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 workman’s compensation
insurance, disability or unemployment insurance benefits or any other employee
benefits offered by the Company to its employees.
 

 
1
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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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.
 
2
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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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.
 
3
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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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.
 
4
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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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.
 
5
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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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:
 
 
If to COMPANY:

 
 
WQN, Inc.

 
 
14911 Quorum Drive

 
 
Suite 140

 
 
Dallas Texas

 
 
 
Attn: Stuart Ehrlich, CEO

 
 
If to CONSULTANT:

 
 
iTella, Inc.

 
 
135 Weston Road

 
 
Suite 326

 
 
Weston, Florida 33326

 
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).
 
6
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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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]
 
7
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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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.        
By:
     
Stuart Ehrlich , President
         QUAMTEL, INC.        
By:
     
Stuart Ehrlich , President
         ITELLA, INC / CONSULTANT        
By:
     
Salvatore Nasca, Jr. President-CEO

 
8
 
Stuart Ehrlich
 
Salvatore Nasca

 
 

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