RESTATED CONSULTING SERVICES AGREEMENT
Exhibit
10.1
RESTATED
CONSULTING SERVICES AGREEMENT
THIS
CONSULTING AGREEMENT (the “Agreement”), is made and entered into as of this 2nd
day of August, 2009 (the “Effective Date”), by and among WQN, Inc., a Texas
corporation (the “Company”), Quamtel, Inc., (“Parent”) and iTella, Inc.,
(hereinafter referred to as “Consultant”), as amended and restated on December
1, 2009. The Company and Consultant are sometimes collectively
referred to as “Parties” or individually as a “Party”.
R E C I T
A L S
WHEREAS,
the Company is an emerging global provider of advanced communications services
specializing in Virtual calling cards with 100% online distribution, residential
and Business phone replacement services with low cost international termination
and Toll Free-Virtual Fax with unified messaging capabilities utilizing Voice
over Internet Protocol (VOIP) as its core technology component; and
WHEREAS,
Consultant has significant experience with operations, administration,
financing, marketing and day to day operations of the Company; and
WHEREAS,
the Company desires to utilize Consultant’s business expertise and Consultant
desires to provide services to the Company.
NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby expressly acknowledged, the Parties agree as
follows:
A G R E E M E N
T
ARTICLE
I
APPOINTMENT
1.1 Appointment. The
Company hereby engages Consultant to furnish the services described in
Article 3 of this Agreement, and Consultant hereby accepts such
engagement. The Consultant agrees to use its best efforts to perform
its duties, responsibilities, and obligations set forth in this
Agreement.
1.2 Status of the
Parties. It is expressly understood and agreed that in the
performance of services under this Agreement, Consultant shall, at all times, be
an independent contractor with respect to the Company, and not an agent, officer
or employee of the Company. Further, it is expressly understood and
agreed by the Parties that nothing contained in this Agreement is intended to
create a joint venture, partnership, association or other affiliation or like
relationship between the Parties. In no event shall either Party be
liable for the debts or obligations of the other Party. Consultant
understands that it will not be treated as an employee for Federal tax purposes
and that Consultant shall be responsible for all taxes, Social Security and FICA
payments and withholding.
Consultant
shall not be entitled or eligible to receive ▇▇▇▇▇▇▇’▇ compensation insurance,
disability or unemployment insurance benefits or any other employee benefits
offered by the Company to its employees.
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ARTICLE
II
CONDITIONS
AND TERMS OF AGREEMENT
The
Company shall at all times retain and exercise full control over the operations
of the Company’s business. Nothing in this Agreement shall be deemed
to delegate to Consultant any such control or
responsibility. Consultant shall perform only those functions set
forth in this Agreement or otherwise delegated by the Company, and shall be
solely responsible for determining the manner in which the services are
rendered. The Company shall provide Consultant with access to the
Company’s premises and its employees to enable Consultant to perform its
services hereunder.
ARTICLE
III
OBLIGATIONS
OF CONSULTANT
Consultant
shall devote its best efforts, skill and sufficient time and attention to carry
out its responsibilities under this Agreement. Consultant shall
report to the Chief Executive Officer of the Company (the “Chief Executive
Officer”) and the Board of Directors of the Company (the “Board of
Directors”). Consultant shall provide, at the reasonable request of
the Chief Executive Officer and the Board of Directors (the “Management”),
advanced business strategy, financing, product development and marketing advice
including but not limited to day to day operations. Consultant shall
act in substantial accordance with all reasonable instructions and directives of
Management. Consultant shall comply with all written policies and
procedures of the Company that are furnished to it and which are applicable to
Company employees in general, in connection with the performance of services
hereunder. Consultant shall be available, at reasonable times and
upon reasonable notice, to consult with Management.
ARTICLE
IV
PAYMENT
4.1 Consideration. In
consideration of the services provided by Consultant pursuant to this Agreement,
the Company shall pay to Consultant $200,000 on an annual (12 calendar month)
basis for a period of six months then after the first six months starting
February 1, 2010 the annual basis will increase to $250,000. All payments
shall be payable in equal monthly installments commencing on the Effective Date
of August 2, 2009, and the above base compensation shall be in addition to
the profit sharing compensation listed in Section 5.2 and other benefits
listed in Article V.
4.2 Reasonableness of
Payments. The amounts paid to Consultant hereunder have been
determined by the Parties in good faith and through arms-length negotiation and
are intended to be based on fair market value for the services rendered by the
Consultant.
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ARTICLE
V
BUSINESS
EXPENSES; ADDITIONAL BENEFITS
5.1 Reimbursement of
Expenses. The Company shall reimburse Consultant for business
expenses incurred in the performance of its services pursuant to this Agreement,
including, without limitation, travel, entertainment, and the use of any and all
communications devices without limit. Requests for reimbursement must
be in writing and accompanied by appropriate documentation.
5.2 Revenue
Sharing. Consultant shall be entitled to and is due to receive
revenue sharing in such amounts of a total of nine percent (9%) of all current
and future Parent and Company gross revenues, but in no
event more than $800,000 in any calendar year. Gross revenues are
payable at such times as results are reported in quarterly
Form 10-Q’s. This benefit is owing and due over the life of the
contract and any renewals.
5.3 Office Space.
Consultant shall maintain at its expense its own business office suitable for
use by Consultant in the performance of its services at the Company’s executive
offices or at a location satisfactory to Consultant, and in addition Consultant
shall be provided adequate work space in the Company’s offices.
5.4 Stock Option
Plan. In consideration of the execution by Consultant of this
Agreement and for services rendered hereunder, employees of
Consultant may be eligible for grants of stock options pursuant to
the Parent’s Equity Incentive Plan, in such amounts as may
from time to time be determined by the Board of Directors of Parent (or the
Stock Option/Compensation Committee), in its sole discretion..
ARTICLE
VI
TERM
OF AGREEMENT
6.1 Term. The
term of this Agreement shall be for a period of Five years from the Effective
Date. This Agreement shall automatically renew for successive one
year period if approved by both parties. This Agreement shall
automatically terminate upon (i) failure of the Consultant to perform its duties
hereunder; (ii) failure of Consultant to provide adequate staffing for its
obligations, or (iii) a Change of Control of the Company, as defined below
, in which case Consultant shall be entitled to receive (a) a
lump sum payment from the Company, within five (5) days after such termination,
equal to the consideration, as defined in Sections 4.1, 5.2, 5.4, 5.5 and
5.6 due to Consultant for the remaining term of this Agreement and (b) any and
all stock options granted to Consultant shall immediately vest, and become
exercisable in accordance with their terms. Sections 5.2, 5.4,
5.5 and 5.6 shall be calculated throughout the term based on reasonable
projections in conjunction with a six month trailing average.
6.2 Force
Majeure. The inability of any Party to commence or complete
its obligations hereunder by the dates required resulting from delays caused by
strikes, walk-outs, insurrection, fires, floods, hurricane, freight embargoes,
epidemics, quarantine restrictions, any law, act, order, proclamation,
decree, regulation, ordinance or any other acts of any governmental or judicial
authority, acts of God, acts of terrorists, war, emergencies, equipment
failures, shortages or unavailability of materials, unavailability of necessary
utilities or other similar causes beyond the Party’s reasonable control which
shall have been timely communicated to the other Party, shall extend the period
for the performance of the obligations for the period equal to the period(s) of
any such delays(s); provided that such Party shall continue to perform to the
extent feasible in view of such force majeure event.
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6.3 Change in Control of the
Company Defined. The term “Change in Control of the Company”
shall mean (i) the approval by the shareholders of the Company ‘s Parent of a
reorganization, merger, consolidation or other form of corporate transaction or
series of transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company’s then outstanding
voting securities, or (ii) the sale of all or substantially all of the assets of
the Company or (iii) the liquidation of the Company or its Parent ,
or (iv) a change in the composition of the Board of Directors such that the
present members do not constitute a majority of the Board of
Directors.
6.4 Section 280G or
409. In the event Consultant is considered a “specified
employee” as defined in Internal Revenue Code (“Code”)
Section 409(A)(2)(B)(i), or in the event that any payment, benefit or
compensation (within the meaning of Sections 280G(b)(2) or 409A of the
Code) to the Consultant or for its benefit is paid or payable or distributed or
distributable pursuant to the terms of the this Agreement or otherwise in
connection with, or arising out of, its engagement by the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a “Payment” or “Payments”), would be subject to excise or additional tax
or interest imposed by Code section 4999 or required under Code section
409A(b)(1) and/or any interest, tax or penalties are incurred by the Consultant
with respect to such excise or additional tax (such excise or additional tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then either (i) the Consultant shall promptly
receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Consultant of all taxes (including any interest or
penalties, other than interest and penalties imposed by reason of the
Consultant’s failure to file timely a tax return or pay taxes shown due on its
return, imposed with respect to such taxes and the Excise Tax), including any
Excise Tax imposed upon the Gross-Up Payment, the Consultant retains an amount
of the Gross-Up Payment equal to the Excise Tax imposes upon the Payments, or
(ii) solely at the Company’s election, any lump sum payment due to Consultant as
a result of the provisions of Section 6.1, 6.2.2 or 6.2.3, shall be paid to
Consultant 6 months after the date such payment is otherwise due, together with
interest at the rate of 8% per annum on such lump sum amount.
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ARTICLE
VII
COVENANTS
7.1 Confidentiality. Consultant
shall (a) not disclose or reveal any confidential information (as herein
defined) to any person other than those who are actively and directly
participating in the services rendered by Consultant under this Agreement and
(b) not use any confidential information regarding the Company for any purposes
other than in connection with the services to be rendered by Consultant
hereunder, and (c) take all steps as are normally used by Consultant in
protecting confidential information to assure adherence to the terms of this
Agreement. In the event that Consultant is requested pursuant to, or
required by, applicable law or regulation or by legal process to disclose any
confidential information regarding the Company, Consultant agrees that it will
provide the Company with prompt notice of such request(s) to enable the Company
to seek an appropriate protective order and/or waive compliance by Consultant
with the provisions of this Section. “Confidential Information” means
all information about the Company, in any form, however and whenever acquired,
that is not generally known to business competitors or the general public, and
which is treated as confidential by the Company, including, without
limitation: price lists, customer lists, vendor or supplier lists,
procedures, improvements, modifications, enhancements, concepts and ideas,
business plans and proposals, business methods, technical plans and
proposals, research and development, know how, budgets and projections, sales
techniques, market studies, competitive analyses, accounts receivable or
payable, billing methods and other non-public financial information, information
regarding the skills and compensation of employees, technical memoranda,
reports, designs and specifications, product and user manuals, software (whether
or not reduced to writing and whether or not protectable by patent or copyright
registration), in both object code and source code, engineering, hardware
configuration information, new product and service developments, and other
information, data and documents now existing or later acquired, regardless of
whether any of such information, data or documents qualify as “trade secrets”
under applicable Federal or state law. Notwithstanding the foregoing,
“confidential information” does not include information which is generally known
in the trade or industry, or which is not gained as a result of a breach of a
duty to maintain the secrecy of the Company’s confidential
information. The phrase “generally known” shall mean readily
accessible to the public in a written publication.
ARTICLE
VIII
MISCELLANEOUS
8.1 Indemnification. To
the fullest extent permitted by law, the Company and Parent shall promptly
indemnify Consultant for all amounts (including, without limitation, judgments,
fines, settlement payments, losses, damages, costs and expenses (including
reasonable attorneys’ fees)) incurred or paid by Consultant in connection with
any action, proceeding, suit or investigation arising out of or relating to the
performance by Consultant of its services pursuant to this
Agreement. This indemnification shall also apply to Consultant’s
prior activities as an officer and director of the Company. The
Company and Parent shall use its best efforts to include Consultant as an
insured under any insurance policy covering its officers, directors and
employees.
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8.2 Notice. Any
notice, request or demand given pursuant to this Agreement shall be in writing
and either hand delivered, or sent by certified or registered U.S. mail, return
receipt requested. Notice shall be deemed given upon receipt and
delivered to the respective addresses set out below, or to such other address as
a Party shall specify in the manner required by this Section, as
follows:
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If
to COMPANY:
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WQN,
Inc.
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Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO
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If
to CONSULTANT:
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iTella,
Inc.
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8.3 Assignment. Consultant
may only assign any of its rights under this Agreement to an entity controlled
by Consultant. The Agreement may not be assigned by the Company
without Consultant’s prior written consent.
8.4 Observation
Rights. In consideration of the execution by Consultant of
this Agreement, one representative of Consultant shall have the right to attend
all meetings of the Board of Directors.
8.5 Governing Law/Prevailing
Party. This Agreement shall be construed in accordance with
and governed for all purposes by the laws of the State of Florida applicable to
contracts executed and to be wholly performed within such state without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Florida or any other jurisdiction) that would cause the application
of the laws of any other jurisdiction other than the State of
Florida. This Agreement shall be subject to the exclusive
jurisdiction of the courts of the State of Florida located in Broward County,
Florida or the United States District Court for the Southern District of
Florida. The parties to this Agreement agree that any breach of any
term or condition of this Agreement shall be deemed to be a breach occurring in
the State of Florida by virtue of a failure to perform an act required to be
performed in the State of Florida and irrevocably and expressly agree to submit
to the jurisdiction of such courts in the State of Florida for the purpose of
resolving any disputes among the parties relating to this Agreement or the
transactions contemplated hereby. The parties irrevocably waive, to
the fullest extent permitted by law, any objection which they may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement, or any judgment entered by any court in
respect hereof brought in Broward County, Florida, and further irrevocably waive
any claim that any suit, action or proceeding brought in Broward County,
Florida has been brought in an inconvenient forum. The
prevailing party in any suit brought hereunder shall be entitled to
reimbursement for legal fees and costs incurred in connection with such suit
(and appeal).
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8.6 Entire
Agreement. This Agreement contains the entire agreement of the
Parties and supersedes all prior agreements, contracts and understandings,
whether written or otherwise, between the Parties relating to the subject matter
hereof and may not be modified except by an amendment signed by the
Parties.
8.7 Termination. This
agreement is irrevocable and under no circumstance can be canceled by the
company for any reason what so ever.
8.8 Severability. If
any provision of this Agreement shall be determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated. If any provisions shall be determined by a court of
competent jurisdiction to be unenforceable because excessively broad or vague as
to duration, activity or subject, it shall be construed by limiting, reducing or
defining it, so as to be enforceable.
8.9 Waiver. Neither
the failure nor delay on the part of either Party to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver
hereof. No waiver shall be effective unless it is in writing and is
signed by the Party asserted to have granted such waiver.
[Signatures
Follow]
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IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date and
year set forth on the first page of this Agreement.
| WQN, INC. | ||
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By:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇ , President
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| QUAMTEL, INC. | ||
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By:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇ , President
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| ITELLA, INC / CONSULTANT | ||
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By:
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▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇. President-CEO
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