CONSULTING AGREEMENT
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AGREEMENT dated as of the 1st day of April, 2004 by and between Netsmart
Technologies, Inc., a Delaware corporation with its principal office at 3500
Sunrise Highway, Suite D-122, Great River, New York 11739 (the "Company"), and
John F. Phillips, residing at 5 Neustadt Lane, Chappaqua, NY 10504 (the
"Consultant").
W I T N E S S E T H :
WHEREAS, the Consultant possesses certain valuable knowledge, skill,
ability and experience with respect to the business and affairs of the Company;
and
WHEREAS, the Company desires to secure the services of the Consultant as
an independent contractor to the Company on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, the parties agree as follows:
1. The Company's Business and Commercial Relationships.
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The Company is engaged in the business of information technology
including (but not limited to) the development, marketing and field
support of certain application software products to providers of
services in the health and human services fields. The Consultant is an
expert and is thoroughly knowledgeable with respect to the business of
the Company, and the Consultant understands and acknowledges that the
Company requires a high level of competency, cooperation, loyalty,
integrity, initiative and resourcefulness with respect to any services
that the Consultant might provide to the Company. The Consultant further
understands that he may have contact with the Company's managers,
employees, vendors, consultants, customers and/or potential customers,
and that collectively, these relationships constitute a substantial part
of the goodwill of the Company.
2. Consulting Relationship.
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The Company hereby appoints and retains the Consultant as an
independent consultant to the Company, and the Consultant accepts such
appointment to perform consulting services for and on behalf of the
Company under and subject to the terms and conditions of this Agreement.
3. The Services to be Rendered.
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The Consultant is an independent contractor of the Company as
provided in Paragraph 7 hereof, and nothing herein shall create,
constitute or represent an employment relationship between the Company
and the Consultant. The Company and the Consultant shall agree upon
certain consulting assignments and activities, and the further terms
thereof, from time to time, provided however, that the Company
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affirmatively anticipates the need for, and the Consultant hereby agrees
to provide, a minimum of twenty-five (25) full days of consulting
service per calendar year during the term of this Agreement.
4. Term of Agreement; Termination Thereof.
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The initial term of this Agreement is for a period of one year.
This Agreement shall automatically renew for successive one-year periods
unless terminated (a) by either party upon 60 days written notice prior
to the end of the (then) current term, or (b) by the Company upon 30
days written notice to the Consultant of a breach of this Agreement, or
failure on the part of the Consultant to adequately provide the services
contemplated hereunder, or failure on the part of the Consultant to
comply with the instructions of the Company as conveyed to the
Consultant from time to time, or for other good cause as determined in
good faith by the Board of Directors of the Company.
5. Consultant's Compensation.
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As compensation for the consulting services rendered by the
Consultant hereunder, the Company shall pay to the Consultant a per diem
fee as agreed upon by the Company and the Consultant from time-to-time.
During the initial term of this Agreement, the per diem fee provided
hereby shall be One Thousand Five Hundred ($1,500) Dollars. The
Consultant shall provide the Company with such written invoices and
other documentation pertaining to the consulting services provided by
the Consultant as are required for the proper accounting and auditing of
such services and fees by the Company no less frequently than monthly.
The Company shall pay such invoices within thirty (30) days of receipt.
6. Reimbursement of Expenses.
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The Company shall reimburse the Consultant, upon presentation of
proper expense statements, for all authorized, ordinary and necessary
out-of-pocket expenses reasonably incurred by the Consultant in
connection with his performance of the consulting services contemplated
hereunder in accordance with the Company's expense reimbursement policy.
7. Independent Contractor Status.
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The Consultant is engaged by the Company solely as an independent
contractor and not as an employee of the Company, and no employment
relationship is created or implied by this Agreement. The Consultant has
no authority, actual, apparent or implied, to act for or on behalf of
the Company, or to bind the Company in any contract or agreement, in any
manner, without the express written approval of the Company. The
Consultant shall not make any representations concerning his authority
inconsistent with this Paragraph 7. The Consultant shall not engage,
employ or retain the services of any person or entity to aid or assist
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the Consultant in the provision of his services hereunder without the
written approval of the Company. The Consultant shall provide for and
assume all expenses and costs incurred by him in the performance of his
duties and obligations hereunder. The Consultant is responsible for the
payment of all Federal, state and local income taxes, employment taxes,
FICA, workers' compensation, and any and all other taxes or fees with
respect to any income derived by the Consultant from the services
performed pursuant to this Agreement.
8. Agreement Not to Compete.
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During the term of this Agreement and for a period of one year
following the receipt by the Consultant of any payments hereunder or
under the Company's Executive Retirement Plan, the Consultant shall not
(for any reason whatsoever) either individually or in conjunction with
any person or persons, association, syndicate, company, corporation or
firm, directly or indirectly engage in any business that is competitive
with the business of the Company as an executive, employee, consultant,
contractor, principal, agent, shareholder, director or in any other
manner. Nothing herein precludes the Consultant from engaging in any
business or endeavor that is not competitive with the business of the
Company. If this Agreement or any portion thereof is determined by a
court of competent jurisdiction to be invalid, unreasonable or
unenforceable, it is hereby agreed to by the Consultant that such
determination will not invalidate the remaining portion(s) of the
Agreement.
9. Solicitation of Employees.
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The Consultant, for himself or any others, directly or
indirectly, shall not hire or engage the services of, or seek or solicit
to hire, any employee of the Company during the term of this Agreement
and for a period of one year following the receipt by the Consultant of
any payments hereunder or under the Company's Executive Retirement Plan.
10. Confidential Information.
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The Consultant acknowledges that the Company's products,
services, processes, inventions, techniques, clients, customers,
commercial accounts, fees, pricing policies, marketing techniques,
organizational structure, long-range strategies and goals, and all
manner of other proprietary information are valuable and unique assets
of the Company, and that they are the Confidential Information of the
Company. Such information is and will remain the exclusive property of
the Company. During and following the term of this Agreement, the
Consultant agrees that he will not communicate, divulge, or use for his
own benefit or the benefit of any person or persons, association,
syndicate, company, corporation or firm, any Confidential Information
obtained by him during the term of his consulting relationship with the
Company. Upon the termination of this Agreement, the Consultant will
deliver to the Company any and all materials, files, documents, programs
and other Confidential Information in whatever form it may exist
(including in electronic form on computer discs or otherwise), and he
will not retain any such information in any form nor will he keep or
give copies or disclose any such information to any other person or
persons.
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11. Enforcement of Agreement.
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Upon breach or threatened breach of this Agreement, the Company
is entitled to injunctive relief against such breach in any court of
competent jurisdiction in addition to any other remedies that may be
available to the Company in law or in equity. The Consultant understands
that any right or remedy set forth in this Agreement is not exclusive,
but is cumulative upon all other remedies available to the Company
including injunctive relief and recovery of money damages. Failure of
the Company to enforce any of the provisions of this Agreement does not
constitute a waiver or limit any of the Company's rights hereunder. The
covenants contained in Paragraphs 8, 9, and 10 hereof are independent of
any other provision of this Agreement and independent of each other, and
the existence of any claim or cause of action which the Consultant may
have against the Company, whether based on this Agreement or otherwise,
is not a defense against the enforcement by the Company of such
convenants.
12. Assignment.
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This Agreement, or any part of it, may not be assigned by either
the Company or the Consultant without the written approval of the other
party.
13. Governing Law.
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This Agreement is made and entered into in the State of New York,
and all disputes, controversies or questions relating to the performance
of the parties hereunder shall be resolved in accordance with the laws
of the State of New York.
14. Entire Agreement; Modification.
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This Agreement contains the entire understanding of the parties
and supercedes any prior agreements or understanding (including any
prior employment agreements or consulting arrangements) between the
Company and the Consultant. The Agreement may be changed or modified
only by written agreement of the parties.
15. Indemnification.
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The Consultant hereby indemnifies and holds harmless the Company
from any and all claims, suits, damages or losses or any nature
whatsoever arising from or directly related to the rendering of
consulting services by the Consultant to the Company as described
herein.
16. Representation of Consultant.
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The Consultant hereby represents and warrants that he is not
party to any employment agreement or contract, or covenant not to
compete, or non-solicitation or non-disclosure agreement which would
prohibit, restrict or in any way impair his ability to enter into or
provide consulting services under this Agreement.
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IN WITNESS WHEREOF, the parties have entered into this Consulting
Agreement as of the date set forth above.
NETSMART TECHNOLOGIES, INC.
By: /s/ James L. Conway
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Chief Executive Officer
THE CONSULTANT
By: /s/ John F. Phillips
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John F. Phillips