Exhibit 10.19
XXXXX CONSULTING AGREEMENT
THIS AGREEMENT is effective as of April 1, 1999, among Eltrax Systems,
Inc. (the "Company"), CRL Enterprises, Inc. (the "Consulting Firm"), and Clunet
X. Xxxxx (the "Consultant"), with reference to the following facts:
A. The Consultant serves as a member of the Board of Directors of
the Company (the "Board");
B. The Consultant is an employee of the Consulting Firm; and
C. The Company wishes to engage the Consultant to perform certain
consulting services in order to benefit from the Consultant's management
experience and abilities, and the Consultant wishes to accept such engagement,
all upon the terms and conditions set forth in this Agreement.
The Company, the Consultant Firm, and the Consultant agree as follows:
1. ENGAGEMENT. The Company hereby engages the Consultant to perform various
management duties as may be agreed to from time to time between the Board and
the Consultant. Such duties will include participation in senior management and
assisting the Company in identifying and pursuing possible acquisitions, joint
ventures, marketing agreements and other growth opportunities. The Consultant
agrees to accept such engagement.
2. DUTIES.
a) The Consultant agrees to consult with and to provide services to the
Company that are reasonable be requested by the Board, consistent with
the Consultant's expertise and experience and consistent with the
Consultant's current duties. Initially, the Consultant shall serve as
the Secretary, General Counsel, and a member of the Board of the
Company.
b) This Agreement and the Consultant's engagement shall not limit the
Consultant from providing services to any other organization or from
engaging in any other activities, as long as such services or
activities are not in conflict with the interests of the Company.
3. TERM. The term of this Agreement will commence on April 1, 1999, and will
continue for a period of three (3) years, unless earlier terminated in
accordance with Section 4 below. The term of this Agreement will automatically
renew for additional two-year terms unless written notice of election to not
renew is given by either party to the other at least one year before the end of
the term.
4. TERMINATION.
a) The Company may terminate this Agreement for cause upon written notice
to the Consultant specifying the cause for termination. For purposes
of this Agreement, "cause" will mean (i) dishonesty, fraud, gross
misrepresentation, embezzlement or material and deliberate injury or
attempted injury, in each case related to the Company or its business,
(ii) any unlawful or criminal activity of a serious nature affecting
the Company, (iii) any willful breach of duty, habitual neglect of
duty or unreasonable job performance after written notice and a thirty
(30) day period to cure, or (iv) a material breach of any provision of
this Agreement after written notice and a thirty (30) day period to
cure.
b) The Company may terminate this Agreement 90 days following the
Consultant's Total Disability. For purposes of this Agreement, "Total
Disability" will mean such disability that prevents the Consultant
from performing his duties under Section 2 of this Agreement for a
continuous period of 90 days.
c) This Agreement will automatically terminate upon the death of the
Consultant.
d) In the event of termination of this Agreement, the obligations of the
Company and the Consultant under Sections 5(b), 6, 7, 9, and 10 of
this Agreement shall survive and continue.
5. COMPENSATION.
a) ANNUAL CONSULTING FEE. The Company will pay consulting fees to the
Consulting Firm at the rate of $240,000 per year, payable monthly in
advance.
b) EXPENSES. The Company will reimburse the Consulting Firm for
reasonable expenses that the Consulting Firm incurs while performing
duties under this Agreement, provided that such expenses are incurred
and properly accounted for in accordance with the Company's policies.
c) OFFICE AND SUPPORT. The Company will provide the Consultant with an
office and normal support, consistent with current practice.
6. CONFIDENTIAL INFORMATION
a) CONFIDENTIAL INFORMATION means information that is not generally known
and that is proprietary to the Company or that the Company is
obligated to treat as proprietary. This information includes, without
limitation:
i. trade secret or other proprietary information about the Company and
its products; and
ii. proprietary information concerning any of the Company's past, current,
or future products, and information concerning the Company's research,
development, engineering, purchasing, manufacturing, accounting,
marketing, selling or leasing.
The term "Confidential Information" does not include information,
which becomes available to the public other than as a result of a
disclosure by the Consultant or was within the Consultant's possession
prior to its being furnished to the Consultant by or on behalf of the
Company.
b) NONDISCLOSURE. The Consultant will not disclose Confidential
Information to any person not authorized by the Company to receive it.
c) USE. The Consultant will not make any use of Confidential Information,
other than for the benefit of, and on behalf of the Company.
d) RETURN OF INFORMATION. When the Consultant's engagement with the
Company ends, he will promptly return to the Company all records and
other items in his possession that disclose or describe Confidential
Information.
7. COMPETITIVE ACTIVITIES. The Consultant agrees that during the term of this
Agreement and for a period of two (2) years after termination of this Agreement,
regardless of the reason for such termination, he will not do any of the
following:
a) directly or indirectly compete with the Company's business, as the
Company has conducted it during the Consultant's engagement, within
any state in the United States or any country in which the Company
directly or indirectly markets its products or services;
b) solicit or encourage any Company customer or potential customer to
cease to do business with or to not do business with the Company; or
c) employ or attempt to employ any of the Company's employees on behalf
of any other entity.
8. NO ADEQUATE REMEDY. The Consultant understands that if he fails to fulfill
his obligations under this Agreement, the damages to the Company would be very
difficult to determine. Therefore, in addition to any other rights or remedies
available to the Company at law, in equity or by statute, the Consultant hereby
consents to the specific enforcement by the Company of Sections 6 and 7 of this
Agreement through an injunction or restraining order issued by an appropriate
court.
9. INDEMNIFICATION & DIRECTORS AND OFFICERS LIABILITY INSURANCE.
a) The Consultant and the Consulting Firm will at all times be entitled
to indemnification from the Company in accordance with Article V of
the Amended and Restated Bylaws of the Company as in effect on the
date hereof. The Consultant and the Consulting Firm will be deemed to
be an "Indemnified Person" as defined therein for all purposes, and
the Consultant's and the Consulting Firm's rights thereunder will not
be adversely affected by any subsequent amendment thereof.
b) The Company will maintain in full force and effect one or more
policies of directors and officers liability insurance providing for
such coverage (in amounts not less than present amounts) as may be
determined from time to time by the Board.
10. MISCELLANEOUS.
a) SUCCESSORS AND ASSIGNS. Either party without the other party's prior
written consent may not assign this Agreement.
b) MODIFICATION. This Agreement may be modified or amended only in
writing signed by each of the parties hereto.
c) GOVERNING LAW. The laws of the State of Michigan will govern the
validity, construction, and performance of this Agreement, without
regard to the conflicts of law provisions of any jurisdictions.
d) ARBITRATION. All disputes under this Agreement shall be submitted to
binding arbitration by the AAA in Southfield, Michigan, and shall be
governed by the AAA commercial arbitration rules. Judgement may be
entered in a court of competent jurisdiction in Michigan, enforcing
any arbitration award.
e) NOTICES. All notices to the Consultant required by this Agreement will
be either hand delivered or sent by fax to a location where the
Consultant is known to reside.
ELTRAX SYSTEMS, INC.
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By: Xxxxxxxx X. Xxxxx,
Chief Financial Officer
CRL Enterprises, Inc.
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By: Clunet X. Xxxxx,
President
CONSULTANT
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Clunet X. Xxxxx
