covenants.
13. REMEDIES FOR BREACH. H&A and the Consultant acknowledge and agree that
great loss and irreparable damage would be suffered by the Company if the
either H&A or Consultant should breach or violate any of the covenants and
agreements set forth in the paragraphs of this Agreement. H&A and the
Consultant further acknowledge and agree that each of these covenants and
agreements is reasonably necessary to protect and preserve the interests of
the Company. The parties agree that money damages for any breach of these
covenants and agreements will be insufficient to compensate for any
breaches thereof, and that H&A and the
Consultant will, to the extent permitted by law, waive in any proceeding
initiated to enforce such provisions any claim or defense that an adequate
remedy at law exists. The existence of any claim, demand, action, or cause
of action against the Company shall not constitute a defense to the
enforcement by the Company of any of the covenants or agreements in this
Agreement.
14. COVENANTS ARE REASONABLE. H&A and the Consultant acknowledge and agree
that: (a) H&A and the Consultant have received good, adequate and valuable
consideration for each of the covenants contained in this Agreement; and
(b) each of these covenants is reasonable and necessary to protect and
preserve the interests and properties of the Company. H&A and the
Consultant also acknowledge and agree that: (a) irreparable loss and damage
will be suffered by the Company should H&A or the Consultant breach any of
these covenants and agreements; (b) each of these covenants and agreements
is separate, distinct and severable from the remaining provisions of this
Agreement; and (c) the unenforceability of any covenants or agreements
shall not affect the validity or enforceability of any other provision or
provisions of this Agreement. H&A and the Consultant acknowledge and agree
that if any of these provisions shall ever be deemed to exceed the time,
activity, or geographic limitations permitted by applicable law, then such
provisions shall be and hereby are reformed to the maximum time, activity,
or geographical limitations permitted by applicable law. This Agreement is
made ancillary to the sale of the business described in the Purchase
Agreement.
15. RENEWAL. The parties agree that they will enter into an at-will employment
or consulting agreement at the expiration of the two year term of this
Agreement, which will permit the Shareholders to continue as registered
representatives of the Company in its main office, or in a branch office,
or other location of the Shareholder's choice. If the Shareholders relocate
to a location other than the Company's main office, the Company shall not
be obligated to incur additional office expenses to support such alternate
location. Compensation will be based purely on commission as determined by
the then standard compensation grid of the Company's other employees. Any
new employment arrangement will include appropriate restrictive covenants
that will protect the Company's interest in its customers and employees.
These restrictive covenants will include non-compete and non-solicitation
provisions carrying a two year term from the date of termination of that
agreement.
16. GOVERNING LAW. This Agreement shall be interpreted, construed, and governed
according to the laws of the State of Georgia.
17. AMENDMENTS. No amendments or variation of the terms or conditions of this
Agreement shall be valid unless agreed to in writing and signed by the
parties.
18. NON-ASSIGNABILITY. H&A's and the Consultant's rights and obligations under
this Agreement are personal and not assignable. The rights and obligations
of the Company hereunder shall inure to the benefit of and be binding upon
the successors and assigns of the Company.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties and shall bind and inure to the benefit of the Company, H&A, and
the Consultant and their respective successors, heirs, assigns and legal
representatives.
20. WAIVER. No waiver of a breach of any provision of this Agreement shall be
construed to be a waiver of any breach of any other provision. No delay
with regard to enforcement of any breach of any provision of this Agreement
shall be construed to be a waiver of such breach.
21. NON-DISPARAGEMENT. H&A and the Consultant warrant and agree that neither
H&A nor the Consultant shall, during or after H&A's engagement with the
Company, disparage the Company or its owners, officers, directors,
shareholders, employees, agents, or its business, products, policies,
practices or services, in any way whatsoever.
WITNESSES: XXXXXXX & ASSOCIATES
By: /s/ Xxxxxx Xxxxxxx
-------------------------------- -------------------------------
Xxxxxx Xxxxxxx
Its: Principal
-------------------------------- -------------------------------
PEACHTREE CAPITAL CORP.
By: /s/ Xxxxx X. Box
-------------------------------- -------------------------------
Xxxxx X. Box
Chairman, Board of Directors
--------------------------------
CONSULTANT
/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------- -------------------------------
Xxxxxxxx X. Xxxxxxx
--------------------------------
