EXHIBIT 10.27
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made as of November 12,
2002, by and between XXXXXX XXXXX, an individual residing at ______________
("Consultant"), and McLAREN PERFORMANCE TECHNOLOGIES, INC., a Delaware
corporation with its principal office located at 00000 Xxxx Xxxxx Xxxx Xxxx,
Xxxxxxx, Xxxxxxxx 00000 (the "Corporation").
W I T N E S S E T H:
WHEREAS, the Corporation is in the business of designing, fabricating,
developing, validating and certifying engines and related components and
products for the automotive industry (the "Business");
WHEREAS, Consultant has significant experience and knowledge of the
Business;
WHEREAS, Consultant has been employed by the Corporation pursuant to an
Employment Agreement with the Corporation dated December 1, 2000 (the
"Employment Agreement");
WHEREAS, the Corporation and Consultant entered into an Agreement dated
November 12, 2002 which terminated the Employment Agreement (the "Termination
Agreement"); and
WHEREAS, the Corporation desires to retain the services of Consultant as a
consultant to provide the Corporation with advice regarding the operations of
the Corporation and the Business on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the covenants and conditions contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Recitals. The foregoing recitals are hereby incorporated into this
Agreement and made a part hereof.
2. Consulting Services. During the Term of this Agreement (as defined
below), Consultant agrees that he will make himself available to the Corporation
during normal business hours to consult with the Corporation and to do all
things reasonably requested by the President or Board of Directors of the
Corporation. Such services may include, without limitation, assistance in
special projects, maintaining media and public relations responsibilities, and
maintaining a public presence for the Company in such venues as the Detroit Auto
Show and NY Auto Show.
3. Term. The term of this Agreement shall commence on March 1, 2003 and
shall continue until February 29, 2004, unless earlier terminated in accordance
with Section 10 of this Agreement (the "Term").
4. Compensation. For all services rendered by Consultant hereunder, the
Corporation shall pay Consultant Forty-Eight Thousand Dollars ($48,000.00) (the
"Consulting Fee"), payable at a rate of Four Thousand Dollars ($4,000.00) per
month, which shall be remitted to Consultant on the first day of each month. In
addition, if the Consultant, his spouse, and dependents, if any, are otherwise
eligible and elect to continue health coverage under COBRA, the Corporation
shall pay for the costs of Consultant's COBRA coverage starting March 1, 2003
through the end of the Term, provided, however, that Consultant, his spouse, and
dependents, if any, remain eligible and further provided that the Corporation's
obligation to pay such coverage shall cease, whether or not Consultant, his
spouse, or dependents remain eligible, if they become covered under another
health plan. Consultant agrees to promptly notify the Corporation if Consultant,
his spouse, or any dependents (a) become eligible to receive group health
benefits under another plan during the COBRA period, or (b) are otherwise
ineligible for COBRA.
5. Independent Contractor Status. Nothing contained in this Agreement shall
be construed to
constitute Consultant as an employee or agent of the Corporation, nor shall
either party have any authority to bind the other in any respect, it being
intended and understood that Consultant shall remain an independent contractor
responsible for his own actions. Consultant acknowledges that the Corporation
has no obligation to and will not withhold income or payroll taxes with respect
to the duties performed by Consultant and Consultant hereby agrees to pay all
such taxes.
6. Indemnity. Consultant shall indemnify, protect and hold harmless the
Corporation from and against all expenses, claims and liabilities arising out of
or relating to a breach of Consultant's obligations hereunder, including any
failure by Consultant to make necessary estimated income or self employment tax
payments.
7. Noncompetition; Non-Interference; Non-Disparagement.
(a) During the Term, Consultant shall not be employed by, or provide
services as a consultant or otherwise to, a party (other than the Corporation)
that is in the business of designing, fabricating, developing, validating or
certifying engines and related components and products for the automotive
industry.
(b) Consultant agrees that, for a period of two (2) years from the date
of this Agreement, Consultant will not interfere with or adversely affect the
Corporation's relationships with any person, firm, association, corporation or
other entity with whom Consultant actually did business or had a personal
contact while employed by the Corporation. Consultant will not divert or change,
or attempt to divert or change, any such relationship to the detriment of the
Corporation or to the benefit of any other person, firm, association,
corporation or other entity. Consultant further agrees that he shall not
participate in any activity that could have an adverse impact on the business or
prospects of the Corporation.
(c) Consultant will not, at any time after the date of this Agreement,
disparage or act in any manner so as to disparage the business of the
Corporation with the public generally, or with any of its customers, suppliers
or employees.
8. Confidentiality. Consultant acknowledges that certain of the
Corporation's business information is confidential. Therefore, Consultant agrees
that Consultant shall not use or reveal, divulge or make known to any person,
firm, company, corporation or other entity any Proprietary Information except as
required by law or court order. "Proprietary Information" is any and all
information or data, whether in writing, or learned orally, by observation or
other sensory detection, whether learned by Consultant during his employment
relationship with the Corporation or during the Term, as well as that
information relating to any product, product design, research, development,
formula, manufacturing process, method of distribution or delivery, knowhow,
trade secret, customer list, contract term, customer pricing, supplier list or
price, business strategy, compensation, plan or practice, financial and
operating records, software, technology, sales data, information or other
records, lists or documents used by the Corporation in the operation of the
Business or otherwise. All Proprietary Information and other Corporation
property shall be returned to the Corporation at the termination of Consultant's
consulting relationship with the Corporation. The Proprietary Information and
all other information relating to the Corporation shall belong to and remain the
property of the Corporation. Upon termination of this Agreement, Consultant
shall leave with the Corporation all such information in any way relating to the
Corporation or the Business. However, Proprietary Information shall not be
deemed to include information which: (a) at the time of disclosure is properly
in the public domain or thereafter properly becomes part of the public domain by
publication or otherwise through no fault or act of Consultant or his agents, or
(b) is independently made available to Consultant in good faith by a third party
who has not violated a confidential relationship with the Corporation.
9. Discoveries and Works. Consultant agrees and acknowledges that all
discoveries and works made or conceived by Consultant as of the date hereof
while in the employ of the Corporation, or during the Term, individually or with
others, that relate to the Business or the Corporation's activities (including
actual or demonstrably anticipated research or development of the Corporation),
or result from any work performed by Consultant for the Corporation shall be
owned by the Corporation. The term "discoveries and works" includes, but is not
limited to, reports, financial analyses or other financial information,
improvements, processes and works of authorship. Consultant shall: (a) promptly
notify, make full disclosure to, and execute and deliver any documents requested
by, the Corporation to evidence or better assure title to such discoveries and
works in the Corporation, (b)
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assist the Corporation in obtaining or maintaining for itself at its own expense
United States and foreign patents, copyrights, trade secret protection or other
protection of any and all such discoveries and works, and (c) promptly execute,
whether during the Term or thereafter, all applications or other endorsements
necessary or appropriate to maintain patents and other rights for the
Corporation and to protect its title thereto. Any discoveries and works which,
within six (6) months after the termination of the Term,are made, disclosed,
reduced to a tangible or written form or description, or are reduced to practice
by Consultant and which pertain to the business carried on or products or
services being sold or developed by the Corporation at the time of such
termination shall, as between Consultant and the Corporation, be deemed to have
been made during the Term and shall be owned by the Corporation. The foregoing
does not apply to a discovery or work that Consultant has developed entirely on
his own time without using the Corporation's equipment, supplies, facilities or
trade secret information except for those discoveries and works that either: (i)
relate at the time of conception or reduction to practice of the discoveries and
works to the Corporation's Business, or actual or demonstrably anticipated
research or development of the Corporation; or (ii) result from any work
performed by Consultant for the Corporation.
10. Termination. This Agreement may be terminated by either party upon
thirty (30) days written notice to the other party. In the event this Agreement
is terminated by the Corporation, the Corporation shall remit to Consultant the
unpaid portion of the Consulting Fee. In the event this Agreement is terminated
by Consultant, the Corporation shall remit to Consultant an amount equal to
fifty percent (50%) of the unpaid portion of the Consulting Fee. Notwithstanding
anything to the contrary contained herein, Consultant shall not be entitled to
any unpaid portion of the Consulting Fee if the Agreement is terminated because
Consultant: (i) breaches Paragraph 7 as determined by the Corporation in its
sole discretion; or (ii) enters into an employment, consulting, joint venture,
partnership, or other such arrangement with a third party such that Consultant
engages in 30 hours of work per week on behalf of such third party. Upon
termination of the Agreement, the Corporation's obligation to pay for
Consultant's COBRA coverage as set forth in Section 4 shall cease.
11. Complete Agreement. This Agreement and the Termination Agreement are
the complete agreement between the parties with respect to the subject matter
hereof. This Agreement and the Termination Agreement supersede all previous
agreements between Consultant and the Corporation, except to the extent
indicated in Paragraph 15 of the Termination Agreement. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the parties.
12. Injunctive Relief. Consultant agrees that the remedy of monetary
damages for any breach or threatened breach of the covenants of this Agreement
would be inadequate to remedy fully the breach because any breach or attempted
breach by Consultant would cause immediate, substantial and irreparable loss of
business and profits to the Corporation in an amount which would be impossible
to ascertain. Accordingly, in the event of any breach or threatened breach of
any of said covenants by Consultant, in addition to any and all other legal and
equitable remedies which may be available, including suit for recovery of actual
damages, the Corporation, and/or any affiliated or related corporation, or any
successor of the Corporation, shall be entitled to equitable relief, including
injunctive relief and specific performance, without the necessity of posting
security or proving actual loss of business to the Corporation by reason of such
breach and, to the extent permissible under applicable law, a temporary
restraining order shall be granted immediately on commencement of any such suit
by the Corporation. Such remedies will not be the exclusive remedies for any
breach of this Agreement but will be in addition to all other remedies available
under this Agreement or at law or equity to the Corporation.
13. Binding Agreement; Successors; Assignment. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by the successors,
heirs, legatees, executors, personal representatives, guardians, custodians,
administrators and conservators of the parties hereto. Consultant may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement.
14. Validity. If any Section, paragraph, sentence, clause or other
provision of this Agreement, or the application of such provision, is held
invalid or unenforceable by a court of competent jurisdiction, such provision
shall be deemed to be modified in a manner consistent with the intent of such
original provision, so as to make it valid and enforceable, and this Agreement,
and the application of such provision to persons or circumstances other than
those with respect to which it would be invalid or unenforceable, shall not be
affected thereby.
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15. Notices. Any notices required or permitted to be given under this
Agreement shall be sent by a nationally recognized overnight delivery service
and shall be effective when received by the other party. For the purposes of
this section, the addresses of the parties shall be as set forth in the first
paragraph of this Agreement. Any party may change the address to which such
communications are to be sent by notice to the other parties as provided herein.
16. Governing Law; Forum. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the law of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. Each
of the parties hereto agrees that any legal or equitable action or proceeding
with respect to this Agreement, or any agreement represented herein or entered
in connection herewith or the transactions contemplated hereby shall be brought
only in any court of the State of Michigan, or in any court in the United States
of America sitting in Michigan, and each of the parties hereto hereby submits to
and accepts generally and unconditionally the jurisdiction of those courts with
respect to such party's person and property, and irrevocably consents to the
service of process in connection with any such action or proceeding by the
mailing thereof by registered or certified mail, postage prepaid to each party
at such party's address set forth above. Nothing in this Section shall affect
the right of any party hereto to serve process in any other manner permitted by
law. Each party hereby irrevocably waives any objection to the laying of venue
of any such action or proceeding in the above described courts.
17. Headings. The section headings herein are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement,
nor are they deemed to constitute a part of this Agreement.
18. Waiver. The failure of either party to exercise or enforce any right or
remedy conferred upon it hereunder shall not be deemed to be a waiver of any
such right or remedy nor operate to bar the exercise or enforcement thereof at
any time thereafter.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
McLAREN PERFORMANCE TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Its: Chief Financial Officer
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
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