CONSULTING AGREEMENT
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CONSULTING AGREEMENT (the "Agreement") dated as of the 21 day of March
2005, between POWER2SHIP INTERMODAL, INC., a Delaware corporation ("Company"),
POWER2SHIP, INC., a Nevada corporation ("P2S") and XXXXXXX XXXXXX, an individual
resident in the State of New Jersey ("Consultant").
R E C I T A L S:
A. Company is a indirect wholly-owned subsidiary of P2S and will
principally be engaged in the business of intermodal transportation (the
"Business");
B. Company desires to engage Consultant to provide the services
hereinafter described relating to the Business;
C. Consultant acknowledges that it has the technical knowledge and
business background and experience to undertake its duties hereunder and will
diligently and faithfully render the services requested by Company; and
D. This Agreement is being entered into in conjunction with the
Company's acquisition of substantially all of the assets of G.F.C., Inc., a
South Carolina corporation, pursuant to the terms of an Asset Purchase Agreement
dated February 16, 2005.
NOW, THEREFORE, in consideration of the terms and the mutual
undertakings contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties, it is
agreed as follows:
1. Term. Subject to the terms and conditions set forth herein, this
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Agreement shall commence on the date set forth above (the "Effective Date") and
expire on the fifth anniversary of the Effective Date; provided, however, that
this Agreement will automatically be extended for successive, one-year renewal
terms, upon such terms and conditions as may be agreed upon, in writing, by
Company and Consultant, unless earlier terminated as provided herein. Except as
set forth to the contrary, the phrase "the term of this Agreement" shall include
any renewal term(s).
2. Services, Availability of Consultant. Company hereby engages
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Consultant to provide the services herein described (the "Services") and to
faithfully perform his obligations hereunder. Consultant shall report directly
to a designee of the Board of Directors of the Company, and shall perform his
Services at the direction of the Company's Board of Directors. Consultant shall
devote such time and attention to his duties under this Agreement as may be
required in order to faithfully perform his obligations hereunder; it being the
expectation of the parties that Consultant shall devote fifteen hours to his
responsibilities hereunder.
3. Duties. For purposes hereof, the Consultant shall be General
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Manager of the Company and the Services shall include and the Consultant shall
be responsible for the day to day management of all phases of the Company's
business including
- DOT and other Governmental compliance
- Hiring and supervision of agents
- Hiring and supervision of owner operators
- Accounts receivables
- Accounts payable
- Billing
- Proper payment to agents
- Proper payment to owner operators, and
- Such other matters as may be requested by the President, Chief
Executive Officer or Board of Directors of the Company and agreed to
by Consultant.
In connection with the Services to be provided by the Consultant to the Company,
Company will provide assistance to the Consultant with respect to IT, legal
issues and financial matters including banking, A/R loan, and accounting and
accounting audits.
4. Compensation. As full compensation hereunder for the faithful
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performance of the Services and adherence to the covenants and undertakings of
Consultant under this Agreement:
(a) Company shall pay to Consultant a commission earned on each
anniversary date of the date of this Agreement equal to 5% (payable 1% per year
for 5 years) of the gross revenue of the Company in excess of the actual Company
revenue generated during the prior year as long as Consultant remains General
Manager of the Company pursuant to this Agreement. For the purpose of
calculating the commission on the first anniversary date, it shall be agreed
that actual revenue in the year prior to the date of this Agreement was
$6,000,000. For example, if the Company's actual revenue increases from
$6,000,000 to $10,000,000 in the first year after the date of this Agreement,
then Consultant would earn a commission of $200,000 that would be paid $40,000
per year at the beginning of years 2 through 6. All intermodal transportation
services generated by P2S or any P2S subsidiary shall be referred to and handled
by the Company.
(b) In addition, the Consultant shall be granted a three-year option for
shares of common stock of P2S ("Option") on each anniversary date of the date of
this Agreement if the Company's actual gross revenue increases from the prior
year's actual gross revenue as long as the Consultant remains General Manager of
the Company pursuant to this Agreement. For the purpose of calculating the
Option on the first anniversary date, it shall be agreed that the Option shall
be based on revenue in excess of $10,000,000. The number of shares of common
stock which the Consultant may purchase upon exercise of the Option shall be
calculated by multiplying the increase in revenue by 2% and dividing that number
by the price of the common stock of P2S at that time (the exercise price per
share). For example, if the Company's revenue in year 1 is $11,000,000 and P2S's
common stock closes at $.50 on the one-year anniversary, then the Consultant
would be granted an Option to purchase 40,000 shares of common stock of P2S= [2%
x $1,000,000] / $.50. The exercise price of the Option and the number of shares
issuable upon exercise of the Option (the "Option Shares") shall be subject to
proportionate adjustment in the event of stock splits, dividends or similar
corporate recapitalizations. In the event P2S desires to grant the Option or
issue the Option Shares under a stock option plan, the terms of the Option and
Option Shares shall, to the extent not inconsistent herewith, be subject to the
terms and conditions of such plan.
(c) During the term of this Agreement, the Consultant shall be entitled
to receive proper reimbursement for all reasonable, out-of-pocket expenses
incurred by the Consultant (in accordance with the policies and procedures
established by the Company for its officers) in performing the Services
hereunder, provided the Consultant receives prior written approval therefore and
submits a properly completed Company expense report with appropriate receipts.
(d) In addition, the Consultant shall be granted a three-year option to
purchase up to 200,000 shares of common stock of P2S at an exercise price equal
to the current market price of the common stock on the day prior to issuance
when and for special sales opportunities as approved by the Company's Board of
Directors.
5. Return of Documents. On termination of this Agreement or at any
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time upon the request of Company, Consultant shall return to Company all
documents, including all copies thereof, and all other property relating to the
Business of Company and/or its Affiliates (as hereinafter defined), including
without limitation, Confidential Information (as hereinafter defined), in its
possession or control, no matter from whom or in what manner they may have
acquired such property.
6. Confidentiality.
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(a) In connection with this Agreement, Consultant may gain access to
Confidential Information (as hereinafter defined) of Company and/or its
Affiliates, including but not limited to P2S (collectively, "Affiliates").
Confidential Information includes information communicated orally, in writing,
by electronic or magnetic media, by visual observation, or by other means, and
may be marked confidential or proprietary, or bear a marking of like import, or
which Company or any of its Affiliates state to be Confidential or proprietary,
or which would logically be considered confidential or proprietary under
circumstances of its disclosure known to Consultant.
(b) Consultant acknowledges and understands that (i) Confidential
Information provides Company and its Affiliates with a competitive advantage (or
that could be used to the disadvantage of Company and its Affiliates by a
competitor), (ii) Company and its Affiliates have a continuing interest in
maintaining the confidentiality of Confidential Information and (iii) Company
and its Affiliates have a compelling business interest in preventing unfair
competition stemming from the use or disclosure of Confidential Information.
Moreover, Consultant acknowledges that clients of Company and/or its Affiliates
entrust Company and its Affiliates with responsibility for acquiring knowledge
relating to aspects of their clients' businesses, with the expectation that
Company and its Affiliates will hold all such knowledge, including in some cases
the fact that they are doing business with Company and its Affiliates, and the
specific transactions in which they are engaged, in the strictest confidence
("Client Confidences").
(c) For purposes hereof, "Confidential Information" includes, but is not
limited to information pertaining to business plans, technology, intellectual
property, joint venture agreements, licensing agreements, financial information,
contracts, customers, Client Confidences, employee identities and contact
information, products, trade secrets, specifications, designs, plans, drawings,
software, data, prototypes, processes, methods, research, development or other
information relating to the business activities and operations of Company and/or
its Affiliates.
(d) Consultant agrees to keep Confidential Information confidential and,
except as authorized by Company or any of its Affiliates, in writing, Consultant
shall not, directly or indirectly, use Confidential Information for any reason
except to perform its obligations under this Agreement. No other rights or
licenses, to trademarks, inventions, copyrights, patents or any other
intellectual property rights are implied or granted under this Agreement or by
the conveying of Confidential Information to Consultant.
(e) Consultant shall use Confidential Information only for purposes of
performing under this Agreement. In the event the performance of the Services
requires Consultant to disclose Confidential Information to any agent,
representative or other third person, disclosure shall be made only on an "as
needed" basis and Consultant shall advise those persons who require access to
the Confidential Information of their obligations with respect thereto.
Further, Consultant shall copy Confidential Information only as necessary, and
ensure that all confidentiality notices are reproduced in full on such copies.
(f) The restrictions in subsection (d) of this Section shall not apply
to any Confidential Information if Consultant can demonstrate that the
Confidential Information:
(i) is or becomes available to the public through no breach of this
Agreement;
(ii) was previously known by Consultant without any obligation to hold
it in confidence;
(iii) is received from a third party free to disclose such information
without restriction;
(iv) is independently developed by Consultant without the use of the
Confidential Information;
(v) is approved for release by written authorization of Company;
(vi) is required by law or regulation to be disclosed, but only to the
extent and for the purposes of such required disclosure; or
(vii) is disclosed in response to a valid order of a court or lawful
request of a governmental agency, but only to the extent of and for the
purposes of such order or request, provided that Consultant notifies
Company of the order or request ten days prior to disclosure and permits
Company and/or its Affiliate to seek an appropriate protective order.
7. Several Covenants. Consultant undertakes that during the term
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of this Agreement and for a period of 24 months thereafter he will not, directly
or indirectly (whether as a sole proprietor, partner, stockholder, director,
officer, employee or in any other capacity as principal or agent), do any of the
following:
(a) hire, or attempt to hire for employment, any person who is or
was an employee of Company or any of its Affiliates within the twelve month
period prior to the date of termination of this Agreement, or attempt to
influence any such person to terminate its employment by Company or any such
Affiliate; or
(b) in any other manner interfere with, disrupt or attempt to
disrupt the relationship, contractual or otherwise, between Company and its
Affiliates, on the one hand, and any of their respective employees, on the other
hand, or disparage the business or reputation of Company or its Affiliates to
any such persons.
(c) solicit, service or accept any actual or prospective accounts,
clients or customers from Company or its Affiliates who were such at any time
during the term of this Agreement;
(d) influence or attempt, directly or indirectly to influence any
of the accounts, customers or clients referred to in Subsection 7(c) to transfer
their business or patronage from Company or any of its Affiliates to any other
person or company engaged in a similar business;
(e) assist any person or company soliciting, servicing or
accepting any of the accounts, customers or clients referred to in Subsection
7(c); or
(f) in any other manner interfere with, disrupt or attempt to
disrupt the relationship, contractual or otherwise, between Company or any of
its Affiliates, on the one hand, and any of the customers or clients referred to
in Subsection 7(c), on the other hand, or any other person, or disparage the
business or reputation of Company or any of its Affiliates to any such person.
8. Blue-Pencil. If any court of competent jurisdiction shall at any
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time deem the term of any of the covenants and undertakings of Consultant under
Sections 6 and 7 and herein too lengthy or broad, the other provisions of
Sections 6 and 7 shall nevertheless stand, the period of restriction shall be
deemed to be the longest period and broadest coverage permissible by law under
the circumstances. The court in each case shall reduce the period of restriction
to permissible duration.
9. Remedies. Without intending to limit the remedies available to
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Company and its Affiliates, Consultant agrees that a breach of any of the
covenants contained in Sections 6 and/or 7 may result in material and
irreparable injury to Company or its Affiliates for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof, Company and
its Affiliates shall be entitled to seek a temporary restraining order or a
preliminary or permanent injunction, or both, without bond or other security,
restraining Consultant from engaging in activities prohibited by Sections 6
and/or 7 or such other relief as may be required specifically to enforce any of
the covenants in such sections. Such injunctive relief in any court shall be
available to Company and its Affiliates in lieu of, or prior to or pending
determination in, any other proceeding.
10. Representations and Covenants of Consultant.
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(a) Consultant hereby represents and warrants to Company and P2S that
(i) Consultant has the full, complete and entire right, power and authority to
enter into this Agreement, (ii) the execution of this Agreement by Consultant
and the performance of Consultant's Services hereunder will not, directly or
indirectly, violate, or be a breach of, any agreement, law, rule, regulation,
order, commitment or responsibility of any kind, (iii) this Agreement contains
the valid and binding obligations of Consultant and (iv) Consultant is not,
directly or indirectly, in breach of any confidentiality agreement or covenant
not to compete to which it is a party.
(b) Consultant represents and warrants to Company and P2S that (i) the
Option and Options Shares (collectively, the "Securities") will be acquired for
investment purposes only and not with a view towards their distribution or
resale except in compliance with applicable securities laws, (ii) the Securities
will be acquired for the account of the undersigned and no other person has any
interest in any of the Securities, (iii) Consultant has such knowledge and
experience in business and financial matters that it is able to evaluate the
risks and merits of its acquisition of the Securities, (iv) Consultant
understands that the Securities will not be registered under the Securities Act
of 1933, as amended, and that the Securities may not be sold, assigned, pledged,
transferred or otherwise disposed of absent such registration or the
availability of an applicable exemption from registration, (vi) Consultant has
reviewed the periodic reports filed by P2S with the Securities and Exchange
Commission during the past year and understands that an investment in the
Securities is highly speculative, (vii) Consultant understands that there is
only a limited public market for the Securities and, therefore, that Consultant
have difficulty or may be unable to resell the Securities or, even if he is able
to do so, may be unable to realize a profit on resale and (viii) Consultant
understands that a legend will be placed on all certificates evidencing any of
the Securities referring to the restrictions described in subparagraph (iv) of
this Section 10(b).
(c) Consultant will not use in the performance of his responsibilities
under this Agreement any confidential or proprietary information or trade
secrets of any other person or entity.
(d) Consultant has not entered into and will not enter into any
agreement (whether oral or written) in conflict with this Agreement.
(e) Consultant will promptly advise Company of any potential
conflict of interest that may arise during his service as a consultant to
Company, and will withdraw from any activity upon request when the Company, in
its sole discretion, deems such withdrawal necessary or desirable to avoid any
actual or potential conflict of interest.
(f) Consultant shall execute and deliver to Company such
Non-Disclosure Agreements and/or Business Ethics and related policies as are
established from time-to-time by Company, and are generally applicable to
Company's consultants.
(g) In the performance of its duties hereunder, Consultant shall,
at all times:
(i) observe the strictest rules of professional, technical and
commercial ethics;
(ii) comply with all applicable laws, rules and regulations, including
those of the Securities and Exchange Commission and each other regulatory
body with jurisdiction over the Company and its operations; and
(iii) hold and maintain all licenses and permits required in order for
Consultant to perform his responsibilities under this Agreement and receive
the compensation to be paid hereunder.
(h) In the performance of his duties hereunder, Consultant shall not:
(i) divulge Confidential Information in violation of this Agreement;
(ii) hire, fire, discipline or reprimand any employee of Company or
any of its Affiliates;
(iii) enter into any written or oral contract, agreement or
understanding with any person, binding Company and/or committing the
assets, funds or other resources of Company or any of its Affiliates; or
(iv) directly or indirectly buy, sell or otherwise engage in trading
in the securities of Company, except as may expressly be permitted by the
Company, in writing.
(i) Consultant has and will continue to truthfully disclose to the
Company the following matters, whether occurring at any time preceding the date
of this Agreement or at any time during the term of this Agreement:
(i) any criminal complaint, indictment or criminal proceeding in which
Consultant, or any officer, director or employee of Consultant, is named as
a defendant;
(ii) any allegation, investigation, or proceeding, whether
administrative, civil or criminal, against Consultant, or any officer,
director or employee of Consultant, by any licensing authority or industry
association;
(iii) Consultant's, or any officer, director or employee of
Consultant's, violation or alleged violation of any confidentiality
agreement or covenant not to compete to which it is a party; and
(iii) any allegation, investigation or proceeding, whether
administrative, civil, or criminal, against Consultant for violating
professional ethics or standards, or engaging in illegal, immoral or other
misconduct (of any nature or degree), relating to the business conducted or
to be conducted by the Company.
11. Termination. This Agreement may be terminated by either party on
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90 days' prior written notice; provided, however, that this Agreement shall
terminate (i) automatically upon the death of the Consultant. and (ii)
immediately upon written notice to Consultant in the event:
(a) Consultant engages in fraud or dishonesty perpetrated upon Company
and/or any of its Affiliates;
(b) Consultant is convicted of a crime (other than a non-felony traffic
offense);
(c) Consultant violates any law, rule or regulation of the Securities
and Exchange Commission or any other regulatory body with jurisdiction over the
Company, its Affiliates and/ or their respective operations;
(d) Consultant discloses Confidential Information in violation of this
Agreement; and/or
(e) Consultant makes any material misrepresentation to any third party
concerning the Company or any of its Affiliates.
Termination shall be without prejudice to the rights of a party to seek damages
or other relief arising out of a breach of this Agreement.
12. Notices. Unless otherwise specifically provided herein, all
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notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid at the following addresses, and/or to such other addresses and/or
persons which either party may designate by like notice:
(a) if to Consultant, to:
000 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to the Company or P2S , to:
Power2Ship, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Chief Executive Officer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
13. Independent Contractor. The relationship of Consultant to Company
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shall be that of an independent contractor. Nothing herein shall create an
employment relationship between the parties, or a joint venture. Each party
shall pay the taxes attributable to it, including those, if any, arising by
reason of execution of this Agreement. Consultant shall pay all taxes and the
cost of insurance and health and other benefits to which Consultant may be
entitled and Company shall have no obligation to pay any such taxes, insurance,
benefits or similar items for or on behalf of Consultant or any person employed
by Consultant. Subject to the terms and conditions of this Agreement, neither
party shall operate under the direct or indirect supervision of the other.
Moreover, neither party shall attempt, or have the right, to bind the other
party to any agreement, understanding or contract with any third party.
14. Additional Provisions.
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(a) This Agreement shall inure to the benefit of, and be binding
upon, Company, and its respective successors and assigns, and Consultant.
Consultant shall not assign or delegate the performance of any of its rights
and/or obligations under this Agreement without the prior written consent of
Company and any attempted assignment in violation of this Agreement shall be
null and void.
(b) This Agreement constitutes the entire Agreement,
representation and understanding of the parties hereto with respect to the
subject matter hereof, and no amendment or modification hereof shall be valid or
binding unless made in writing and signed by the parties hereto.
(c) No waiver of any provision of this Agreement shall be valid
unless the same is in writing and signed by the party against whom it is sought
to be enforced. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.
(d) If any provision of this Agreement is invalid or unenforceable
in any jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, but the
foregoing shall not render invalid or unenforceable in such jurisdiction the
remainder of this Agreement or the remainder of such provision or affect the
validity or unenforceability of any provision of this Agreement in any other
jurisdiction.
(e) Any legal suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby shall be
instituted exclusively in a federal or state court of competent jurisdiction
located in the County of Palm Beach, State of Florida. Each of the parties
hereto hereby: (i) waives any objection which it may now have or hereafter have
to the venue of any such suit, action or proceeding, and (ii) irrevocably
consents to the jurisdiction of such courts in any such suit, action or
proceeding. The parties further agree to accept and acknowledge service of any
and all process which may be served in any such suit, action or proceeding and
agree that service of process upon a party mailed by certified mail to such
party's address shall be deemed in every respect effective service of process
upon such party in any such suit, action or proceeding. Each of the parties
waives any right to object to the jurisdiction, the venue of either of such
courts, or to claim any such court is an inconvenient forum.
(f) Consultant acknowledges that prior to the execution of this
Agreement it had full opportunity to consult with his own independent attorneys
and advisors as deemed appropriate and Consultant fully understands the nature
and scope of his rights and obligations hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement or caused this
Agreement to be executed on the date first above written.
POWER2SHIP INTERMODAL, INC.
By:
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Name:
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Title:
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POWER2SHIP, INC.
By:
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Name:
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Title:
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CONSULTANT
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
