CONSULTING AGREEMENT
Consulting agreement dated as of the 26th day of May, 2006, by and between
Adsouth Partners, Inc. a Nevada corporation with its principal office at 1141 S.
Rogers Circle, Suite 11, Boca Raton, Florida 33487 (the "Company"), and John P.
Acunto, Jr., residing at 7098 Via Firenze, Boca Raton, Florida 33433
("Consultant").
WITNESSETH:
WHEREAS, the Company has an agreement with Consultant pursuant to which
Consultant is providing services to the Company (which agreement, as in effect
at the time of the execution of this Agreement is referred to as the "Prior
Agreement"); and
WHEREAS, the Company desires to amend, extend and restate the terms of
Consultant's relationship with the Company; and
WHEREAS, this agreement amends, restates and replaces in its entirety the Prior
Agreement and sets forth the relationship between the Company and Consultant
from and after the date of this Agreement, terminating any rights he has under
the Prior Agreement, other than for compensation earned and accrued through the
date of this Agreement pursuant to the Prior Agreement and options granted
pursuant to the Prior Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Services.
(a) Subject to the terms and conditions hereinafter set forth, the
Company hereby engages Consultant to 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, 2010, and shall continue on a year-to-year basis
thereafter unless terminated by either party on ninety (90) days'
notice prior to the expiration of the Initial Term or any
subsequent one-year term. The Initial Term and the one-year
extensions are collectively referred to as the "Term."
Notwithstanding the foregoing, in the event that, at the request
of the Company, Consultant guarantees indebtedness of the Company
or any of its subsidiaries in an aggregate amount of not less than
two hundred fifty thousand ($250,000.00) dollars), then as long as
there are obligations under any such guarantees, the Company shall
not have the right to terminate this Agreement without the consent
of Consultant. Upon termination of this Agreement for any reason,
Consultant shall not be required to guarantee any obligations of
the Company or its subsidiaries subsequent to the termination of
this Agreement, and, upon
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termination he may terminate his guarantees as to future advances
to the Company or any subsidiary.
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 base compensation (the "Base Compensation") in the
amount of twenty thousand dollars ($20,000.00) per month, payable
in advance on the first day of the month as a draw against the
commission compensation set forth in 3(c) & 3(d).
(b) Major medical health insurance for Consultant and members of his
immediate family; provided, however, that until such time as the
Company shall have adopted a company-wide health insurance
program, the Company will provide consultant with a monthly
medical allowance of $750 which Consultant may continue, at his
option.
(c) The Company shall pay Consultant a commission (the "Commission")
on gross profit from all Covered Accounts (except Genco), as
hereinafter defined, equal to the amount, if any, by which (i) ten
percent (10%) of the Company's gross profit on the Covered
Accounts for each of the Company's fiscal quarters during the Term
exceeds (ii) Consultant's Base Compensation payable during the
quarter. The Commission shall be payable not later than the date
on which the Company files its Form 10-QSB for the quarter or,
with respect to the fourth quarter, the Form 10-KSB for the year,
and shall be accompanied by a statement setting forth the
determination of the Commission due for the month. As regards
Genco, commissions earned shall be calculated and paid on a
monthly basis consistent with the formula described next
immediately below at (d) and due and payable beginning January 1st
, 2006.
(d) Except as defined below for Genco Power Solution, Inc. ("Genco")
gross profit shall be determined in accordance with generally
accepted accounting principles consistently applied. A
determination by the Company's independent accountants as to the
gross profit from any Covered Account (except Genco) shall be
final, binding and conclusive on both parties. As regards Genco,
Genco's gross profit on each unit sold shall be determined by the
following formula: Revenue from the sale and installation of the
unit minus 130% of the cost of the unit. Payments are to be paid
in equal proportion to money received on each contract.
(e) All commissions paid to date are ratified as correct and
non-refundable, including N.V.E./Stacker.
(f) The term "Covered Accounts" shall mean:
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(i) All of the Company's present accounts;
(ii) Any new accounts which are unequivocally generated by
Consultant's efforts.
(iii) All revenue from Genco commencing January 1, 2006.
(iv) All revenue from the sale of any new product which is
brought to the Company solely by Consultant.
(g) The options granted pursuant to the Prior Agreement shall continue
in full force and effect to the extent set forth therein.
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 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, except that
the Company shall pay Commissions to his beneficiary for gross
profit recognized during the balance of the then current Term.
(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 (x) any felony or (y) any misdemeanor involving
theft, fraud, drugs or controlled substances.
(d) In the event of termination of this Agreement or Consultant's
engagement by the Company pursuant to Section 6(b) of this
Agreement, the Company shall pay Consultant his Base Compensation
through the end of the month of discharge and the Commissions for
gross profit recognized through the end of the month of discharge.
(e) In the event of termination of this Agreement or Consultant's
engagement by the Company pursuant to Section 6(c) of this
Agreement, the Company shall pay Consultant his Base Compensation
through the end of the month of discharge and the Commissions for
gross profit recognized through the end of the then-current Term.
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(f) In the event of a termination of this Agreement or Consultant's
engagement by the Company other than as provided in Sections 5(a),
5(b) and 5(c) of this Agreement, the Company shall pay Consultant
his Base Compensation through the end of the then-current Term and
the Commissions for gross profit recognized through the end of the
then-current Term.
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) 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 6, 7, and 8 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 6(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
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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 6 and 7 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 any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable because of the
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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 6, 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, Angela
Acunto, as follows:
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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, until June 16, 2007. Thereafter, sales of such
shares, to the extent that they may be sold pursuant to Rule 144 of
the Securities and Exchange Commission (the "Commission") pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), or are
otherwise registered pursuant to such Securities Act, shall not exceed
that 1% volume limitation of Rule 144 of the Commission pursuant to
the Securities Act.
13. Rights Concerning Directors. During the Term and as long as the
number of shares owned by Consultant, including any shares owned by
family members as to which he has the right to vote or to dispose of
the shares, represents not less than 40% of the then outstanding
stock, Consultant shall have the right to designate one nominee for
director if the board consists of three or four directors and two
nominees for director, if the board consists of five or more
directors. All of such nominees shall be (a) independent directors as
defined in the regulations relating to Nasdaq listed stock and (b) not
directly or indirectly related to Consultant or his wife.
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.
(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 (561) 750-0420, or to Consultant at
(561) * , with notice to the Company being sent to the
attention of the individual who executed this Agreement on
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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 Boca Raton, Florida
before a single arbitrator, whose decision 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
have no power to modify or amend any specific provision of this
Agreement except as expressly provided in Section 7(b) and 15(h)
of this Agreement.
(g) Notwithstanding the provisions of Section 14(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, including the Prior Agreement, all of which
except as expressly set forth in this Agreement, are hereby
terminated, with respect to the subject matter covered in this
Agreement. This Agreement may not be modified or 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
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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.
(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/ Loren Haynes
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Loren Haynes, Chairman of the
Compensation Committee
By: /S/ John Cammarano
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John Cammarano, Member
By: /S/ Harlan Press
----------------
Harlan Press, Member
By: /S/ John P. Acunto, Jr,
-----------------------
John P. Acunto, Jr.
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