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1.
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Arrangement:
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a)
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Upon
the terms and conditions hereinafter set forth, Consultant hereby
agrees
to provide consulting services to the
Company.
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b)
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Consultant
represents and warrants to the Company that she is free to enter
into this
Agreement in accordance with the terms hereof and is under no restriction,
contractual or otherwise, which would interfere with her execution
hereof
or performance hereunder.
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2.
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Term. This
Agreement shall commence as of the date first written above (the
"Commencement Date") and shall terminate at the close of business
on
December 31, 2010 (the “Term”).
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3.
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Consulting
Services and Benefits. The President of the Company may request the
Consultant to perform consulting services on behalf of the Company
from
time to time and such services are not to exceed 1 hour per
month. For and in consideration of the services performed by
Consultant, the Company shall provide group health or hospitalization
insurance plans in the form and coverage as the Company makes available
to
its full time employees.
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4.
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Independent
Contractor Status. The Consultant is an independent
contractor of the Company. The Agreement does not render the
Consultant an employee, partner, agent of, or joint venturer with
the
Company for any purpose, and Consultant will not hold herself out
as such.
The Consultant shall pay any taxes, duties or charges of any kind
(including any withholding or value added taxes) imposed by any federal,
state or local governmental entity for any payments made to the Consultant
hereunder.
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5.
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Location. Notwithstanding
anything which may be contained herein to the contrary, the Consultant's
offices shall be located in the County of Berkshire, State of
Massachusetts area and the performance of her duties hereunder shall
not
require her continued presence outside of such counties if the Consultant
shall object thereto.
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6.
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Termination. The
employment of the Consultant, and the obligations of the Consultant
and
the Company hereunder, shall cease and terminate (except as otherwise
specifically provided in this Agreement) upon the first to occur
on the
following dates (the "Termination Date") described in this
Section:
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a)
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The
date of expiration by its terms of the
Term;
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b)
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The
date of death of the Consultant;
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c)
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The
Consultant is terminated “For Cause” (as defined in Section
8).
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7.
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Restrictive
Covenants:
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a)
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Non-Disclosure. The
Consultant shall not at any time during or after the term of this
Agreement disclose or furnish to any other person, firm or corporation
(the "Entity") except in the course of the performance of her duties
hereunder, the following:
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i)
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any
information relating to any process, technique or procedure used
by the
Company, including, without limitation, computer programs and methods
of
evaluation and pricing and marketing techniques;
or
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ii)
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any
information relating to the operations or financial status of the
Company,
including, without limitation, all financial data and sources of
financing, which is not specifically a matter of public record;
or
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iii)
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any
information of a confidential nature obtained as a result of her
prior,
present or future relationship with the Company, which is not specifically
a matter of public record; or
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iv)
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any
trade secrets of the Company; or
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v)
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the
name, address or other information relating to any customer or debtor
of
the Company; or
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vi)
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any
Confidential Information, or divulge, communicate, use to the detriment
of
the Company or for the benefit of any other person or persons, any
Confidential Information, or misuse in any way, Confidential Information
pertaining to the Business. Any confidential information or
data now known or hereafter acquired by the Consultant with respect
to the
Business shall be deemed a valuable, special and unique asset of
the
Company that is received by the Consultant, in confidence and as
a
fiduciary, and the Consultant shall remain a fiduciary to the Company
with
respect to all of such information.
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b)
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Non-Competition. The
Consultant shall not, during the period (the “Restricted Period”) from the
date hereof until the later of one year after the termination of
her
consulting arrangement with the Company or the third anniversary
of the
Closing date (as defined in the Asset Purchase Agreement dated September
10, 2007 by and among the Company, Consultant and other parties set
forth
on the signatory page thereto (the
“APA”)):
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i)
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Without
the prior written consent of the Company (A) directly or indirectly
acquire or own in any manner any interest (whether through a debt
or
equity instrument) in any person, firm, partnership, corporation,
association or other entity (including the Company) which engages
or plans
to engage in any facet of the Business or which competes or plans
to
compete in any way with the Company or any of its subsidiaries or
Affiliates anywhere with the Territory. Territory means any state
(including the District of Columbia), territory or possession of
the
United States within which the Company presently or hereafter does
business or within a 50-mile radius of any of the Owned Premises,
Owned
Real Estate, Real Property and/or Leased Premises (as defined in
the APA),
(B) be employed by or serve as an Consultant, agent, officer, director
of,
or as a consultant to, any person, firm, partnership, corporation,
association or other entity which engages or plans to engage in any
facet
of the Business in which the Company now or hereafter engages or
which
competes or plans to compete in any way with the Company or any of
its
subsidiaries or Affiliates within the Territory, or (C) utilize her
special knowledge of the business of the Company and her relationships
with customers, suppliers and others to compete with Company and/or
its
Affiliates in any business which engages or plans to engage in any
facet
of the Business in which the Company now or hereafter engages or
which
competes or plans to compete in any way with the Company or any of
its
subsidiaries or Affiliates within the Territory; provided, however,
that
nothing herein shall be deemed to prevent either Consultant from
(x)
acquiring through market purchases and owning, solely as a passive
investment, less than one percent in the aggregate of the equity
securities of any class of any issuer whose shares are registered
under
§12(b) or 12(g) of the Securities Exchange Act of 1934, as amended,
and
are listed or admitted for trading on any United States national
securities exchange or are quoted on the National Association of
Securities Dealers Automated Quotation System, or any similar system
of
automated dissemination of quotations of securities prices in common
use,
so long as Consultant is not a member of any “control group” (within the
meaning of the rules and regulations of the United States Securities
and
Exchange Commission) of any such issuer. Consultant
acknowledges and agrees that the covenants provided for in this Section
are reasonable and necessary in terms of time, area and line of business
to protect the trade secrets of the Company. Consultant further
acknowledges and agrees that such covenants are reasonable and necessary
in terms of time, area and line of business to protect the Company’s
legitimate business interests, which include its interests in protecting
the Company’s (i) valuable confidential business information, (ii)
substantial relationships with customers, and (iii) customer goodwill
associated with the ongoing Business. Consultant hereby
expressly authorizes the enforcement of the covenants provided for
in this
Section by (A) the Company and its subsidiaries, (B) the Company’s
permitted assigns, and (C) any successors to the Company’s
business. To the extent that the covenants provided for in this
Section may later be deemed by a court to be too broad to be enforced
with
respect to its duration or with respect to any particular activity
or
geographic area, the court making such determination shall have the
power
to reduce the duration or scope of the provision, and to add or delete
specific words or phrases to or from the provision. The
provision as modified shall then be
enforced.
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ii)
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The
Consultant shall not, directly or indirectly, for herself or for
any other
person, firm, corporation, partnership, association or other entity
(including the Company), (A) solicit any of the Company’s Consultants or
employees employed in the Business, (B) call on or solicit any of
the
actual customers or clients of the Business, nor shall she make known
the
names and addresses of such customers or any information relating
in any
manner to the Company’s trade or business relationships with such
customers, (C) in any manner, directly or indirectly, attempt to
seek to
cause any entity to refrain from dealing or doing business with the
Company or assist any entity in doing so or attempting to do so or
(D)
employ any Consultants of Company.
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iii)
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Injunction. Consultant
recognizes and hereby acknowledges that a breach or violation by
Consultant of any or all of the covenants and agreements contained
in this
Section may cause irreparable harm and damage to the Company in a
monetary
amount which may be virtually impossible to ascertain. As a
result, Consultant recognizes and hereby acknowledges that the Company
shall be entitled (without the requirement of posting a bond) to
an
injunction from any court of competent jurisdiction enjoining and
restraining any breach or violation of any or all of the covenants
and
agreements contained in this Section by the Consultant, her, Affiliates,
partners or agents, either directly or indirectly, and that such
right to
injunction shall be cumulative and in addition to whatever other
rights or
remedies the Company may possess hereunder, at law or in
equity. Nothing contained in this Section shall be construed to
prevent the Company from seeking and recovering from the Consultant,
jointly and severally, damages sustained by it as a result of any
breach
or violation by they Consultant of any of the covenants or agreements
contained herein.
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8.
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Termination
by the Company “For Cause.” At any time during the term of
this Agreement, the Company may discharge the Consultant for cause
and
terminate this Agreement without any further liability hereunder
to the
Consultant or her estate, except to pay any accrued, but unpaid,
compensation. In the event of such termination, Consultant
agrees she shall also be deemed to have resigned from the Company
and its
Parent, as a Consultant, effective as of the date of such
termination. For purposes of this Agreement, a "discharge for
cause" shall mean termination of the Consultant upon written notification
to the Consultant limited, however, to one or more of the following
reasons:
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a)
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Fraud,
misappropriation or embezzlement by the Consultant in connection
with the
Company; or
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b)
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Willful
and unauthorized disclosure of confidential, or proprietary trade
secret
information of the Company; or
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9.
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Miscellaneous:
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a)
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Assignment. This
Agreement shall not be assigned by either party, except that the
Company
shall have the right to assign its rights hereunder to any parent,
subsidiary and affiliate of, or successor to, the
Company.
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b)
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Binding
Effect. This agreement shall extend to and be binding upon
the Consultant, his legal representatives, heirs and distributees,
and
upon the Company, its successors and
assigns.
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c)
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Notices.
Any notice, request, instruction, correspondence or other document
to be
given hereunder by any party hereto to another (herein collectively
called
“Notice”) shall be in writing and delivered personally or mailed by
registered or certified mail, postage prepaid and return receipt
requested, as follows:
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IF
TO THE COMPANY:
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William
Pagano
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c/o
Universal Supply Group, Inc.
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275
Wagaraw Road
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Hawthorne,
New Jersey 07506
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IF
TO THE CONSULTANT:
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Nancy
Mead
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90
State Road
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Great
Barrington, Massachusetts 01230
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d)
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Waiver. A
waiver by a party hereto of a breach of any term, covenant or condition
of
this Agreement by the other party hereto shall not operate or be
construed
as waiver of any other or subsequent breach by such party of the
same or
any other term, covenant or condition
hereof.
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e)
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Prior
Agreements. Other than for that certain APA, any and all
prior agreements between the Company and the Consultant, whether
written
or oral, between the parties, relating to any and all matters covered
by,
and contained or otherwise dealt within this Agreement are hereby
canceled
and terminated.
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f)
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Entire
Agreement. No waiver, modification, change or amendment of
any of the provisions of this Agreement shall be valid unless in
writing
and signed by the party against whom such claimed waiver, modification,
change or amendment is sought to be
enforced.
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g)
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Definitions.
All capitalized terms not defined herein shall have the meaning set
forth
in the APA.
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h)
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Authority.
The parties severally represent and warrant that they have the power,
authority and right to enter into this agreement and to carry out
and
perform the terms; covenants and conditions
hereof.
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i)
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Applicable
Law. THE
PARTIES AGREE
THAT THE FEDERAL COURTS IN SPRINGFIELD, MASSACHUSETTS AND STATE COURTS
IN
BERKSHIRE COUNTY, MASSACHUSETTS SHALL HAVE EXCLUSIVE JURISDICTION
ON ALL
MATTERS ARISING OUT OF OR CONNECTED IN ANY WAY WITH THIS AGREEMENT,
AND
CONSULTANT FURTHER AGREES THAT THE SERVICE OF PROCESS OR OF ANY OTHER
PAPERS UPON THEM IN THE MANNER PROVIDED FOR NOTICES HEREUNDER SHALL
BE
DEEMED GOOD, PROPER AND EFFECTIVE SERVICE UPON
THEM.
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j)
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Severability. In
the event that any of the provisions of this Agreement, or any portion
thereof, shall be held to be invalid or unenforceable, the validity
and
enforceability of the remaining provisions shall not be affected
or
impaired, but shall remain in full force and
effect.
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k)
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Titles.
The titles of the Articles and Sections of this Agreement are inserted
merely for convenience and ease of reference and shall not affect
or
modify the meaning of any of the terms, covenants or conditions of
this
Agreement.
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S&A
Purchasing Corp.
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BY:
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/s/
William Pagano
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William
Pagano
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BY:
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/s/
Nancy Mead
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Nancy
Mead, Consultant
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