Exhibit 10.3
Amended consulting agreement dated as of May 9, 2006 between
the Company and Xxxx Xxxxxx
AGREEMENT dated as of the 09th day of May, 2006, by and between Adsouth
Partners, Inc. a Nevada corporation with its principal office at 0000 Xxxxx
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 (the "Company"), and Xxxx
X. Xxxxxx, Xx., residing at 7098 Via Firenze, Xxxx Xxxxx, Xxxxxxx 00000
("Consultant").
WITNESSETH
WHEREAS, the Company desires to extend the engagement of Consultant to provide
his services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual premises and promises set forth
in this Agreement, the parties agree as follows:
1. Services.
(a) Subject to the terms and conditions hereinafter set forth, the
Company hereby engages Consultant as a consultant who shall
provide the services (the "Services") during the Term of this
Agreement. The Services shall include marketing services
relating to the Company's businesses, including actively seeking
to generate business, including when requested, supervisory
services, and such other services relating to the Company's
divisions as the Consultant and the Company may mutually
determine. Consultant shall report to the Company's chief
executive officer or other officer designated by the chief
executive officer.
(b) Unless terminated earlier as provided for in Section 5 of this
Agreement, this Agreement shall have an initial term (the
"Initial Term") commencing as of the date of this Agreement and
expiring on June 30, 2012, and shall continue on a year-to year
basis thereafter. The Initial Term and the one-year extensions
are collectively referred to as the "Term." However, in the
event that Consultant for any reason related or not to his
Consultancy Agreement makes, guarantees or underwrites loans or
financial facilities to, for or on behalf of Company, with
Company's permission (in an aggregate amount of not less than
two hundred fifty thousand ($250,000.00) dollars), then and in
that event Consultancy Agreement is not cancelable without the
express written consent of Consultant for so long as such
commitment(s) are in force or effect.
2. Consultant's Performance. Consultant hereby accepts the engagement
contemplated by this Agreement. Consultant may engage in other
business and personal activities, as long as the performance of such
services or other activities does not conflict with Consultant's
obligations under this Agreement. During the Term, Consultant shall
perform the Services diligently, in good faith and in a manner
consistent with the best interests of the Company. Consultant will
not be required to move his residence from South Florida.
3. Compensation.
(a) For his services to the Company during the Term, the Company
shall pay Consultant a minimum draw (the "Fee") in the amount of
twenty thousand dollars ($20,000.00) per month against
commissions stated in 3(b) commencing with the month of June
2006, payable in advance on the first day of the month. The fee
shall be a nonrefundable payment. Also, Consultant shall have
the option of: a) participating in the company-wide health
insurance plan plus receive the executive health benefit fully
paid by the Company or, b) be reimbursed for his actual
out-of-pocket premium expenses for obtaining or maintaining his
own health insurance plan, individual or family.
(b)
The Company shall pay Consultant a commission (the "Commission")
on all Covered Accounts, as hereinafter defined, equal to ten
percent (10%) of the Company's gross profit on the Covered
Accounts which are generated during the Term. Except as defined
below for Genco Power Solution, Inc. (Genco) gross profit shall
be determined in accordance with generally accepted accounting
I
Exhibit 10.3
Amended consulting agreement dated as of May 9, 2006 between
the Company and Xxxx Xxxxxx
principles consistently defined. A determination by the
Company's independent accountants as to the gross profit from
any Covered Account or the Company's gross profit pursuant to
Section 4(e) of this Agreement shall be final, binding and
conclusive on all parties. Except as regards Genco, the formula
of which shall be used to calculated Genco's Gross Profit (GGP)
as follows: Price of Job (J)(Unit plus material and labor),
minus Cost of Unit (U) minus 30% of U to arrive at the profit,
times 10% commission. (E.g. Job = $15,000.00. Unit = $7,500.00.
Difference is $7,500.00, minus 30% = $5,000.00 times 10%
Commission = $500.00.)
(c) The term "Covered Accounts" shall mean:
(i) All of the Company's present accounts;
(ii) Any new accounts which are generated by Consultant's
efforts, including, without limitation, those profits of
Genco Power Solutions, Inc., with the start date of such
"profit eligibility" beginning January 1st, 2006, and if
not previously paid by the signing of this agreement, then
on demand by Consultant;
(iii) Any new products to which the Company acquires rights
during the Term, including ownership of the product or
license or distribution rights to the product, if such
products or the rights to the products are generated from
an account that comes within the definition of a Covered
Account.
(d) The commission shall be determined monthly. The Company shall
provide Consultant with a statement setting forth the
determination of the Commission due for the month. Such
statement shall be accompanied by payment equal to the amount of
the Commission due for the month.
(e) Contemporaneously with the execution of this Agreement, the
Company shall grant Consultant a five-year non-qualified stock
(the "Option") to purchase two million (2,000,000) shares of the
Company's common stock, par value $.0001 per share, at an
exercise price of sixty five cents ($.65) per share. The Option
shall be exercisable in cumulative installments as follows:
(i) The Option shall be immediately exercisable as to
five hundred thousand (500,000) shares.
(ii) For each calendar quarter during the Term,
commencing with the quarter ending September 30,
2005, the Option shall become exercisable as to
the greater of (A) a fraction of one twenty five
thousand (125,000) shares, the numerator of which
is the Company's gross profit for the quarter,
determined in accordance with generally accepted
accounting principles consistently applied, and
the denominator of which is five hundred thousand
dollars ($500,000), or (B) the number of shares of
Common Stock as to which the Option had not become
exercisable as of the last day of the applicable
calendar quarter; provided, however, that in no
event shall the option become exercisable pursuant
to this Section 4(e)(ii) for more than six hundred
thousand (600,000) shares in any twelve (12) month
period.
(iii) Notwithstanding the foregoing, the Option shall
not be exercisable until such time as the
Company's authorized common stock has been
increased from 33,333,333 shares to a number
approved by the Company's board of directors.
(iv) After the above periods have elapsed the Board of
Directors is encouraged to reward Consultant's
productivity with Options in an amount equal to
the formula outlined in this section 3 subsection
ii on a year to year basis.
(v) In the event that options are reduced to any
current option holder or any person or group
eligible for options then and in that event all
options envisioned here shall be similarly reduced
and become immediately vested and exercisable.
(vi) From time to time the Chief Executive Officer may
determine, in the CEO's sole discretion, to
increase or add to the number of options available
to Consultant, based on Consultant's performance.
4. Reimbursement of Expenses. The Company shall reimburse Consultant,
upon presentation of proper expense statements, for all authorized,
ordinary and necessary out-of-pocket expenses reasonably
II
Exhibit 10.3
Amended consulting agreement dated as of May 9, 2006 between
the Company and Xxxx Xxxxxx
incurred by Consultant during the Term in connection with the
performance of his services pursuant to this Agreement hereunder in
accordance with the Company's expense reimbursement policy.
5. Termination.
(a.) This Agreement and Consultant's engagement hereunder
shall terminate immediately upon the death of
Consultant, with the sole exception being the
"commissions" delineated herein, which shall pass to
Consultant's wife surviving him and then to his
children surviving him and her, for their lives.
(b.) This Agreement and Consultant's engagement hereunder,
may be terminated by Consultant or the Company on
written notice to Consultant in the event of
Consultant's Disability. The term "Disability" shall
mean any illness, disability or incapacity of
Consultant which prevents him from substantially
performing his regular duties for a period of two (2)
consecutive months or three (3) months, even though
not consecutive, in any twelve (12) month period.
(c.) The Company may terminate this Agreement and
Consultant's engagement for Cause. The term "Cause"
shall mean (i) a breach of Sections 7, 8, 9 or10 of
the Agreement; (ii) a breach of trust whereby
Consultant obtains personal gain or benefit at the
expense of or to the detriment of the Company; or
(iii) a conviction of Consultant of any felony or any
misdemeanor involving drugs or controlled substances.
(d.) In the event of termination of this Agreement or
Consultant's engagement, by the Company, as provided
in this Section 6, Consultant shall receive his full
fees through the ending date of this agreement, and
Consultant shall be entitled to Commissions due on
gross profit from Covered Accounts for a thirty-six
month period from the date of his termination. In the
event that Consultant terminates the Agreement then
and in that event Consultant shall receive one year of
his fees plus twelve months of his commissions from
the date of this Agreement
6. Trade Secrets and Proprietary Information.
(a) Consultant recognizes and acknowledges that the Company, through
the expenditure of considerable time and money, has developed
and will continue to develop in the future information
concerning customers, clients, marketing, products, services,
business, research and development activities and operational
methods of the Company and its customers or clients, contracts,
financial or other data, technical data or any other
confidential or proprietary information possessed, owned or used
by the Company, the disclosure of which could or does have a
material adverse effect on the Company, its business, any
business it proposes to engage in, its operations, financial
condition or prospects and that the same are confidential and
proprietary and considered "confidential information" of the
Company for the purposes of this Agreement. In consideration of
this engagement, Consultant agrees that he will not, during or
after the Term, without consent of the Company's board of
directors, make any disclosure of confidential information now
or hereafter possessed by the Company, to any person,
partnership, corporation or entity either during or after the
term here of, except that nothing in this Agreement shall be
construed to prohibit Consultant from using or disclosing such
information (a) if such disclosure is necessary in the normal
course of the Company's business in accordance with Company
policies or instructions or authorization from chief executive
or financial officer or an officer designated by the chief
executive or financial officer, or (b) such information shall
become public knowledge other than by or as a result of
disclosure by a person not having a right to make such a
disclosure, or (c) subsequent to the Term, if such information
shall have either (i) been developed by Consultant independent
of any of the Company's confidential or proprietary information
or (ii)
III
Exhibit 10.3
Amended consulting agreement dated as of May 9, 2006 between
the Company and Xxxx Xxxxxx
been disclosed to Consultant by a person not subject to a
confidentiality agreement with or other obligation of
confidentiality to the Company. For the purposes of Sections 7,
8, and 9 of this Agreement, the term "Company" shall include the
Company, its parent, its subsidiaries and affiliates, other than
affiliates whose relationship as an affiliate is derived solely
from Consultant's interest in or position at the other party.
(b) In the event that any trade secrets or other confidential
information covered by Section 7(a) of this Agreement is
required to be produced by Consultant pursuant to legal process,
Consultant shall give the Company notice of such legal process
within a reasonable time, but no later than ten (10) business
days prior to the date such disclosure is to be made, unless
Consultant has received less notice, in which even Consultant
shall immediately notify the Company objects(at the Company's
Cost and expense) in a timely manner so that Consultant is not
subject to penalties for failure to make such disclosure,
Consultant shall not make any disclosure until there has been a
court determination on the Company's objection's. If disclosure
is required by a court order, final beyond right of review, or
if the Company does not object to the disclosure, Consultant
shall make disclosure only to the extent that disclosure is
unequivocally required by the court order, and Consultant will
exercise reasonable efforts at the Company's expense, to obtain
reliable assurance that confidential treatment will be accorded
the Confidential Information.
7. Covenant Not To Solicit or Compete.
(a) During the period from the date of this Agreement until one (1)
year following the expiration or termination of this Agreement,
Consultant will not, directly or indirectly:
(i) Persuade or attempt to persuade any person or
entity which is or was a customer, client or
supplier of the Company to cease doing business
with the Company, or to reduce the amount of
business it does with the Company (the terms
"customer" and "client" as used in this Section 8
to include any potential customer or client to
whom the Company submitted bids or proposals, or
with whom the Company conducted negotiations,
during the term of Consultant's engagement
hereunder or during the twelve (12) months
preceding the termination of this Agreement or his
engagement hereunder:
(ii) Solicit for himself or any other person or entity
other than the Company the business of any person
or entity which is a customer or client of the
Company, or was a customer or client of the
Company within (1) year prior to the termination
of this Agreement or his engagement hereunder;
(iii) persuade or attempt to persuade any employee of
the Company, or any individual who was an employee
of the Company during the one (1) year prior to
the termination of this Agreement, to leave the
Company's employ, or to become employed by any
person or entity other than the Company; or
(iv) engage in any business in the United States
whether as an officer, director, consultant,
partner, guarantor, principal, agent, employee,
advisor or in any manner, which directly competes
with the business of the Company as it is engaged
in at the time of the termination of this
Agreement , unless, at the time of such
termination or thereafter during the period that
Consultant is bound by the provisions of this
Section 8, the Company ceases to be engaged in
such activity, provided however, that nothing in
this Section 8 shall be construed to prohibit
Consultant from owing an interest of not more than
five (5%) percent of any public company engaged in
such activities.
(b) Consultant acknowledges that the restrictive covenants (the
"Restrictive Covenants") contained in Sections 7 and 8 of this
Agreement are conditions of his engagement are reasonable and
valid in geographical and temporal scope and in all other
aspects. If any court determines that any of the Restrictive
Covenants, or any part of any of the Restrictive Covenants, is
invalid or unenforceable, the remainder of the Restrictive
Covenants and parts thereof shall not thereby be affected and
shall remain in full force and effect, without regard to the
invalid portion. IF any court determines that
IV
Exhibit 10.3
Amended consulting agreement dated as of May 9, 2006 between
the Company and Xxxx Xxxxxx
any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable because of the geographic or temporal
scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.
8. Inventions and Discoveries. Consultant agrees promptly to disclose in
writing to the Company any invention or discovery made by him during
the Term, whether during or after working hours, in any business in
which the Company is then engaged or which otherwise relates to any
product or service dealt in by the Company and such inventions and
discoveries shall be the Company's sole property. Upon the Company's
request, Consultant shall execute and assign to the Company all
applications for copyrights and letters patent of the United States
and such foreign countries as the Company may designate, and
consultant shall execute and deliver to the Company such other
instruments as the Company deems necessary to vest in the Company the
sole ownership of all rights, title and interest in and to such
inventions and discoveries, as well as all copyrights and/or patents.
If services in connection with applications for copyrights and/or
patents are performed by Consultant at the Company's request after
the termination of his engagement hereunder, the Company shall pay
him reasonable compensation for such services rendered after
termination of this Agreement.
9 Injunctive Relief. Consultant agrees that his violation or threatened
violation of any of the provisions of Sections 6,7 or 8 of this
Agreement shall cause immediate and irreparable harm to the Company.
In the event of any breach or threatened breach of any of said
provisions, Consultant consents to the entry of preliminary and
permanent injunctions by a court of competent jurisdiction
prohibiting Consultant from any violation or threatened violation of
such provisions and compelling Consultant to comply with such
provisions. This Section 10 shall not affect or limit, and the
injunctive relief provided in this Section 10 shall be in addition
to, any other remedies available to the Company at law in equity or
in arbitration fro any such violation by Consultant. The provisions
of Sections 7, 8, 9 and 10 of this Agreement shall survive any
termination of this Agreement and Consultant's engagement pursuant to
this Agreement.
10 Indemnification. The Company shall provide Consultant with payment of
legal fees and indemnification to the maximum extent permitted by the
Company's Certificate of Incorporation, By-Laws, and the laws of the
jurisdiction under which the Company was organized.
11. Independent Contractor. In all matters relating to this Agreement,
Consultant shall act as an independent con tractor. He is not, and
shall not be, an employee, joint venture, partner or agent of the
company, and he shall assume any and all liability for his own acts.
Consultant shall have no authority to assume or create obligations,
express or implied, on behalf of the Company or any subsidiary or
affiliate of the Company, and Consultant shall have no authority to
represent the Company as its agent, employee, and partner or in any
other capacity.
12. Lock up Agreement. Consultant agrees that he will not, and he
represents that he has obtained the agreement of his wife, Xxxxxx
Xxxxxx, as follows:
(a) Each of the Consultant and his wife will not publicly sell any
of the 933,334 which each of them received in connection with
the January 2004 reverse merger, for a period of two years from
the date of this Agreement. Thereafter, sales of such shares
shall be subject to the provisions of Section 13(b) of this
Agreement.
13. Rights Concerning Directors. During the Term, Consultant shall have
the right to designate two individuals, reasonably acceptable to the
Company, to serve as directors provided that such individuals would
be independent directors under the listing requirements for the
NASDAQ Stock Exchange.
14. Miscellaneous.
(a) Consultant represents, warrants, covenants and agrees that he
has a right to enter into this Agreement, that he is not a party
to any agreement or understanding, oral or written, which would
prohibit performance of his obligations under this Agreement,
and that he will not use in the performance of his obligations
hereunder any proprietary information of any other party which
he is legally prohibited from using.
V
Exhibit 10.3
Amended consulting agreement dated as of May 9, 2006 between
the Company and Xxxx Xxxxxx
(b) The Company represents warrants and agrees that it has full
power and authority to execute and deliver this Agreement and
perform its obligations hereunder and this Agreement has been
duly authorized by the Board and no other corporate action is
required of the Company to enter into this Agreement and perform
its obligations hereunder.
(c) If requested by the Company, Consultant will cooperate with the
Company in connection with the Company's application to obtain
key-man life insurance on his life, on which the Company will be
the beneficiary. Such cooperation shall include the execution of
any applications or other documents requiring his signature and
submission of insurance applications and submissions to a
physical.
(d) Any notice , consent or communication required under the
provisions of this Agreement shall be given in writing and sent
or delivered by hand, overnight courier or messenger service,
against a signed receipt or acknowledgement of receipt or
acknowledgement of receipt, or by registered or certified mail,
return receipt requested, or telecopier or similar means of
communication if receipt is acknowledged or if transmission is
confirmed by mail as provided in this Section(d), to the parties
at their respective addresses set forth at beginning of this
Agreement or by telecopier to the Company at (000) 000-0000, or
to Consultant at (561)-, with notice to the Company being sent
to the attention of the individual who executed this Agreement
on behalf of the Company. Either party may, by like notice,
change the person, address or telecopier number to which notice
is to be sent by telecopier.
(e) This Agreement shall in all respects be construed and
interpreted in accordance with, and the rights of the parties
shall be governed by, the laws of the State of Florida
applicable to contracts executed and to be performed wholly
within such State, without regard to principles of conflicts of
laws except that the provisions of Section 10 shall be governed
by the corporation law of the state in which the Company is
incorporated.
(f) Except for actions, suits or proceedings taken pursuant to or
under Section 7, 8, 9, or 10 of this Agreement, any dispute
concerning this Agreement or the rights of the parties hereunder
shall be submitted too binding arbitration in Miami, Florida
before a single arbitrator shall be final, binding and
conclusive on all parties, and judgment on such award may be
entered in any court having jurisdiction. The arbitrator shall
no power to modify or amend any specific provision of this
Agreement except as expressly provided in Section8 (b) and 15(h)
of this Agreement.
(g) Notwithstanding the provisions of Section 15(f) of this
Agreement, with no respect to any claim for injunctive relief or
other equitable remedy pursuant to section 10 of this Agreement
or any claim to enforce an arbitration award or to compel
arbitration, the parties hereby(i) consent to the exclusive
jurisdiction of the state courts sitting in Palm Beach County,
Florida and (ii) waives any claim that the jurisdiction of any
such court is not a convenient forum for any such action and any
defense of lack of in personam jurisdiction with respect
thereof.
(h) If any term, covenant or condition of this Agreement or the
application thereof to any party or circumstance shall, to any
extent, be determined to be invalid or unenforceable, the
remainder of this Agreement, or the application of such term,
covenant or condition to parties or circumstances other than
those as to which it is held invalid or unenforceable, shall not
be affected thereby and each term covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent
permitted by law, any court arbitrator having jurisdiction may
reduce the scope of any provision of this Agreement, including
the geographic and temporal restrictions set forth in Section 7
of this Agreement, so that it complies with applicable law.
(i) This Agreement constitute the entire agreement of the Company
and Consultant as the subject matter hereof, superseding all
prior or contemporaneous written or oral understandings or
agreements, including any and all previous employment or
consulting agreements or understandings, all of which except as
hereinafter provided, are hereby terminated , with respect to
the subject matter covered in this Agreement. This Agreement may
not be modified or
VI
Exhibit 10.3
Amended consulting agreement dated as of May 9, 2006 between
the Company and Xxxx Xxxxxx
amended, nor may any right be waived, except by a writing which
expressly refers to this Agreement, states that it is intended
to be a modification, amendment or waiver and is signed by both
parties in the case of a modification or amendment or by the
party granting the waiver. No course of conduct or dealing
between the parties and no custom or trade usage shall be relied
upon to vary the terms of the Agreement. The failure of a party
to insist upon strict adherence to any term of this Agreement on
any occasion shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. In particular,
the obligations of the Company and Consultant pursuant to the
Prior Employment Agreement, except that Consultant's obligations
and the Company's rights pursuant to Sections 6, 7, 8, and 9 for
the Prior Employment Agreement shall remain in full force and
effect.
(j) Neither party hereto shall have the right to assign or
transfer any of its or his rights hereunder except in
connection with a merger of consolidation of the Company or
sale by the Company of all or substantially all of its
business and assets.
(k) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors,
executors, administrators and permitted assigns.
(l) The headings in this Agreement are of reference only shall not
affect in any way the construction or interpretation of this
Agreement.
(m) No delay or omission to exercise any right, power or remedy
accruing to either party hereto shall impair any such right,
power or remedy or shall be construed to be a waiver of or an
acquiescence to any breach hereof. No waiver of any breach
hereof shall be deemed to be waiver of any other breach hereof
theretofore or thereafter occurring. Any waiver of any provision
hereof shall be effective only to the extent specifically set
forth in an applicable writing. All remedies afforded to either
party under this Agreement, by law or otherwise, shall be
cumulative and not alternative and shall not preclude assertion
by such party of any other rights seeking of any rights or
remedies against any other party.
(n) It is acknowledged that this writing reflects an amendment or
modification to a previously entered into Agreement and that
many of the payments stated here have already been paid and
received. Therefore, no payments are envisioned here that would
be duplication.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written
ADSOUTH PARTNERS, INC.
By: /S/Xxxxx Xxxxxx
--------------------------------------
Chairman of Compensation Committee, Adsouth
Partners, Inc.
/S/ Xxxx X. Aucnto
-----------------------
Xxxx X. Xxxxxx, Xx.
VII